Reform through financial civil disobedience

Zynks

A theoretical scenario for discussion:

Short version: The protests being planned for this weekend are unlikely to get us anywhere. We are sitting ducks and have no call whatsoever on the secret decisions being made. In a few weeks we might have signed off state owned assets as collateral for a bailout that could be priced to be unpayable.

It is suggested here that the last civilised resort available to the common Irish citizen is financial civil disobedience in the form of stopping paying mortgages immediately (temporarily) until some conditions are satisfied (elections now, transparency and fairness in the bailout deals, and private business debt (banking/developers, etc) going back to being private).

This concept is based on the assumption that the IMF and ECB would be unwilling to bridge this new 'liquidity' hole, therefore triggering a sequence of events that would restore common sense on how the crisis is being handled.

Long version:

We have more power than we realise, wake up!

Many are probably feeling the same as me: like sitting ducks.

Many are loosing jobs, and the ones that aren’t, are certainly feeling the squeeze: cost of living going up, taxes up, salaries down, negative equity, etc. And apparently nowhere to run to.

To make things more desperate, bankruptcy laws make the bottom of cliff particularly scary.

Now the general public is becoming increasingly aware of the level of incompetence and corruption that has been driving this country in the last 10-15 years, and the cost of this is measurable in a criminally irresponsible level of sovereign debt inflated by the “ nationalized“ private sector hole, mostly from banking and construction.

And WE, the taxpayers are now responsible for the genuine and for the “inherited“ monstrous debts.

So, we all feel like going out to protest, to burn the circus down, to get FF to quit, to stop secret deals with the ECB and IMF that will enslave us for many years to come, but.....

...we also feel that there might be no point in street protests. There is nobody there willing to listen to us, is there? We all know what the outcome from the organised events planned for Saturday will be, more scaremongering about how we must keep our “friends” on our side, and so on. This of course being said by one of the people’s worst threats, our own government. But we are stuck with them until they decide to pull the plug - does anyone believe there are many politicians in the opposition who are willing to take the risk of being the “tipping point”? Nothing will happen before all the secret deals are made and we are terminally screwed as a country and as individuals.

We also know that the debt is just too big for our economy, and it will only get worse as the country chokes under the severe measures being introduced. I am starting to believe the rumours that someone wants Ireland to become the example to other countries in trouble, to scare them from causing the same trouble.

So all of this got me thinking, are we really that powerless? Are we really totally at the mercy of this mad government? What could we possibly do to take a minimum level of control of the events, and of our destiny? And how could this be done without empowering extremists of any kind at the same time?

First, lets look at what this minimum level of control means. My initial thoughts would be:

• to ensure that whatever bailout deal goes ahead that the deal is truly fair and that it gives this economy a chance to survive - and that state companies are not used as collateral for the rescue package, as per rumours raised recently.
• that is gives the government no option but to dissolve the Dail immediately
• that it ensures that private business debt remains as such, between the borrower and the lender, and not the taxpayers’ problem just because it went sour - they are grown ups enough
• Immediate review of our draconian bankruptcy laws (as suggested by the EU).
• that a way is found to structure Irish mortgages as they are in France: fixed, but at a very decent cost (last time I looked, about two years ago, their 10 year fixed was cheaper than our variable rate. It is just about the methods of funding that the French banks adopt)

Sounds like mission impossible to secure the above before it is too late, though the demands are quite fair. I have a proposal that it is either completely mad, or it may actually have a chance of working to secure these objectives: financial civil disobedience.

Sure, normally such an initiative would take ages to produce results, and certainly too late to avoid the ultimate catastrophe. But what if this disobedience hits the government, the ECB and the IMF where it hurts? What if the entire country stopped paying their mortgages until the conditions above are satisfied?

If everybody stops paying as a protest, the banks will come close to a halt as their cash flow is severely affected unless they get a lot more funding, which the ECB and the IMF might be reluctant to bridge. If this happens, the government would have no choice but to give up and call the elections.

But if the mass protest remains until all the conditions are satisfied, then the new government will have to play ball.

Once this happens, we go back to paying our mortgages and working to rebuild our economy and fund the state to repay legitimate debts.

In my view this would get more of a reaction from the Brian's the IMF and ECB than all the peaceful protests that you could throw at them.

BUT,

Does it make sense to you?

P. Breathnach

I am reminded of the scene in Blazing Saddles: "One move and the ****** gets it."

aidan24326

There's a fundamental problem with your plan OP, in that almost every mortgage holder would be paying their mortgage by direct debit, making your plan more or less unworkable unless everybody withdraws whatever money they have.

Zynks

aidan24326 wrote: »

There's a fundamental problem with your plan OP, in that almost every mortgage holder would be paying their mortgage by direct debit, making your plan more or less unworkable unless everybody withdraws whatever money they have.

I am not proposing a bank run. That would be disastrous.

Why would you need to remove all the money? If you have a second account (e.g. savings) in the same bank, and you transfer funds leaving the account where the dd hits underfunded, the mortgage payment doesn't go through.

There are other ways of doing it, but I wanted to address your specific point.

Zynks

I guess this idea wasn't a winner from the lack of response. So back to the drawing board...

Mahatma coat

No, yer onto something, but you would need to get the Courts onside
Gettin a Judge or a Constitutional Lawyer to Say something MIGHT be Doable in the current Climate, then if you can Raise a bit of Viral Support the media might have the balls to run with it

I-Shot-Jr

I don't think enough homeowners would be willing to worsen their credit ratings in what is an already precarious economic climate for his to go ahead. It is an interesting idea and I would love to know what the outcome would be if enough people did that.

There is also the fact that many might find themselves in arrears, not through choice but to worsened economic conditions: Job loss etc

Long story short, homeowners probably feel they have enough on their plate without deciding to become a revolutionary force in Irish economics and banking.

kaiser sauze

aidan24326 wrote: »

There's a fundamental problem with your plan OP, in that almost every mortgage holder would be paying their mortgage by direct debit, making your plan more or less unworkable unless everybody withdraws whatever money they have.

The big problem with what you say is that people could simply cancel their direct debits.

hth