Or a Collapse of Authority

There comes a moment in the decline of established authorities when they suddenly lose their power to compel obedience. We are seeing this now in Iran: the Supreme Leader has lost his aura of religious authority, becoming just another political figure contending for his right to rule. Suddenly, in the street, a protestor refuses to obey the police; an invisible line in the minds of people has been crossed, and you know it is only a matter of time before authority it replaced with mere power – and real power will then eventually shift. In a different way, here at home, we are seeing it in the rebellion of debtors, less and less intimidated by the institutions to which their are in debt.

The banks and credit card companies are calling these rebels “ruthless defaulters,” according to Sunday’s New York Times. More and more of them are simply not paying and not responding to increasingly frantic efforts to get them to pay. “They’ve done the math on their account and they’re very angry,” said Corey Calabrese, a Fordham Law student who is an administrator of the school’s walk-in clinic for debtors at Manhattan Civil Court. Public sentiment is on their side, she added: “For the first time, Americans are no longer blaming the borrower but are looking at the credit card companies.” (See “They’re Not Paying Anymore,” on the Times’ website as When Debtors Decide to Default)

The choice of words is interesting. Usually the banks or mortgage companies are called “ruthless,” without pity, as they go after the irresponsible or hapless debtors. The language suggests that financial institutions now see themselves as the underdog, craving sympathy in the face of merciless debtors. But looking at it more carefully suggests that they are starting to feel powerless – perhaps because they are. If more and more debtors simply refuse to pay, what will they do?

The example of the Wall Street firms that got bailed out – and then went on to award big bonuses again to those responsible for the debts that got them in trouble – has not been lost on at least some of the little guys. It’s a gut reaction, but all the more powerful for just that reason.