On one of the business shows a few days ago a host continued his rhetoric about deadbeat Americans not paying their bills. People defaulting on mortgages, credit cards, and auto loans are the reason this crisis is not over, was the point he was trying to make. Oh how they loved Americans when they were racking up all this debt making banks and retailers record profits thus proliferating stock prices and record bonuses. And since our corporate mantra is “Greed is Good” and “Free Market Capitalism” is it any wonder that many Americans rushed to get rich in the great American real estate boom.

Now were on the other side of the boom and it’s time to pay the proverbial piper, but no one wants to. When the consumer defaults on debt they are a deadbeat and vilified. But when corporate America wants to renegotiate that’s smart business. Let’s look at this for a moment.

Some of the most powerful businessman in the world made their fortunes by renegotiating debt. By pushing corporations into bankruptcy they get both lenders and bondholders to reduce principal, lower rates, and extend terms. With their sins washed away by a stroke of the pen a new capital structure and lower leverage will enable them to rewrite history proclaiming superb business acumen and prowess. Donald Trump in the early 90’s and many times since, KKR, Cerberus, Apollo, Carlyle Group, and Blackstone are just a few who have profited from debt forgiveness. Blackstone is currently asking bankers to reduce $5 billion dollars worth of Hilton Debt to help absolve that sin. I guess all those Harvard MBA’s got a little too giddy at the top. You see when the educated business class over pays for something it’s ok to default and renegotiate. According to the Wall Street Journal, companies hold roughly $1 trillion of senior loans and high yield bonds that will mature in the next six years. Most of this debt was issued during the boom times at outrageous valuations. Didn’t these “masters of the universe” realize we were peaking? We will never know, but that’s not the point. What they do understand is this simple point, if we overpay or make a mistake we’ll renegotiate.

Now what is beginning to scare many on Wall Street is that average Americans are beginning to understand this concept and take a business approach to their finances. I mean if greed is good and we all embrace the free markets then your free to stop paying your mortgage if you so choose. If you’re underwater say 100k on a 300k house the greedy thing to do is not pay. If your credit card company won’t lower that 30% interest rate and offers a settlement of 20 cents on the dollar maybe you should take it. Recently a friend of a friend who is a prominent attorney for one of the largest TARP recipient banks decided she was no longer going to pay her mortgage, “just doesn’t make business sense” she replied. Everyday I encounter more and more mainstream Americans who are considering walking away from debt they can afford to pay. While this behavior may be considered appalling to some the trend is gaining traction. If anything in the new book “The Buyout of America” comes true and private equity continues to default at a record levels mainstream America will revolt and it will be ugly, after all since they have nothing; they have nothing to lose.