A lack of legal assistance fuels the foreclosure crisis

From The Progressive:
http://www.progressive.org/mplove101409.html

Our House Is On Fire, Part 1: Now the Robber Barons Replace the Welfare Queens (and Rightly So)

By David A. Love, BlackCommentator.com

The following is the first part of an ongoing Color of Law series.


Gordon Gecko had a long run of it, but now the party is over. I’m talking, of course, about the character in the film Wall Street, that conniving titan of finance who would sell his mother for a buck and a quarter, and there is scant evidence that he had not already accomplished that goal. "Greed is good," he declared.

Gecko began to have his heyday in the Reagan era. That’s when the "conventional wisdom," fueled by greed, began to call for a supply-side economic policy in which financial benefits would be bestowed upon the wealthy and businesses in the form of tax cuts. And as the theory goes, the benefits would "trickle down" to the common folk. In reality, the result was more like "trickle on".

Another hallmark of the Reagan era, which was perfected in the Clinton and Bush years, was the deregulation of the financial markets and other industries. Over the years, these policies were bought and paid for to the tune of $5 billion in contributions, given by Wall Street to Democratic and Republican politicians alike, to keep the government out of the gambling casinos, I mean financial markets. This led to the proliferation of exotic financial instruments called derivatives, which have turned out to be a little more than a high-tech, blue chip hustle. Unregulated, unmonitored, and getting their money’s worth, the banks were able to engage in predatory lending, sucking homeowners - particularly homeowners of color - into unconscionable subprime mortgages. When applied to the environment and food and safety standards, deregulation has resulted in salmonella - and rat - infested peanuts, E-coli tainted beef and climate change.

Meanwhile, as the land of opportunity became the most unequal, top-heavy society in the West, the media - deregulated, conglomerated and with fewer diverse voices (thank you, President Clinton) - provided us with empty calories for our entertainment. Many of us did not realize what was taking place right under our noses: the most dramatic upward redistribution of wealth in history, and a level of income inequality which makes democracy unsustainable.

Since the 1980s, when much of the New Deal regulatory framework has given way to the best unbridled capitalism money could buy, society has steered its best and brightest into the whole Wall Street thing. As the nation’s infrastructure began to crumble and its students fell behind the rest of the developed world in math and science, everyone, including yours truly in a former life, wanted a job shuffling paper and moving numbers around but not creating anything tangible, not building anything of much use to society.

With the adoration of the rich and famous, and the glorification of wealth as a virtue, came the vilification of the poor and the stigmatization of poverty. This gave birth to the concept of the welfare queen, the fictional Black woman on welfare who has six children, wears a mink coat and drives a Cadillac. The typical welfare recipient is White, but never mind. What a worthy scapegoat, no doubt created in some conservative think tank. And what better justification for taking from the poor (unworthy as they are, living off the government dole), and giving to the rich (needy as they are, and unable to live the American dream)? It was "reverse Robin Hood", as Jesse Jackson aptly described it, which culminated in the passage of welfare reform by President Clinton and a Republican Congress.

A Dickensian treatment of the poor was in full fashion. Poverty became a moral failing, an issue of genetics. "Are there no debtors’ prisons? No poor houses?" Well, given that American capitalism never was meant to employ everyone (for more information, see slavery), and given that many of the good blue collar and even white collar jobs have been sent overseas, what do you do with that surplus population, as Dickens called it? It seems no accident that the prison boom, the war on drugs, and draconian prison sentencing came at a time when there were no jobs to be found in the inner cities. The "land of the free" has the world’s largest prison population, even more than China, which is a police state and has over four times the population of the U.S. Prisons are one of America’s primary forms of social control, and there is profit in the warehousing of Black, Brown, and poor bodies.

And as all of this was going on, the people at the top were having a big party at our expense. There has been very little mention of the plight of the poor, although their ranks rose under Bush. In America, over 41 million people were poor as of 2005. Further, 18 percent of children live in poverty, and 1 in 50 children is homeless. With the collapse of the financial system, how can you scapegoat the poor when everyone is either poor or has real potential to join its ranks? This time around, the anger is directed towards the real culprits: the people who, like the robber barons of old, actually stole the money and brought us to where we are today.

It is cathartic to watch the spectacle of bank executives hauled before Congress to explain themselves. What got these people in trouble was not merely their obscenely immense wealth or the manner in which they earned or stole that wealth. Rather, in the midst of all the destruction they left in their path, the broken lives and stolen futures, these individuals still wanted to be rewarded for their failure, for being the special people they think they are. With their pernicious sense of entitlement, the robber barons looked at the rest of society with contempt, as if they are superior to the regular everyday chumps at the bottom of the pyramid scheme.

In a moment of clarity, everyday people have identified the real problem - unfettered capitalism. The robber barons have replaced the welfare queens, and so we have come full circle. This time around, the public refused to fall for the okeedoke and allow themselves to be distracted by some straw man or scapegoat. The Right’s early contention - that Black and Latino homeowners brought the financial system down with mortgages they could not afford - did not hold water. So, is this a sign of political maturity for the common folk, a new populism? Perhaps, but it is too early to tell. The test will come in how society responds to the crisis, learns the lessons of history, and constructs an economic system that seeks fairness, equity and justice. Heaven forbid we become more like those so-called "socialist" Europeans, with their universal healthcare, lower levels of inequality, lower poverty rates and higher educational standards. In the meantime, it will probably get worse before it gets better. But no one said it would be a pretty sight.

What’s Good for Wall Street Is Only Good for Wall Street

By David A. Love
BlackCommentator.com
Color of Law
September 25, 2008

One trillion dollars. Now that’s some money. When all is said and done, that is roughly the amount it will take to save that shining beacon for all the world to follow, American predatory capitalism.

What could $1 trillion buy you? Well, you could buy a failed war in Iraq for about that much. In contrast, it would cost $55 billion a year to wipe out child poverty in the U.S. And not doing anything about child poverty costs us $500 billion a year.

Some experts are telling us that this bailout of Wall Street by the taxpayers - with no oversight, no strings attached, no obligations for those who seek the bailout - is necessary to prevent a total collapse of the economy. As for this, I say don’t give it to them. After all, we were always told that the free market, the invisible hand, unencumbered by government regulation, will take care of itself. The Wall Street robber barons would never find such charity in their hearts for the common folk. They would tell us that we can’t depend on government handouts, that we should pull ourselves up by our bootstraps and play by the rules.

And what’s in it for us?

We certainly don’t need a 9-11-style commission to state the obvious, that this financial meltdown is the result of greed. It has finally put to rest a number of fallacies:

• The first fallacy is that what is good for Wall Street is good for Main Street, and that increases in worker productivity lead to wage increases. If that were true, then as Wall Street boomed, the average family would not have witnessed a stagnation or decline in their standard of living. Capitalism depends on making a profit, so they say, and if that means cutting wages, then so be it.

• The second is that Wall Street hates socialism. Not true. Apparently, they love socialism for the few, socialism for themselves, and to hell with everyone else.

• The third is that deregulated free market capitalism, served up for public consumption, is the best thing since shrimp and cheese grits. The reality, however, is pretty clear. Deregulation is a proxy for greed and excess, allowing the hustlers to run their hustle unencumbered, in the light of day, and with the sales receipt in hand for the government they just bought and paid for, and these swindlers have the sales receipt to prove it. Unregulated markets give you mortgage scams, a polluted environment, and now a wrecked economy.

So, why should we bail out companies that have been run into the ground, with jobs slashed or outsourced, while the heads of these ruined enterprises are rewarded for their failure with $40 million golden parachutes? Why should we throw good money after bad, and feed a fundamentally broken system that has no accountability to the public? And who is going to bail out the common, everyday people? The money always seems to be there for certain things, such as war profiteering and corporate bailouts, and of course, that massive upward redistribution of wealth that is eviscerating the poor, the working class and middle class. If we are going to have a good old-fashioned, socialist-style bailout for some, why can’t we have it for all?

Those of you who read the Color of Law column regularly know that I often refer back to Dr. King, and I think he has provided some words that are perfect for the situation in which America finds itself. He said that we, this nation, needs a “shift from a thing-oriented society to a person-oriented society,” and a “radical redistribution” of wealth and power. Sounds good to me. Perhaps there is no better time than the present.

Some people say that the New Deal saved capitalism from communism. Others say it saved America from capitalism. Still others say it saved capitalism from itself. What is certain, however, is that conservatives have done everything in their power to remove the last traces of the New Deal. And it is that very assault on the vestiges of the New Deal - with its relief for the unemployed, economic recovery and reform of the financial system, and greater acceptance of trade unionism as a counterbalance to corporate power - that helped create today’s hot mess in the financial sector. It will undoubtedly take a move as dramatic as the New Deal, if not bolder, to make things right.

But if the entire system is not reformed, with an eye toward bringing economic justice, changing the configuration of the economic pie and removing the stranglehold that corporations have on this society, then we have a problem.

Progressives Must Claim the Political Center

By David A. Love
BlackCommentator.com Editorial Board
July 17, 2008

What’s all this talk about politicians moving to the political center?

Every four years, we hear about the need for presidential candidates to move to the center in order to appeal to the audience beyond their party’s base.

I think that Texan populist Jim Hightower said it best when he suggested that “there’s nothing in the middle of the road but yellow stripes and armadillos.”

A variation on that theme is from the late Republican Barry Goldwater, who said “extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!”

Political observers ask if Barack Obama is moving to the center. I don’t know, and it is not my concern. But I will say that the strategy of going down the middle to score points and win elections, changing one’s positions, and flip-flopping, is a time-tested failure. The political graveyard is strewn with the careers of poor souls who followed “conventional wisdom” or the advice of highly paid strategists with their poll-driven drivel. Al Gore and John Kerry - who snatched defeat from the jaws of victory by becoming wooden centrist caricatures - are two names that come to mind, Bush election stealing notwithstanding. And Hillary Clinton torpedoed her quest for the brass ring from the jump, by positioning herself as a virtual man and a warmonger in support of America’s exploits in Iraq. The “conventional wisdom” endorsed this path, but public opinion ultimately did not.

And what exactly is this conventional wisdom? In my humble opinion, it amounts to two things: First, there is the water cooler talk from a manufactured, media-driven punditocracy - “experts” who claim to know, yet possess few if any qualifications for their supposed knowledge, and make their arguments out of thin air. These are the people who will, for example, engage in a lengthy Sunday-morning television discussion on the problems facing the Black community, without a single African American (or anyone who knows a single African American) participating in the discussion. Second, there is the effort to cater to the so-called swing voters, people who are uninformed about politics and the issues, and will vote for the candidate with whom they would prefer to have a beer.

Ultimately, this talk about the fictitious center is unproductive. Rather, the center must be redefined.

We live in extreme times, and positive action of an extreme nature is needed. Capitalism once again is unraveling, as corporate greed and policies of upward wealth distribution take their toll on the common folk. Dinosaur industries such as Big Oil are rewarded for their damage to the environment and are profiting from our misery. Meanwhile, the U.S. auto industry - the people who killed the streetcars and the electric cars throughout the nation, and offered you Hummers while other nations were investing in alternative fuel technology - is repeating the 1970s, collapsing under the weight of its own arrogance and inaction. As the government bails out the mortgage giants Fannie Mae and Freddie Mac, and the failing Indymac Bank, where is the relief for ordinary citizens who are losing their homes and their jobs and livelihood, those who can no longer afford to live in America? Conditions suggest that with a low-wage job at Wal Mart or McDonald’s awaiting them, in a country that does little else than buy cheap foreign goods and make hamburgers, these people are not seeking modest milquetoast solutions to these crises.

Obama has been able to seize on this discontent and desire for change. Certainly, the Republican Party has revealed itself as nothing more than a vehicle for the delivery of corporate largesse - with lip service paid to religious fanatics and the Archie Bunkers of America - and is headed for a well-deserved implosion. But if the Democratic Party - also known too often for cow-towing to corporate interests, failing to seriously pursue a Bush-Cheney impeachment, and capitulating on the Iraq War and immunity for telecom companies that spied on Americans - does not seek meaningful, systemic change, then it won’t be far behind on the road to the chopping block.

Progressives find themselves with a golden opportunity to become the new center in American politics. When I say progressives, I mean independents, Greens and other third parties, the Democratic Party base, labor, and other groups. There is much hope that the pernicious Bush era will come to an end with the coming election. When that happens, then the hard work begins, as a quadrennial contest alone does not a movement make. A progressive-led coalition must create a movement that takes back the country, infuses the national dialogue with progressive values, permeates the national consciousness with progressive language, and shapes public policy in a deliberate, long-term manner. Such action will be necessary even under an Obama administration, to ensure that a progressive agenda comes to fruition and has the broad-based support to sustain itself.

Democrats do not need to run to the center, but progressives need to become the new center and lead the way.

In Philly, They’ll Cut Off Your Gas For A Laugh

Color of Law
By David A. Love
BlackCommentator.com Editorial Board
June 26, 2008

Recently, in Philadelphia I heard the most insulting radio commercial of all time.

It was an ad for Philadelphia Gas Works, or PGW, a local city-owned utility. The narrator, a woman, lectures to the audience that if they do not pay their gas bill, PGW will cut off their service. In the background, throughout the commercial, is the sound of a man singing in the shower. Suddenly, towards the end of the commercial, he starts screaming in agony, presumably because PGW shut off his hot water.

Now, PGW tried to make light of a matter which is anything but amusing. It would seem to represent the worst, most inappropriate and most poorly timed public relations strategy in recent memory, but no one seems to talk about it. The PGW people are inferring that people are trying to beat the system, to have gas heat without paying for it.

Here’s a novel idea: perhaps poor and working people cannot afford fuel costs. Philadelphia, like other cities, is hurting from the recession, but for many people, every day is a recession. One-third of the city is mired in poverty, and the city has the highest per capita incarcerated population in the nation. There are no summer jobs for the kids, and for many of them there may not be any free bus passes when they return to school.

But the problem is bigger than Philly. The city’s current administration is as able as any, and seemingly abler than those who preceded it, but they inherited problems that are shouldered by states and localities throughout this nation. It will take a national strategy to solve them.

To make it simple, people cannot afford to live in America.

There is the energy crisis, where profiteers and speculators are making out like bandits from the high price of oil, and companies such as Exxon Mobil are posting record profits, while common people cannot afford their energy needs. Alternative fuels will save the environment and unleash new industries and spur job creation, but the corporate giants that killed the street cars throughout the nation, and the electric cars in California, stand in our way.

The energy crisis relates to the food crisis, because the high cost of energy increases the cost of food.

Then, of course, there is the subprime mortgage crisis, where the financial giants and Wall Street banks defrauded millions of people with home loans with unconscionable terms they could not possibly afford. These people are continuing to lose their homes in cities throughout the country, in what has become a loss of wealth of historic proportions.

Related to the mortgage crisis is the emerging school loan crisis, where colleges and universities make unholy alliances with lenders. The result is tuition that rises well in excess of the rate of inflation, and students that graduate with a mortgage-sized, high-interest loan. The massive amounts of debt with which these young people are saddled - before they even start their career in a job market of fewer opportunities and outsourcing abroad - will gravely affect their life choices and career choices.

Finally, there is the crumbling infrastructure crisis. The levies broke in New Orleans following Hurricane Katrina, but now the levies are breaking everywhere. And our children and families are levies, too, and they cannot stand the pressure. There are inadequate public investments in physical infrastructure such as roads and bridges, and spending for social welfare and education takes a back seat to prison and war profiteering.

What caused this problem? To make a long story short, much of it has to do with the conservative revolution, perverse public policy choices that shift wealth upward, deregulation, hatred of government as a force for social change, and unscrupulous politicians who run the track each and every day to make that money for their corporate pimps.

The PGW commercial represents the common Dickensian strategy, American-style, of callously blaming the poor for their own problems, calling for personal responsibility, and criminalizing them as a means of shutting them up, shutting them down and keeping them in line. But what do you do when most people are poor or are becoming poor, as is the case with the U.S.?

But there is a better way. In this election season, as we are about to witness a potentially dramatic pendulum shift in the United States, there are clear choices as to what direction Americans want for the country. Whatever happens, people of good will must be part of a movement that brings sustained economic and social equity and justice, seeks quality jobs, healthcare and education as a human right, and ensures that government serves the people and is no longer used as a casino for multinational conglomerates. Although the next occupant of the White House can go a long way in setting the tone, an election result is not a magic wand, and there are no shortcuts for the hard work which must be done on the ground.

People of Color Sacrificed on the Altar of Predatory Capitalism

By David A. Love
Published By The Black Commentator
January 24, 2008

It should come as no surprise that free-market capitalism — predatory, unchecked, unregulated, and like any other hustle, dependent upon winners and losers for its bread and butter — chooses to prey on the most vulnerable members of society. We were aware that homeowners of color, steered into unconscionable subprime mortgages and targeted for economic exploitation, are bearing the brunt of America’s foreclosure crisis.

But a new report now tells us exactly how much damage has been done to these families.

According to a report by United for a Fair Economy entitled, “Foreclosed: State of the Dream 2008,” the subprime lending debacle is causing the greatest loss of wealth to people of color, primarily African-Americans and Latinos, in modern U.S. history. In dollars, the loss amounts to somewhere between $164 billion and $213 billion over the past eight years.

To be sure, White Americans are also being devastated by subprime mortgages, an inherently flawed, expensive and predatory product with exploding adjustable rates, balloon payments, and penalties for early repayment that cripple their victims and make it unlikely that they will repay. And in some cities, foreclosures have increased as much as 300 percent since 2000. Over half a million borrowers in the U.S. have lost their homes since 2006, and up to 1 million could lose their homes by the end of 2008.

There is clear evidence that there is racial discrimination (and gender discrimination) on the part of mortgage lenders, those who steer their victims into these horrible loans. People of color are more than three times as likely to have subprime loans. These loans account for only 17 percent of loans to Whites, but 55 percent of loans to Blacks. Given people of similar financial circumstances, Whites are steered into safer, less expensive loans. If subprime loans were distributed equally, losses for Whites would increase 44.5 percent, while losses for people of color would decrease 24 percent. Before this economic crisis, Blacks were 594 years behind Whites in terms of Median Household Net Worth. The subprime crisis will only worsen this gap. And at current rates, parity in home ownership between people of color and Whites will not be reached for another 5,434 years.

Institutional racism is costly, and the home foreclosure mania is destroying families and communities, eroding the tax bases and revenue streams of American cities, leading to an increase in crime, and causing cuts in government services. A number of cities, including Cleveland, Baltimore and Buffalo, are suing mortgage lenders for the damage caused by their predatory and discriminatory practices.

Meanwhile, as hundreds of thousands of families lose their homes, and millions more are affected by a chronic financial crisis in which their wages are dropping, the five largest Wall Street banks awarded themselves a record $39 billion in bonuses in 2007. This, despite the fact that 2007 was the financial industry’s worst year since 2002, and a year in which shareholders lost more than $80 billion. These corporations have caused great destruction, and yet have not been held accountable for their actions.

The answer to this problem lies with public policy decisions. American history is rife with the promulgation of bad public policy in the name of the unbridled free market: slavery, genocide, land stealing, wage exploitation, sweatshops, union busting, child labor, health and environmental hazards, etc. Then, as now, predatory capitalism has benefited a chosen few at the expense of the many. If the federal government can promote policies that benefit the rich and the corporate conglomerates, then certainly we can adopt policies which eradicate systemic economic inequality and racial discrimination, mandate corporate responsibility, encourage low-income home ownership, and repair the victims of subprime lending.

America, resist your antidemocratic tendencies. The subprime crisis is the tip of the iceberg in a nation which touts equality and fairness, and yet hustles its people with a game of loaded dice.