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September, 2009:

A Second Look | Who Says Banks Aren’t Lending?

Sep 29th, 2009
by Tom.
2 comments

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via They Call This Season ‘Fall’ for a Reason | The Public Record
By Dave Lindorff , The Public Record, Sep 28th, 2009

So now it turns out that the whole Troubled Assets Relief Program (TARP) was a flop or more likely a scam. Remember Bush Treasury Secretary Henry Paulson telling us last September that credit markets had locked up, and then, after half of the $750 billion that he extorted out of Congress was handed out to Wall Street firms, new President Barack Obama justifying the spending of the second half of the money because we needed to “get the banks lending again”?

Well, now Neil Barofsky, the special inspector general for TARP, is telling us that all that money, and more than $2 trillion in loans, accomplished nothing.  In an interview with Lagan Sebert, published in Huffington Post, Barofsky says, “We were told by Treasury that the purpose of the TARP fund was to increase lending. But we haven’t increased lending.”

Well yeah, that’s true. Just ask any ordinary working stiff. My little bank, the Harleysville National Bank here in eastern Pennsylvania, far from expanding lending, has been shutting down customer credit lines. As a bank manager told me, they were “reviewing all our equity lines” in light of declining property values (actually, property values in our area north of Philadelphia have remained pretty stable).

In general, banks across the country have been canceling credit lines, closing credit card accounts on customers deemed risky—including small businesses—and making it very hard to get a new mortgage. (They’ve also been raising all kinds of fees, ripping customers off in other ways, but that’s another story.)

Read on…

Here’s my two cent’s worth on the lending situation.

Getting a home loan was no problem. This past May, I called and made an appointment with the guy who handles home loans with my little home town credit union and asked for a home mortgage. We, my wife and I, went to the appointment after we got all the papers together. I was pleasantly shocked when he revealed to us that all the manila folders on his desk, and the ones on a table behind his desk, several stacks, were new loan applications and they were in the chute to close; it was just a matter of the borrowers waiting for the lowest rate possible. We went through the process of applying for a loan, were pre-approved, and we went house hunting. It was just that easy.

The point is, I think that the situation of the lack of lending by banks is both local and varies individually from one applicant to the next. For this reason everyone must take extra care with their credit rating. Don’t borrow unless you can comfortably make the payments. During the past decade or so, people borrowed knowing that they would have to scrape to make payments and put themselves in a high wire balancing act.

We all know that the second part of this debacle is the commission of predatory lending practices. There are some very good methods to protect yourself from predatory lending at this HUD website. Here are a couple of things you can do to prevent becoming a victim:

Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your downpayment, failing to disclose the nature and amount of your debts, or even how long you have been employed…

Do NOT let anyone convince you to borrow more money than you know you can afford to repay…

There is also a list of characteristics of predatory lending at the HUD website.

But what caused all this? What pushed the big banks over the edge so as to need a bailout in the first place? We’ve all heard that they bundled sub-prime mortgages to falsify their worth, but weren’t there supposed to be bank regulators watching this? 

The answer is simple. Deregulation caused this. Here is the heart of the matter – the exact piece of legislation that caused all this trouble:

The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, repealed the part of the Glass-Stegall Act of 1933 that prohibited banks, investment banks, and insurance companies from acting as a combination of any of those three. This is from Wikipedia:

Contrary to Phil Gramm’s claim that “GLB didn’t deregulate anything” (see Defense), the GLB Act that he co-authored explicitly exempted security-based swap agreements (a derivative financial product based on another security’s value or performance) from regulation by the SEC Commission by amending the Securities Act of 1933, Section 2A, and similarly the Securities Exchange Act of 1934, Section 3A, to read, in part:[27] [28]

1. The definition of “security” in section 2(a)(1) does not include any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act [15 USCS § 78c note]).

2. The Commission is prohibited from registering, or requiring, recommending, or suggesting, the registration under this title of any security-based swap agreement[.] …

3. The Commission is prohibited from … promulgating, interpreting, or enforcing rules; or … issuing orders of general applicability; … as prophylactic measures against fraud, manipulation, or insider trading with respect to any security-based swap agreement[.]

Bundling mortgage derivatives based on sub-prime (shaky) loans, then trading them as securities led to the housing bubble collapse once the loans began to default. A few of these derivatives going bad would not have been much of a problem, but the number of these derivatives traded were vast.

GLBA has to be reversed back to Glass-Stegall standards. Stronger regulation is the answer. You can’t fix the damage done by deregulation with more deregulation.

 

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A Second Look | Medicare For All? – Keep Dreaming

Sep 27th, 2009
by Tom.
1 comment

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via Medicare for All: Yes We Can | CommonDreams.org

by Holly Sklar, Published on Saturday, September 26, 2009 by CommonDreams.org

More Americans die of lack of health insurance than terrorism, homicide, drunk driving and HIV combined.

Grandma could be dead from lack of health insurance before she turns 65 and gets Medicare – 80 percent of first-time grandparents are in their 40s and 50s.

America is the only country that rations the right to health care to those 65 and older.

Lack of health insurance kills 45,000 American adults a year, according to a new study published in the American Journal of Public Health. One out of three Americans under age 65 had no private or public health insurance for some or all of 2007-2008…

…Even with health insurance, many Americans are a medical crisis away from bankruptcy. Research shows 62 percent of all bankruptcies in 2007 were medical, a share up 50 percent since 2001. Most of the medically bankrupt had health insurance – the kind insuring profits, not health care…

…Wendell Potter, CIGNA’s chief of corporate communications until quitting in 2008, testified to Congress, “The status quo for most Americans is that health insurance bureaucrats stand between them and their doctors right now, and maximizing profit is the mandate.” He said, “Every time you hear about the shortcomings of what they call ‘government-run’ health care, remember this: what we have now … and what the insurers are determined to keep in place, is Wall Street-run health care.”…

…Contrary to myth, the United States does not have the world’s best health care. We’re No. 1 in health care spending, but No. 50 in life expectancy, just before Albania, according to the CIA World Factbook. In Japan, people live four years longer than Americans. Canadians live three years longer. Forty-three countries have better infant mortality rates.

All these facts, all this red meat, and I can find no potatoes, no completeness.

You could put all this in a book, take the book to the halls of Congress, and smack every Senator and Congressman you pass on the head with it and you will not change their minds. It’s like telling the truth to an inquisitor. Unless it is what they want to hear, then it is all a lie.

Democratic Party leaders have this bone in their brain that compels them to think that if they don’t act like Republicans, no one will love them. Republicans have long been associated with helping the rich, and now the Democrats, the working man’s champions, are in that same boat. The solution to this convolution is obvious and it has two parts.

The first part, is that there is too much corporate money being passed to these politicians and their PACs. If we had national clean elections as does Arizona, which are a way to control the amount of money politicians spend on themselves to get elected, then politicians would be more concerned with representing the people and acting on the majority opinion than what their electoral prospectus ciphers out to be.

The second part is term limits. In this typist’s humble opinion, members of Congress should be limited to two terms of four years each, like the President, for both Senators and Congressmen. If this takes an amendment to the Constitution, then so be it. The drive to get reelected trumps the majority opinion – job preservation is the motivator behind making law and that should be a crime.

We can bask in the dreamy dream land of Medicare for all and sip our drinks by the pool in an idyllic setting, but the dirty, ugly, dusty, concrete truth is that there is nothing in that notion that would make the fat cats richer, so there is no political will for it.

…Tell President Obama and Congress, Yes we can have Medicare for All. Rep. Anthony Weiner’s amendment would substitute the text of the Expanded and Improved Medicare for All Act (HR 676), which has 86 co-sponsors, for House legislation HR 3200. Like the even worse Baucus bill in the Senate, HR 3200 would feed for-profit insurers more customers without providing the universal health care Medicare could provide at much lower cost…

Write and dial until your fingers turn blue. Nothing will happen. We did not elect Rep. Dennis Kucinich as President although he ran for it and we could have. We elected another DLC-like centrist who acts like he wants to be the head of both parties.

We could have elected Dennis, who wrote HR 676, if we had voted for him, but we were too caught up in the rapturous voice of change to think about our progressive dreams and who could take us there. We formed Barrack Obama in our image and projected on him the picture of a progressive savoir when all along, underneath it all, he was and is a fence-straddling centrist with his own agenda.

So go for it. Call every member of Congress, write them letters, send them email. I’ve done some of that. I’m still waiting. While you have them on the phone ask them what they think about limiting their own terms in Congress and limiting the money they can raise for reelection. You might get a laugh.

 

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A Second Look | The ACORN We All Need To Know (UPDATED)

Sep 26th, 2009
by Tom.
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acorn_logo_nu-cropped-proto-custom_2

Acorn Logo

UPDATE 01/26/10

The guy who misrepresented himself to ACORN employees by secretly video taping them and thereby underminig their civil rights, has finally been caught in his nefarious activities:

O’Keefe reportedly arrested by FBI in alleged “plot to wiretap” senator’s office

From a January 26 Times-Picayune article:

The FBI, alleging a plot to wiretap Democratic Sen. Mary Landrieu’s office in downtown New Orleans, arrested four people Monday, including James O’Keefe, a conservative filmmaker whose undercover videos at ACORN field offices severely damaged the advocacy group’s credibility.

FBI Special Agent Steven Rayes alleges that O’Keefe aided and abetted two others, Joseph Basel and Robert Flanagan, who dressed up as employees of a telephone company and attempted to interfere with the office’s telephone system.

A fourth person, Stan Dai, was accused of aiding and abetting Basel and Flanagan. All four were charged with entering fedral property under false pretenses with the intent of committing a felony.

So, now that O’Keefe has been caught doimg what he does best, Congress will immediately rescind their resolutions condemning ACORN and set matters straight, right?

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UPDATE: Sunday, October 11, 2009

Embattled ACORN is not taking the right wing attacks and smears lying down, as I hoped they wouldn’t. They are mobilizing, rallying to the defense of an orgaznization that stopped the bulldozing of homes after Katrina, and have kept people out of foreclosure all across America. They are asking for people’s personal testimonies on how ACORN saved them.

ACORN activists across the country say being the voice for the voiceless is the real story of their organization. That’s why they refuse to buckle to what they see as right-wing detractors trying to bring down the group because it teaches poor people to stand up for themselves.

This mobilization is the perfect counter-punch. I applaud ACORN for not knuckling under to the right-wing’s war and smear campaign started by Karl Rove.

______________________________________________________________________

via The ACORN I Know | The Public Record

If there ever was an article about the conservative’s war on ACORN that should be on everyone’s desk top, then it is this one by David Swanson,The Public Record, Sep 24th, 20009. This article offers an insight to the intensity and scope of the organizational effort by ACORN to right the wrong of predatory lending. This will open your eyes as to why Rove and his minions are waging a war against ACORN. It is because they are scared…

If someone told you that a bunch of low-income people, most of them African-American or Latino, most of them women, most of them elderly, had been victimized by a predatory mortgage lender that stripped them of much of their equity or of their entire homes, you might not be surprised.

But if I told you that these women and men had gotten together and, after three years of work, brought the nation’s largest high-cost lender to its knees, forced it to sell out to a foreign company, and won back a half a billion dollars of what had been taken from them—one of the largest consumer settlements ever—you’d probably ask me what country this had happened in.

Surely it couldn’t have been in the United States of the Second Gilded Age, the land of unbridled corporate power and radical government activism on behalf of the rich and the greedy.

Yet, it was. These victims identified a problem and named it “predatory lending” in the late 1990s. Their campaign to reform Household International (also known as Household Finance and as Beneficial) played out from 2001 to 2003, concluding with a settlement that includes a ban on badmouthing the company.

That’s why more people haven’t heard about this. The families who fought back and defeated Household are barred from bragging about it or teaching the lessons they learned, because that would require recounting the damage that Household did to homes and neighborhoods. These families are members of ACORN, the Association of Community Organizations for Reform Now.

…read on, dear followers, and learn.

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PS: I posted a comment to the story on the web page.

You opened my eyes about ACORN’s power. Rove and his minions seek to destroy ACORN out of fear.

I had not heard of ACORN’s campaign to help those screwed by Household Finance. The effort by ACORN was huge and good and right and I applaud you and your colleges for having the courage to face down our corporate plunderers (the Second Gilded Age is so appropriate).

Some people who condemn ACORN do so against their own self-interests being in the demographic that might actually benefit from their services. I can’t understand why ideology has them grasping at reasons to condemn. It would be almost funny if it weren’t so sad.

 

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