Monday, April 13, 2009

Fending Off the Mortgage Industry

Hitting the Pause on Foreclosures

“In the 30s, there were organized committees all over the country, block by block. The sheriff would come and evict a family. After he left, they moved people back in. The moratorium was won on the streets.”

Before she was evicted from her own home, Kendra Washington took a walk around her Detroit neighborhood. She found an empty home and decided to squat with her two children. “I refused to get my kids put out on the street,” said the single mother who moved into a vacant Housing and Urban Development house.

After government officials came knocking at Washington’s door, attorney Jerry Goldberg, a long-time civil rights activist, persuaded them in court that it was in the government’s interest to let Washington and her children stay. He argued that Washington had made improvements to the house and so maintained its value. Without her efforts, he explained, the house would have been vandalized.

Washington got to stay.

In the last year, Goldberg and his staff at Moratorium NOW!, a coalition of activists and union and religious leaders, have brought at least 50 cases to courts in Detroit on behalf of homeowners. They have been fighting to save homes literally one house at a time through picketing at the banks and legal action. Some of the people impacted are senior citizens with fixed incomes and also with medical conditions that have drained their savings. The houses have belonged to them for more than 20 years.

“We believe they have a right to a home and we defend their right to stay,” Goldberg said.

Some politicians agree. A new bill introduced in Michigan’s state legislature would create a two-year moratorium—making it the lengthiest moratorium in the nation.

According to Goldberg, in many of his cases, people have been able to stay in their homes because he showed that the foreclosure was violating federal law like the Housing and Economic Recovery Act of 2008 (HERA), which was approved last July. The law requires financial institutions to modify default mortgages when this will result in a greater recovery of their value than a foreclosure.

“We argued that the loan modification would add a greater value to the property than the foreclosure will,” he said.

In the cases of low-income homes insured by the Federal Housing Administration, Goldberg and his team have shown in court that the government hasn’t played by its own rules.

Homeowners in danger of being evicted are supposed to get the chance to stay in the house through a lease agreement. But many homeowners are finding their requests to stay in the home denied, said Goldberg. Instead, the Federal Housing Administration has been paying the mortgage companies the full value of the house after it foreclosed, he added.

They don’t always win in court though.

“When we don’t have good luck through the courts, we have good luck through the streets,” said Goldberg.

On at least six occasions, the coalition has picketed outside homes or banks just before people were about to be evicted. This is often the last resource when the actions can’t be fought in court because there’s no legal basis, Goldberg said.

On one occasion, a 78-year-old woman was able to get a new loan to stay in her home after the group picketed outside the bank Countrywide. The new loan allows her to stay in her home of 42 years.


Washington made payments on her home of a decade for as long as she could after a foot surgery caused her to lose her $40,000 a year job. The lender wasn’t willing to lower her payment on the $150,000 mortgage. As her savings ran out, Washington watched homes in the neighborhood being sold for as little as $500.

Michigan has been hit by a severe economic downturn for the last decade. It has lost half a million, mostly union, industrial jobs in the last five years. The crisis struck Detroit before it did the rest of the nation, and the sub-prime market of predatory lending completed the job. In Detroit, the average medium sales price for a home these days is $6,237, according to data from Multiple Listing Services. One in every 137 homes in Michigan is facing foreclosure.

“Our business is to sell foreclosed homes,” said Carl Williams, chief executive of the Saturn Group. His real state company has sold at least five houses for $1 with buyers paying the realtor’s commission.

“When the properties get evicted, the homes are immediately stripped and vandalized, losing all their value, tearing down the fabric of the community,” said Goldberg.

That’s exactly what happened with Washington’s 1,625 square foot home when vandals came in, took everything and set the house on fire. The brick home had been remodeled, Washington said. She had put hardwood floors in the kitchen, new cabinets and ceramic tile. “The sad part about it is that [the bank] would have done better working with me; now they’ve got nothing,” she said.

A bill introduced in Michigan (SB 29) by State Sen. Hansen Clarke would approve the longest moratorium in the nation, allowing homeowners to remain in their house for two years while they make a monthly payment set by a trial judge based on their income.

“If you want to stabilize the markets you have to slow down the foreclosure rate, keep people in their homes, occupied and maintained,” said State Sen. Clarke. It’s a more responsible approach than borrowing millions of tax dollars to bail out financial institutions.”

There’s legal precedent for this, too. In 1934, the Supreme Court ruled that a moratorium on foreclosures was constitutional because of the crisis faced by the nation. Twenty-five states were able to institute them.

“In the 30s, there were organized committees all over the country, block by block. The sheriff would come and evict a family. After he left, they moved people back in,” says Goldberg. “The moratorium was won on the streets.”

California currently has a 90-day foreclosure moratorium. Connecticut’s governor M. Jodi Rell supported a bill in progress for a six-month forbearance with a mandatory 60-day mediation period. Last April, Massachusetts passed a law that put in place a 6-month moratorium on mortgage foreclosures if people filed and claimed they were victims of unfair lending practices. Several banks including Citigroup Inc, JPMorgan Chase & Co. and Morgan Stanley placed a moratorium on some foreclosures to give the Obama administration time to set into motion a rescue plan for homeowners.

“There’s logic to these efforts of saying: “Let’s hit the pause,” said attorney Ellen Harnick, senior policy counsel on foreclosure issues at the Center for Responsible Lending. “People close to the crisis have been sounding the alarm for over two years, and there’s an awful lot of sadness and disappointment with the fact that so many homes could have been saved had solutions been implemented earlier”.

Some analysts and advocates though caution that a moratorium won’t work on its own.

“You’re just postponing the inevitable if you don’t have the tools to work on this,” said Jason Reece, senior researcher and expert on regional housing for the Kirwan Institute for the Study of Race & Ethnicity at Ohio State University.

Reece supports similar efforts in Ohio were 80,000 homes went in to foreclosure last year, and 40,000 others are at risk. But he contends a moratorium needs to be tied to system reforms, direct assistance to the communities that are most hit and the possibility of having bankruptcy judges alter the terms of a loan.

Yet, Sen. Clarke hopes the moratorium would prevent the need of families to go into bankruptcy. “I don’t want it to get that bad for a family that they have to go to bankruptcy court,” he says.

While the administrations’ $75 billion modification and assistance program has received a warm reception, housing advocates believe it still has fallen short. Since only banks that receive additional Troubled Asset Relief Program, or TARP, funds are required to participate, there’s a concern on how the government will enforce it industry-wide.

“Why shouldn’t it be mandatory for all the banks that already got the bail out money?” Goldberg complained. He believes the people should come first and need to organize from the grassroots to bring a change.

This is exactly what Take Back the Land, a grassroots volunteer organization in Miami, Florida is inviting people to do on vacant government housing and foreclosed homes.

Max Rameau, the group’s founder, helps homeless families relocate into what he calls “liberated” houses. He makes sure the homes have electricity and water before they move in. “It’s completely illogical and inhumane that you have all these houses and families are looking for homes,” said Rameu.

Those who squat run the risk of getting arrested and charged with trespassing. But Rameu thinks they face a greater danger living in the streets.

“This is a solution coming from the community,” said Rameu. “We value the human rights of housing over the right of a corporation to make a profit.”

Indictment of Bush Officials May Come in Days

A Little Rebellion Against Tyranny

Dorsett Bennett

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Former Chilean dictator Augusto Pinochet, former U.S. President George W. Bush
Like former Chilean dictator Augusto Pinochet, former U.S. President George W. Bush and his team could end up in serious trouble stemming from an imminent indictment in Spanish courts for kidnapping, secret prisons and torture.

The imminent indictment in Spanish courts of former officials of the Bush Administration is being applauded by civil and human rights organizations and legal scholars. The popular wave of support for indictment of Bush officials may lead to Bush himself.

Newsweek Magazine recently blew open more shocking news about Bush' system of kidnapping, secret prisons and torture. A secret Red Cross report indicates that many kidnapped and tortured people were turned into "disappeared persons" by the CIA under instructions from Bush and Cheney. A former Bush administration official told Newsweek's Michael Isikoff that the information had been hidden from the Red Cross.

"The majority of the people in the CIA program are unaccounted for. We don't know what happened to them," a human rights investigator told Isikoff.

Like Bush, former Chilean dictator Augusto Pinochet, thought his power would shield him from criminal prosecution when his regime kidnapped and tortured and assassinated individuals who became known as the "disappeared." It was when Spanish courts brought indictments against Pinochet that everything changed.

Michael Ratner, president of the Center for Constitutional Rights said, "The importance of this investigation [in Spain ] can not be understated. Contrary to statements by some, the Spanish investigations are not 'symbolic.' Just ask Augusto Pinochet, who was stranded under house arrest in England and who ultimately faced criminal charges in Chile because of the pressure of the Spanish courts. If and when arrest warrants are issued, 24 countries in Europe are obligated to enforce them. The world is getting smaller for the torture conspirators.”

Ramsey Clark, former U.S. Attorney General has called for the prosecution of Bush and other high officials in the United States.

"The greatest danger arising from impunity for President Bush and his cohorts would be that all subsequent officials will feel secure in committing the same crimes and the people, having failed to compel impeachment for such open, notorious and egregious crimes, will feel even more helpless to prevent them. Ultimately the power and the responsibility to prevent criminal acts by government is with the people."

"People should not be afraid of their governments. Governments should be afraid of their people."--V. I recently watched the 2006 movie V for Vendetta. The movie is set in Great Britain in the near future. Under the guise of several terrorist acts, a totalitarian government is elected to Parliament under the Chancellor to save the country from these terrorists. The only problem is the people must give up a lot of their freedoms for being safe. The government eventually becomes cruel, corrupt, and oppressive to the people.

Abraham Lincoln once warned us, "Corporations have been enthroned... and the money power of the country will endeavor to prolong its reign... until all wealth is aggregated in a few hands and the Republic is destroyed." Does this sound a bit familiar?

For those of you on the far right who were wrongfully believe the government should be able to do anything to 'protect us,' I would quote Benjamin Franklin, "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety."

Shays' Rebellion was an armed uprising in Central and Western Massachusetts, (mainly Springfield) from 1786 to 1787. The rebels were led by Daniel Shays and known as Shaysites (Regulators), were mostly poor farmers angered by crushing debt and taxes. Failure to repay such debts often resulted in imprisonment in debtor's prisons or the claiming of property by the County or wealthy lenders.

The rebellion started on August 29, 1786. A militia that had been raised as a private army defeated an attack on the federal Springfield ArmoryArticles of Confederation and gave strong impetus to the Constitutional Convention which began in May 17, 1787. by the main Shaysite force on February 3, 1787. There was a lack of an institutional response to the uprising, which energized calls to reevaluate the

Thomas Jefferson wrote a friend about Shays' rebellion "I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical. Unsuccessful rebellions, indeed, generally establish the encroachments on the rights of the people which have produced them.... It is a medicine necessary for the sound health of government."

The American people have been violated both by the Government and by the Financial Elites (comprised of both Republicans and Democrats). Now the Obama administration and the Democrats in Congress appear to want to 'pass over' the violations, AND to extend the power of the government to violate our rights. I Am Not suggesting an armed rebellion, but rather a political one to end these abuses. A political pundit once stated that the only difference between the Democrats and Republicans, was the velocity of which their knees hit the floor when the wealthy and lobbyists enter the room. Can You Take an Honest Look at Yourself, And Say That You like the Situation We Are Now in?

Russia test-fires intercontinental missile

Russia test-fires intercontinental missile

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Russia successfully test-fired a Topol intercontinental ballistic missile on Friday as part of checks needed to extend its service life for up to 22 years, Russian media reported.

The Topol was fired from the Plesetsk cosmodrome, nestled among the forests of northern Russia, and successfully hit the test site on Russia's Pacific peninsula of Kamchatka, 6,000 km (3,700 miles) to the east.

"This launch confirmed the time extension for the Topol group of missiles for up to 22 years," Itar-Tass news agency quoted Colonel Alexander Vovk of the Russian Strategic Rocket Forces as saying.

Test launches of new missiles have become routine in recent years, and the Kremlin says the financial crisis will not discourage it from spending as much money as needed on defense. The Topol, which entered service in 1985, was last test-fired last October.

Russia has extended the highly mobile Topol's use way past the 10-year guaranteed operational life set by the manufacturer. It is designed to pierce anti-missile defense systems such as those that the United States has said it wants to build in Eastern Europe.

The RS-12M Topol, called the SS-25 Sickle by NATO, has a maximum range of 10,000 km (6,125 miles) and can carry one 550-kiloton warhead.

Colombian Fact-Finding Mission "Shocked"

Colombian Fact-Finding Mission "Shocked"

By Constanza Vieira

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A delegation of seven British Labour members of parliament and 10 trade union leaders from the U.S., Canada and Britain said they were in a "state of shock" over what they heard during a week-long fact-finding mission to Colombia.

In a strongly worded statement read out in Spanish at a press conference Wednesday in the Colombian Congress, the parliamentary and labour mission accused the government of right-wing President Álvaro Uribe of being an "accomplice of crimes against humanity."

Crimes against humanity are defined by Article 7 of the Rome Statute of the International Criminal Court (ICC), based in this city in the Netherlands, as "any of the following acts when committed as part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack: murder; extermination; enslavement; deportation….; imprisonment…; torture; rape, sexual slavery, enforced prostitution, forced pregnancy, enforced sterilisation…; persecution against any identifiable group or collectivity on political, racial, national, ethnic, cultural, religious, gender (grounds)...; (or) enforced disappearance of persons".

The Rome Statute went into effect in Colombia in November 2002 for crimes against humanity, as well as genocide, which is defined in Article 6. But this country availed itself of Article 124, which allows a signatory state to refuse to accept the jurisdiction of the ICC with respect to war crimes "'alleged to have been committed by its nationals or in its territory" for seven years – a period that ends in November this year.

For now, the ICC prosecutors are keeping Colombia under observation.

"We have no doubts, given the evidence received, that the Colombian government of Álvaro Uribe and the security forces are accomplices in human rights abuses," says the communiqué read out by British Labour MP Sandra Osborne, a member of the House of Commons Foreign Affairs Committee.

"We are also convinced that the murderous activities of the paramilitaries are approved of and actively supported by the government and the army," the statement says, referring to the far-right militias commanded by drug lords, which partially demobilised after negotiations with the Uribe administration.

These crimes are aggravated by the impunity enjoyed by the perpetrators, and the judicial system’s failure to prosecute the criminals and those who gave the orders, it adds.

Colombia has been in the grip of a civil war since 1964, when the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN) guerrillas rose up in arms.

The paramilitary groups, in their present form, emerged in the 1980s to combat the leftist insurgents alongside the government forces.

An October 2008 report by the London-based rights watchdog Amnesty International states that 1,300 civilians were killed outside of combat in 2006 and 1,400 in 2007, while some 270,000 people fled their homes in the first half of 2008 - a 41 percent increase in forced displacement with respect to the previous year.

According to the European Union, only eight out of 100 homicides lead to a conviction in Colombia, and at least 1,200 civilians have been killed since mid-2002 and passed off by the Colombian military as guerrillas or paramilitaries killed in action.

In its seven-day visit to Colombia, the mission gathered information on human rights abuses and violations of labour rights, and met with a wide range of actors from Colombian society, covering civic, political, judicial and military interests and including trade unionists, students, teachers, indigenous people, peasant farmers, trade union lawyers, human rights defenders and released FARC hostages, said the statement read by Osborne.

Since 2008, the FARC has released eight politicians it had taken hostage with the hopes of negotiating with the government a swap of hostages for imprisoned rebels.

Three other political hostages, including former presidential candidate Ingrid Betancourt, escaped or were rescued, along with a number of soldiers and police being held by the guerrillas.

The parliamentary and labour delegation travelled to the eastern oil-producing department (province) of Arauca, on the border with Venezuela, where they heard the personal accounts of local people affected by the war, and visited the women’s prison and imprisoned local human rights activist Martín Sandoval.

They also met with Uribe and high-level officials, but their reaction was not published locally.

Instead of imprisoning the real criminals, the government has imprisoned trade unionists, members of the political opposition, and human rights defenders like Sandoval, says the statement, which calls for his "immediate release, and the immediate release of other political prisoners and trade unionists."

The members of the mission announced that when they return to their countries, "we will be calling for an immediate end to all military and political support for the Colombian government."

They also urged that no free trade agreement with Colombia be approved until human and labour rights are respected in an internationally verifiable manner.

The free trade deal negotiated with the United States has been held up by Democratic lawmakers in the U.S. Congress over similar concerns about violence against trade unionists in Colombia.

But in Canada, the conservative government of Prime Minister Stephen Harper tabled the Canada-Colombia free trade agreement on Mar. 26, which means parliament had 21 days from that date to debate its ratification.

And the second round of talks between three Andean countries – Colombia, Peru and Ecuador – and the European Union on a free trade deal took place in mid-March in Lima, Peru.

The fact-finding mission warned that it would publicly expose the complicity of multinational corporations in violations of human and labour rights in Colombia.

The members of the mission said they would work to put an end to the criminalisation of legitimate, democratic opposition, support eventual peace talks and a hostage-prisoner swap between the FARC and the government, and work to bring to a halt the extrajudicial executions of civilians passed off as battlefield casualties by the Colombian army.

The delegation included Labour MP Peter Kilfoyle, a former British defence minister who resigned in 2000, unhappy with some of then Prime Minister Tony Blair’s policies.

The mission was organised by Justice for Colombia, a British NGO created in 2002 – a year when 184 trade unionists were killed in this country, considered the most dangerous place in the world to be a labour activist.

Justice for Colombia is a coalition of 40 British trade unions, along with trade councils, NGOs, academics and MPs, "who support the Colombian people and trade union movement in their struggle for peace with social justice."

In September 2007, Justice for Colombia drew the ire of Colombian Defence Minister Juan Manuel Santos when it urged Britain’s recently inaugurated Prime Minister Gordon Brown and his foreign secretary to halt military aid to Bogotá.

British military aid to Colombia is second only to U.S. aid, of which Colombia is the third biggest recipient, after Israel and Egypt.

The 2007 "End British Military Aid to Colombia Petition" was signed by all of the then members of the Labour Party National Executive Committee who did not form part of the government, all of the Labour MPs in the European Parliament, dozens of British Labour MPs, and all of the trade unions affiliated with the Labour Party.

"Colombians tend to believe this kind of declaration is extremely important, and that something will start to happen now," like a change in policies of military aid to the government, human rights activist Lilia Solano told IPS by telephone from Bogotá.

"But we have to wait and see what results will be achieved; we aren’t sure it will be that effective," she added.

Banks accused of profiteering as they triple mortgage margins

Banks accused of profiteering as they triple mortgage margins

Banks have been accused of profiteering as new figures show they have almost tripled their margins on mortgages in the past year.

The difference between the Bank of England's benchmark interest rate and the average rate on a tracker mortgage has risen from 1.18 per cent at the beginning of April last year to 3.20 per cent today, according to personal finance website

The Bank of England has aggressively cut its Bank rate from 5 per cent in October to a historic low of just 0.5 per cent in an attempt to revive the economy.

While existing borrowers with a tracker mortgage will be enjoying the drop in rates, new borrowers are being badly hit. HSBC has announced it is launching a tracker loan charging 4.09 per cent above the Bank rate.

The margins on the average two-year fixed rate deal has risen from 1.19 per cent above the two-year swap rate - which is the rate that lenders use to price their fixed rate mortgages – at the beginning of April last year to 2.41 per cent above the rate today, Moneyfacts said.

Despite two-year swap rates dropping by 3.03 per cent since the beginning of last October, the average two year fixed rate mortgage has been reduced by just 1.64 per cent over the same period, it said.

It comes after billions of pounds of financial support from the Government has been given to the banks during the credit crisis.

Andrew Montlake, of mortgage brokers Coreco, said: "Banks are taking the opportunity to widen their margins to claw back of the profits that they've lost during the credit crisis. Every time they launch a new range of deals, the margins seem to be even bigger, specifically on tracker rate deals."

The average rate charged on a two-year fixed rate deal is currently 4.64 per cent, compared with 3.70 per cent for the average two-year tracker, according to the research.

Michelle Slade, analyst at, said: "Since base rate started falling in October 2008, mortgage lenders have continued to increase their margins.

"While existing tracker customers have benefited, anyone looking for a new tracker deal has seen the margin over base continue to increase. The vast majority of providers have passed much bigger cuts to their savings rates, when compared to their standard variable rate as once again they increase their margins."

An HSBC spokesperson said: "HSBC's tracker mortgages are regularly the lowest in the market. Mortgage interest rates reflect the risk of lending in the market, in the current environment it is not surprising that they are higher than previous years."

Bailed-out banks face probe over fee hikes

Bailed-out banks face probe over fee hikes

David Enrich and Marshall Eckblad

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THE US committee overseeing federal banking-bailout programmes is investigating the lending practices of institutions that received public funds, following a rash of complaints about increases in interest rates and fees.

Since the Troubled Asset Relief Program was launched in October, banks bolstered by capital infusions have boosted charges on a wide range of routine transactions, hiked rates on credit cards and continued making loans criticised as predatory by consumer advocates.

The TARP funds are intended to open lending spigots and make it easier for people to borrow money.

Last week, for example, Bank of America told some customers that interest rates on their credit cards will nearly double to about 14 per cent. The bank, which got $US45 billion ($62.6 billion) in capital from the US Government, also is imposing fees of least $US10 on a wide range of credit-card transactions.

Citigroup, another recipient of government cash, is trying to entice customers to borrow at high rates.

“You could get $US5000 today,” Citigroup's consumer-finance unit wrote in fliers mailed to customers. The ads don't disclose that the loans often carry annual interest rates of 30 per cent.

The interest rates “compare competitively to similar offers in the market” and vary depending on the creditworthiness of borrowers, a Citigroup spokesman said. Citigroup has received $US50 billion in capital from taxpayers, and the US government will soon own as much as 36 per cent of the company's common stock.

“To continue to offer competitive products and services and responsibly lend in this current environment, we must adjust our pricing,”said a Bank of America spokeswoman about the company's new fees and interest rates.

The US Government's ownership stakes in hundreds of banks, as well as political ire stoked by lucrative pay and perks, are raising the spectre of new regulation on basic banking practices. First-quarter results due starting this week will be scrutinised for signs of how much taxpayer-funded capital is being funnelled into loans.

Elizabeth Warren, chairwoman of the Congressional Oversight Panel, the body named by US Congress to oversee the federal bailout, said the panel is working on a report examining instances of potentially inappropriate lending by banks that got taxpayer capital. “The people who are subsidising the activities of the banks through their tax dollars are the same people who are furnishing the high profits through consumer lending,” Ms Warren said. “In a sense, we're asking taxpayers to pay twice.”

Last month, a Senate committee narrowly approved a bill that would rein in many credit-card marketing and pricing policies, including ballooning interest rates. Proponents of the legislation say many of the largest card issuers have received government aid and so should be subject to greater scrutiny.

Banks say that raising fees and rates, even on low-risk customers, is a legitimate way to recoup some of the costs of the bad loans still on their books. They also say taxpayers have a financial interest in seeing the industry quickly return to profitability. Any revolt over price hikes could intensify the crisis by depriving institutions of a key income source, say banks. New restrictions on these lending practices “may truly have an impact on profitability”, said Gerard Cassidy, a bank analyst with RBC Capital Markets. The controversy underscores the quandaries of Washington's dual role as owner and overseer of US banks. While shoring up the banking system is a goal of federal regulators and the White House, what is good for the bottom line of banks is not necessarily good for their customers.

So far, regulators are focusing mostly on nursing banks back to health.

“To my knowledge, the TARP funds weren't supposed to change consumer-protection requirements that apply to all institutions,” Comptroller of the Currency John Dugan said. Mr Dugan's office oversees most of the nation's biggest banks.

One bank that advocacy groups like the Consumer Federation of America and the Consumers Union are watching is Pacific Capital Bancorp. The Californian bank-holding company got $US180.6 million from TARP and is an issuer of so-called tax-refund anticipation loans. These are loans made to people who want immediate access to their state and federal tax refunds, and typically have annual interest rates that exceed 100 per cent.

Debbie Whiteley, a Pacific Capital spokeswoman, said the bank was not using TARP capital to make tax-refund loans. Still, the government infusion is helping to improve the bank's overall financial health, according to the company, meaning it will be in better position to make a variety of loans.

Regional banks US Bancorp and Wells Fargo offer “cheque account advance” loans that allow customers with direct-deposit accounts to access funds before they are credited to a customer's account balance. The short-term loans carry annual interest rates of about 120 per cent.

US Bancorp and Wells Fargo said the loans satisfied customer needs for emergency credit. The cost to borrowers was relatively low, according to the banks, because the loans usually were repaid within weeks.

Last year, US banks and savings institutions collected $US39.5 billion in deposit-account charges, and fees for everything from ATM usage to balance transfers accounted for about 25 per cent of the industry's total revenue, according to the Federal Deposit Insurance Corp.

A big chunk of that revenue comes from overdraft fees. The industry's median overdraft charge is up 10 per cent to $US27.50 in the six months since the government began pumping capital into banks, according to Moebs Services, a research firm. The median charge previously held steady for five years.

Meanwhile, the average annual credit-card rate has climbed to 12.35 per cent from 11.38 per cent six months ago, according to

The Government has demanded that TARP recipients provide detailed accounts of what they're doing with taxpayer-funded capital. According to an analysis of federal data by The Wall Street Journal, overall loan volume at 470 banks that got TARP capital was down 1 per cent from the quarter ended September 30, compared with a 2.2 per cent decline at banks with no capital infusion as of March 20.

Obama Administration Endorses Continued Spying on Americans

Obama Administration Endorses Continued Spying on Americans

Justice Department Moves to Squash NSA Spying Suits

by Tom Burghardt

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Since fatuously declaring his to be a "change" administration, President Barack Obama has quickly donned the blood-spattered mantle of state secrecy and executive privilege worn by the Bush regime.

On Friday April 3, the Department of Justice filed a motion to dismiss one of the Electronic Frontier Foundation's (EFF) landmark lawsuits against illegal spying by the National Security Agency (NSA).

That suit, Jewell v. NSA, was filed last September against the NSA, NSA Director Keith B. Alexander, President George W. Bush, Vice President Richard Cheney, U.S. Attorney General Michael Mukasey and Mike McConnell, Director of National Intelligence. But with the departure of the Bush gang, the defendants now include President Barack Obama, NSA Director Keith B. Alexander, U.S. Attorney General Eric Holder and Dennis C. Blair, Director of National Intelligence.

When the suit was filed against the government, EFF declared:

The lawsuit, Jewel v. NSA, is aimed at ending the NSA's dragnet surveillance of millions of ordinary Americans and holding accountable the government officials who illegally authorized it. Evidence in the case includes undisputed documents provided by former AT&T telecommunications technician Mark Klein showing AT&T has routed copies of Internet traffic to a secret room in San Francisco controlled by the NSA. ("EFF Sues NSA, President Bush and Vice President Cheney to Stop Illegal Surveillance," Electronic Frontier Foundation, Press Release, September 18, 2008)

Though the drapery in the Oval Office may have changed, the criminal acts against American citizens and legal residents by unaccountable intelligence agencies and privateers in the corporate security industry continue apace.

Based on information disclosed by AT&T whistleblower Klein and other sources, including The New York Times, the suit seeks to "halt illegal, unconstitutional, and ongoing dragnet surveillance" by AT&T and other grifting telecoms of the "communications and communications records" of their customers.

Klein told the Court in a sworn affidavit that AT&T's internet traffic in San Francisco runs through fiber-optic cables at the company's Folsom Street facility. Using a device known as a splitter, a complete copy of internet traffic that AT&T receives--email, web browsing requests and other electronic communications sent by AT&T customers, or received from people who use another internet service provider--was diverted onto a separate fiber-optic cable connected to the company's SG-3 room, controlled by NSA. Only personnel with NSA clearances--either working for, or on behalf of the agency--have access to this room.

The evidence of corporate malfeasance presented by Klein and other whistleblowers, led the civil liberties' watchdog group to assert that AT&T's "deployment of NSA-controlled surveillance capability" is not limited to the corporation's San Francisco facility "and is consistent with an overall national AT&T deployment to from 15 to 20 similar sites, possibly more. This implies that a substantial fraction, probably well over half, of AT&T's purely domestic traffic was diverted to the NSA. At the same time, the equipment in the room is well suited to the capture and analysis of large volumes of data for purposes of surveillance."

As I reported in November, among the firms supplying the surveillance products hardwired into America's telecommunications infrastructure is Verint Systems Inc. (formerly Comverse InfoSys). The firm was founded by former Israeli intelligence officer, Jacob "Kobi" Alexander, a corporate grifter who fled the United States for Namibia after being indicted in 2006 on thirty-two counts of fraud. Alexander hatched a backdated stock options scheme that netted him $138 million in profits looted from company shareholders.

While Alexander and his family may be safely ensconced in the dry but relatively safe harbor of Windhoek, Verint's security products live on, providing "actionable intelligence solutions" to repressors world wide. According to a Business Week company profile,

Verint Systems, Inc. provides analytic software-based solutions for the security and business intelligence markets. Its analytic solutions collect, retain, and analyze voice, fax, video, email, Internet, and data transmissions from voice, video and IP networks for the purpose of generating actionable intelligence for decision makers. The company primarily offers communications interception solutions, such as STAR-GATE, RELIANT, and VANTAGE; networked video solutions that include NEXTIVA; and contact center actionable intelligence solutions, which include ULTRA. Verint Systems serves government entities, global corporations, law enforcement agencies, financial institutions, transportation agencies, retail stores, utilities, and communications service providers. (Verint Systems, Inc. Business Week, Information Technology Sector, accessed April 11, 2009)

Other corporate outfits providing similar intelligence "solutions" to America's telecommunications firms and agencies such as the CIA, FBI, Department of Homeland Security, Defense Intelligence Agency, National Reconnaissance Office and the National Geospatial-Intelligence Agency include Verint's rival Narus (another spooky Israeli security firm), Siemans and Ericsson.

Despite the economic meltdown, Washington Technology reported March 27 that "technology companies are poised to tap into the billions of dollars that will flow from the American Recovery and Reinvestment Act into new federal, state and local initiatives." Many of the initiatives include new corporate welfare projects devised by the Department of Homeland Security and the FBI to "keep America safe."

In this context, the Obama administration's drive to preserve the NSA's ability to illegally spy on Americans is intimately connected to the corporatist bottom line. After all, Democrat or Republican, the business of government is business.

Arguments in San Francisco federal district court by U.S. Attorneys have been described by constitutional law experts as being "worse than Bush." In their motion to dismiss Jewell, the Obama administration cited the same perverse logic of the previous regime: that the state secrets privilege requires the court to dismiss the issue "out of hand."

Douglas Letter, U.S. Terrorism Litigation Counsel for Obama's Department of Justice, argued that simply allowing the case to proceed "would cause exceptionally grave harm to national security."

Yet more pernicious--and unprecedented--arguments followed. "The DoJ," according to EFF, now claim "that the U.S. Government is completely immune from litigation for illegal spying--that the Government can never be sued for surveillance that violates federal privacy statutes."

Arguing that the state possesses "sovereign immunity," the "change" administration now claims that under provisions of the disgraceful USA PATRIOT Act--a draconian law rammed through Congress in the wake of the 9/11 attacks--the state is "immune from suit under the two remaining key federal surveillance laws: the Wiretap Act and the Stored Communications Act."

In practice, this means that under a new, ludicrous interpretation of the Orwellian PATRIOT Act, the government can never be held accountable for illegal surveillance under any federal statute. As Glenn Greenwald points out in Salon,

In other words, beyond even the outrageously broad "state secrets" privilege invented by the Bush administration and now embraced fully by the Obama administration, the Obama DOJ has now invented a brand new claim of government immunity, one which literally asserts that the U.S. Government is free to intercept all of your communications (calls, emails and the like) and--even if what they're doing is blatantly illegal and they know it's illegal--you are barred from suing them unless they "willfully disclose" to the public what they have learned. ("New and worse secrecy and immunity claims from the Obama DOJ," Salon, April 6, 2009)

EFF attorney Kevin Bankston told Salon: "This is the first time [the DOJ] claimed sovereign immunity against Wiretap Act and Stored Communications Act claims. In other words, the administration is arguing that the U.S. can never be sued for spying that violates federal surveillance statutes, whether FISA, the Wiretap Act or the SCA."

In their motion to dismiss, DoJ attorneys--like their predecessors--argue on Page 13 of the Government's brief that "An assertion of the state secretes privilege "must be accorded the 'utmost deference' and the court's review of the claim of privilege is narrow." Kasza, 133 F.3d at 1166; see also Al-Haramain, 507 F3d at 1203 ('[W]e acknowledge the need to defer to the Executive on matters of foreign policy and national security and surely cannot legitimately find ourselves second guessing the Executive in this arena')."

On Page 16, the state contends that, "Finally, all of the plaintiffs' claims require the disclosure of whether or not AT&T assisted the Government in alleged intelligence activities, and the DNI again has demonstrated that disclosure of whether the NSA has an intelligence relationship with a particular private company would also cause exceptional harm to national security--among other reasons by revealing to foreign adversaries which channels of communication may or may not be secure."

If U.S. District Judge Judge Vaughn Walker rules in the state's favor and dismisses Jewell, constitutional protections under the fourth amendment guaranteeing "the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures," would be a meaningless charade.

There is however, a precedent for the Obama administration's blatant violation of our rights: that of their predecessors in the Bush regime's Office of Legal Counsel.

According to an October 23, 2001 Department of Justice memorandum titled Authority for Use of Military Force To Combat Terrorist Activities Within the United States, authored by torture-enabler and OLC head, John C. Yoo, the military could be deployed domestically to interrogate, detain, raid and spy on Americans, without having to comply with constitutional guarantees under the Bill of Rights. Yoo advised the Oval Office:

Fourth, we turn to the question whether the Fourth Amendment would apply to the use of the military domestically against foreign terrorists. Although the situation is novel (at least in the nation's recent experience), we think that the better view is that the Fourth Amendment would not apply in these circumstances. Thus, for example, we do not think that a military commander carrying out a raid on a terrorist cell would be required to demonstrate probable cause or to obtain a warrant. (Page 2)

Additionally, having decided that the President enjoys plenary, that is, unlimited power to carry out the "war on terror" Yoo concludes, after dispensing with Fourth Amendment protections that,

First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully. ...

The current campaign against terrorism may require even broader exercises of federal power domestically. Terrorists operate within the continental United States itself, and escape detection by concealing themselves within the domestic society and economy. While, no doubt these terrorists pose a direct military threat to the national security, their methods of infiltration and their surprise attacks on civilian and governmental facilities make it difficult to identify any front line. Unfortunately, the terrorist attacks of September 11 have created a situation in which the battlefield has occurred, and may occur, at dispersed locations and intervals within the American homeland itself. As a result, efforts to fight terrorism may require not only the usual wartime regulations of domestic affairs, but also military actions that have normally occurred abroad. (Pages 24, 25)

Indeed, the Bush administration's so-called Terrorist Surveillance Program (TSP) transformed the United States into a limitless battlespace where anything goes. From warrantless wiretapping of telephone and internet communications, the seizure of business and medical records, as well as the illegal--and indefinite--detention of citizens and legal residents as "unlawful enemy combatants," Yoo's memorandum provided the steel and concrete that gave form to the architectural blueprints for a presidential dictatorship.

Instructively, these memos were not withdrawn until 2008. However, in moving to suppress Jewell, Obama's Justice Department and their private partners in the telecommunications industry in practice, are continuing the same repressive policies.

As Wired reported back in January, "NSA whistleblower Russell Tice" revealed "that the National Security Agency spied on individual U.S. journalists, entire U.S. news agencies as well as 'tens of thousands' of other Americans."

Tice said on Wednesday that the NSA had vacuumed in all domestic communications of Americans, including, faxes, phone calls and network traffic.

Today Tice said that the spy agency also combined information from phone wiretaps with data that was mined from credit card and other financial records. He said information of tens of thousands of U.S. citizens is now in digital databases warehoused at the NSA.

"This [information] could sit there for ten years and then potentially it marries up with something else and ten years from now they get put on a no-fly list and they, of course, won't have a clue why," Tice said.

In most cases, the person would have no discernible link to terrorist organizations that would justify the initial data mining or their inclusion in the database. (Kim Zetter, "NSA Whistleblower: Wiretaps Were Combined with Credit Card Records of U.S. Citizens," Wired, January 23, 2009)

As George Washington University Law Professor and constitutional scholar, Jonathan Turley, told MSNBC's Keith Olbermann on "Countdown" April 7,

I think right now, the Bush people are bringing out their mission-accomplished sign, because they've not only gotten Obama to protect Bush and Cheney and others from any criminal investigation on torture, but he's now gone even further than they did in the protection of unlawful surveillance. This is the ultimate victory for the Bush officials. They have Barack Obama adopting the same extremist arguments, and in fact exceeding the extremist arguments made by President Bush...

You cannot any longer suggest that President Obama is advancing the civil liberties and the privacy interests that he promised to advance. This is a terrible roll-back. It's a terrible decision. ("Countdown" with Keith Olbermann, MSNBC, Tuesday, April 7, 2009)

And with Congress' passage of the abominable FISA Amendments Act (FAA) last July, handing the NSA carte blanche to continue warrantless spying and driftnet surveillance of Americans, granting grifting telecom giants such as AT&T, Sprint and Verizon get-out-of-jail-free-cards in the form of retroactive immunity for their collusive and wholly illegal activity with NSA and other state agencies, America's post-constitutional new order continues apace. As I reported last September, "the extent of these illegal programs have revealed, the 'enemy' is none other than the American people themselves!"

Three months into the Obama administration, the contours of a new and improved "liberal" police state reveal the same rotten, nidorous core as that of their predecessors. This time around however, the mailed fist of the capitalist state is gussied up with Smiley Face emblems and Hello Kitty stickers.

New York police attack protesting New School students

New York police attack protesting New School students

By Sandy English

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In a display of brutality, the New York City Police Department (NYPD) arrested 22 students who had occupied the premises of the New School in Manhattan’s Greenwich Village last Friday. Students were struck by police without provocation and thrown to the ground, and others were pepper-sprayed.

Approximately 60 students occupied a New School building on Friday morning. The students were demanding the resignation of New School president Bob Kerrey, the former Nebraska governor and senator, and a Vietnam war criminal, as well as the school’s autocratic executive vice president, James Murtha.

More than 20 police, wearing helmets, carrying plastic handcuffs, and wielding batons and pepper-spray, appeared at the school as the occupation began at about 5:30 a.m. Police presence increased throughout morning, as the police put up barriers and crime-scene tape to seal off the area.

Police vans and a truck from the Emergency Service Unit, the police unit that manages high-powered weapons and special siege and anti-riot tactics, appeared within a few hours. Soon, scores of police had surrounded the school building.

Emergency medical personnel and the Fire Department were also on hand. According to the New York Times, by 11:00 a.m. there were more than 100 police vehicles present and several mounted officers. Police helicopters circled overhead.

At about 11:30, police used bolt cutters to remove the chains used by the students to lock the doors and entered the building. They told the students to kneel on the ground and remove their backpacks. They were handcuffed one at a time.

As some of the students tried to exit by a side door in the building, police pepper-sprayed them and forced them back inside. Police chased down protesters on sidewalks near the school, striking some and throwing them to the ground, as videos by independent photographs have documented.

An NYPD spokesman, Paul J. Browne, denied pepper-spray or mace was used in the arrests, although, when later confronted with video evidence, he admitted that this had happened. Speaking of the unprovoked assault by one cop in attacking a protester, also caught on video, Brown told the media, “He pushed him and he fell down.”

Students arrested face charges of burglary, riot and criminal mischief, and have been suspended from the New School pending administrative review. As the action was going on, President Kerrey announced that he no longer considered the protesters students.

On Friday evening, more than 200 people, most of them students, assembled at nearby Union Square to protest the police behavior. The group spontaneously began to march toward Kerrey’s residence on 11th Street, but was turned back by police who arrested at least two of the demonstrators.

Donna Lieberman, executive director for the New York Civil Liberties Union, noted after viewing the video:

“What appears on the video is someone yelling at the cops and getting punched in the face for it and thrown to the ground and arrested. The Police Department has no authority to use physical force on somebody in this situation and they have no authority to arrest people for yelling at them; that is a violation of civil rights plain and simple.”

The faculty union, ACT-UAW Local 7902, which represents more than 4,000 part-time and adjunct faculty at the New School and at nearby New York University, issued a statement that said in part that it “is gravely concerned with the Kerrey administration’s harsh response to the New School students who recently occupied 65 Fifth Avenue, including a massive show of police force.”

Bob Kerrey has been a highly controversial figure since his installation as the New School’s president in 2001 because of his role in the Thanh Phong Massacre in Vietnam in February 1969.

That such a man could become the head of the New School, historically a left-leaning institution, whose faculty has included John Dewey, W.E.B. Dubois, James Baldwin and Hannah Arendt, was rightly seen by many students and faculty at the time as a travesty.

At the time, the World Socialist Web Site noted that Kerrey’s appointment “testifies to the protracted decay of liberalism in the generation which has passed since conflicts over the Vietnam War rocked every college campus in America.”

Kerrey’s appointment as president of the New School reflected the debased political environment that would allow the US government to again embark on a mass killing in another small country in a few years time, this time in Iraq—a war that enjoyed Kerrey’s vocal political support.

Kerrey’s undemocratic methods of administration have made him an increasingly unpopular figure at the New School. In December, the New School Faculty senate passed a resolution of no confidence in him in a vote of 74-2.

Approximately 75 students occupied the building in December for 30 hours, also demanding the resignation of Kerrey, a greater say in the administration of the school and full disclosure of the school’s investments. That occupation ended peacefully.

In a move typical of the Kerrey-Murtha administration, earlier this month 12 artists who teach part-time at the New School’s Parsons School of Design were abruptly laid off without explanation via an e-mail message.

Most noteworthy in Friday’s events was the excessive reaction and use of force by the NYPD against a small, peaceful occupation by the students. There can be no question that a decision was taken by the administration of Mayor Michael Bloomberg and the NYPD, in consultation with Bob Kerrey, to mobilize the police in a show of force totally disproportionate to the ostensible objective of removing a relative handful of students from a school building.

Behind this lies more than the organic hostility of New York’s billionaire mayor and the former war criminal and establishment politician turned university president to the democratic rights of protesting students.

The deteriorating social conditions of the working class in New York City—a doubling of unemployment in a year, increased homelessness and use of food banks, evictions and foreclosures, together with employer demands for concessions and wage cuts—have created a volatile situation in which mass dissent by millions of workers could become the defining political feature in the city in the next few years.

The response of the city government has been to increase state-police methods of surveillance and repression. Already, the NYPD’s notorious stop-and-frisks increased from 468,932 in 2007 to 531,159 last year. The Center for Constitutional Rights (CCR) noted that more than 80 percent of those stopped are Latino or black. It is no secret that the vast majority of these are working class youth.

The CCR observed, “The remarkably low rates of NYPD initiated stops-and-frisks that result in arrests, summons, weapons and/or contraband yielded make evident the ineffectiveness of this unconstitutional practice.”

NYPD behavior at demonstrations has become more violent and provocative in recent months, while the department has unveiled preparations for increasingly repressive measures.

At one of the January protests against the Israeli invasion of Gaza, police pepper-sprayed and beat protesters without provocation.

In February, the NYPD announced that it had begun training 130 additional cops in the use of semi-automatic rifles and “close quarter combat” at a training site in the Bronx that includes mock urban streets and buildings.

In March, the NYPD announced plans for a vast network of surveillance cameras in Midtown Manhattan. The system would collect data such as license plate numbers of vehicles and video of pedestrians, and would duplicate the security system already being installed in Lower Manhattan.

According to the New York Times, the so-called Lower Manhattan Security Initiative would include “mobile teams of heavily armed officers as well as closed-circuit television cameras, license plate readers and explosive trace detection systems.” More than 3,000 network cameras would be used.

The NYPD has also proposed a program known as Operation Sentinel in which every vehicle entering Manhattan would have its license plate photographed and scanned.

Pentagon holds war game simulating world financial crisis

Pentagon holds war game simulating world financial crisis

By Patrick Martin

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Two weeks before the April 2 economic summit of 20 leading capitalist countries in London, the American military held a war game simulating a concerted financial attack on the United States. The two-day event was held March 17-18 near Ft. Meade, Maryland, according to report published Thursday by the web site

Three participants discussed the first-ever financial crisis war game with the web site, describing how they sat “along a V-shaped set of desks beneath an enormous wall of video monitors displaying economic data.” One participant described the experience as “a little bit like Dr. Strangelove.”

Those engaged in the exercise included hedge fund managers, economics and business professors and executives from UBS, a major investment bank, invited by the Pentagon to help it role-play a global economic crisis in which five “teams” participated, representing the United States, Russia, China, East Asia and “all others.” Uniformed military officers and US intelligence agents observed the exercise and took notes.

According to the account published by, “the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war game. The United States remained the world’s largest economy but significantly degraded its standing in a series of financial skirmishes with Russia, participants said.”

The exercise was clearly driven by recent economic events. It was held only a few days after the Chinese premier publicly questioned the safety of his country’s vast holdings of dollar-denominated debt, including more than $1 trillion in US government bonds. Shortly after the exercise, a top Chinese central banker raised the possibility of replacing the dollar as the principal world reserve currency.

Professor Paul Bracken of the Yale School of Management told, “The purpose of the game is not really to predict the future, but to discover the issues you need to be thinking about.” The ongoing world financial crisis “loomed large over what everybody was doing,” he said.

Another participant underscored the political implications of the economic crisis, saying, “Why would the military care about global capital flows at all? Because as the global financial crisis plays out, there could be real world consequences, including failed states. We’ve already seen riots in the United Kingdom and the Balkans.”

While the event was not officially classified, many participants declined to discuss it with the press. It was conducted at the Warfare Analysis Laboratory in Laurel, Maryland, run by the Johns Hopkins University Applied Physics Laboratory.

Among the eventualities examined in the war game were the collapse of North Korea, a US blockade of Iran, Russian manipulation of natural gas prices, and increasing tension between China and Taiwan, leading to China dumping some of its US dollar holdings. A group of referees dubbed the “White Cell” decided what the impact of the moves by each team would be.

According to, “At the end of the two days, the Chinese team emerged as the victors of the overall game-largely because the Russian and American teams had made so many moves against each other that they damaged their own standing to the benefit of the Chinese.”

Bracken told that the war game shed light on the connection between political-military events, like the US embargo of Iran, and the economic consequences, and also demonstrated that China could successfully sell off at least a portion of its dollar assets, undermining the financial standing of the United States, without wiping out its own reserves.

US security officials have already pointed to the political impact of the world financial crisis in terms of threats to the dominant position of American imperialism. Admiral Dennis Blair, Obama’s choice to head the US spy apparatus as director of national intelligence, told a Senate hearing February 12 that the economic crisis, not terrorism or the wars in Iraq and Afghanistan, is “the primary near-term security concern” of Washington.

In delivering the “annual threat assessment” coordinated by the DNI across 16 separate US intelligence agencies, Blair was setting aside the Bush administration’s professed obsession with Al Qaeda, as well as more traditional security concerns with Russia and China, to suggest that “the global economic crisis and its geopolitical implications” constituted a greater danger.

He described the financial crisis in apocalyptic terms, as “the most serious one in decades, if not in centuries,” and cited the possibility that economic turmoil could produce political instability and “high levels of violent extremism,” not only in the Middle East and South Asia, but in Latin America, Africa and the former Soviet Union.

Only a month after this blunt warning of the threat of social revolution, the Pentagon held its exercise simulating the geo-strategic impact of the crisis on relations among the great powers. It is only logical to assume that similar exercises, albeit unpublicized, are being conducted to prepare the US military forces to repress revolutionary uprisings of the working class both abroad and at home.

Auto workers’ jobs & pensions threatened

Auto workers’ jobs & pensions threatened

By Martha Grevatt

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“We think we can have a successful U.S. auto industry. But it’s got to be ... much more lean, mean and competitive,” President Barack Obama told CBS’s “Face the Nation” on March 29. The next day Obama presented the report of the Auto Task Force—composed of bankers and capitalist think tankers—which rejected restructuring plans submitted Feb. 17 by General Motors and Chrysler.

Workers on the shop floor know what is in store when they hear “lean, mean and competitive.” It was the bosses, now crying poverty, who paid auto workers to attend compulsory classes on “lean manufacturing.” What they call lean—which is supposed to mean less fat—in reality means tearing out the heart of shop floor operations: the hourly worker.

The “not lean enough” auto industry has reduced the active (not retired) membership of the United Auto Workers to 431,000, the lowest in six decades—and less than one-third of the 1.53 million members in 1979. It includes 132,000 hourly workers at the Detroit Three, many of whom are laid off. At GM 7,000 workers are either retiring or quitting for a lump sum. Thousands more are exiting Ford and Chrysler. If these workers are replaced it will be by a worker earning half their wages.

Workers of color and women have suffered the most from decades of downsizing. Some years ago one in 50 Black household incomes was tied to the auto industry. Now the figure is closer to one in 100. Cities with a majority-Black population like Detroit have been doubly hit by loss of jobs and erosion of the tax base.

Yet behind the rejection of the automakers’ proposals and the forced resignation of GM CEO Rick Wagoner is an assessment that the restructuring (including the cutting of 50,000 more jobs worldwide) does not go far enough.

The banker-advisors, as Obama stated, want a new “set of sacrifices.” (Detroit News, March 30) It could entail a “surgical” bankruptcy, presented as a quick fix that would, in a period of weeks or months, rid GM and Chrysler of their secured and unsecured debt. However, the experience of steel, airline and most recently UAW Delphi workers demonstrates the real purpose of bankruptcy: to break union contracts. It would force even more drastic concessions than those demanded with the $17.3 billion government loan to GM and Chrysler.

“We need to go deeper and we need to go faster,” concurred Fritz Henderson, who has assumed GM’s top post and is open to a “prepackaged” bankruptcy. (Detroit News, April 5)

GM has 60 days to revise its plan in order to receive further federal assistance. Chrysler has 30 days to finalize an alliance with the Italian automaker Fiat. Both must get lenders and bondholders to substantially reduce debt. Failure to meet these conditions could trigger bankruptcy proceedings and, for Chrysler, possible liquidation.

Workers’ pensions in grave danger

“GM does not provide golden parachutes. Rick [Wagoner] will receive the retirement benefits he accrued based on his nearly 32 years with GM,” said company spokesperson Greg Martin. It’s fair to assume that even if GM declared bankruptcy, Wagoner’s $23 million “pension” would be protected.

The pensions of current and future retirees, however, are in grave danger. Fearing that if they continued working they would lose their jobs and pensions, many younger workers with 30 years seniority retired. Now falling stock values have left their pension funds underfunded.

If GM or Chrysler were to declare bankruptcy they could halt additional contributions. If the automakers stopped issuing pension checks the quasi-governmental Pension Benefit Guarantee Corporation would cover at best 80 percent of earned benefits, but could pay as little as 30 percent to a retiree under 65 years old.

Furthermore, the PBGC does not guarantee health benefits. In 2007 the UAW agreed to set up a Voluntary Employee Beneficiary Association for retiree health care with a one-time sum paid by the automakers. The VEBA could run short of money, especially with a government requirement that half the payment be made in potentially worthless company stock.

Three-quarters of Chrysler’s secured debt is held by four banks—Goldman Sachs, Morgan Stanley, JP Morgan Chase and Citigroup. Together these banks collected $95 billion in bailout money and $16.8 billion in federal funds via the AIG rescue. One-twelfth of that sum could wipe out the $6.9 billion debt held by these thieves since the 2007 sale of Chrysler to Cerberus.

UAW members have been ordered to make sweeping contract changes in a possible violation of the National Labor Relations Act. Meanwhile, a federally orchestrated debt-for-equity swap stands to make these same four banks part owners of a reorganized Chrysler.

The new amalgam of owners, which also would include Fiat, Daimler, Cerberus and the federal government, could still find it in their interest to declare bankruptcy. The 39,000 Chrysler workers and hundreds of thousands at parts suppliers and dealers would just be collateral damage in the battle for more profit.

A job is a worker’s property right!

The only thing the UAW leadership seems to be thinking about is how to give more concessions to save the industry. Autoworkers need their own survival program. If technology and overproduction make fewer workers necessary, then it is time to demand a shorter work week with no cut in pay—and to insist that workers have a property right to their jobs. If the bosses can’t run a “viable” company, turn the plants over to the workers. If trillions can go to bail out the banks, why can’t billions be used to bail out pensions, which are workers’ deferred wages?

Some autoworkers have begun to fight back. Workers at parts suppliers are getting quite militant in Europe and Canada.

In March in Windsor, Ontario—across the river from Detroit—members of the Canadian Auto Workers staged a one-day sit-in at two plants of Catalina Precision Products, a Chrysler supplier. They were demanding the severance benefits owed them after operations closed.

In Belfast and two English towns workers at Visteon, a Ford spin-off, have occupied three plants since April 1. Spokesperson for the union UNITE, Davy McMurray, stated, “Ford gave these people an assurance that their terms and conditions would remain the same, including redundancy packages. ... the workforce intends to stay in the plant until Ford comes to the negotiating table.”

In Chatham, Ontario, members of UAW Local 251 are blocking entrances and exits to a plant owned by Transcast. They are determined to keep parts and tooling from leaving the factory. Their action affected production at Chrysler’s two Canadian assembly plants.

Now is the time for autoworkers and retirees to expand the fight from the extremities to the heart and take on the Detroit auto industry.

Wage-freeze protest shuts Greece down

Wage-freeze protest shuts Greece down

By Kathy Durkin

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Hundreds of thousands of angry Greek workers shut down government offices, closed the banks and disrupted transportation for 24 hours on April 2.

The nationwide strike, timed to coincide with the G20 economic summit in London, was aimed against government-imposed austerity measures, including a public sector wage freeze. Furious at rising unemployment and growing poverty, workers took direct action and demanded that they not be made to pay for Greece’s economic downturn.

They idled the shipping industry as commercial ships countrywide did not leave their ports. Air traffic controllers stopped working, grounding 190 international and domestic flights. Bus drivers turned off the ignitions of their vehicles, while train, ferry and railway workers didn’t go to work. Public transportation in Athens was totally disrupted.

Teachers went on strike and state-run schools were closed. Hospital workers stayed out, leaving only emergency staff and minimal medical services in place. Public workers’ absences shut down utility and other government services.

Journalists also joined the strike. News coverage was kept off the air, print and broadcast media were closed down, and publication was stopped for April 3 newspaper editions.

In Athens, more than 15,000 marchers held banners aloft, to the accompaniment of drums, as they demanded increases in wages and pension protection. Thousands more protesters rallied in the major commercial hub and port city of Thessaloniki, as strikes took hold there and in other major towns and cities.

The 24-hour walkout was called by Greece’s largest unions, the General Confederation of Workers and the Civil Servants’ Council, which represent one-half of the nation’s public and private sector workforce. The Greek Communist Party had a strong presence as well.

In January, Prime Minister Costas Karamanlis’ administration enacted a 28-billion-euro (37.6-billion-dollar) bank-support program, which had no provisions to aid workers, who are feeling deeply the effects of the steep economic crisis. Two months later, 4,000 people lost their jobs. Threats of more layoffs loom.

With 20 percent of workers earning less than 5,000 euros (6,712 dollars) annually, higher salaries are needed, not wage freezes or cutbacks.

This is the second nationwide strike to rock Greece since December, when the police shooting of a youth prompted rebellions, which were also spurred on by anger at growing unemployment and poverty.

A popular chant on April 2 which showed the political character of the Greek workers’ struggle and surely did not go unnoticed by the G20 was “No compromise! Capitalism must pay for the crisis!”

France: Workers seize bosses to save jobs

France: Workers seize bosses to save jobs

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It is hard—but not impossible—to lay off workers in France because they have legal rights to their jobs. But as the economic crisis tightens its grip on the French economy, more and more French bosses are resorting to layoffs.

Sequestration is the French word for making the bosses bargain when they instead want to lay off workers to make more money. Rather than sitting in to seize the plant, French workers sit around their bosses and insist they bargain. This happened four times in March.

French labor experts say that this tactic appears to be on the rise. What makes the French bourgeoisie tremble is that a majority of the French public support the tactic. (New York Times, April 3)

In the case of Caterpillar’s plant near Grenoble, where 733 jobs were on the line, a “sequestration” led the company to back down and French President Nicolas Sarkozy to declare that he would take “steps” to save the factory. The cops have publicly announced that they will not intervene against sequestrations as long as there is no violence or property destruction. (

The unions have been quick to point out that 90 percent of France’s bailout money is going to companies, not workers.

Henri Guaino, a special counselor to President Sarkozy, told a conservative French newspaper, “Every politician, every leader must consider this problem ... because everything can break down, the political risk is very high, the risk of violence, of revolt is very big, and the situation can degenerate.”