Thursday, June 26, 2014

Backing Banks Over Borrowers, California Judges Often Big Stakeholders in Same Banks

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Sue your bank in California over a wrongful foreclosure, and the best you're likely to get - if you have ironclad evidence that it broke the law - is a loan modification. That is, a "win" for the borrower usually means the bank keeps another customer and collects interest payments that are thousands of basis points above the level at which the bank is able to borrow from the Fed. Very often, however, homeowner lawsuits against the banks end in dismissal. In the parlance of the courts, the defendant's demurrer is sustained. Judges in California's superior courts often rule in favor of the banks, and the few lawsuits that filter up to the appeals courts and Supreme Court don't fare any better.

Why do the banks keep winning in court against borrowers alleging wrongful foreclosure, fraud and other abuses? Many borrowers and their lawyers say there's a judicial bias favoring the banks over homeowners, and that this bias is revealed by the economic position of the judges themselves. Most California judges are wealthy, and many of them hold significant investments in financial corporations and bonds, oftentimes even in the very same banks and mortgage lenders that have been sued by thousands of Californians over alleged fraud, deception and wrongful foreclosure.

Case in point: Baldwin v. Bank of America, a borrower lawsuit alleging wrongful foreclosure that battled all the way to the steps of California's Supreme Court. In 2007, Marvin Baldwin borrowed half a million dollars from J&R Lending to purchase a small three-unit apartment building in Long Beach, California. It was the height of the real estate bubble. Things quickly fell apart, and Baldwin ran into financial troubles.

In 2009, Bank of America, which by this point had acquired Baldwin's loan, notified him that he qualified for a federally sponsored HomeSaver Forbearance Program, a temporary bridge toward a permanent loan modification. Baldwin assumed that this was how the taxpayer-funded bank bailouts were translating into assistance for small landlords, so he cooperated with Bank of America and made payments under the program. But late in 2010, Bank of America recorded a notice of default against Baldwin's loan. Things looked dire.

Then in October, two months after filing the notice of default, Bank of America spun around again and appeared to be offering Baldwin a rescue plan. Bank of America announced a national moratorium on foreclosures due to the bank's acknowledgement of "irregularities" in its own internal processes. But then Bank of America reversed course yet again. In spite of announcing a moratorium on foreclosures - a moratorium stemming from the robo-signing scandal in which it was revealed Bank of America was routinely breaking the law - Marvin Baldwin's home was suddenly sold at auction on December 8, 2010.

He filed a lawsuit alleging breach of contract and fraud and sought injunctive relief to save his property. Baldwin alleged in his lawsuit that Bank of America violated California's Unfair Competition Law, which states, among other things, that a company cannot act in ways that would be likely to deceive a reasonable customer. The foreclosure "moratorium" Bank of America announced was one such deceptive practice because the bank lulled its borrowers into inaction, but then in fact continued to foreclose on properties and sell them, argued Baldwin and his lawyer. A year later, a trial court in Los Angeles sided with Bank of America, ruling the foreclosure and auction were perfectly legal, and that the bank's actions weren't deceptive.

Marvin Baldwin and his lawyer Lenore Albert appealed and argued their case before California's 2nd District Appellate Court. They lost again. The court's reasoning waded deep into gray areas, interpreting California's business laws, fraud laws, and real estate laws liberally in the Bank of America's favor.

Broad Pattern of Bias Seen

Plaintiffs' attorneys see a broad pattern in California in which the judiciary has routinely sided with the banks, even when the law could be interpreted to prevent or reverse a foreclosure.

"They don't want to be the judge that allows 40 million mortgages to go back to the borrowers," said Patricia Rodriguez, a lawyer who has filed homeowner lawsuits against banks and mortgage servicers in multiple California superior courts. "They don't want to possibly set a precedent." A single ruling against Bank of America that reverses a foreclosure sale because the bank didn't follow the letter of the law, for example, could spill over into thousands of other cases and potentially impact the profitability of the entire banking and loan servicing industry in Calfiornia, said Rodriguez.

"It was very clear that there is one form of justice for the small borrower and another form of justice for the moneyed interests," said Donald Adams, a retired California attorney. "It pains me to say that, but having seen the real estate debacle and the judiciary's protection of these fraudulent practices, I have reluctantly come to that conclusion."

As to why the banks so often come out winners, some point to the economic interests of the judges. The average superior court judge in California is paid a salary of about $150,000, but many of the judges are appointed to the bench after years of lucrative private practice where they earned many times this amount of money. Most judges worked as lawyers at large law firms and boutique offices whose clients include major corporations, real estate companies, banks, and others that can pay top dollar. By the time they become judges, most of these lawyers have amassed considerable financial wealth, and like other members of the top 1%  of income earners and wealth holders, most judges invest their fortunes in stocks and bonds. And after years of working for corporate clients, many judges have also been steeped in legal and social philosophies that favor the interests of the wealthy above those of consumers and debtors.

It's impossible to really know why California's judges have decided so many mortgage fraud and wrongful foreclosure cases in favor of the banks. Certainly it's a mix of factors, including ideology, but also the existing structure of the legal system that favors wealthy defendants like the banks over isolated and indebted plaintiffs; the banks can afford the best lawyers to represent them, and the biggest banks spend several billion each year lobbying the legislatures of all 50 states and the federal government to shape laws and regulations in their favor. It's an uneven playing field from the very start. But one possible way to gauge the possibility of bias in the legal system is to look at the economic interests of California's judges. Unlike ideology, the material interests of the judiciary can be observed and measured. Through their ownership of bonds in financial and mortgage lending companies, many judges own senior claims on debt, debt that is directly tied to the loans of homeowners. Judges also own equity stakes in corporations, the value of which hinges very much on residential mortgage loans and loan-servicing activities.

For example, 42 of California's 105 appeals court judges own stocks or bonds in financial companies. Seventeen of California's appeals court judges own stock in Bank of America, while 10 own stock in Citibank, 6 in US Bank, 5 in JPMorgan Chase, and 4 in Wells Fargo. These judges own significant numbers of shares, on average amounting to about $10,000, but some California appeals court judges have revealed in their financial disclosure reports that they own perhaps as much as $1 million in stock in these banks.

The implication here is that many of California's judges have a financial stake in the profitability of the largest mortgage servicers in the state, the same banks that have been brought before the courts in thousands of cases alleging wrongful foreclosure.

For example, in the Baldwin case, one of the appeals court judges who ruled in favor of Bank of America, Steven Suzukawa, owned as much as $100,000 in Bank of America stock, according to public records. Another of the judges on the three-judge appellate panel that heard the Baldwin case, Norman Epstein, owned as much as $10,000 in Bank of America stock. This was not disclosed, according to parties involved in the case. Under California's judicial ethics standards, a judge owning more than $1,500 in stock of a company that is party to a lawsuit should recuse themselves from the case.

Baldwin fought on after the setback in the appeals court which was decided in February of this year, petitioning the Supreme Court of California to hear the case. California's highest court refused to consider the lawsuit, dismissing the petition on May 21.

"I am a bit shocked at the failure to review such a new issue that affects thousands," wrote Lenore Albert, Baldwin's counsel, in an email.

One of the Supreme Court judges who was set to decide whether or not Baldwin would be heard had to recuse himself from even making that preliminary decision. Ming Chin, appointed to the California Supreme Court by former Governor Pete Wilson in 1996, disclosed as much as $100,000 worth of stock in Bank of America. Judge Chin also owns stock in Morgan Stanley, the investment bank that sold billions in mortgage-backed securities during the real estate bubble of the 2000s.

Majority of Justices Major Stakeholders in Banks

A majority of California's Supreme Court justices own major stakes in the banks that service the majority of mortgage loans in the state. Justice Marvin Baxter owns shares of Wells Fargo Bank and Citibank. Justice Carol Corrigan owns shares of Citigroup and part of a business called Redwood Mortgage Investors, a private investment company that owns tens of millions of dollars worth of residential mortgage loans in California. Justice Joyce Kennard owns stock in JPMorgan Chase and Citibank. Justice Kathryn Werdegar owns as much as $1 million in Wells Fargo stock. That makes five of California's seven Supreme Court justices major investors in the mortgage lending and loan servicing industries.

"I'm so frustrated," said one lawyer, speaking on the condition of anonymity, about decisions of California's judges. "I have my team putting together the wall of shame for the judges, how they're not enforcing the law."

The state courts, many of them, were individually biased against the consumers," said retired attorney Don Adams. "The courts were not going to let individual borrowers escape mortgage payments, and were less concerned with stopping the fraudulent and predatory activities that got us into the mess in the first place."

In 2009, Adams sued Countrywide on behalf of a client who sought to quiet title to their home after a tangled deal of loans involving Countrywide, Citibank, and Bank of America led Countrywide to wrongfully foreclose. Countrywide admitted to foreclosing "in error," but a trial court found in favor of the bank, forcing the borrowers to sign a new loan agreement with Countrywide. Adams and his clients appealed the decision, but then lost before a panel of three judges in California's Second Appellate District court. One of the judges, Arthur Gilbert, owned stock in Bank of America and Citibank. Another one of the judges, Kenneth Yegan, disclosed two loans for over $1 million he had taken from Countrywide.

According to Adams, the bias of the courts in favor of the banks existed long before the foreclosure crisis. "Had courts enforced the law against the lenders, the great recession did not have to occur," he said. "Many of us were after the New Centurys, the Ameriquests, and Countrywides well before the collapse. Even after the economy imploded, most judges did their best to protect the business interests of the predatory lenders by cynically not wanting to let the consumers 'off the hook' without recognizing that borrowers would still have to pay a mortgage, but the lenders would have to unwind the loans and do it again. The courts felt that was too much for the fraudsters - and accordingly protected them."

Wednesday, June 25, 2014

America’s Housing “Recovery”: Transforming “Foreclosed Homes” Into Rental Empires

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Security is a slippery idea these days — especially when it comes to homes and neighborhoods.

Perhaps the most controversial development in America’s housing “recovery” is the role played by large private equity firms. In recent years, they have bought up more than 200,000 mostly foreclosed houses nationwide and turned them into rental empires. In the finance and real estate worlds, this development has won praise for helping to raise home values and creating a new financial product known as a “rental-backed security.” Many economists and housing advocates, however, have blasted this new model as a way for Wall Street to capitalize on an economic crisis by essentially pushing families out of their homes, then turning around and renting those houses back to them.

Caught in the crosshairs are tens of thousands of families now living in these private equity-owned homes. For them, it’s not a question of economic debate, but of daily safety and stability. Among them are the Cedillos of Chandler, Arizona, a tight-knit family in which the men work in construction and the oil fields, while the strong-willed women balance their studies with work and children, and toddlers learn to dance as early as they learn to walk. Their story of a private equity firm, a missing pool fence, and the death of a two-year-old child raises troubling questions about how, as a nation, we define security in housing and why, in the midst of what’s regularly termed a “recovery,” many neighborhoods may actually be growing increasingly vulnerable.

A Buying Frenzy

In early August 2013, the Cedillo family threw a pool party at their house in Chandler. It was the sixth birthday of Brenda Cedillo’s son, Jesus, and the family gave him a Batman-themed celebration, complete with a piñata in the driveway and a rented waterslide for the small pool in the backyard. Brenda, her brother Bryan, and her sister Christine had signed a one-year lease on the two-story structure three weeks earlier, which made the party special. It was the first family celebration that could be held in a house.

“We’ve always lived in apartments, apartments, apartments,” said Christine.

The three of them were excited to find a place they could afford that was big enough for their children, Christine’s partner Javier, and their parents Olga and Jesus. Christine’s oldest daughter, two-year-old Zahara, was so close to Brenda’s son that the two called each other brother and sister.

The only worry during the party was the pool, carefully monitored by the adults. Being unfenced, it had been a source of stress since they moved in. Repeated requests to the management company overseeing the property that one be installed had resulted in nothing. The Cedillos had no idea that the house’s real owner was a private equity firm called Progress Residential LP. It had been founded in 2012 by Donald Mullen, a former Goldman Sachs partner, and Curt Schade, a former managing director at Bear Stearns, an investment bank that collapsed in 2008. Progress was financed by a $400 million credit line from Deutsche Bank.

The same month that the family rented the house at 1471 West Camino Court, Progress Residential purchased more homes in Maricopa Country than any other institutional buyer. Nationally, Blackstone, a private equity giant, has been the leading purchaser of single-family homes, spending upwards of $8 billion between 2012 and 2014 to purchase 43,000 homes in about a dozen cities. However, in May 2013, according to Michael Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University, Progress Residential bought nearly 200 houses, surpassing Blackstone’s buying rate that month in the Phoenix area.

The condition and code compliance of these houses varies and is rarely known at the time of the purchase. Mike Anderson, who works for a bidding service contracted by Progress Residential and other private equity giants to buy houses at auctions, was sometimes asked to go out and look at the homes. But with the staggering buying rate — up to 15 houses a day at the peak — he couldn’t keep up. “There’d be too many, you couldn’t go out and look at them,” he said. “It’s just a gamble. You never know what you’ve got into.”

The House on West Camino Court

The two-story house that would soon become the Cedillo family’s home was in fine structural condition when the family signed the lease. It hadn’t sat vacant for long. Earlier that year, the former owner, Lloyd Carter, sold the house to avoid foreclosure after realizing that he owed $100,000 more on his mortgage than the house was worth. (“I didn’t even know who they sold it to,” Carter told me. “The title agency just sent the documents with the courier and met me at a Starbucks.”)

There were a number of small rehab issues: a cockroach infestation, oil that had spilled in the driveway, and a sloppy paint job. Christine recorded some of these problems and others on a walk-through inspection, but she wasn’t overly troubled. “All I was looking for was a place big enough for us to be together,” she said. Until then, she had been living in her parents’ apartment in Tempe with Zahara and her younger daughter Elysiah.

The one serious problem was the lack of that pool fence. Before the family moved in, Christine asked the Golba Group, the property management company hired by Progress to lease and maintain many of its houses, to install one. As she recalls, Lacey, the property agent, left for a moment and when she returned “said they weren’t going to put it up.” Christine offered to cover the cost and was informed that the family could install their own barrier, but only if it didn’t affect any of the landscaping and wasn’t fixed to any permanent structures, which to Christine sounded impossible.

The next week, the family moved in, increasingly nervous about the fenceless backyard, especially since they were unsure what steps they could legally take as renters. Christine’s father began collecting wood to build a barrier on the patio and the family agreed on a safety plan: both front and back doors were to remain locked at all times, and multiple adults had to supervise the children if they were outside. Christine says she called the company another time to ask for a fence, again offering to cover the cost.

Golba claims it has no record of these requests. Lacey (who declined to share her last name) said she doesn’t remember the Cedillos, no less whether they requested a fence. “If you knew the amount of properties we had,” she told me by phone. “It was over a year ago.”

The Private Equity Business Model

Global private equity firms have not been, historically, in the business of dealing with pool fences and the other hassles of maintaining single-family houses. But following the housing market collapse, the idea of buying a ton of these foreclosed properties suddenly made sense, at least to investors. Such private-equity purchases were to make money in three ways: buying cheap and waiting for the houses to gain value as the market bounced back; renting them out and collecting monthly rental payments; and promoting a financial product known as “rental-backed securities,” similar to the infamous mortgage-backed securities that triggered the housing meltdown of 2007-2008. Even though the buying of the private equity firms has finally slowed, economists (including those at the Federal Reserve) have expressed concern about the possibility that someday those rental-backed securities could even destabilize – translation: crash — the broader market.

Since Wall Street was overwhelmingly responsible for the original collapse of the housing market, many have characterized these new purchases as a land grab. In many ways, Progress CEO Donald Mullen is the poster-child for this argument. An investment banker who enjoyed a brief flurry of fame after losing a bidding war to Alec Baldwin at an art auction, he was the leader of a team at Goldman Sachs that orchestrated an infamous bet against the housing market. Known as “the big short,” it allowed that company to make “some serious money“ when the economy melted down, according to Mullen’s own emails. (They were released by the Senate Permanent Subcommittee on Investigations in 2010.) As Kevin Roose ofNew York magazine has written, “A guy whose most famous trade was a successful bet on the full-scale implosion of the housing market is now swooping in to pick up the pieces on the other end.”

A Child’s Death

Unlike her cousin Jesus, two-year-old Zahara was afraid of the pool. She was much more likely to be found dancing in front of the television, or eating vegetables, which were — to her family’s surprise — her favorite food. She loved ketchup, and once disgusted her aunt Brenda by dipping her entire hand into the ketchup bowl at a restaurant and licking the condiment off her fingers. Describing herself as someone who “loves firsts,” Christine saved everything about her daughter’s life from her positive pregnancy test to the certificate she received for volunteering at Zahara’s Early Head Start program.

Tod Stewart, Christine Cedillo’s lawyer, remembers being shocked by the number of keepsakes the family had collected over Zahara’s short life. “I asked her for some pictures of Zahara,” Stewart told me, “and Christine sent me 1,200 photos.”

About a week before Zahara’s death, Christine reached out to her daughter’s Head Start teacher to inquire about swimming lessons. The girl still showed an extreme aversion to the pool, but Christine wanted to be careful. That birthday party weekend was, according to family members, the moment when her fear of the water must have evaporated, because that following Wednesday, while Christine was at work and Zahara was at home recovering from a fever with her grandmother Olga, the toddler crawled out through a doggie door and found her way into the pool.

“I literally went into shock,” says Christine after she got a call from Olga at the Subway outlet where she and Brenda worked. “I took off my apron and sped off to the hospital.”

Multiple Violations

As far as legal liability goes, Arizona pool laws are not very complicated.

If a property is out of compliance with city or state codes, the responsibility for possible injuries or death, such as a drowning, falls on the owner of the property — especially when the injured party is a minor. Reviewing photos of the West Camino house taken by the police and investigators, Doug Dieker, a personal injury lawyer in Scottsdale, explained that the place was clearly “in violation of city code.”

If an interior fence around a pool is lacking, city code requires one of three precautions: the doors with pool access need to be self-latching and self-closing; there needs to be a power cover for the pool; or there needs to be audible alarms on all the doors. None of these three things existed at the house at the time of the drowning, according to both photo evidence and testimony from the family.

Dieker, who has worked on a similar wrongful death case in which a 16-month-old child drowned in a pool in neighboring Glendale after crawling through a doggie door, explained, “Anytime you rent to a family with small children, the duty under Arizona law is that the landlord needs to take the precautions of a reasonably prudent person.”

As he reviewed the photos, he added, “The outside fence is in violation of city code, also.”

Not “Traditionally Correct” Practices



When Christine arrived at the hospital, Zahara was hooked up to a breathing tube and her stomach was dramatically inflated. Javier, who works in construction, was out of town on a job. Christine called to tell him to come home, now. The doctors informed her that even if they could get Zahara to breathe again, she would have suffered serious brain damage. Christine said she just wanted her daughter alive, so the doctors continued trying to resuscitate her.

“They were pressing and pressing on her and I said, ‘Just leave her alone,’” was how Christine described her daughter’s final moments. “We said a prayer and the priest blessed her body and I just fell on the floor and started crying.”

The family returned from the hospital and began a nine-day mourning period, but Christine didn’t stay idle for long. Brenda remembers that her sister almost immediately began attending to the preparations for her daughter’s funeral. In the process, as Christine tells it, she called Golba to let the company know what had happened. Rather than receive condolences, she was told to submit a police report.

Christine began researching the city building codes and laws on the subject, only to find herself shuttled from one agency to the next. “On the City of Chandler website, I looked up code enforcement,” she recalled. “I called a couple of times. It was very confusing; when I called code, they said to call [the Department of] Buildings. And when I called Buildings, they told me to call code.”

Finally she went down to the code office and told one of the inspectors how her daughter had died. She wanted to know if there was a violation at the house and, if so, how to report it. The inspector took her number and scheduled a time to come inspect the house. Instead, he called back that afternoon and left a voicemail suggesting that Christine call the Department of Buildings. When she recounted the exchange with Golba and the frustration with the city to the funeral director at Zahara’s service, Christine was advised to find herself a lawyer.

In a phone interview, Scott Golba, cofounder of the Golba Group, claimed that issues like drownings or code violations are not common at the investor-owned homes his company has managed. (Pool drownings in Maricopa County, it should be noted, are remarkably common; 10 children have drowned there so far in 2014, according to Children’s Safety First.)

Golba did, however, suggest that Progress’s need to achieve a high rate of returns for its investors had brought a financial pressure previously unheard of to the single-family rental market. “Institutional owners want to know, ‘How much money did I make on every single square foot? How much money did I have to put in capital wise, and how much money did I make on that capital?’… It’s all about spreadsheets when it comes to institutional owners.”

For Progress and other institutional investors, so far the returns on their single-family rental homes haven’t always proved to be a happily-ever-after story. Last summer, another private equity firm, American Homes 4 Rent, fired a number of its employees after posting losses. In February, data showed that the rents Blackstone was collecting from 3,207 houses that together made up the collateral for the first-ever “rental-backed security” had declined by 7.6%. “Single-family landlords have struggled to turn a profit while acquiring homes faster than they can fill them with tenants,” Bloomberg News reported last August.

Scott Golba explained that sometimes this gap between anticipated profits and actual ones led companies like Progress to skirt the rules to increase returns. “Initially they have to sell to their stockholders a certain dollar amount, and if it doesn’t come to that, when everything’s said and done, if they can’t make that much money out of the home, they have to explain that to their stockholders or the bank they lend to.”

“On the negative side,” he continued, “they’ll try to raise the rents or do something that isn’t traditionally correct to save money — or I should say, to make more money out of the property.”

The Fence

In the spring, while Christine and Javier were still coping with their grief, the Cedillos moved out. “We’ve got to learn to live without her for the rest of our lives,” Christine told me.

Zahara’s death affected other family members as well. Olga remained heartbroken, while Brenda felt the stress of keeping the family together, even as she held down a full-time job, finished her junior year of college, and cared for Jesus, who grew increasingly withdrawn and angry at school. At the cemetery, Christine remembers the six-year-old exclaiming, “It’s just so stupid! Why couldn’t they just put up a fence?”

In fact, more than three months after the drowning, Progress did finally approve and pay for the installation of a fence at the house. But even that didn’t go according to plan because the fence was initially installed next door, at 1461 West Camino Court. (That home’s owner, Michael Hoard, remembers returning home to find an unexpected barrier in his backyard. “I got back Saturday, went outside, and there was a pool fence that I hadn’t asked to be installed. Two or three days later, I got back from work and it was gone.”)

Christine and Jesus are now preparing to file a wrongful death suit against Progress. So far, they’ve refused to put down a dollar amount on the compensation they would accept. Instead, they want to see local laws enacted that would require institutional investors like Progress to have their houses inspected to ensure that they are in compliance with local ordinances. “I just want this not to happen to someone else,” said Christine. Employees from Progress’s Scottsdale office did not return repeated requests for comment.

Rob Call, a graduate student in the department of Urban Planning at MIT, has researched institutional investor homes in Atlanta. What he’s found is that the sort of vulnerability experienced by the Cedillos is a distinguishing feature of the wave of private-equity ownership. “I see it as a business model that is anti-community control.” He sees the logic behind the private equity push into the rental market — essentially using housing as a “wealth extraction tool” from communities — as similar to the one lenders and mortgage companies employed in the years leading up to the 2007-2008 crash.

“If Wall Street is involved and willing to dump $20 billion into something, it’s because they think they can, and they plan on making a bunch of money on it,” he says. “Last time they got involved in housing, that’s exactly what they did. And then everything came crashing down.”

In the meantime, the Cedillos tend to a grave instead of a child, sad proof of what might be called “rental-backed insecurity” in a new American housing world.

Ukraine and the Rise of Euro-Fascism

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Current events in Ukraine are guided by the evil spirit of fascism and Nazism, though it seemed to have dissipated long ago, after World War II. Seventy years after the war, the genie has escaped from the bottle once again, posing a threat not merely in the form of the insignia and rhetoric of Hitler’s henchmen, but also through an obsessive Drang nach Osten policy.

The bottle has been uncorked, this time, by the Americans. Just as 76 years ago at Munich, when the British and the French gave Hitler their blessing for his eastward march, so in Kiev today, Washington, London and Brussels are inciting Yarosh, Tyahnybok, and other Ukrainian Nazis to war with Russia. One is forced to ask, why do this in the 21st century? And why is Europe, now united in the European Union, taking part in kindling a new war, as if suffering from a total lapse of historical memory?

Answering these questions requires, first of all, an accurate definition of what is happening. This, in turn, must start with identifying the key components of the events, based on facts. The facts are generally known: Yanukovych refused to sign the Association Agreement with the EU, which Ukraine had been under pressure to accept. After that, the United States and its NATO allies physically removed him from power by organizing a violent coup d’état in Kiev and bringing to power a government that was illegitimate, but fully obedient to them. In this article, it will be called “the junta.”

The goal of this aggression was to gain acceptance of the Association Agreement, as is evidenced by the fact it was indeed, prematurely, signed by the EU leaders and the junta only a month after the latter had seized power. They reported (the document bearing their signatures has not yet been made public!) that only the political part of the agreement has been signed, the part that obligates Ukraine to follow the foreign and defense policy of the EU and to participate, under EU direction, in settling regional civil and military conflicts. With this step, adoption of the Agreement as a whole has become a mere technicality.

In essence, the events in Ukraine mark the country’s forcible subordination to the European Union — what may be called “Euro-occupation.” The EU leaders, who insistently lecture us on obedience to the law and the principles of a law-based state, have themselves flouted the rule of law in this case, by signing an illegitimate treaty with an illegitimate government. Yanukovych was ousted because he refused to sign it. This refusal, moreover, needs to be understood in terms not only of the Agreement’s content, but also the fact that he had no legal right to accept it, because the Association Agreement violates the Ukrainian Constitution, which makes no provision for the transfer of state sovereignty to another party.

According to the Ukrainian Constitution, an international agreement that conflicts with the Constitution may be signed only if the Constitution is amended beforehand. The U.S.- and EU-installed junta ignored this requirement. It follows that the U.S. and EU organized the overthrow of Ukraine’s legitimate government, in order to deprive the country of its political independence. The next step will be to impose their preferred economic and trade policies on Ukraine, through its accession to the economic part of the Agreement. Furthermore, although the current Euro-occupation differs from the occupation of Ukraine in 1941 in that, so far, it has occurred without an invasion by foreign armies, its coercive nature is beyond any doubt. Just as the fascists stripped the population of occupied Ukraine of all civil rights, the modern junta and its American and European backers treat the opponents of Euro-integration as criminals, groundlessly accusing them of separatism and terrorism, imprisoning them, or even deploying Nazi guerrillas to shoot them.

As long as President Yanukovych was on track to sign the Association Agreement with the EU, he was the recipient of all kinds of praise and coaxing from high-ranking EU officials and politicians. The minute he refused, however, American agents of influence (as well as official U.S. representatives, such as the Ambassador to Ukraine, the Assistant Secretary of State, and representatives of the intelligence agencies), together with European politicians, began to castigate him and extol his political opponents. They provided massive informational, political, and financial aid to the Euromaidan protests, turning them into the staging ground for the coup d’état. Many of the protest actions, including criminal attacks against law enforcement personnel and government building seizures, accompanied by murders and beatings of a large number of people, were supported, organized, and planned with the participation of the American Embassy and European officials and politicians, who not only “interfered” in Ukraine’s domestic affairs, but carried out aggression against the country via the Nazi guerrillas they had cultivated.

The use of Nazis and religious fanatics to undermine political stability in various regions of the world is a favorite method of the American intelligence agencies. It has been employed against Russia in the Caucasus, in Central Asia, and now even in Eastern Europe. The Eastern Partnership program, which the U.S. encouraged the Poles and EU officials to initiate, was aimed against Russia from the outset, with the objective of breaking the former Soviet republics’ relations with Russia. This break was supposed to be finalized by contracting legal Association Agreements between each of these countries and the EU. In order to provide political grounds for these agreements, a campaign was launched to fan Russophobia and spread a myth called “the European choice.” This mythical “European choice” was then artificially counterposed to the Eurasian integration process, with Western politicians and the media falsely depicting the latter as an attempt to restore the USSR.

The Eastern Partnership program has failed in every single former Soviet republic. Belarus had already made its own choice, creating a Union State with Russia. Kazakhstan, another key Eurasian country (though not formally an Eastern Partnership target) likewise chose its own path, forming the Customs Union with Russia and Belarus. Armenia and Kyrgyzstan have decided to join this process. The province of Gagauzia has spurned the adoption of Russophobia as a cornerstone of Moldovan policy; the Gagauz referendum, rejecting European integration in favor of the Customs Union, challenged the legitimacy of Chisinau’s “European choice.” Georgia, the only republic to have made a relatively legitimate decision in favor of Association with the EU, paid for its “European choice” with the loss of control over a part of its territory, where people did not want to live under Euro-occupation. The same scenario is now being imposed on Ukraine — loss of a part of its territory, where the citizens do not accept the leadership’s “European choice.”

The coercion of Ukraine to sign the EU Association Agreement became entangled with Russophobia, as a reaction of the Ukrainian public conscience, wounded by the decision of the people of Crimea to join the Russian Federation. Since the majority of Ukrainians still do not automatically think of themselves as divided from Russia, there has been a strong push to inculcate a perception of this episode as Russian aggression and the annexation of part of their territory. This is why Brzezinski talks about the “Finlandization” of Ukraine, as a way to anesthetize the brains of our political elite during the American operation to sever Ukraine’s ties with historical Russia. While under anesthesia, we Russians are supposed to accept a feeling of guilt for our mythical oppression of the Ukrainian people, while the latter are force-fed loathing for Russia, with which they have allegedly battled for ages over Little Russia and Novorossiya.[1]

Only a superficial observer, however, would see the current anti-Russian hysteria in the Ukrainian media, so striking in its frenzied Russophobia, as a spontaneous reaction to the Crimean drama. In reality, it is a piece of evidence that the war being waged against Russia is now entering an overt phase. For two decades, we were fairly tolerant of the manifestations of Nazi ideology in Ukraine, not taking it too seriously, in view of the apparent absence of clear preconditions for Nazism. The lack of such preconditions, however, was completely compensated by the persistent sowing of Russophobia through support for numerous nationalist organizations. The discrepancy between their ideology and historical accuracy does not bother the fuehrers of these organizations. In return for a pittance from NATO member countries, they are completely unrestrained in painting Russia as the enemy image. The result is unconvincing, because of our common history, language and culture: Kiev is the mother of all Russian cities, the Kiev-Pechersk Lavra is a major holy site of the Orthodox world, and it was at the Kiev-Mohyla Academy that the modern Russian language took shape). Therefore wild lies are employed, playing on tragic episodes in our common history, such as the Revolution and the Civil War, as well as the Holodomor famine of the 1930s, which are falsely attributed solely to Russian tyranny. Russophobia, based on Nazism, is being made the cornerstone of Ukraine’s national identity.

This article is not concerned with exposing the objective absurdity of the Ukrainian Nazis’ hysterical Russophobia, but rather with establishing the reasons for its re-emergence in the 21st century. This requires an awareness that such “Ukrainian Nazism” is an artificial construct, created by the age-old enemies of the Russian world. Ukrainian exclusionary nationalism and fascism, cultivated from abroad, has always been aimed at Moscow. At first it was promoted by Poland, which viewed Ukraine as its own borderland, and established its own vertical power structure to administer it. Then came Austria-Hungary, which invested large amounts of money over a long period of time, to encourage Ukrainian separatism. During the German fascist occupation, these separatist tendencies were the ground in which the Bandera movement and the Polizei sprang up, aiding the German fascists in establishing their order in Ukraine, including though punitive operations and enslavement of the population. Their modern followers are now doing likewise: under the guidance of their American instructors, guerrillas of the Banderite Right Sector are conducting punitive operations against the population in the Donbass, helping the U.S.-installed junta “cleanse” cities of supporters of greater integration with Russia, and assuming police functions for the establishment of a pro-American, anti-Russian order.

It is obvious that without steady American and European support, neither the coup d’état nor the existence of the Kiev junta would have been possible. Unfortunately, as the famous dictum goes, “history teaches us, that history teaches us nothing.” This is a catastrophe for Europe, which has more than once had to deal with instances of the proto-fascist model of government that has now taken shape in Ukraine. It involves, essentially, a symbiotic relationship between the fascists and big capital. A symbiosis of this type gave rise to Hitler, who was supported by major German capitalists, seduced by the opportunity, under the cover of national-socialist rhetoric, to make money from government orders and the militarization of the economy. This applied not only to German capitalists, but also Europeans and Americans. There were collaborators with the Hitler regime in practically all the European countries and the United States.

Few people realized that the torch marches would be followed by the ovens at Auschwitz, and that tens of millions of people would die in the fires of World War II. The same dynamic is playing out in Kiev now, except that the shout of “Heil Hitler!” has been replaced by “Glory to the heroes!” — heroes whose great feat was to execute defenseless Jews at Babi Yar. Moreover, the Ukrainian oligarchy — including the leaders of some Jewish organizations — is financing the anti-Semites and Nazis of Right Sector, who are the armed bulwark of the current regime in Ukraine. The Maidan sponsors have forgotten that, in the symbiotic relationship between Nazis and big capital, the Nazis always get the upper hand over the liberal businessmen. The latter are forced either to become Nazis themselves, or to leave the country. This is already happening in Ukraine: the oligarchs who remain in the country are competing with the petty fuehrers of Right Sector in the domain of Russophobic and anti-“Muscovite” rhetoric, as well as in grabbing the property of those former Nazi-sponsors who have fled to Moscow.

The current rulers in Kiev count on protection from their American and European patrons, pledging to them daily that they will fight the “Russian occupation” to the last standing “Muscovite.”[2] They obviously underestimate how dangerous Nazis are, because Nazis truly believe they are a “superior race,” while all others, including the businessmen who sponsor them, are viewed as “sub-human” creatures, against whom violence of all sorts is permissible. That is why Nazis always prevail, within their symbiotic relationship with the bourgeoisie, who are then forced either to submit, or flee the country. There is no doubt that if the Bandera followers are not forcibly stopped, the Nazi regime in Ukraine will develop, expand, and penetrate more deeply. The only thing still in doubt will be Ukraine’s “European choice,” as the country reeks more and more of the fascism of 80 years ago.

Of course, Eurofascism today is very different from its 20th-century German, Italian, and Spanish versions. European national states have receded into the past, entering the European Union and submitting to the Eurobureaucracy. The latter has become the leading political power in Europe, easily quashing any bids for sovereignty by individual European countries. The bureaucracy’s power is based not on an army, but on its monopoly over the issuance of currency, over the mass media, and over the regulation of trade, all of which are managed by the bureaucracy in the interests of European big capital. In every conflict with national governments during the past decade, the Eurobureaucracy has invariably prevailed, forcing European nations to accept its technocrat governments and its policies. Those policies are based on the consistent rejection of all national traditions, from Christian moral standards to how sausages are produced.

The cookie-cutter, gender-neutral, and idea-free Europoliticians little resemble the raving fuehrers of the Third Reich. What they have in common is a maniacal confidence that they are in the right, and readiness to force people to obey. Although the Eurofascists’ forms of compulsion are far softer, it is still a harsh approach. Dissent is not tolerated, and violence is allowed, up to and including the physical extermination of those who disagree with Brussels’ policies. Of course, the thousands who have died during the drive to instill “European values” in Yugoslavia, Georgia, Moldova, and now Ukraine, do not compare with the millions of victims of the German fascist invaders during World War II. But who has tallied up the indirect human casualties from the promotion of homosexuality and drugs, the ruin of national manufacturing sectors, or the degradation of culture? Entire European nations are disappearing in the crucible of European integration.

The Italian word fascio, from which “fascism” derives, denotes a union, or something bound together. In its current understanding, it refers to unification without preservation of the identity of what is integrated — whether people, social groups, or countries. Today’s Eurofascists are trying to erase not only national economic and cultural differences, but also the diversity of human individuals, including differentiation by sex and age. What’s more, the aggressiveness with which the Eurofascists are fighting to expand their area of influence sometimes reminds us of the paranoia of Hitler’s supporters, who were preoccupied with the conquest of Lebensraum for the superior Aryan race. Suffice it to recall the hysteria of the European politicians who appeared at the Maidan and in the Ukrainian media. They justified the crimes of the proponents of Eurointegration and groundlessly denounced those who disagreed with Ukraine’s “European choice,” taking the Goebbels approach that the more monstrous a lie is, the more it resembles the truth.

Today the driver of Eurofascism is the Eurobureaucracy, which gets its directions from Washington. The United States supports the eastward expansion of the EU and NATO in every way possible, viewing these organizations as important components of its global empire. The U.S. exercises control over the EU through supranational institutions, which have crushed the nation-states that joined the EU. Deprived of economic, financial, foreign-policy and military sovereignty, they submit to the directives of the European Commission, which are adopted under intense pressure from the U.S.

In essence, the EU is a bureaucratic empire that arranges things within its economic space in the interests of European and American capital, under U.S. control. Like any empire, it strives to expand, and does so by drawing neighboring countries into Association Agreements, under which they hand their sovereignty over to the European Commission. In order to make these countries accept becoming EU colonies, fear-mongering about an external threat is employed, with the U.S.-guided media portraying Russia as aggressive and bellicose, for this purpose. Under this pretext, the EU and NATO moved quickly to occupy the countries of Eastern Europe after the Soviet Union collapsed; the war in the Balkans was organized for this purpose. The next victims of Eurofascism were the Baltic republics, which Russophobic Nazis forced to join the EU and NATO. Then Eurofascism reached Georgia, where Nazis under American guidance unleashed civil war. Today, the Eurofascists are using the Georgian model in Ukraine, in order to force it sign the Association Agreement with the EU, as a subservient territory and a bridgehead for attacking Russia.

The U.S. sees the principal threat to its plans for putting the Eurobureaucracy in charge of the post-Soviet area, as being the Eurasian integration process, which is developing successfully around the Russia-Belarus-Kazakhstan Customs Union. The EU and the U.S. have invested at least $10 billion in building up anti-Russian networks, in order to prevent Ukraine from taking part in that process. In parallel, using the support of Polish and Baltic Russophobes, as well as media under the control of American media moguls, the United States is inciting European officials against Russia, with the goal of isolating the former Soviet republics from the Eurasian integration process. The Eastern Partnership program, which they inspired, is a cover for aggression against Russia in the former Soviet area. This aggression takes the form of forcing former Soviet republics to enter EU Association Agreements, under which they transfer their sovereign economic, trade, foreign-policy and defense functions to the European Commission.

For Ukraine, the Association Agreement with the European Union means transferring to Brussels its sovereign functions of regulating trade and other foreign economic relations, technical standards, and veterinary, sanitary, and pest inspections, as well as opening its market to European goods. The agreement contains a thousand pages of EU directives that Ukraine would be required to follow. Every section mandates that Ukrainian legislation be brought into compliance with the requirements of Brussels. Moreover, Ukraine would assume the obligation to comply not only with current Brussels directives, but also future ones, in the drafting of which Ukraine will have no part.

Plainly put, after signing the Agreement, Ukraine is to become a colony of the European Union, blindly obeying its demands. These include requirements which Ukrainian industry is unable to carry out, and which will harm the Ukrainian economy. Ukraine is to completely open its market to European goods, which will lead to a $4 billion increase in Ukraine’s imports and drive uncompetitive Ukrainian industrial products out of the market. Ukraine will be obliged to meet European standards, which would take 150 billion euro of investment in economic modernization. There are no sources for such amounts of money. According to estimates by Ukrainian and Russian economists, Ukraine, after signing the Agreement, can look forward to a deterioration of its already negative balance of trade and balance of payments, and, as a consequence, default.

Thus, signing the Association Agreement would mean an economic catastrophe for Ukraine. The EU would achieve certain advantages, by way of an expanded market for its products and the opportunity to acquire devalued Ukrainian assets. U.S. corporations, for their part, would gain access to shale gas deposits, which they would like to supplement with pipeline infrastructure and a market for nuclear fuel elements for power plants. The main goal, however, is geopolitical: after signing the Association Agreement, Ukraine would not be able to participate in the Customs Union with Russia, Belarus and Kazakhstan. It is for this outcome that the U.S. and the EU resorted to aggression against Ukraine, organizing an armed seizure of power by their protégés. While they accuse Russia of annexing Crimea, they themselves have taken over Ukraine as a whole, by installing a junta under their control. The junta’s mission is to strip Ukraine of its sovereignty and put it under the EU, through signing the Association Agreement.

The disaster in Ukraine may be termed aggression against Russia by the U.S. and its NATO allies. This is a contemporary version of Euro-fascism, which differs from the previous face of fascism during World War II in that it employs “soft” power with just some elements of armed action in cases of extreme necessity, as well as the use of Nazi ideology as a supplementary rather than an absolute ideology. One of the main defining elements of Eurofascism has been preserved, however, and that is the division of citizens into superior ones (those who support the “European choice”) and inferior ones, who have no right to their own opinions and toward whom all is permitted. Another feature is the readiness to use violence and commit crimes in dealing with political opponents. The final aspect that needs to be understood, is what drives the rebirth of fascism in Europe; without grasping this, it is impossible to develop a resistance plan and save the Russian world from this latest threat of Euro-occupation.

The theory of long-term economic development recognizes an interrelationship between long waves of economic activity and long waves of military and political tension. Periodic shifts from one dominant technological mode to the next alternate with economic depressions, wherein increased government spending is used as an incentive for overcoming the crisis. The spending is concentrated in the military-industrial complex, because the liberal economic ideology allows enhancement of the role of the state only for national security objectives. Therefore, military and political tension is promoted and international conflicts provoked, to justify increased defense spending. This is what is happening at present: the U.S. is attempting to resolve its accumulated economic, financial, and industrial imbalances at other countries’ expense, by escalating international conflicts that will allow it to write off debts, appropriate assets belonging to others, and weaken its geopolitical rivals. When this was done during the Great Depression of the 1930s, the result was World War II. The American aggression against Ukraine pursues all of the above-mentioned goals. First, economic sanctions against Russia are intended to wipe out billions of dollars of U.S. debt to Russia. A second objective is to take over Ukrainian state assets, including the natural gas transport system, mineral deposits, the country’s gold reserves, and valuable art and cultural objects. Third, to capture Ukrainian markets of importance to American companies, such as nuclear fuel, aircraft, energy sources, and others. Fourth, to weaken not only Russia, but also the European Union, whose economy will sustain an estimated trillion-dollar loss from economic sanctions against Russia. Fifth, to attract capital flight from instability in Europe, to the USA.

Thus, war in Ukraine is just business for the United States. Judging by reports in the media, the U.S. has already recouped its spending on the Orange Revolution and the Maidan by carrying off treasures from the ransacked National Museum of Russian Art and National Historical Museum, taking over potential gas fields, and forcing the Ukrainian government to switch from Russian to American nuclear fuel supplies for its power plants. In addition, the Americans have moved ahead on their long-term objective of splitting Ukraine from Russia, turning what used to be “Little Russia” into a state hostile to Russia, in order to prevent it from joining the Eurasian integration process.

This analysis leaves no room for doubt about the long-term and consistent nature of the American aggression against Russia in Ukraine. Washington is directing its Kiev puppets to escalate the conflict, rather than the reverse. They are also inciting the Ukrainian military against Russia, aiming to drag Russian ground forces into a war against Ukraine. They are encouraging the Nazis there to initiate new combat operations. This is a real war, organized by the United States and its NATO allies. Just like 75 years ago, it is being waged by Eurofascists against Russia, with the use of Ukrainian Nazis cultivated for this purpose.

What is surprising is the position of the European countries, which are tailing the U.S. and doing nothing to prevent a further escalation of the crisis. They should understand better than anybody, that Nazis can only be stopped with force. The sooner this is done, the fewer victims and less destruction there will be in Europe. The avalanche of wars across North Africa, the Middle East, the Balkans, and now Ukraine, incited by the U.S. in its own interests, threatens Europe most of all; and it was the devastation of Europe in two world wars that gave rise to the American economic miracle in the 20th century.

But the Old World will not survive a Third World War. To prevent such a war means that there must be international acknowledgement that the actions of the U.S. constitute aggression, and that the EU and U.S. officials carrying them out are war criminals. It is important to accord this aggression the legal definition of “Eurofascism” and to condemn the actions of the European politicians and officials who are party to the revival of Nazism under cover of the Eastern Partnership.

A Secret Plan to Close Social Security’s Offices and Outsource Its Work

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For months there have been rumors that the Social Security Administration has a “secret plan” to close all of its field offices. Is it true? A little-known report commissioned by the SSA the request of Congress seems to hold the answer. The summary document outlining the plan, which is labeled “for internal use only,” is unavailable from the SSA but can be found here.

Does the document, entitled “Long Term Strategic Vision and Vision Elements,” really propose shuttering all field offices? The answer, buried beneath a barrage of obfuscatory consultantese, clearly seems to be “yes.” Worse, the report also suggests that many of the SSA’s critical functions could soon be outsourced to private-sector partners and contractors.

Here are five insights from this austerity-minded outline.

1. This is death by jargon.

The Social Security Administration has contracted with an entity called The National Academy of Public Administration, or NAPA, to “conduct a study and submit a high-level plan proposing a long-range strategic vision.” The seven-member panel conducting the study includes current and former employees of government contractors IBM, Cisco, and Grant Thornton, as well as career bureaucrats and the editor of Government Executive magazine.

The panel’s four-page overview lays down a nearly impenetrable barrage of consultant-speak. This is a language in which “smaller workforce” means “layoffs” and “reduced physical infrastructure” is a euphemism for “closing field offices.” It is a language in which goals, objectives, strategies and tactics are reduced to a pulpy mash of undifferentiated “vision elements.” The language is rich in booster-ish phrases like this one: “Stress program integrity in everything we do.” (As opposed to, you know, not doing that.)

For most of its four pages the document’s runic language artfully dodges the question at hand, preferring instead to inform the public of such need-to-know information as the fact that “we embrace change and reward managed risk.” It is not until the final page that the bomb is dropped, surrounded by a cloud of verbal decoys. The key phrase: “Our communication and business practices enable a dispersed workforce that is no longer working in centralized, traditional offices.”

“Centralized, traditional offices.” Or, as the rest of the world calls them, “offices.”

The document suggests that Social Security’s administrative functions will be transferred online, allowing for human contact only “in very limited circumstances.” Even in those cases it appears that the default options will be telephone calls and online chats, together with rare meetings with personnel who may be housed in the offices of other agencies – or, conceivably, private corporations.

2. The SSA isn’t resisting congress’ brutal cuts.

Despite the fact that a Democratic president is running the executive branch, the Social Security Administration appears to be accepting the harsh budget cuts imposed upon it by Congress with an air of surprising passivity. This is puzzling. Social Security is an enormously successful and popular program. Historically only conservative Republicans have urged cuts to its administrative budget. Those cuts are already frustrating the public and undermining public confidence in the program. (For more on this topic see the Special Senate Subcommittee on Aging, href=”http://www.reuters.com/article/2014/03/20/us-column-miller-social-security-idUSBREA2J1OV20140320?>Mark Miller of Reuters, Michael Hiltzik of the Los Angeles Times, Hiltzik again, and ourselves.)

And yet, these needless and harmful cuts are being accepted as a fait accompli by both the NAPA panel and the Social Security Administration itself. The SSA’s “Agency Strategic Plan for 2014-2018,” which is published where the “strategic vision” document might logically be found, glosses over current and impending staffing reductions with language like this: “In the coming years, as we prepare for more employee retirements and continued budget constraints, we will develop and implement a strong succession plan to prepare for the new skills, competencies and work styles of a leaner, modern Federal workforce.”

English translation: We are downsizing for budget reasons but would rather not say too much about it.

Then there’s this: “The size of our workforce has declined by about 11,000 employees since the beginning of FY 2011 and we expect this trend to continue … we estimate that more than 21,000 of our employees will retire by FY 2022. A shrinking workforce affects our ability to meet the needs and expectations of our customers and stakeholders.”

English translation: Our staffing budget keeps getting slashed and our service will continue to decline accordingly.

The fact that neither the SSA, the administration, nor the president himself are publicly fighting these brutal cuts is a betrayal of Social Security’s promise. That betrayal is made even more acute by the fact that cuts to Social Security’s administrative budgets do not help the deficit in any way, since the SSA is fully funded from Social Security’s revenues.

3. They intend to do more outsourcing, too.

One of the bitter ironies of the bipartisan austerity craze has been the fact that, while there has been an assault on government jobs, there has been an equal or greater push to transfer government revenues to the private sector using lucrative, cost-inflating “privatization” contracts.

That seems to be what somebody has in mind for Social Security’s future, too. One of the 29 “vision elements” in the Vision 2025 document states that service delivery should be “integrated across SSA programs and with external partners …” It goes on to state that all support functions for SSA should be “provided through a shared services model (e.g., within SSA, across government, and by contract).” (Emphases ours.)

No descriptions are offered for those “external partners” or the recipients of those “shared services” contracts, but the message seems clear: they’re closing the field offices, laying off employees, and shifting the work to other agencies as well as profit-driven (and therefore ultimately costlier) private enterprises.

The choice of private partners thus far isn’t encouraging. The user portal informs people signing up for online access that they may be subject to an eligibility verification by Experian. That’s the credit-rating firm that is currently the subject of a multistate investigation, as well a a lawsuit on behalf of the people of Mississippi. The complaint, which is unrelated to Social Security, alleges that Experian knowingly made “sweeping errors” on consumers’ credit records and repeatedly violated consumer protection laws.

4. They expect people to do everything on the Internet – and their website is terrible.

The “vision” document states it plainly: “We … use online, self-service delivery as our primary service channel.” They also expect to “automate processes to maximize operational efficiency.” “Direct service options (e.g. in person, phone, online chat, video conference)” will only be available “in very limited circumstances.”

That’s a bad idea. Seniors use the Internet far less than other people. Only 57 percent of people over 65 are online, as opposed to a nationwide average of 87 percent, according to a recent Pew study. Disabled people, Social Security’s other major user group, can also experience difficulties accessing the Internet. Minorities and low-income people, many of whom depend on the SSA’s assistance, are also less likely to be web-connected.

This idea gets even worse when one attempts to use the SSA’s website, as we did recently. We will document that tragicomic misadventure in greater detail shortly, but the short version is this: although I have led very large-scale information technology projects, it took me several days to successfully enroll in the SSA website. The delays were caused by a combination of downtime and poor web design.

The website is confusing, even for tech-savvy and (relatively) youthful users. Imagine how daunting it must be those who aren’t comfortable with computers, those whose cognitive skills may be in decline, and those who have lost the full use of one or more senses. To make matters worse, the SSA site explicitly forbids would-be users from allowing others to navigate the process on their behalf.

On the other hand, converting more of Social Security’s functions to website technology could be result in a very lucrative payday for government contractors like… well, like IBM and Cisco.

5. They’re downsizing just as demand grows.

The “Vision 2025” agenda has a number of other problems. For example, it calls for ending the practice of retaining employees with specialized knowledge of specific programs. They are to be replaced with “generalists,” even though applicants and beneficiaries are more likely to obtain useful information from employees with more specific knowledge. And yet, the “vision” calls for “empowering” employees even as it proposes to deprive them of the specialized knowledge they need to use that power wisely.

But the most important takeaway is this: They’re closing field offices, downsizing their workforce, and trying to force everyone through an inadequate Internet portal. That’s all in an effort to reduce Social Security services at a time when the need is about to grow dramatically.

The scare rhetoric about the cost of baby boomers’ benefits is just that: scare rhetoric. Any long-term imbalances are easily rectified through one or two simple and equitable adjustments (like lifting the payroll tax cap). But there is no question that the number of Social Security applicants and recipients is going to increase dramatically, and with them will come a greater administrative workload. The SSA’s own website lays out the numbers: “By 2033, the number of older Americans will increase from 46.6 million today to over 77 million.”

The SSA is perfectly willing to cite that figure as part of an overly fearmongering set of statistics meant to raise false alarms about solvency. But when it comes time to craft an appropriate plan for the program’s administrative future, statistics like that are nowhere to be found. Instead, the SSA continues to close offices and plans even more dramatic cuts to its workforce.

It has become increasingly clear that plans are underway at the SSA to impose more needless cuts on SSA’s budgets and render the program’s benefits increasingly inaccessible to Americans who have earned them. The American Federation of Government Employees is currently on a campaign that encourages people to register their objections to this troubling plan.