Inevitably, after peeling past the pre-programmed slogans Ron Paulistas bring with them, you will discover a person – generally white and overwhelmingly male – looking for some alternative to mainstream politics. Ever susceptible to slick marketing campaigns thanks to a solid diet of American television, these zealots have bought it hook line and sinker in a typical conspiratorial fashion. The lynchpin is the Federal Reserve, a seemingly mysterious institution, which in the world of Ron Paul politics stands in as a more acceptable substitute for the variety of other conspiracy theories floating through far-right America including the Bilderbergs, the rich as secret lizard people and the Masons.

Yet, the idea that Ron Paul offers a kind of alternative to mainstream politics falls apart quite easily upon inspection. There are three primary reasons for this – two relate to Paul himself and the other is a function of mainstream politics more generally. In the end, it is more accurate to say that Ron Paul is mainstream politics unmasked, a raw version of what both Democrats and Republicans desire to become if left to their own devices.

Key to this is seeing Ron Paul economics for what they are. Forget the Fed. Leave aside all the slogans about “living within our means” and “punishing generations with debt” for a moment. Ron Paul is the most pro-corporate politician in the Presidential race. His economic policies would further unleash multinational corporations and the 1% who own them onto American society – with absolutely no restraints. Paul is virulently anti-union in part because unions give workers a collective identity in order to regulate worksites. He opposes government regulation on employers since he connects their activity to his notion of “liberty.” And he has repeatedly associated taxation, even taxation of the corporate world, as an affront to freedom.

Taken together, Ron Paul’s notion of economic liberty is an only slightly disguised version of the hyper-neoliberal ideas that have been circulating since the 1980s. What is different now is that the circulation is taking place in the aftermath of an economic crisis that has unmasked the bankruptcy of the very idea Paul is promoting – capitalist economics. Although Paul presents his economic proposals as alternative non-mainstream notions, they fit perfectly inside the rise of the multinational corporations and the deep enrichment of the 1%. Albert Einstein offered the best bit of advice on how to deal with folks like Ron Paul when he said “We can’t solve problems by using the same kind of thinking we used when we created them.” Giving corporate America a free hand to rampage through our economy, our communities and our environment is more of the same.

Ron Paul supporters mix this pro-corporate economic package with a fairly typical set of reactionary social policies. He has opposed any legislation in support of gay marriage on the Federal level and was neutral on the “don’t ask don’t tell” seeing the problem as less one of discrimination and more of “seeing people as part of groups.” Paul’s positions on race are even murkier due to his frequent open associations with white supremacists and the general acceptance of his ideas amongst this repugnant community. But his most explicit reactionary position is reserved for gender, more specifically the issue of sexual harassment. Here, Paul claims that anything less than penetration does not qualify as sexual harassment – words don’t matter. Females who file sexual harassment suits are, according to Paul, oppressing others. They should, instead, just exercise their right to choose a different job. Misogynist victim blaming at its worst.

The final reason that Ron Paul is not an alternative is the very reason that links him to mainstream politics. Just like Obama, Romney and Gingrich, he offers no concrete plans to address the problems that most affect people’s everyday lives. He doesn’t have a serious plan for housing. He would, just as his counterparts, continue the failed capitalist housing policies, probably adding some rhetorical flair about the liberty and freedom built into the feelings of anxiety most Americans feel when it comes to housing. His education policy is similarly irresponsible. Paul chooses to devolve education decisions onto state and local government while giving private enterprises a strong hand in further commodifying education in America. And on health care, his policies are merely a pumped up version of the pro-market policies of his Democratic and Republican counterparts.

Although Paul’s foreign policy position is trumpeted as being far off from his Republican counterparts, it contains many mainstream elements. Paul himself is always quick to indicate that his “non-interventionist” position does not mean that he wishes to radically transform the US military. He constantly issues the call for a “strong national defense” which translates into a well-funded military. As he stated directly in a recent interview, “My Plan to Restore America does not cut one penny of defense.”

Unfortunately, Liberals and even some Greens have taken the anti-war bait and Ron Paul has been able to make coalitions with otherwise ideological opponents such as Dennis Kucinich and Ralph Nader. This has given Paul some cred among anti-war types while creating confusion between having a position against military intervention and being anti-militarist.

While the “Ron Paul as alternative” charade rolls along, candidates carrying ideas clearly outside of the mainstream struggle to carve out some media attention. One is from my own organization, the Socialist Party USA – Stewart Alexander. Alexander is running campaign for President on a platform filled with radical ideas that would address many of the problems raised by the 2008 economic crisis. He has some new medicine for an old illness.

On economics, the Alexander/Mendoza campaign recognizes the destructive role of the 1%. Creating a progressive tax structure that captures the wealth at the top of society, designing a banking system that works like a highly regulated public utility and addressing the unemployment crisis by viewing a job as a human right means transforming an economic system that has failed the 99%. Similar proposals to open the education to all, to preserve our precious natural resources and to fund a worker owned and managed cooperative sector are clearly different than the re-hashed blather being served up by mainstream politicians.

Economic democracy is also connected to personal freedom. The Alexander/Mendoza campaign is one of the few that recognizes just how corporate power prevents Americans from fully exercising their civil rights. Corporations are not people and people need a voice – a voice that will be unchained as a result of electoral reform, the breaking up of media monopolies and the campaign’s support of people’s right to self-determination whether it be through marriage, adoption or alternative family structures.

Finally, Stewart Alexander is offering a radically different approach to the military. He is a passionate anti-militarist. Both he and his running mate, the ex-Marine, Alex Mendoza know the wasteful destruction that the US military has created. The pair call for a closing of all foreign bases, an end to security state measures and, unlike Ron Paul, an immediate 50% reduction in the military budget. They understand that anti-militarism is about more than opposing intervention – it is about re-thinking how our country relates to the rest of the world.

So, as the Presidential campaign heats up, it is important to see past the media spin – especially when the spinning is done in order to create false alternatives. The Obama campaign will certainly begin its own campaign to present their candidate as offering solutions beyond the mainstream. Such claims will be every bit as shallow as the notion that Ron Paul offers some new set of ideas worthy of the mantle of being alternative. There are some alternatives out there and their voices need to be heard. One of them will be running red, on the ticket of the Socialist Party USA and carrying with him the hope of moving past the miserable future created for us by capitalism.

The legal score came just twelve hours after the mayor ordered a pre-dawn raid of the camp, in which thousands of dollars worth of equipment, including tents, cookware, and personal effects, were destroyed. In a statement after the proceeding, Occupy NOLA attorney Davida Finger said the legal team witnessed this happening: “We watched all the belongings being thrown into trash trucks and (getting) ground up.” The timing of the raid on the morning of the court case was an act of executive trespass that Quigley said he has never seen in his long career: “This has never happened in my thirty years of practice that one side argues we don’t need a TRO today because we are not going to move and then they move anyways.”

Fortunately, the outrage at this singularly disgraceful act was not limited to protesters. The federal judge assigned to the case, Jay Zainey, was also not pleased about the mayor disrespecting the pending federal procedure. He responded to Quigley’s statement by saying: “I am not particularly happy that the mayor did this either.” In a visit to the encampment afterwards, Quigley told protesters that he believed the mayor’s overstep is what won Occupy NOLA the case: “If the mayor hadn’t acted, they probably would have given us 48 hours to vacate.” Mayor Landrieu, known as “Mini Moon” by critics (in reference to father Moon, former mayor himself), shot himself in the foot with his wanton act of aggression.

He did not use rubber bullets, instead opting to conceal his offensive in a cloud of connivance. Like other mayors throughout the country, he played the role of sympathetic “liberal” early on, as he visited the camp and pronounced his support for their first amendment rights. However, suspicions were raised when dozens of new faces joined Occupy in late October, after being displaced from a “homeless encampment” beneath the Pontchartrain Expressway at Calliope Street. While the movement has steadily been open to those with nowhere else to go, a large inundation of society’s most vulnerable has proven to be an overwhelming burden for an encampment that lacks the necessary resources, including medical and psychiatric care.

Whether or not the city intentionally diverted the Calliope “refugees” to Occupy NOLA or not, their presence at the camp has served to refocus local attention on the continued crisis in housing. New Orleans, continues to suffer from an acute homeless epidemic, six years after Hurricane Katrina ravaged the city’s housing stock. There are currently 10,000 people lacking permanent shelter, according to data provided by UNITY, a local homeless non-profit. Much of this stems from city officials using the storm’s devastation as cover to engage in a historic privatization bonanza, which saw four reparable public housing facilities razed. Meanwhile, 40,000 houses remain battered and vacant, and the current administration has elucidated no plan to rehabilitate them. Instead, the mayor has just issued a “10 year plan to end homelessness,” which leans heavily on an already-tapped non-profit community, and is short on any concrete explanation of how the current bed shortage is going to be addressed.

While the city denies malicious intent in its closing of the Calliope camp, there is no denying their recent machinations. Just two days before his Friday closure announcement, mayoral spokesman Ryan Berni claimed that there were still no plans to shut down Occupy NOLA. In an email to me, he said: “We are closely monitoring the issue in Duncan Plaza and have been working with the group to keep the area safe while they exercise their first amendment rights. Public safety and public health are our priorities. There is no deadline at this time.” Less than 48 hours later, Landrieu pulls an about-face and invokes an immediate deadline. In so doing, he said: “It is a violation of the law to be in Duncan Plaza from 10:30pm to 6:00am. It is unlawful for people to be in Duncan Plaza while they are storing equipment that includes tents, palettes, kitchen supplies or other items.”

This press conference was replete with lies and deception. Firstly, he said that protesters “are aware they are in violation of the law.” This is despite the fact that he had yet to communicate such to the encampment. Meanwhile, the movement naturally questions the legitimacy of any law restricting their right to remain on site. Secondly, he claims that the encampment has encroached on the rights of others to peaceably assemble in the plaza: “There were a couple of other groups that had permits that had to be pulled because Occupy NOLA was using the space.” This statement is ludicrous, as permits for use of Duncan Plaza are generally not granted. Furthermore, the city has not responded to requests to provide proof of this claim. Thirdly, he says that giving protesters notice prior to closing camp is not required: that he is being especially conciliatory in so doing. This further demonstrates the mayor’s narrow grasp of the law, and his duty to make public space regulations clear prior to enforcement. Fourthly, he tells the public that the park’s homeless population will all be provided some form of shelter. In reality, the administration shipped a few dozen homeless individuals off to Exodus House, a local shelter, where director Donald Wilkerson describes available services as such: “It’s probably not going to be a lot of housing. It’s going to be a lot of services. Housing might be available for some people. That’s the end goal. But we’ve got to get that other stuff out of the way.” Many of these individuals will wind up back at Occupy NOLA, which slowly reassembled late Tuesday after word spread of Judge Zainey’s decision.

The camp is now required to play by new rules, including a ban on “open flames,” “animals” and “weapons.” Meanwhile, the gazebo that often housed GA’s is now fenced off. The protesters will also be required to provide their own port-a-lets, which Mr. Quigley arranged for them. As part of his heroics, he also arranged for donors to put up the necessary $5,000 bond.

Through the day Wednesday, the park will begin to resemble the full-fledged Occupy encampment, if only for another six days. Next week, the lawyers will attempt to extend the restraining order indefinitely, as the case gets passed over to Judge Lance Afrik. Attorney Davida Finger warns that Occupy NOLA still faces an “uphill battle.” However, the contest already won is quite significant. Few other Occupy camps have victored in court, with only Occupy Nashville also securing a TRO. The movement needed a little help from a mayor that was ready to encroach on the hallowed domain of a federal judge. With that and a dynamic legal team at their disposal, Occupy NOLA schooled Mini Moon in court on Tuesday.

According to international law and all measures of morality and rationality we illegally invaded and continue to occupy Afghanistan and Iraq.  We destroyed much of the basic infrastructure of both nations. We killed hundreds of thousands of their citizens, many being women, children and the elderly. So, is it not time to immediately end both occupations and return home all our service personnel, as well as cancelling all contracts for the 100,000+ private mercenaries AKA military contractors? Then, we should dismantle our 800+ military installations in over 100 countries, a decision that would help ease the tremendous anger most of the world’s populace has for our country.

Cut Military Spending by Minimum of 25% and…

Going by fiscal year 2011, those savings would be around $168 billion. As a short term fix, that sum would equal what it would take to help all 50 states balance their budgets completely! Translated: No major layoffs or cuts in services, as our cities would be getting the revenues they need to keep their public sector jobs and services. This would save our schools, police and fire departments, libraries, public hospitals, Medicaid and many other programs that now help the indigent and working poor. In year two of such a plan, we could see these transferred revenues going to lower property taxes and fix our roads and public transportation and perhaps begin helping homeowners who are now ready to be foreclosed. This brings me to:

Community owned and operated nonprofit mortgage banks

Instead of bailing out banks, why not subsidize local city or county-owned non-profit mortgage banks? Imagine this: You go to such a bank and you are approved (after being vetted) for the purchase of a new home. The rate would simply be the overhead for running such a mortgage bank, which means perhaps 1.5 % to cover salaries and office space etc. You want to see real economic stimulus? Think of how many of you out there would now be able to afford owning instead of renting? Who needs a landlord when the monthly mortgage payments would be the same as paying rent? This would cause a snowball effect that would increase the housing market unbelievably! Home builders, carpenters, cabinet and door makers, hardware essentials, wood and concrete.  On and on we would see such a massive stimulus, all from one simple action: taking the profit out of the mortgage business. Plus, the local non-profit mortgage bank would hold the paper on that home, for the life of the mortgage — the way things used to be!  These loans should only pertain to homes where buyers actually will reside in them.  No loans to investors or absentee landlords.

Federal Surtax of 50% on Income over 1,000,000 a year

Some call this the ‘Millionaires tax,’ and it would help stifle the greed and corruption of the corporate world. Why?  Well, to begin with, anyone earning up to one million dollars per year would still pay at the current tax rates. It is only on income beginning with dollar $1,000,001 that would see a flat surtax of 50%. Cannot a very wealthy individual live comfortably on 50% tax free of the mega millions he or she earns? The CEOs who are making tens and hundreds of millions while their own employees have to struggle day in and day out financially, cannot they be happy with 50% of such wealth? Think of how that added revenue would allow Uncle Sam to further help this economy grow. To those super wealthy who say “I give money to charity or my foundation does this and that,” now they can say they are doing their share of helping the rest of us. Let the local communities receive that extra revenue from Uncle Sam and use some of it to help the sick and indigent and struggling. As we all may one day wind up in some nursing facility or hospital, perhaps some of that 50% Surtax can go to give pay increases to the aides who clean the **** from our elderly parents and grandparents and bath them and dress them. It is a disgrace that most aides who do this type of difficult and needed work are lucky to be earning around $9-10 an hour to do, while the top management of these facilities earns in the millions! The greatest benefit of this tax would be added revenues to allow us to:

Nurture Small Business and the Employee with a Payroll Tax Forgiveness

We need to forgive the FICA contribution (around 7.5%) from both employee and small business owner for the first $20,000 of wages. This would accomplish a great deal. First off, it would put in the pocket of both parties up to $1500 a year, to be used as each sees fit. For the employee, this money addition could help to purchase a needed car, or dress the kids, or fix the home or apartment – more economic stimulus. The business owner could keep all the savings or use it to upgrade the business or even as a pay raise or bonus for employees. The important thing is that if a business owner simply pockets the savings, maybe his competitors will do differently. If a business owner wishes to keep good employees from going to work for competitors (the ones who would share this money more equitably)… you get my drift. As far as limits to this plan, it should only apply to a maximum of 50 or 100 employees per business location. Such a plan, for those worried about undocumented workers, would stifle “off the books” hiring. Why take the risk when you won’t be paying into FICA for the first $20k of salary? Most of the hiring of the undocumented concerns wages well below that per year.

Let’s move toward public funding of all elections

Let’s face it, this would take a constitutional amendment to get around the “Money is free speech” ruling of the Supreme Court (Buckley vs. Valeo, 1976). My candidacy will not accept more than $100 per donor, and a limit of $200 per family, and NO business or corporate donations at all! If the public, the voters, tell candidates “I won’t vote for you, PERIOD, if you do not adhere to this policy,” well, strange things can happen. We need to evolve into a system where NO private money is allowed in campaigns — PERIOD!  This would break the monopoly that the current 2 Party System has on elections. With public funding we can have a multi-party system, and more important than that, independents can actually have a chance of winning.

There are certainly many more bold and innovative ideas to consider. Yet, let’s just keep it simple for now. The aforementioned do get to the nitty gritty of key changes needed to save our republic and to usher in true and sincere democracy. I need YOUR vote, or more importantly, our nation needs your voice on these issues.

The location of the camp in Burlington is in a small city park adjacent to the City Hall building. This park has been a traditional gathering spot for some of the homeless, transient and out-of-work population of the city for decades. After Occupy moved in, some police and city officials attempted to blame the long-term situation of the homeless in the park on the presence of the Occupy tents. Years of alcohol abuse by a few individuals and accompanying crude remarks, arguments and the occasional fight were suddenly blamed on the Occupy camp. Police told the local Gannett media outlet that these folks and the incidents they created were only occurring because the occupiers had set up their camp. Of course, this was nonsense and was quickly rejected by the bulk of Burlington’s residents. However, the issues associated with a few of the park’s more-or-less permanent denizens remain for the Occupy encampment to deal with.

In economic terms, the homeless represent the ultimate failing of the capitalist model, especially its neoliberal form. Those that lost their homes in the housing/credit default crash of 2008 are but the most recent examples of what’s wrong with this model of finance capital. However, even those that social service agencies label as hard core homeless are homeless because monopoly capitalism has failed them. Perhaps they lost their job when the corporation moved overseas. Perhaps they served in the military fighting some war for capital that destroyed their ability to function without drugs and alcohol. Perhaps they are mentally ill and have no support system beyond the SSI check they get (if they get one at all). This latter can be seen as an exaggerated form of what Marx termed social alienation. In other words, that process exacerbated by the emphasis that capitalism places on individualism as the agent that drives history and society, whereby people become foreign to the world they are living in.

The presence of the homeless in the camps is eye-opening for many of the occupiers that have a place indoors to return to. For many, it is an exercise in reversing the “otherness” of the homeless. No longer are they men and women one might have crossed the street to avoid or dropped a coin in their cup. Nor are they mere demographic statistics or anecdotal people that shore up one’s theories of government policy and its shortcomings. In the camps, the homeless become people with whom one must figure out a way to get along with. For those very few that just don’t want to get along, other avenues of dealing with them must be made apparent. Key to this process is forgetting the label and seeing the persons.

Other media reports about the Occupy movement seem to work overly hard at separating the long term homeless from the occupiers. These “real” homeless, state these articles, resent the presence of the occupation while acknowledging that the tents in the park make it easier for them to exist without police harassment. In other words, this type of press represents an attempt to create class divisions between those whom the neoliberal economy has already discarded with those that are fighting to prevent that economy from destroying more lives. This reportage is nothing new. In fact, the mainstream media has long represented those without homes in the capitalist world as creatures whose existence deserves at best pity and the occasional meal. For those with less compassion than your average member of the church social justice committee, the homeless deserve nothing. Not even dignity. Then again, handouts that demand access to one’s soul (like those provided by Salvation Army and many other faith-based organizations) don’t leave one with much dignity either. My anecdotal evidence suggests that most of the homeless involved with Occupy are glad for the camp not only because it makes it easier for them to survive on the streets, but because it gives them something meaningful to do beyond mere survival.

In occupations I was involved with in the past–most notably at Berkeley’s People’s Park in 1979–it was the homeless that protected the space from police and other ne’er-do-wells. Unafraid of the violence they knew the police and their unofficial allies (usually right wing frat boys in the case of Berkeley) to be capable of, these men and women stayed in the camp for weeks. They excised threats of physical violence with words, intimidation and the occasional fist. When fellow campers stepped out of line regarding women or fighting, the occupiers chosen by the rest of us to enforce certain levels of respect did so.

It seems rougher on the streets now then back in 1979. Times have changed and issues are somewhat different. Generally speaking, the men and women without homes who are with the Occupy movement are not symbols to be romanticized nor individuals to be ostracized. Besides being witness to the harm capitalism can do to a person’s livelihood, they are allies and, like the rest of us, come with their own suppositions, hopes and problems. While we try to effect change in the world we can also effect change in ourselves and those we occupy with.

The larger story of Canaraan is tightly linked to its neighbor, camp Corail, once touted as the very model for the international community’s humanitarian effort in Haiti.  The Corail experiment, and its dismal consequences, is well documented in a recent Rolling Stone article: In short, several thousand earthquake victims were relocated from urban Port-au-Prince to temporary shelters planted in an empty wasteland some distance north of the city.  Marked by the inefficiency, confusion, and high-handedness emblematic of Haiti’s stalled reconstruction effort, the Corail ‘model camp’ did not go as planned, leaving transplanted families far from economic activity and at the mercy of flooding, landslides, and hurricanes.  It is widely recognized as a failure.

Yet any major building project, even an ultimately unsuccessful one such as Corail, offers hope of something to those who have nothing, and soon enough Corail was surrounded by the sprawling series of unplanned settlements now known collectively as Canaan or Canaraan.  Like Corail, Canaraan residents are vulnerable to wind and water and find themselves cut off from the economic life of the city.  But lacking Corail’s official designation as a camp for internally displaced persons (IDPs), Canaraan residents are routinely dismissed as mere ‘squatters’ unworthy of assistance however pressing their need.  Ignored by both the Haitian government itself, and the 3,000+ international NGOs which function like a de facto shadow government, President Martelly’s visit to Canaraan was thus both a validation of  resident’s existence and a sign that perhaps their luck was about to change.

So far, at least, it has not.  Months after the visit, Canaraan is without signs of progress or construction, and residents’ former optimism is increasingly guarded, if not abandoned outright.  The future of textile factories in Canaraan remains a question without an answer, but it is worth asking why powerful actors, both Haitian and international, continually present them as a cure-all for Haiti’s many ills.  Factory projects have been a staple of USAID projects for a generation, and enjoy the prominent and high-profile support of figures such as Bill Clinton and Ban Ki Moon.  The Factory Solution predates the earthquake, and has not been shaken by it.  It now represents the single most significant international effort to impact the economic lives of Haitian people.

One need not dig too deep to find the dark side to this proposed answer to Haiti’s problems.  To make way for construction, for example, Canaraan families would be displaced from the flatlands into uncertain housing on the same treeless hills where landslides killed 23 people just two months ago.  It is unclear how many of the residents of the sprawling camp will find employment in the proposed industrial complex, but certainly fewer than the many tens of thousands of  people who currently live there. Even for those fortunate enough to obtain work, foreign owned textile factories in Haiti have developed a notorious reputation for unsafe conditions, workplace intimidation, union-busting, and wages so shockingly low that it is virtually impossible for even a small family to rely on them for survival. (Wages amount to approximately US $3 a day for textile labor, an in depth report on labor conditions in Haiti can be found here).  In this environment of kickbacks and sexual harassment, where nearly all employees labor without benefit of union representation or health insurance, the prospects for Canaraan residents will likely remain grim even if the President’s promises come true.

This is not to condemn all factories out of hand. Factory work is not inherently a social evil.  In many societies, including our own, factory labor has provided a pathway out of poverty.  For their part, residents in Canaraan express a desire for jobs above all else, and are even willing to accept eviction from their homes for factories that everyone knows will refuse to pay a subsistence wage.

Yet Canaraan residents’ desire for factory work must be understood against a backdrop of economic and political forces which have left Haiti’s poor strikingly boxed-in on all sides by bad options.  Physically, the choice between overcrowded slums, flood-prone plains, and denuded hillsides have left Canaraan residents perilously exposed to danger, whether they decide to remain in the city or flee to its outskirts.  Likewise, decades of US-driven trade policy has left families with few meaningful economic choices except factory work, effectively selling their labor to northern businesses at bargain basement prices.

Such a narrowing of options is not an accident.  It is the intentional result of express U.S. foreign policy.  It may come as a surprise to many Americans that the weight and prestige of their nation’s diplomacy was thrown into an effort to thwart raising Haiti’s minimum wage above 31¢ an hour, but this is precisely the sort of foreign machination that Haitians have been forced to live with for decades.  U.S. diplomatic cables, recently exposed by the group Wikileaks, detail the extent of this meddling, in which US muscle was engaged to sabotage parliamentary efforts to raise wages to a level capable of supporting dignified existence.

Against this backdrop, Canaraan residents’ approval of their President’s message emerges as a rational response to a set of artificially constrained options.  A house on a landslide-prone hill is preferable to a tarp on a flood-prone plain; likewise, a factory’s starvation wages are preferable to none at all.  And what other options are there?  Flooded with highly subsidized foreign food products, Haitians have watched the decimation of their agricultural sector.  Forced to open borders to ravenous (and sometimes predatory) foreign competitors, Haiti has seen its domestic enterprises left stunted.  As a result, the economic policies of the world’s powerful have effectively pushed Haiti’s poor into an ever narrowing chute — the only escape being into the arms of US, Canadian, or Korean textile corporations and their cut-rate sub-contractors in Haiti.  And with the wage increase successfully neutralized, it’s now impossible to earn a living even at that.

Yet beneath that surface enthusiasm, Canaraan residents voice a complex mix of hope and resignation, stoicism and anger, which is every bit as complicated as the geopolitical forces presently at work upon them.  Derided by the powerful as opportunists and squatters, Canaraan residents’ most simple acts of daily life — planting seeds for a dozen stalks of corn on a small plot of land, rebuilding the tarp roof of a Lutheran church, selling goods at market to send children to school — seem like acts of defiance against a global economic order determined to reduce people to a state of dependence.

No one, perhaps not even President Martelly himself, really knows whether the factory project will ever actually materialize, whether its promised employment will allow an escape from poverty, or if, instead, it will prove as illusory as countless other promises made to camp residents by politicians, diplomats, NGOs, and the international community.  But one thing is clear, until the powerful actors presuming to decide Haiti’s future put the autonomy, dignity, and well-being of Haiti’s poor majority at the center of reconstruction efforts, instead of simply instrumentalizing them as a pool of cheap labor, Canaraan families will not be able to break out of the trap of poverty, foreign factories or not.

The earthquake made Mathias homeless when it crushed his apartment and killed his cousin and younger brother. He and his wife first stayed in a park next to St. Anne’s Catholic Church. Then the family moved to what they thought was a safer place, Sylvio Cator stadium. They put up a tent on the lawn inside the stadium and stayed there for several months. The authorities then moved them just outside of the stadium so the soccer team could practice. They lived in a tent outside the stadium with 514 other families for over a year until they were ordered to leave in July 2011. Each family was told they had to leave and were given 10,000 Goudes (about $250 in US dollars) to assist in their relocation. Where did the 514 families go? No one knows for sure. About 150 families stayed together and live under tarps beside Mathias. Some used the money to build new tarp shelters elsewhere and some used it for food. The rest? No one knows. No one is keeping track.

When I asked what Mathias would like to say to the human rights community, he said:

The life of the people living in the tents is not a human life. Our human rights are not respected. No institutions are taking care of us, we are the forgotten. We want people to remember us and help us to have the human life we should have. It’s not our choice to live this way. The situation of life bring us here. We hope to have a normal life. But the hope is very far from us.

The International Organization for Migration (IOM) reported August 19, 2011 that there are about 594,800 people living in about 1000 displacement camps in Haiti. Most want to leave but have nowhere to go. Nearly 8000 people have been evicted in the last three months. Their report concludes by saying “With nearly 600,000 internally displaced persons still in camps, the scale of Haiti’s homeless problem remains daunting.”

Complicating the problem is the increasing wave of forced evictions happening in Haiti. These are evictions without any legal process, often by police, frequently accompanied by violence.

Landowners use armed police and private security to carry out evictions and scare people away. They rarely go to court because they usually cannot prove they own the land. So they resort to brute force to overwhelm the families. Police and private security use guns, machetes, batons and bulldozers to push people out.

The administration of President Michel Martelly has apparently given a green light to widespread violent demolition of camps without any legal process. Though the administration announced plans to relocate families from six camps, nothing has happened.

The Haitian human rights law firm Bureau des Avocats Internationaux (BAI) reports that before June they were receiving several threats of forced evictions per month. Since June, the threats increased to several per week. Now they are receiving several reports of forced evictions every day.

Dozens of human rights activists called on the United Nations to condemn these illegal evictions and to make Haiti impose a moratorium on illegal evictions until there are realistic plans to house the families being uprooted.

These evictions are in defiance of a ruling by the Inter American Commission on Human Rights which issued precautionary measures asking Haiti to cease illegal evictions. On November 18, 2010, the IACHR expressed concern over forced evictions of the displaced and sexual violence against women and girls. Specifically, the IACHR wrote Haiti asking the government to “offer those who have been illegally expelled from the camps a transfer to places that have minimum health and security conditions, and then transfer them if they so agree; guarantee that internally displaced persons have access to effective recourse before a court and before other competent authorities; implement effective security measures to safeguard the physical integrity of the inhabitants of the camps, guaranteeing especially the protection of women and children; train the security forces in the rights of displaced persons, especially their right not to be forcibly expelled from the camps; and ensure that international cooperation agencies have access to the camps.”

Residents recently surveyed by BAI and the University of San Francisco said money given them upon eviction was insufficient to relocate or pay rent anywhere. Small grants worth about $250 are not enough to build even the most basic 12×10 shack with plywood walls, a corrugated metal roof and concrete floor – leaving many of those evicted without any shelter except to go put up a tarp in another displacement camp. No wonder that 35 percent of them reported being the victims of physical harm or threats of physical harm.

The following are recent examples of illegal forced evictions, all have occurred since Martelly became President.

On May 27, 2011, at 6am, Haitian National Police wielding machetes and knives stormed a camp in the Delmas 3 neighborhood destroying about 200 makeshift tents, and forcing people to flee, according to Jacqueline Charles of the Miami Herald. There was no court order of eviction.

In early June, Haitian National Police showed up and began destroying tarps and tents of hundreds of families camped at the intersection of Delmas and Airport Roads. The police fired shots and swung batons as people protested in front of their camp. This was done without legal authority.

Later in June, at another camp in Delmas 3, truckloads of agents armed with machetes descended on another camp and dismantled it. After the tents were destroyed a bulldozer showed up and leveled what was left. This too was without any legal process.

In a midnight raid on July 3, 2011, police and private security forces completely destroyed tents of about 30 families in Camp Eric Jean-Baptiste in the Port au Prince suburb of Carrefour.

On July 18, 2011, Haitian National Police entered the displacement camp in the parking lot of Sylvio Cator sports stadium and destroyed the tents and belongings of 514 families. There was no lawful process. People were given about $250 to pay for new shelters. Many told human rights monitors that they did not want the money, they wanted to stay but accepted the money as they had no other options. These illegal evictions were condemned by the UN Office of High Commissioner for Human Rights.

On July 27, 2011, members of the Haitian National Police arrested, assaulted and ransacked tents of internally displaced people protesting against the illegal eviction of dozens of families at Camp Django. Camp residents were given about $125 for their destroyed shelters.

So, what should be happening?

The Interim Haiti Recovery Commission, co-chaired by former US President Bill Clinton, just pledged $78 million to fund a housing plan for 16 districts in Haiti. But, as Haiti Grassroots Watch reports, even if all the planned repairs and construction of 68,025 units takes place, that is only 22 percent of what is needed since there are over 300,000 families and 600,000 people living in camps.

It is time for the Interim Haiti Recovery Commission, the UN, The US and the international community to stand up for the human rights of the hundreds of thousands of people like Mathias. Housing is a human right. Using force to evict homeless survivors of Haiti’s earthquake from one spot to make them homeless in another place is illegal, senseless and violent. Mathias and his family deserve much more.

• Vladimir Laguerre helped with this article.

Yet, in fact, what we are really seeing unfold in Israel (at least for the time being) is the total opposite of a ‘working class’ re-awakening. Indeed, some in Israel  are calling it the ‘Real Estate Protest,’ because basically those protesting want assets: they all wish to have property, a house of their own. They want to be landlords. They want the key, and they want it now. What we see in Tel Aviv has no similarity whatsoever to the struggles taking place in al-Tahrir or in Athens. At the most, the Israeli demonstrations mimic some manifestations of a struggle for justice or Socialist protest.

But that is where the similarities end.

Motti Ashkenazi (a legendary Israeli anti establishment figure) wrote in Ynet that “another Left is needed (in Israel), a Left that is primarily concerned with the poor of its country rather than with the plight of our neighbours.” In clear terms that cannot be interpreted otherwise: Motti Ashkenazi is exploring what he considers to be a necessary shift in Israeli ‘progressive’ thought, and what he appears to conclude is, forget about Palestine; let’s once and for all concentrate on  ‘us,’ the Jews.  Ashkenazi continues,  “we need another Left, a modest one. Instead of a vision for the entire Middle East, it had better present a vision of the State of Israel.”

Professor Nissim Calderon (a  lecturer in Hebrew literature ) also presented a similar line:  “We have erected a Left that has been focusing on the fight for peace, and peace only.   But there is a huge hole in our struggle- we failed to  struggle for social justice.”  Again  ‘Lefty’ Calderon refers to the social struggle within the Israeli Jewish population.

The mass protest in Israel is, in fact, the complete opposite of a genuine social revolution. Whilst it may present itself as a popular protest, in practice, it is a ‘populist festival’. According to reports from Israel, the leaders of the emerging protest are even reluctant to call for Netanyahu’s resignation.  The same applies to security matters, the occupation, the defence budget – the organizers wouldn’t touch these subjects in order not to split their rapidly growing support.

What we see in Israel is neither a socialist revolution nor is it a struggle for justice. It is actually a ‘bourgeoisie wannabe revolution’, and the Israelis took to the street because each of them wants to be a landlord, to own a property. They do not care much about politics, ethics, or social awareness, and neither do they seem to care much about the war crimes they are collectively complicit in.  Malnutrition in Gaza is really not their concern either. They seem to not care about anything much at all, except themselves becoming property owners.

But why do they want to own a property? Because they cannot really rent one. And why can’t they rent? It is obviously far too expensive.  But why is it too expensive? Because Israel is the ultimate  embodiment of a corrupted, hard speculative, capitalist society.  And I guess that this is the real untold story here. If Zionism was an attempt to solve ‘the Jewish Question,’ as the author Shahid Alam so insightfully explores, it has clearly failed since it has only managed to relocate ’the Jewish Question’ to a new place; i.e., Palestine.

Zionism promised to bring about a new productive and ethical Jew as opposed to what it defined as the ‘Jewish Diaspora speculative capitalist’. ¹ It clearly failed, and the truth of the matter is that in the Jewish State, Israeli Jews are now being  subjected to the symptoms of their own very problematic culture.²

Israel, that was supposed to be the state of the Jewish people, has become a  haven  for the richest  and most corrupted Jews from around the world: according to the Guardian, “out of the seven oligarchs who controlled 50% of Russia’s economy during the 1990s, six were Jewish.” During the last two decades, many Russian  oligarchs  have acquired  Israeli citizenship. They also secured their dirty money by investing in the Blue & White financial haven.  Wikileaks has revealed lately that “sources in the (Israeli) police estimate that Russian organised crime (Russian Mafia) has laundered as much as US $10 billion through Israeli holdings.”³

Mega-swindlers such as Bernie Madoff  have been channeling their money via Zionists and Israeli institutions for decades. Israel is also a leading trader in blood  diamonds. Far from being surprising, Israel is also the fourth biggest weapon dealer on the planet. Clearly, blood diamonds and guns are proving to be a great match. And it doesn’t stop there — every so often, Israel is caught engaging in organ trafficking and organ harvesting.

Increasingly, Israel seems to be nothing more than a vast money-laundering haven for Jewish oligarchs, swindlers, weapons dealers, organ traffickers, organised crime, and blood-diamond traders. But on top of that, rich Jews buy their holiday homes in Tel Aviv and Jerusalem: there are reports that in Tel Aviv alone, thousands of holiday properties are empty all year round while native Israelis cannot find a roof.

The Israeli people are yet to understand their role within this horror show. The Israeli people are yet to grasp that they are nothing but the foot soldiers in this increasingly horrendous scenario. They do not even gather that their  state maintains  one of the world’s strongest armies to defend the assets of just a few of the wealthiest and most immoral Jews around.

I actually wonder whether Israelis can grasp it all. Yet the truth of the matter is that the leaders of the present Israeli ‘real estate revolution’ want to maintain the struggle as a material-seeking adventure, and they are clearly avoiding politics.  The driving sentiment and motivation here is obviously ‘give us the keys to our new homes and we clear the square.’

I guess that it is not surprising that within such an inherently greedy and racially-oriented society, the dissent that manifests will inevitably also be reduced to sheer banal materialism.

It seems the Israelis cannot rescue themselves from their own doomed fate because  they are blindly hijacked by their own destructive culture.  As myself and a few others have been predicting for a decade or more, Israeli  society is about to implode. It is really just a question of time.

1. Marxist Zionist Ber Borochov (1881-1917) argued that the class structure of European Jewry resembled an inverted ‘class-pyramid,’ a structure in which a relatively small number of Jews occupied roles within the ‘productive layers’ of society as workers, whilst a significant number were settled in capitalist and speculative trades such as banking.
2. In Haaretz Beni Ziper wrote, “I saw on television people shouting against the rich, or tycoons who control the country. Seemingly everyone thinks it’s exciting and daring and nobody reflects on  the chilling historical  equivalence with the Depression in Germany at the time of  Weimar Republic, when the ‘rich Jews who control us’ were targeted by everyone.”  Ziper is clever enough to notice a close and disturbing repetition in Jewish history. However, Ziper is also very critical of his countrymen.  “So I’m all for protests against the state, but in no way against people or groups of people, be they ‘rich’ or ‘(Jewish) Orthodox’ or even ‘settlers.’  Whoever gives privileges to the settlers in this country and it’s not that the settlers come and rob the cashier at gunpoint.” Whether we agree with Ziper or not, it is clear that he also admits that there is a similarity between the arguments voiced in Israel against the rich, and the German right wing’s anti-Semitic attitude towards Jews in the 1920’s-30’s.
3. For more information about global organised crime connections with Likud or other major Israeli political parties, follow this link

Moalim, quoted by the British Telegraph, was not posing as spokesperson to the estimated 11 million people (per United Nations figures) who are currently in dire need of food. About 440,000 of those affected by the world’s “worst humanitarian disaster” dwell in a state of complete despair in Dadaab, a complex of three camps in Kenya. Imagine the fate of those not lucky enough to reach these camps, people who remain chronically lacking in resources, and, in the case of Somalia, trapped in a civil war.

All that Batula Moalim was pleading for was “plastic sheeting for shelter, as well as for food and medicine.”

It is disheartening, to say the least, when such disasters don’t represent an opportunity for political, military or other strategic gains, subsequently, enthusiasm to ‘intervene’ peters out so quickly.

UN officials from the World Food Programme (WFP) are not asking for much: $500 million to stave off the effects of what is believed to be the worst drought to hit the Horn of Africa in 60 years. This is not an impossible feat, especially when one considers the geographic extent of the drought and creeping famine. Ethiopia, Somalia, Djibouti, Kenya are all affected, and terribly so. Sudan and Eretria are also not far from the center of this encroaching disaster.

60 percent of the amount requested by WFP has already been raised. More is needed, however, especially as the reverberation of the drought is already surpassing the immediate need for food and shelter. Five million are already at risk of cholera in Ethiopia alone, according to the World Health Organization (WHO). Hundreds have reportedly died, and many more are likely to follow.

Cholera requires an immediate remedy as the intestinal infection leads to sever diarrhea, dehydration and death. Other figures are equally grim. 8.8 million people, also in Ethiopia, are at risk of contracting malaria, according to Tarik Jasarevic, WHO spokesman.  Jasarevic has also told journalists that these ailments have already been reported in Somalia, and other Ethiopian regions. This means the disaster is not confined to refugee camps and is thus much harder to control.

For refugees, there is nothing worse than having no safe haven in sight. Still, they must escape when death becomes the only alternative to aimless journeys. While hundreds of thousands are gathering in Kenya’s camps, an average of 1,700 Somali refugees venture to Ethiopia each day. The latter, a country with a population of about 85 million, is fully embroiled in the crisis. 4.5 million Ethiopians need assistance, a rise of over 50 percent in less than three months, according to WHO. One can only try to envisage the speed at which this disaster is unraveling.

International organizations, including WFP, WHO and UNICEF have made numerous appeals. Some major media outlets responded by giving the humanitarian crisis a degree of coverage. While donations have bashfully trickled in, the goals are yet to be reached. According to a report by the Telegraph, “no African country has offered a donation to help drought victims in the Horn of Africa outside of those affected.”

The report, published July 15, quoted Michael O’Brien-Onyeka, Oxfam’s Regional Campaigns Policy Manager for East and Central Africa, who said it was “disappointing” that “African states insist on ‘African solutions for African problems’ with regard to Libya but fail to respond to droughts and famines.”

On the subject of Libya, it may be helpful to consider some financial figures.

“The British Government has pledged £38 million in food aid to Ethiopia,” reported the Telegraph. The following day, British Daily Mirror reported on the seemingly different subject of Libya. Four more British jets were recently deployed to the war zone near Libya, raising the total to 22 RAF jets, according to James Lyons in the Mirror (July 16). The cost thus far is £260 million, only £40 million short of the total amount needed by the WFP to feed 11 million starving people.

Here is another example of the dubious nature of British involvement in the war on Libya (falsely slated as a war to prevent imminent massacres of civilians): “Tornado GR4s cost around £35,000 for every hour they are in the air and are having to fly long distances from their base in Gioia del Colle, southern Italy, to Libya,” according to the Mirror.

Major African countries and Britain are not the only parties involved in acts of duplicity. The US military adventurism in the Horn of African, especially Somalia, and its renewed use of costly unmanned drones can feed, cloth, shelter and treat countless refugees. More, Arab and Muslim countries tend to be the least responsive parties in such situations. While it is true that the chief of the Organization of Islamic Cooperation (OIC), Ekmeleddin Ihsanoglu made several appeals for help, such singular calls generate feel-good moments but no major mobilization for action.

The disaster in the Horn of Africa is partly man-made. Countries with ‘failed states’ status (in other words, victims of outside interventions) cannot possibly fend off crises of this magnitude. For the last 20 years, Somalia has had no central government controlling the country’s territories. Outside intervention has made it impossible for any party to unite the disjointed country. What is a Somali refugee to do?

To help the millions disaffected by the multilayered disaster in the Horn of Africa, we need more than appeals for blankets and food stuff.  We also need a degree of human decency and common sense. We need to re-channel some of the funds wasted on disastrous wars into actually saving lives. If warning parties would ground their Tornado GR4s and other warplanes for a few days, the single action alone could save the entire region.

For now, though, let us all do what we can to help the Horn of Africa survive this terrible ordeal.

I remembered this incident while reading Joe Allen’s newest book People Wasn’t Made To Burn. The story therein is of a man, James Hickman, who loses two of his children in a fire that was almost certainly set by his landlord as a means of chasing the tenants from the building so that he could increase his income. At the time of the fire, the living conditions were already unsafe and unhealthy, yet greed compelled by the desire to increase profit rendered any concerns about this irrelevant. His children’s deaths eventually drove Mr. Hickman into such depths of depression that he killed the landlord. After seeing justice for his children’s death denied by the system, Hickman saw no other course but to administer his own. The murder of the landlord inspired a movement to defend Mr. Hickman and change the nature of rental housing in Chicago. Allen takes this tragic story and renders it into a chilling narrative that reads like a novel. Simultaneously, Allen’s description of the efforts undertaken by socialists and others in Hickman’s defense read like an organizing primer.

It was the presence of socialists and other like-minded folks that made sure that the movement against the prosecution of Hickman was bigger than Hickman or his act. Under the direction of these activists, the movement around Hickman’s defense became an indictment of a system that let slumlords get away with murder. During the period that this story takes place there were so-called covenant laws that forbade blacks from renting in certain neighborhoods, thereby allowing unscrupulous landlords to charge exorbitant rents for buildings they did not even attempt to maintain. This aspect of legal institutional racism endangered the poor, especially African-Americans.

Furthermore, it was the system of profit that encouraged landlords to let their properties slip into dangerous disrepair while overcharging their tenants. It was also the system of profit that encouraged corruption amongst the very officials hired to guarantee safe living conditions. As labor leader Willoughby Abner told a rally on the opening day of Hickman’s trial: “The same government which failed to heed the need of Hickman and millions of other Hickmans is now trying to convict Hickman for its own crimes, its own failures.” Indeed, it is that system that continues to insure that abuses like this continue to this day.

Allen has written a masterpiece of historical narrative. The story of James Hickman and his family is an emotionally wrought story on its own. Allen’s retelling leaves none of that emotion out. Although it is history he is writing down, the manner of the telling makes that history as current as the latest breaking news. The book is further enhanced by the inclusion of artist Ben Shahn’s illustrations reprinted from a 1947 Harper’s magazine feature about the Hickman case. Allen ends his story with a description of a 2010 fire in Cicero, Illinois, which is right outside of Chicago. There were no fire escapes in the building and it was overcrowded. The people who lived there were violating occupancy laws because they could not afford separate apartments. That fire killed seven people and was found to be deliberately set by the landlord and his maintenance man. This time around the authorities were able to get an indictment of the men responsible for the deaths. In fact, the prosecution intends to seek the death penalty. However, the system that Willoughby Abner said “failed to heed the need of Hickman and millions of other Hickmans” continues to force people to live in unsafe living conditions while making it likely that unscrupulous landlords will continue to choose profits over the safety of those who rent from them. Indeed, it will continue to make it likely that certain landlords would rather burn their properties than take care of them.

I don’t think you realize how hard it is for the oppressed to become united. Their misery unites them (…) But otherwise their misery is liable to cut them off from one another, for they are forced to snatch the wretched crumbs from each other’s mouth.

— Bertolt Brecht Collected Plays Vol. 9
(Pantheon Books New York 1972) p. 379

There are two uncontestable facts about the United States: the economy and the working class are experiencing a prolonged economic crisis which has lasted over three years and shows no signs of ending; there has been no major revolt, mass national resistance or even large scale protests of any consequence. Few writers have attempted to address this seeming paradox, and those who do have provided partial answers which, in fact, raise more questions than they answer.

Lines of Inquiry

Essentially most writers emphasize one of the two sides of the “paradox”. The ‘crises’ analysts focus on the extent, duration and enduring nature of the economic breakdown, outlining its harsh impact on the working and middle class in terms of losses of employment, benefits, wages, mortgages etc. Others, mostly left progressive, emphasize the local protests, critical responses registered in opinion polls, occasional complaints of trade union bureaucrats and the hopes and intimations of academics and pundits that a ‘revolt’ is on its way some time in the near future.

Among the minority of less sanguine critical analysts, there is despair, or at least a more pessimist view of the ‘paradox’. They point to several deep-seated psychological, organizational and political obstacles which prevent any revolt or mass unrest from taking hold among the United States’ public.

On the whole these critics see the working and middle class as ‘victims’ of the system, acted upon by false leaders, media manipulation, corporate capitalism and the two party system which prevent them from pursuing their class interests.

In this essay, I will pursue an alternative line of analysis which will argue that the “external enemies” blocking working and middle class resistance are aided and abetted by the behavior and perceived interest within the classes. In pursuit of this line of inquiry, I will argue that both the nature and scope of ‘the crises’ has been misunderstood in its impact on the working and middle class and as a consequence the degree of internal contradictions within those classes has not been adequately understood.

Key Concepts: Clarifying ‘Crises’ and its Impact

Economic crises, even severe, prolonged ones, such as is affecting the US today, do not have a uniform impact on all sectors of the working and middle class. The uneven impact has segmented the working and middle class, between those who are adversely affected and those not, or who in certain circumstances have benefited. This segmentation is one key factor accounting for the lack of class solidarity and has resulted in ‘contradictions’ within and between the working and middle class.

Secondly, the uneven development of social organization – especially trade unionization – between public and private sector workers, has led to the former securing and retaining greater social benefits and increases and wages, while the former has lost ground. The public sector workers draw on public financing to fund their ‘corporate interests’ while private sector workers are forced to pay increased taxes, because of regressive fiscal legislation. The result is an apparent or real conflict of interest between well-organized public workers organized around a narrow set of (self) interests and the mass of unorganized private sector workers who, unable to increase their wages via class struggle, side with “fiscal conservatives” (funded by big business) to demand cutbacks from public sector workers.

Political partisanship, especially among middle and working class Democrats, undercuts class solidarity and weakens unified social resistance. This is evident in relation to issues of war and peace, the economic crises and cutbacks in social programs. When the Democrats hold office, as they do today and the wars and war spending multiply, the bulk of the peace movement has disappeared, labor protests against budget cutbacks focus on Republican governors, not Democrats, even as the working and middle class (including public sector employees) are adversely affected.

The millionaire top trade union officials (average annual salary over $300,000 plus perks) further the division by prioritizing the security of their position via million dollar contributions to the Democrats, thus buying insurance on income flows from dues payments. Security of officialdom via alignment with Party legislators and governors, mayors and executive leaders contributes to a further division within the working class between ‘secure functionaries’ and their followers on the one hand, and the rest of the middle and working class.

Operating with these key concepts we will now turn to describing the ‘objective conditions of crises’, a critical survey of some explanations for the ‘paradox’, and follow with a detailed examination of the ‘internal contradictions’ and conclude by outlining some points of departure for resolving the paradox.

Economic Crisis is Real, Deep and Sustained

The symptoms and structures of a deep economic crisis are readily visible to any but the most obtuse government apologist or prestigious economist: un- and under-employment has reached between 18 to 20 percent. One out of three US families are directly affected by loss of employment. One out of ten American family homeowners are either behind in the mortgage payments or face foreclosure. Over half of the current unemployed (9.1 percent) have been out of work at least six months. Massive cutbacks in public expenditures and investments have led to the end of health, educational and welfare programs for tens of millions of low income families, children, the disabled, the elderly pensioners. Private firms have eliminated or reduced payments for health insurance, leaving over 50 million working Americans without health insurance and another 30 million with inadequate medical coverage. Tax exemptions, reduced and regressive taxation have increased tax payments by wage and salaried workers, reducing their net income. Increases in pension and health payments forced on middle and working class employees have further reduced net income. Increased spending for at least four wars (Iraq, Afghanistan, Pakistan, Libya) preparation for a fifth (Iran) and support for the world’s most militarist state (Israel) and a greatly expanded and costly domestic police state apparatus (Homeland Security alone costs $180 billion) has greatly deteriorated environmental, workplace and leisure space living standards.

Corporate political power and absolute tyrannical control over the workplace has increased fear, insecurity and virtual terror among employees facing increased speed-ups and arbitrary elimination of any say in health and workplace safety, work schedules, over and under time workloads. Low pay service jobs proliferate, high pay jobs are outsourced out of the country; manufacturing plants are relocated abroad; lower paid immigrant professionals and laborers are imported increasing pressure on US workers to compete for lower pay and lesser benefits. The ‘economic crises’ is embedded in the deep structure of US capitalism and is not a ‘cyclical phenomenon’ subject to a dynamic recovery, restoring lost jobs, homes, living standards and working conditions.

Middle and Working Class Responses to the Economic Crises

The profound, deep seated and pervasive economic crises has not elicited any commensurate revolts, rebellion or even sustained national protest movements. At best local protests by specific segments of the working and middle class have sought to defend narrow organizational and economic interests. The public employees in Wisconsin’s protest movement were as exceptional in its militancy as it was isolated and limited in its overall national impact. As California Republican and New York Democratic governors eliminate tens of billions of dollars in wages, pension and health benefits for hundreds of thousands of unionized public employees, union officials squawk impotently on the sidelines, incapable of mounting any serious protests let alone popular movements. Though public opinion polls register high levels of individual concern about the economic crises and dissatisfaction with both political parties the response to the crises has not led to practical activity, nor has any mass ‘movement’’ emerged – it remains private inconsequential discontent.

As much as millions of middle and working classes are deeply preoccupied with the ongoing economic crises there are no significant social or political repercussions past, present or in the foreseeable future.

All the inflated hopes and ‘ominous prognostications’ by liberals and leftists, socialists and progressives, who wrote and predicted a coming ‘revolt of the masses’ have been flat wrong. The crisis continues and the highly dissatisfied middle and working class remain privately suffering, muttering their grievances in isolation, unwilling to engage in any mass collective action.

Even as the mass media, even as the internet, Facebook and Tweeter, present millions demonstrating and striking and even toppling oppressive regimes in the Middle East and North Africa; even as news reports filter out of repeated general strikes and mass occupations of public plazas by employees and workers and unemployed in Greece, Spain, Portugal, Italy and France, the United States workers stand numb, indifferent and impotent to ‘learn the lessons’ and ‘take collective action’ even where the issues of employment and cutbacks are similar.

Explanations for Social Immobility in the Face of the Economic Crises

There is no lack of ‘recognition’ that ‘something is wrong’ in these United States. There is no lack of pundits attempting to grapple with the paradox of economic crises and social immobility.

Several explanatory forays are floating through the media and the internet. Some writers resort to psychological explanations of social passivity pointing to widespread ‘fear’ of employer retaliation, state repression, or a sense of ‘futility’ in the face of political party indifference and hostility. The psychological arguments have some merit as they point to some of the immediate causes of non-involvement but fail to explain what causes ‘fear’ and futility.

In response many critical progressives cite the absence or weakness of social organizations; in particular, they point to the decline of trade union organizations, leaving 93 percent of the private sector unorganized and the state sector unionized workers with limited bargaining powers. While these critics are right to emphasize the unwillingness of millionaire trade union officials to break new political ground and initiate new organizing efforts, one needs to explain why the unorganized middle and working class have not themselves launched any new initiatives. Union officials have a long history of “give backs” going back at least two decades and yet those who are directly adversely affected and those who have lost their jobs have not organized an alternative network of solidarity.

Political analysts emphasize the oligarchic and restrictive nature of the electoral system as pre-empting the emergence of new political initiatives. The multi-million dollar cost of running for office, the near monopoly dominance of the mass media by the corporate two-party elite and the legal obstacle to securing a place on the ballot, discourage disenchanted voters from supporting new political party initiatives. But the deeper question is why mass movements, outside of the party-electoral framework, have not emerged that might eventually challenge the political oligarchy, the corporate monopoly of media and change the legal constraints on effective entry into the electoral arena. Why do mass movements emerge in other even more repressive countries, facing similar constraints on legal access and confronted by entrenched oligarchies?

If similar ‘external constraints’ as those found in the US led to divergent behavioral responses, it raises the question of whether the differences within the middle and working class can be the source of passivity and immobility.

A few writers, principally on the Left, cite the divorce or distance between intellectuals/academics and the downwardly mobile middle and working class. In the United States there are few intellectuals – politically engaged writers and political lecturers.

What passes for the educated classes, are full-time professional academics who differ little in their social and everyday life, regardless of their stated ideological philosophies. The vast majority of leftist academics conceive of their ‘activism’ as reading papers to each other at ‘left’ or ‘social forums’, which differ little in format and consequences from mainstream professional meetings.

Even those left academics who take a political role, it is mostly in relation with the multi-millionaire senior trade union officials and their loyalist apparatus. As a result the progressive academics have ended up with little entrée into the vast majority of workers who are outside of the trade unions and those dissident union factions challenging the trade union – Democratic Party – corporate nexus.

An Alternate Explanation for the ‘Paradox’

One of the key problems inhibiting an understanding of the paradox is the treatment of the key concept – “crises”. Many writers conceive of the ‘crises’ in a ‘holistic’ way, presuming what is ‘general’ or ‘systemic’ has a homogenous effect on the middle and working class. In fact, the vast majority, say, three-quarters have not been seriously impacted by the “crises”. Assuming that the unemployed and under-employed comprise about 20 percent and adding those who have suffered serious downward mobility, we still have at least 70 percent whose main preoccupation is to retain their ‘privileged’ position and to disengage from those who have fallen out of their class-social orbit.

In the US, more than any other country, the sharp internal differences between employed and un-underemployed has led to ‘competition’ not solidarity. In most countries of the world ‘unemployed’ and underemployed workers can expect backing, active support from unionized workers; in the US once middle class employees and workers lose their job and cannot pay dues they are dropped. Even in terms of social, family and neighborhood life, they are seen as a ‘cost’, a potential drain on the resources of those who are employed. The employed see the unemployed and poorly paid as a welfare cost, hence an added tax burden instead of as an ally in a struggle to make the corporate elite pay higher taxes and reduce war spending. Among employed workers higher taxes, means capital flight; lesser military expenditures mean few war industry jobs.

Segmentation within the middle and working class operates at many levels. The most striking is between the pay scale of top union officials which runs over $300,000 plus perks and the unemployed/underemployed living on less than $30,000. These economic differences are played out politically and socially. The trade union apparatus buys ‘job security’ by contributing tens of millions to mostly Democrats, to ensure that unions retain their formal legality and collective bargaining rights. In other words the ‘organized’ unions, all of 12% of the labor force, is a ‘captive force’ of the ‘crises ridden’ state, which excludes any new socio-political initiatives which would reflect the demands and interest of the under-unemployed and low paid non-unionized workers.

Middle and working class are differentially, impacted by the crises: those with jobs and ties to the Democratic Party place their partisan loyalties above any notion of class solidarity. Job holders don’t support the jobless – they see them as competitors over a shrinking income pie.

If we examine these two groups in detail, we find that the poorly paid and un-and underemployed tend to be young people under 30 years, blacks, Hispanics and single parents; the better paid employed middle and working class tend to be older, white, educated and of Anglo-Jewish background. The generational, racial, ethnic divisions play a far bigger role in the US than anywhere else, because of the obliteration of class identity and outlooks, which has diluted any notion of class solidarity.

The segmentation of the middle and working class is deepened in the US because those with stable employment in many cases benefit from the adverse consequences affecting downwardly mobile (unemployed) employees and workers.

Mortgage foreclosures affect over 10 million American families unable to meet their payments. Banks eager to recover some part of their loan, offer to sell houses at sharply reduced prices. Employed middle and working class home buyers are elated to purchase homes, even as their class members are evicted to the street or trailer camp. There is no movement to block or protest evictions from neighbors, workmates and/or relatives; instead discreet inquiries are made about the auction date.

Better paid workers look to secure cheaper consumer goods in super-stores that employ minimum wage workers. The ‘interests’ of workers are defined by immediate individual-consumer interests not in terms of the improvement of strategic interests resulting from the potential social and political power of an organized class.

Employed middle and working class homeowners see themselves as ‘tax payers’ allied with corporate and real estate moguls fighting to lower taxes by cutting welfare and social services for the low paid working class and unemployed. The growth of upper and middle/working class tax revolts against the welfare state is, in effect, a war of one segment of the class against another. Clearly one segment fights to grab the crumbs from the mouth of another segment.

Even among the organized working class, there is segmentation. Pockets of better paid unionized public sector workers secured pay raises and pension and health plans via collective struggle, ignoring the interests, demands and needs of the sea of non-unionized workers, who were in the process of downward mobility while paying higher taxes. Hence their socio-economic differences were politicized and exploited by the Right – and the public-private sectors of the middle and working class competed over the crumbs of a shrinking budget.

As public facilities for health and education declined, the middle and working class divided between those who turned to private clinics and schools and those who remained dependent on public facilities, based on state expenditures. Those segments tied to the ‘private’ rejected taxes to fund the ‘public’, undercutting any class solidarity to improve the financing and quality of public health and education.

Conclusion

It is clear that the crisis of capitalism has evoked contradictory responses among different segments of the middle and working class based on its differential impact. Pre-existing non-class identities, internal economic division between leaders and followers and generational divisions and party partisan loyalties have undermined class solidarity and led to inconsequential complaints and diffuse hostility.

Competition – not solidarity – within and among the middle and working class is the reason for the profound immobility of Americans in the face of a prolonged and deepening economic crises.

That is now and in the past. Are there any prospects for a different future? Is there any possibility for uniting middle and working class segments in any sustained struggle? Are there alternative roads to class solidarity and popular mobilizations?

The most promising direction is to start at the local and regional level and involve local community organizations and dissident rank and file trade unions and progressive professionals (lawyer, doctors, etc.) in struggles, which resonate with the most adversely affected groups facing unemployment, foreclosures, no health plans, etc.

All polls show a deep divergence between the vast majority of Americans and the political elite of both parties on issues of bank bailouts, tax exemptions for the rich, “reforms” (privatizations and cut backs), Medicare, Medicaid, and Social Security. Divergences exist over the loss of life and expenditures in America’s multiple and longest wars (Afghanistan).

Referendums proposing (1) to end the cap on social security taxes for the rich would end the so-called “social security crises”; (2) a sales tax on financial transactions would fund the Medicare deficit. Public investments in our deteriorating infrastructure based on the transfer of war funds ($790 billion) would create jobs, increase demand in the domestic economy and augment the productivity and competitiveness of the US economy. Support for public health is an issue that unites most segments of the middle and working class, unionized health workers and community organizations in a potential confrontation with Big Pharma and the private corporate health industries.

A higher minimum wage – starting at $12 an hour – could mobilize most middle and working class segments, and initiatives at the local level could bring in the immigrant and domestic low paid workers.

The interview data demonstrate that most Americans have apparently ‘contradictory’ attitudes: supporting progressive and regressive policies. For example, many support Medicare and ‘small government’; federal job creation and deficit reduction; import tariffs and cheap consumer imports. A comprehensive activist political educational program, that demonstrates that progressive social reforms are feasible and fundable, based on a sustained fiscal struggle against corporate and financial capital, can be converted into organization and direct action. We start with an objective reality, demonstrating that the sustained crisis of capitalism does not, and cannot, deliver the most elementary demands: jobs, housing, security, peace and growth. That is a big advantage over the advocates of the system who argue for prolonged and deeper regressive measures for the foreseeable future.

Secondly, we start with the advantage of knowing that the country has the potential wealth, skills and resources to overcome the crises. Thirdly, we can argue from relatively successful popular programs which have vast support – social security, Medicare, Medicaid – as ‘examples’ to extend and deepen social coverage.

For most Americans, the fight today, to the extent that it exists, is defensive – efforts to preserve the last vestiges of independent organization, to defend social security, health programs, affordable public education, pensions. The corporate offensive is increasingly ‘homogenizing’ the organized middle and working class with the lowest paid unorganized segments. There are fewer ‘privileged workers’ even as they are still in self-denial.

The near extinction of private sector unionism and the moribund millionaire leadership provides an opportunity to start anew with a horizontal leadership, accountable to the membership and integrated with community based co-op, ecologist, immigrant, consumer based organizations. What is absolutely clear is that ‘crises’ alone will not result in any mass upheaval; nor do ‘enlightened’ progressive academics holed up in their micro-world offer any leadership.

The road forward starts with local leaders emerging from local coalitions, building organizations on the bases of independent political and social initiatives which resonate with their neighbors, fellow workers and the organized and unorganized downwardly mobile Americans. I see no easy or quick solutions to the ‘paradox’ but I do see the objective conditions for building a movement. I hear a multitude of angry and discordant voices. Above all, I hope the oppressed will stop “snatching the crumbs from each other”.

The people calling for justice are residents of a make shift tent camp called Camp Django in the Delmas 17 neighborhood of Port au Prince.  They are up in arms over injuries to Marie, one of their young mothers, and repeated government threats to demolish their homes.  Despite the 100 degree heat, over a hundred residents, mostly mothers, trekked across town to demand the government protect their human right to housing.

At their invitation, we followed them back to the place they have made lived since the January 12, 2010 earthquake that left hundreds of thousands homeless.  In a sloping lot smaller than a football field, two hundred fifty families live in handmade shelters made out of grey and blue plastic tarps/tents, scraps of wood and mismatched pieces of tin.  The tarps under which they live are faded from a year-and-a-half of sun but still show brands of USAID, World Vision, Rotary International, UNICEF, UNFAM, Republic of China and others.  Outside the camp, big green trees with flame orange flowers provide color and shade.

Inside, babies and little children peek out of tent openings that reveal mats on the ground and beds and boxes.  Families live inches from their neighbors.  They buy water outside and carry it back to their tents.  Four topless wooden boxes with blue plastic UN tarps are the showers where people can wash themselves if they bring their own water and soap.  Hole in the dirt toilets are few, full and pungent in the 100 degree heat.  They are surrounded by razzing flies.  When it rains, rainwater flows into tents and the mess from the toilets spreads all over.

A teenage boy clad only in his underwear soap washes himself in between tents.  A middle age woman sits under a banana tree nursing a dollar bill size patch of open wound on her foot, a quake injury that demands a skin graft she cannot afford.  A family has an aluminum pan filled with grey water and skinned bananas.  Camp leaders tell us their community contains over 375 little children including 20 children whose parents died in the earthquake.

“We are earthquake victims,” the women and men of the camp tell us as they show us around.  “We have a human right to live somewhere. We do not want to fight for the right to stay in these camps.  It is very hot here and we cannot stay in the tents in the middle of the day.  But we all search and search and there is no other place to go.  Until we get housing, these homes are everything we have.”

There are nearly a thousand such camps of people across Port au Prince.  Some house thousands, many like Camp Django, housed hundreds.

A government myth says people gather in the camps only to receive food and water and medical services.  The truth is that many, many camps, including Camp Django, get no water, food or medical services. They are there, they tell us, because they have no other place to go.

We visited Marie (not her real name for her protection) in her boxlike tent.  She lies on a bed writhing in pain.  She has been vomiting and bleeding and was surrounded by other residents of the camp.  They were taking turns propping her up and drying her forehead.   They explained to us that she had been assaulted by men who entered their camp at the order of the Mayor of the Port-au-Prince suburb of Delmas.

Last Saturday, a group of five men, some armed with guns, stormed into the camp and threatened the residents.  Four of the men were wearing green t-shirts that read “Mairie de Delmas” (The Office of the Mayor of Delmas).

The Mayor’s men told the people that they would soon destroy their tents.  They bragged they would mistreat people in a manner worse than “what happened at Carrefour Aero port,” referring to the violent unlawful eviction of a displacement camp at that location by the same mayor and police less than a month ago.

The Mayor’s men pushed their way through the camp, collecting the names and identification numbers of heads of household and marking tents with red spray painted numbers.

When the men pounded on the wooden door of the tarp covered shelter where 25-year-old pregnant Marie lived with her husband, she tried to stop them from entering.  Marie tried to explain that her husband was not home.  But the leader of the group, JL, violently slammed open the wooden door of her tent into her stomach, causing her to fall hard against the floor on her back.

Three days later, Marie remained in severe pain and bed ridden, worried sick about her baby.

When one of Marie’s neighbors protested JL’s brutality, JL became enraged and threatened to kill him. Onlookers in the camp feared his words, particularly when they noticed a pistol tucked into his belt.

When the government pushed their way into the camp, residents called human rights advocates from Bureau des Avocats Internationaux (BAI) and asked them to come at once.

Jeena Shah, a BAI attorney, arrived at Camp Django while government agents were still there.  Jeena asked JL who had sent his group to Camp Django and why they had marked the tents with numbers. JL was evasive, repeating over and over that “the government” had sent him. Finally he stated that “the National Palace,” a reference to current President Michel Martelly, had sent him.  As of the writing of this article, the President had neither confirmed nor denied authorization or participation in the threatened eviction.

Camp Django residents rightfully feared that their camp faced the same fate that so many displaced persons had since the earthquake more than 18 months ago—violent eviction, exacerbation of their already vulnerable situations and homelessness.

Camp Django is but a small example of what is going on in Haiti.  The International Organization on Migration estimated that as of April 2011, 166,000 homeless earthquake survivors were facing imminent threats of eviction, one fourth of the displaced population.  The evictions have been carried out by the government or with the government’s tacit approval despite rulings by the Inter-American Commission on Human Rights’ directing to the Haitian government to place a moratorium on evictions and create adequate measures to protect the displaced population from unlawful forced evictions.

It is still unclear whether the Mayor of Delmas encouraged or condoned these specific acts of violence against the residents of Camp Django, but the Mayor’s stand on forced evictions is well known.  After leading a rampage of violent unlawful evictions last month, he recently stated on Haitian television that he will continue forcing displaced communities out of their tent camps, even though they still have nowhere else to go.

President Martelly, who has refused to publicly condemn the violent forced evictions perpetrated by the Mayor of Delmas, is responsible for any threats and harm that befall the community of Camp Django and Haiti’s thousand other displacement camps.

The women sing out for justice.  “The rich,” they tell us, “use force against the poor in Haiti.”  They demand justice for Marie.  And they insist their human right to housing be protected.  They are organizing.  Their voices are strong.  Their passion is pure.  Their cause is just.  They inspire us to join them.

This should really not have been a surprise to anyone who has been paying attention to the state of the real economy these past few years. And yet, in the CNBC story about the Shiller Report, we get this little nugget:

“Just about everybody agrees we’re going to miss the seasonally strong period in 2011, which we should be at the very beginning of right now with May, but nobody thinks that will make any difference,” says S&P’s David Blitzer. “Everybody’s now keeping their fingers crossed for 2012 and wondering whether people just don’t want to own homes anymore.”

That last sentence is what really took my breath away. I have no idea who David Blitzer is, but presumably he gets paid a lot of money to think about and analyze what’s going on in the economy—the housing market in particular. Sadly, like many people who get paid to pontificate in our mainstream media, he either doesn’t have a clue or he is deliberately concealing the truth.

Let me dispense with the second part of that last sentence first. Is Blitzer really that obtuse to think the reason Americans have stopped buying houses is because they don’t want to—as if owning a home were akin to buying a pair of Crocs shoes, lots of fun when everyone else was doing it but now terribly out of fashion? Earth to David Blitzer: people still WANT to own homes. Home ownership is still the basic foundation of the (dying) American Dream. That hasn’t changed. What’s changed is that now people can no longer AFFORD to buy homes. Or maybe you missed all that economic data showing that America currently has about seven million fewer jobs today than it did in 2007, or that that most of the jobs that have been created since the depths of the Great Recession barely pay above minimum wage. What exactly are the unemployed supposed to USE to buy a new home with—food stamps?

As for the first part of that last sentence, it could serve as a motto for our financial punditry and political “leadership” in general. Just cross your fingers and hope everything gets better. While you’re at it, you should rub a pair of ruby slippers and chant “there’s no place like home.” Both actions are likely to be just as effective.

It is now nearly three years after the market crash of 2008, and if you want to know why America refuses to face up to reality you need look no further than the sheer blithering idiocy that passes for expert analysis on the economic front. This issue has been beaten to death in a number of quarters since the crash, of course, but that doesn’t lessen the shock that comes with the continued appearance in the media of statements like Mr. Blitzer’s. All he and his ilk can do is shake their heads in exasperation when the bad news hits, and repeat that same lie they have told themselves and everyone else over and over since 2008, “Nobody could have predicted…”

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.

ForeclosureGate represents the sum total illegal and unethical lending and collections activities during the real estate bubble. It continues today. Law professor and law school dean Christopher L. Peterson describes the contractual language for the sixty million contracts between borrowers and lenders as fictional since the boilerplate language names a universal surrogate as creditor (Mortgage Electronic Registration System), not the actual creditor. Other aspects of ForeclosureGate harmed homeowners but the contractual problems that the lenders created on their own pose the greatest threats.

When the Massachusetts Supreme Court upheld a lower court ruling that the actual creditor must named in the mortgage agreement (a legal requirement that the banks forgot to meet in their contracts), there was consternation on Wall Street. What would happen if a class action lawsuit challenged these flawed mortgages? Isn’t the Massachusetts decision the latest of many attacking the legal basis of the shoddy business practices and boilerplate industry contracts? What if homeowners started walking away from their underwater mortgages based on the legally flawed contracts? If there were a viable prospect of a class action suit against financial institutions threatening to invalidate these contracts, wouldn’t that crash the stock values of the big banks and some Wall Street firms?

The big banks and their partners on Wall Street need a preemptive strike to derail the legal process that threatens their existence. They may get a temporary reprieve through pending consent decrees from the United States Department of Justice and consortia of state attorney’s general. If that protection fails, big money will make every effort to buy a bill from Congress that absolves them retroactively, en masse. The consent decree might cost them a few billion dollars. That’s much better than owing the trillions in lost home values due to their contrived real estate bubble and stork market crash.

As bad as this is, it gets worse.

Beyond ForeclosureGate

The surface scandal is about fraudulent business practices and a systematic assault on homeowners by lenders, servicers, and the legal system. A much broader picture must be viewed in order to understand the utter contempt that the ruling elite has toward citizens and the depraved tactics used to express that contempt, all to serve endless desire to accumulate more money and power.

The set up began when we heard about the ownership society in the 2004 presidential election. President Bush defined ownership as taking the government out of our lives so more people could own homes and control their destinies. The foundation was home ownership. As Bush said on the campaign trail, “We’re creating a home — an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property.”¹

Then Federal Reserve Chairman Alan Greenspan was uncharacteristically coherent when he laid the foundation for the swindle earlier that year. Greenspan told the Credit Union National Association that the fixed rate mortgage was “an expensive way of financing a home.” He was clear when he advised lenders that, “consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.”²

The Chairman of the Federal Reserve and the president ratified the real estate bubble, already underway at the time, as political and financial doctrine. The advice was clear. Get an ARM, own your piece of the American Dream and spend that equity. Housing prices never go down, right?

Freddie Mack, Fannie Mae, Wall Street and the big banks provided the back room. Mortgage Backed Securities (MBS) derivatives were vastly expanded. This made it easy for more homebuyers to qualify for mortgages they might not otherwise get, credit standards dropped. Those with good credit saw an array of tantalizing zero interest loans and other mortgage products to maximize available cash and feed the stock market.

It was all good until it wasn’t.

The real scandal is the unfathomable loss of wealth and opportunities by the vast majority of citizens and the vicious attack on the most vulnerable citizens as a part that process. The attack continues and is worthy of review.

Foreclosure and Bankruptcy

Foreclosure is the down side of the ownership society. When you’re sold a bill of goods, a property that you were told you were qualified to buy, and you lose it, you are evicted from ownership island.

Before Congress passed the 2005 bankruptcy reform act, homeowners could avert foreclosure in many states by filing for bankruptcy. Not just anyone could qualify. The process of qualifying was difficult and, oftentimes humiliating. But homes were saved and families were preserved with a chance to start over.

A myth emerged of the bankruptcy abuser, a high-class sort of welfare cheat. These reckless people worked the system to rack up large debts that were subsequently wiped clean through bankruptcy. The alleged abuse of the system became the excuse for a major overhaul of bankruptcy law. The legislation passed the Senate with 74 yes votes and soon became law.

The changes since the 2005 legislation provide substantial benefits to creditors. Morgan et al. summarized the direct benefits to creditors in a forthcoming publication in the New York Fed’s Economic Policy Review. Before bankruptcy reform, the filer of a bankruptcy claim used to determine Chapter 7 or 13 filing status. That makes a difference in the amount and type of debt relief. The legislation imposes means test that determines precisely which chapter (7 or 13) filers must use. Significantly, chanter 13 filers retain more debt from medical and other unsecured credit.

Legal costs ranged from $600 to $1500 before bankruptcy reform. Legal fees now range between $2800 and $3700. Previously, there was no requirement for credit counseling prior to filing.

Filers must now document approved credit counseling six months before filing or face dismissal of their case (Morgan et al.). This counseling requirement can lead to unwarranted dismissals or inordinate delays in filing at a time when filers need relief.

Under the old law, only bankruptcy trustees appointed by the federal court could file claims of abuse by the filer. Under the new legislation, anyone can file a claim of bankruptcy abuse, which can lead to a dismissal of the cause. This is a huge benefit to lenders who wanted to keep citizens from realizing debt relief.

The Real Benefit for Big Money – Delayed Bankruptcy Filings

The new law makes it harder to file a claim, doubles costs, and gives the creditors a say in claiming fraud on the part of those who file claims. Significant delays in filing for bankruptcy became the norm.

From “Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors,” Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008.

Time is money for loan servicers. A long delay before a bankruptcy filing, allows servicers the opportunity to add on special fees, many of which the borrower can’t comprehend. One thorough study showed that many of these fees were questionable. The longer it takes, the greater the revenue opportunities. Delay benefits creditors since loan payments continue at their original level.

What happened to those big spending, reckless bankruptcy abusers that were the rationale for the 2005 reforms? The following graph from the Consumer Bankruptcy Project shows that there is virtually no difference between the incomes of filers before and after bankruptcy reform. The majority of filers made between ten and forty thousand dollars a year before reform. That has remained virtually unchanged. The big spending abusers were and remain a mythical construct; the centerpiece of a diversion strategy to keep attention away from this never-ending gift to creditors.

From “Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors,” Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008.

These newly empowered creditors were the same creditors who hired debt collectors to try and frighten people out of their filings. A major study found that 24% of filers reported that debt collectors told deliberate lies to avoid bankruptcy. They heard that filing for bankruptcy would lead to jail, job loss, or an IRS audit. Some were told that it was illegal to file for bankruptcy.³

The deck was stacked early against citizens and protection from creditors disappeared under the new law. The creditors, who so recklessly precipitated the economic collapse, came out on top. They were free to profit in any way they could from their new market,

What Causes Bankruptcy – Financial Shocks from Medical Expenses

Prior to the new law, the major cause of bankruptcy stemmed from medical care expenses and the resulting disruptions to families. Rather than the mythical big spender contrived by Congress, for nearly half of filers, major medical expenses, family tragedies, were the tipping point to a loss of financial viability.

The Consumer Bankruptcy Project audited a representative sample of bankruptcy filers in 2001. The audit found that 46% cited a “major medical cause” for bankruptcy. This includes the direct cost of uncovered medical bills for major illness or injury, lost work due to the same, and the need to mortgage the family home to cover medical costs.

Did Congress review this data? Were they intent on making it harder to file bankruptcy as a result of illness? When bankruptcy is delayed or simply not attainable, less money is available for needed medical care. Were the members supporting bankruptcy reform indifferent to the suffering compounded by their thoughtless legislation?

The situation is worse now. A comprehensive survey of those who filed bankruptcy in 2007 showed the increasing desperation of those faced with medical problems. When individuals or family members are in dire need of medical care, do they just sit home and suffer?

From “Medical Bankruptcy in the United States, 2007: Results of a National Study,” Himmelstein et al., American Journal of Medicine, 2009:04.

The results of this survey show that two thirds of bankruptcies result from medical care that they can’t afford or losses in income from medically required leave. Where are the big spending cheats?

Nihilists at the Helm

The big banks, Wall Street, the politicians they own, and the Federal Reserve Board created the real estate bubble in bad faith.

They knew or should have known:

• that the real estate bubble was unsustainable;
• when the bubble deflated, many homeowners would hit a financial wall; and, that
• when homeowners hit the wall, to maintain viability for their families, they would need relief of some sort.

What did the nihilists of the financial elite and their hit men walking the halls of power do with all this knowledge? They went ahead with the real estate bubble, fostered it, deregulated meaningful controls on the financial industry, and crafted a new bankruptcy law to stick it to filers. They knew or should have know that data from 2001 showed a very high rate of filings due to the financial stress of medical care and crises. Did they care? Do they care now? Has anything been done to correct this injustice?

While citizens suffer in financial distress, often due to illness, at the behest of influential bankers and investors, the Department of Justice crafts a settlement with lenders and their representatives to relieve them of the stern justice due for their specific crimes and the larger horrors they visit upon citizens, all in the name of short term profit.

We are most emphatically not a nation of laws. We are a nation where the law is used by a very few for their own purposes, without regard for the well being of the nation or its citizens. We are a lawless nation.

1. “Remarks to the National Association of Home Builders in Columbus, Ohio.”
2. “M. Collins, Money Party to Citizens – Drop Dead!, Scoop.”
3. Lawless, et al. “Did the Bankruptcy Reform Fail? An Empirical Study,” American Bankruptcy Law Journal, Vol 82, 2008.October 2008.

Whether out of extraordinary resolve or sheer desperation, a “show me the money” policy is exactly the course Fed Chair Ben Bernancke is pursuing at full throttle. Faced with the unenviable task of reflating a deflating and uncooperative economy, the Fed opted last fall to take the “easy money” quotient a notch higher by formally initiating a second round of quantitative easing, while tacitly acknowledging the possibility of QE3, QE4, and so on into the undefined future. With Fed Fund rates effectively at or very near zero and a trillion dollars already in reserves, the Fed is in other words doing all it can to get the “credit-as-money” spigot flowing.

While hardly a ringing endorsement of the Fed, the truth is that the Fed has few other “money spigot” tools at its disposal.¹ So it was that – in an op-ed appearing in the November 4 issue of the Washington Post – the beleaguered Bernancke reminded the nation that the Fed cannot, by itself, solve all the problems rippling through the American economy. That process said Bernancke “will take time and the combined effort of many parties including the central bank, Congress, the administration, regulators and the private sector.”

Although the Fed for its part has shown unusual resolve to go the distance, the stimulative activities of the private sector – disconcertingly led as they are by a handful of big banks – are mostly focused on overseas “opportunities” in the emerging markets and not stimulative activities here at home. This combination of “cheap” dollars and cheap emerging market prices has of course enabled the financial sector to do quite well, despite increased risk. Meanwhile even those regulators not previously captured by special interests find themselves increasingly hobbled by a complex matrix of old, new and proposed regulations interlaced with a variety of deregulation schemes which together dilute the likelihood of effective action – and maintains the regulatory environment for “rogue Wall Street firms to kill small American businesses for profit.”

That leaves Congress and the administration. While both are also arguably captured by special interests, they are clearly feeling the intense pressure of a cash-strapped public. Hence the recent tax-cut bill which will add nearly a trillion dollars to the federal debt but do little to stimulate adequate money (as credit) creation where it is needed most – not in the financial economy headquartered on Wall Street but in the real economy, here on Main Street. Now caught between the proverbial rock and a hard place, the Fed, by its own admission and despite its high minded goals, appears every bit as needy as the erstwhile Jerry Macguire.

Main Street’s Woes Belie Wall Street’s Gains

For the moment, the Fed’s “easy money” goal of raising asset prices seems to be working, albeit not necessarily in sectors – such as real estate – where it would do the home economy the most good. Capitalizing on stockpiles of cash, good credit and “cheap money” secured by uber-low interest loans and back-stopped by TARP, the big banks and large corporations – together with a small army of investment funds – have been having a field day speculating in potentially lucrative but nevertheless risky ventures, inflating as they go various commodity prices such as wheat, corn, hogs and similar commoditized foods, as well as health care, precious metals and oil – and raising the possibility of igniting dangerous currency wars through revved up currency speculation.

Surging prices for necessities such as food, oil, and health care send mixed signals to ordinary Americans because inflation in the U.S. economy (after stripping out volatile food and energy prices) is actually at the lowest level it has been since 1957. Clear evidence of this phenomenon appears in the retail sector where for months retailers have been slashing prices on a seemingly endless supply of goods. While bargain hunters and incurable sentimentalists appear to have responded for the holidays at least, one has to wonder how the slimmest of profit margins can sustain not only retailers but their suppliers – and in turn, the myriad of producers and raw materials providers needed for finished goods, even if these are sourced from cheap-labor countries.

Ominously, job growth (with the exception of part-time jobs) is also going mostly nowhere, a fact which – however contra-indicative of an apparent holiday spending spree – does nothing to reverse the troublesome downward spiral in prices and wages. Consensus also has it that higher-than-normal unemployment will be with us for years to come. All of which affirms Bernancke’s preoccupation with stagflation and deflation – and bodes poorly for the Main Street economy inasmuch as “falling prices often also mean falling wages, as businesses respond to declines by cutting output and jobs.”

Wall Street gains make it clear that the banks and investor class are doing very, VERY well, thank you very much. Another portion of the population, perhaps as much as a third overall, is doing reasonably well – or at least well enough to keep up appearances. We have in other words, two Americas which, if understood, helps us make sense of conflicting economic data. The top 20% of Americans are prospering and spending handsomely despite carrying the major share of the tax burden, while the next 20% represents a fragile middle class that has become “mostly a figment of nostalgia and/or political illusion.” In real terms, the bulk of Main Street, including drop-off portions of the shrinking middle class, is bleeding profusely with one of every six Americans unemployed and countless more chronically “underemployed.”

Unfortunately for those most severely affected, the level of suffering is masked by the fact that there are “wide variations of hardship in the 50 largest metropolitan areas” – and official estimates do not always paint accurate pictures. As but one example, Detroit’s mayor and local leaders maintain that Detroit’s unemployment rate actually hovers near 50%, a figure far above official estimates of 30%.

Contributing to the probability of an increase in Main Street woes is the likelihood of a second dip in the housing recession – meaning home prices have yet to hit bottom. This translates into progressively fewer Americans who will be able to tap into home equity as a means of getting themselves through tough times – and it could bring about another tsunami of foreclosures. In turn, local real estate and other tax revenues will continue to decline even as demand for social services increases. This spells additional trouble for state and local governments, with states themselves collectively facing a $140 billion dollar operating budget shortfall next year alone.

Big Trouble Ahead for State and Local Budgets?

Indeed, state and local operational budgetary problems are becoming serious enough to threaten the inviolability of once “super safe” municipal bonds – which heretofore have been considered an attractive investment that comes with the added benefit of providing state and local government with funds for community improvements. Because bonds are essentially loans which the issuer (be it corporate or governmental entity) must pay back with interest, income streams of the issuer must be adequate enough to satisfy the terms of the loan. Unfortunately, low tax revenues and weak economic outlook are now compromising the bond issuer’s (borrower’s) ability to meet the terms of the loan – so much so that municipal bond defaults have been running triple the usual rate.

Economic forecasts that are tepid at best lead anaylsts to “fear that at some point, investors could balk at lending to the weakest states, setting off a crisis that could spread to the stronger ones.” Big name financial analysts such as Meridith Whitney and bond experts such as Marilyn Cohen go so far as to pose the possibility of widespread muni bond defaults.

While not everyone believes state and local budget problems are severe enough to create a ripple effect of bankruptcies, it is nevertheless unsettling to recall that the Great Depression actually began – and was prolonged – as various municipalities, mostly in the South and Midwest, began cutting services and defaulting on bond debt. A re-play of the Great Depression notwithstanding, the one thing most agree on is that states and communities with high levels of debt and poor revenue prospects will at the very least see the cost of borrowing head skyward, as investors head for cover.

Compounding muni market fears is the fact that, while investors of muni bonds may at one time have been lucky enough to have ended up with the equivalent of a piece of Central Park in satisfaction of debt defaults, today many such investors may not fair so well. This is in part because the states themselves are ill-prepared to help themselves much less troubled municipalities, and in part because, in the words of SEC Commissioner Elisse Walter, “investors in municipal securities [have become] in many ways ‘second-class citizens’ who [do] not receive the protections customary in many other sectors of the U.S. capital markets.”

Although states themselves cannot declare bankruptcy and typically look to other ways to satisfy their debt obligations including recasting pension contracts, increasing taxes and slashing programs, they can, at their discretion, help municipalities in trouble. States are, however, much less likely to provide such help when they themselves are in financial trouble. So what happens when a state refuses to rescue a troubled municipality? The municipality can potentially be forced into bankruptcy, leaving bond holders holding the bag.

As fiscal pressures have mounted, states seem to be turning to unorthodox methods in order to remain operational. This is verified by new evidence – emerging as a result of SEC investigations of New Jersey, Florida, California and elsewhere – which suggests that many states may be papering over their fiscal troubles by providing fraudulent information about their finances to muni bond investors. The states do this in a variety of ways, including keeping liabilities under wrap through delayed filings or by burying them in opaque documents. They also may resort to deferring payments of obligations and re-characterizing bond debt as revenues.

In the case of Illinois, for example, heavy borrowing and a history of deferring bill payments has led three major credit-rating agencies to rank Illinois as one of the two riskiest states for bond investors, California being the other. In his final quarterly report, published January 7 (2011), former Illinois Comptroller Dan Hynes warned that “the state could face $7 billion to $10 billion in unpaid bills by the end of the current fiscal year… Any use of bonds to deal with the state’s fiscal condition will continue to impact the state’s cash management practices in the future, as the state must adjust to those higher debt service obligations.”

Despite such warnings, “Illinois plans to borrow more than $3 billion to pay the bills for FY2011 and in June 2010, the legislature permitted the university systems to borrow millions more to make up for the fact that the state has not made the payments it had promised them.” In other words, Illinois is not only borrowing more to pay its own bills (by floating bonds) but it also has begun allowing other entities within its purview the new privilege of borrowing as a means of helping that entity to meet the state’s portion of obligations to it. This according to the non-profit Sunshine Review, which is a collaborative research organization dedicated to state and local government transparency.

The Sunshine Review further reports that: “As of the end of August 2010, Illinois had borrowed $9.6 billion in the prior 12 months.” For Illinois residents this means that as much as $551.3 million extra will have to be shelled out for the state’s borrowing over the last year alone. In addition, “more than half the state’s additional borrowing costs, amounting to approximately $301.2 million, will come due in the next five years.” And adding still more salt to taxpayer wounds, “the cost of insuring five-year Illinois bonds to protect $10 million of debt against default in June 2010 rose to $370,000, a record, from a low of $155,000 in January, 2010. The price fell back to $281,000 at the end of July 2010.”

In addition to the myriad problems associated with borrowing to pay obligations (about which we have only touched upon here), there is another problem connected to the budgetary process – and it lies in current accounting practices which rely on the cash basis method (also referred to as modified accrual basis). This according to the Institute for Truth in Accounting, a professional group of financial and public policy experts dedicated to reform of the GAAP accounting practices now used under the Comprehensive Annual Financial Reports (or CAFRs). For example, “the state of Illinois routinely delays Medicaid payments to healthcare providers. Each year the budget appears balanced on a cash basis even though the state does not provide sufficient funding for the Medicaid program.”

While arguing that “objectively better” accounting systems are universally employed in the private sector, the IFTA said that its research found that the current accounting system “does not give all stakeholders an accurate diagnosis of the financial health of state governments because the accounting principles recommended are biased towards the interests of government officials. The current structure and funding mechanism of the GASB make it difficult for members of this board to not be influenced by constituency groups that represent governmental officials and their staff.”

Thus, says former SEC Chairman Arthur Levitt, “At the core of the [muni] problem are questions about how governments manage pension funds, what investors know, and when they know it. The case against New Jersey revealed that the state has made unfunded pension fund promises to its employees, and compounded the problem by not being forthright with bond investors.”

In ideal circumstances, pension funds are supposed to keep up with benefit promises through a combination of employer and worker contributions, together with market returns from a fund’s investment portfolio. But, says Levitt, those revenue streams have slowed to a trickle as states have cut back on their own contributions, employees have contributed too little, and hoped-for investment gains have shriveled up. If investors discover that the muni market has instead become a way to paper over irresponsible promises, they will flee it, and that could spell disaster.

Investor anxiety has become significant enough that “some analysts have suggested that the Fed could ease muni market worries by purchasing muni debt or lending to struggling borrowers.” But on January 7, Fed Chair Ben Bernancke nixed the idea on legal, political, and practical grounds, saying “that if municipal defaults did become a problem, it would be in Congress’s hands, not his.”

But assuming that Congress will bail out any state in terminal trouble is itself a very risky gamble. Why? Because “[a]nything that the feds do for one state they’d have to do for others, which would turn into a bottomless and politicized spending pit.” With balance sheet problems of its own to contend with, the federal government is hardly in a position to bail out a string of troubled states, this fact being reinforced by growing taxpayer objections.

All of which brings us back to the unchartered waters of quantitative easing. Will QE2 and beyond be able to provide the kind of economic relief so desperately needed by Main Street? This is likely to remain an open question for some time to come because the money spigot used by the Fed can only create money as bank credit – and credit becomes far more expensive, indeed sometimes altogether unobtainable, for those in financial distress. Which of course translates to a “tight” money (as credit) supply – right where it is needed most, here on Main Street.

Should QE2 (or maybe 3 or 4) somehow ultimately work well enough to satisfy squeaky wheels, there’s still that pesky question forever lurking in the background: Can we REALLY keep borrowing our way into prosperity – or is there a better way? ²,³

Stay tuned.

1. While Fed tools may be limited, its options within that framework of tools are less so. In this video presentation prepared for the American Monetary Institute, ex-marine and long time AMI board member Dick Distelhorst explains that the Fed actually has the ability to issue “money,” based on reserves, directly to the American people instead of to the banks as it has been doing, thereby bailing out the people instead of the banks. While this interesting option would still be based on debt (that is to say, creating money at interest based on bonds held in reserves), it does nevertheless raise the important question as to why the Fed chose to support the errant banks instead of the people who are forced to pay for the bailout. Answers to that question may potentially be found in 13 Bankers by Simon Johnson and James Kwak and similar books along with articles such as this, this, and this. But particularly for the purposes of this article, the present author has charitably conjectured that the Fed unwittingly over-looked this option in favor of fractional reserve monetary (that is, credit/debt) expansion – which of course can only be done by the banks, but which could potentially get more money (as credit) into the system.
2. Monetary expert Will Abrams explains Canada’s experience under two types of monetary systems, one built on debt – the other on the creative and consumptive activities of the people.
3. For an abbreviated, step-by-step explanation of our current monetary system see “Money Owed and Owned.” Or see this more technical description.

A year ago, people wandered the streets dazed, searching for loved ones. Lost power cut communications except by satellite phone. Haiti’s quake vulnerability was well known but little reported, and no advance precautions were taken.

The inevitable finally happened, harming the majority poor population most. Earlier storms wiped out public housing and erased communities, letting developers build upscale condos and other high-profit projects on choice Port-au-Prince land. After the quake, the Red Cross estimated at least three million Haitians needed emergency aid — everything, including food, clean water, makeshift shelters, blankets, other provisions, medical care, sanitation, and funds for relief, rubble clearance, and rebuilding as soon as possible.

A year later, 95% of the rubble remains. Up to 1.5 million Haitians remain homeless. Most promised aid never came. Haitians were left stranded in squalid tent camps on their own. Twelve months later, the crisis festers, a monstrous crime of indifference, neglect, exploitation, and persecution by imperial Washington and world capitalism, valuing Haiti and its people solely as commodities.

Observers like former Jamaican Prime Minister P.J. Patterson expressed dismay, saying:

The mountains of rubble still exist. The plight of the victims without any sign of acceptable temporary shelter is worsening the conditions for the spread of cholera, and the threat of new epidemics becomes more frightening with each passing day. In short, there has been no abatement of the trauma and misery which the Haitian populace has suffered.

According to Oxfam’s Roland Van Hauwermeiren:

2010 was “year of indecision (that) put Haiti’s recovery on hold. Nearly one million people are still living in tents or under tarpaulins and hundreds of thousands of others who are living in the city’s ruins still do not know when they will be able to return home.” They have none.

Bodies are still being recovered, yet President Preval declared search and rescue operations over 11 days after the quake, and did virtually nothing to find them or provide aid from the time disaster struck. Nor was he visible to show concern.

Washington deployed 22,000 soldiers, Marines, sailors and airmen to obstruct, not deliver, incoming aid, control the airport, other strategic facilities, coastal areas to turn back fleeing Haitians, and secure the country for capital. Desperate Haitians were largely ignored. A year later, they still are.

World support yielded billions of dollars mainly from private donations. According to a Chronicle of Philanthropy survey, an estimated 38% reached Haitians, but the true figure is likely far less, most of it stolen by predatory NGOs or allocated for commercial development. A March 2010 donors conference secured over $5.3 billion pledged by governments. Pathetically little was delivered, least of all from Washington.

The Obama administration promised $1.15 billion. It delivered nothing, its response as contemptuous as shown needy Americans, left mostly on their own during a devastating economic crisis with austerity, not aid, planned going forward.

Compounding unmet needs, Nepalese Blue Helmets introduced cholera in Haiti’s main rice-growing area. Now raging, it caused thousands of deaths, hospitalizing many more, and leaving up to a million or more vulnerable to infection. Yet the disease is easily treated if done properly on time. Despite heroic efforts by hundreds of Cuban and other volunteer doctors and medical professionals, including Doctors Without Borders (Medecins Sans Frontieres), cholera remains out of control, the death toll rising daily.

Last October in frustration, a homeless mother lamented that “If it gets any worse, we’re not going to survive.” It did as cholera rages. Reconstruction is absent. Rubble is uncollected. Aid is absent, and Haiti’s November 28 elections were engineered for more of the same, a sham awaiting an unscheduled runoff with two candidates most Haitians reject.

As a result, the combination of devastation, exposure, overwhelming need, disease, neglect, electoral theft, repression, exploitation, and rapists ravaging thousands of women and young girls left millions of Haitians slowly expiring out of sight and mind to world audiences. It’s especially true in America where television news lost interest shortly after the quake and never reported it accurately. Nor have print stories that occasionally continue.

Major Media Misinformation

On January 10, Time magazine asked “Who Failed on Haiti’s Recovery,” saying:

The combination of “rapacious foreign aid workers (and) feckless politicians” lost Haiti, ignoring Washington’s iron grip on the country for generations, the root of Haiti’s problems. Yet Time stressed that “numerous formerly poor, underperforming countries….achieved a degree of stability and prosperity that would have been unthinkable a few years ago.”

False, with few exceptions as throughout the developing world imperial America and predatory capitalism institutionalized exploitation and poverty for the vast majority. Local officials and elites, business leaders, and a small professional class alone profited. South Africa is a case in point where conditions for the Black majority are worse now than under apartheid, an unreported story in the West.

Yet Time insisted that America’s “moral obligation isn’t to solve the world’s most intractable problems. It’s to act where we can do the most good.” That, of course, required freeing developing countries from its imperial grip, the core issue Time and other Western media ignore.

On January 3, New York Times writer, Deborah Sontag, headlined, “A Year Later, Haiti Struggles Back,” saying:

Despite Haiti’s “gloomy backdrop, many Haitians (have) started to find some equilibrium – to heal, to rebuild or simply to readjust their sights….haunting and hopeful.” Relating some of their stories, Sontag showed exceptions obscuring the overwhelming misery most Haitians face, ones she and other mainstream journalists ignore, pretending conditions are improving. Daily, in fact, they worsen.

The White House, World Bank, USAID, UN and Predatory NGOs One Year Later

On January 12, a shameless White House press release said it’s:

an important time for us to reflect on the important progress that’s been made, and the many players who have made it possible, while reaffirming the American commitment to Haiti and looking forward ahead to the work that remains to be done in cooperation with the Haitian people and international partners.

In fact, Washington remains Haiti’s main problem, responsible for colonizing, plundering, exploiting, and brutalizing Haitians for generations. Real sovereignty depends on liberation from America’s yoke, what most Haitians want most along with removing paramilitary UN Blue Helmets (MINUSTAH), letting Aristide return, and being able to have free and open elections with majority party Fanmi Lavalas participating so Haitians can have leaders they trust.

On January 12, World Bank.org called Haiti’s “disaster response/development community (in) reflective mood” despite the continuing human tragedy “compounded by the ongoing political standoff….Still, there are some glimmers of success that provide some motivation for those of us working to transform and modernize Haiti.”

The World Bank, IMF and other international lending agencies, of course, exploit nations for capital, leaving most people impoverished and ignored.

NGOs as well are notorious for exploiting nations wherever they show up. Thousands of them now ravage Haiti. Yet the Red Cross said:

Because of the generosity of our donors, Haitians are receiving immediate relief and longer-term support and training to help them recover and rebuild. And in the coming years, the American Red Cross will continue to responsibly invest the money entrusted to us by the American people into essential programs and projects until every donated dollar is spent.

In fact, precious little goes for Haitian needs, leaving them worse off today than a year earlier. On January 7, Huffington Post writer, Marcus Baram, headlined, “Haiti Earthquake Anniversary: Little Progress, Broken Promises,” saying:

“This week (an unnamed) leading international charity slammed the relief effort as a ‘quagmire,’ sharply criticizing the recovery mission (co-)chaired by (Bill Clinton), saying that the much-praised panel ‘failed to live up to its mandate.’ ” In fact, “some problems have worsened.” World attention turned elsewhere and predatory NGOs freely plunder Haiti for profit.

Washington plans it on a grander scale, yet on January 12, USAID said:

From the first moments after the earthquake until today, the US Government has mounted an unprecedented humanitarian effort, led by USAID (in fact, a notorious predator) and through the hard work of many people across multiple agencies and departments. All of this work is supported by the tremendous generosity and compassion of the American people….The US Government is committed to helping the people and Government of Haiti build back better.

Paramilitary UN Blue Helmets (MINUSTAH) noted the one year anniversary, saying:

“To celebrate (the) lives (of those lost) and honour all our friends and colleagues who perished….the one year anniversary is being marked by a formal commemoration at MINUSTAH.” The mission remains committed to “restoring a secure and stable environment.” In fact, it’s a repressive occupier Haitians despise, reject and want removed.

On January 12 at UN headquarters in New York, Secretary-General Ban Ki-moon participated in a deceitful 4:53PM wreath-laying ceremony, coinciding with the time Haiti was struck. A servant of power, his complicity and indifference worsened Haiti’s problems. So have predatory NGOs, Western nations, international lending agencies, USAID, and other exploitive missions.

On January 7, the Washington Post gave rare responsible op-ed space to Professor Alex Dupuy (a Haitian native) for his article headlined, “One year after the earthquake, foreign help is actually hurting Haiti,” saying:

The international community, notably “the United States, Canada, France, the United Nations, and financial institutions such as the World Bank and the International Monetary Fund (have been) significantly….problematic. Their objectives and their policies first and foremost aim to benefit their own investors, farmers, manufacturers and non-governmental organizations (NGOs).”

As a result, “a dramatic power imbalance (exists) between the international community, under US leadership, and Haiti. (It) monopolizes economic and political affairs and calls the shots.” Haiti’s oligarchs “also bear great responsibility for the abysmal conditions of the country before the earthquake,” created “in close partnership with foreign governments,” notably America and international lending agencies.

The Interim Haiti Recovery Commission (IHRC), co-chaired by Bill Clinton and Haitian Prime Minister Jean-Max Bellerive, effectively displaced Preval’s government by setting reconstruction priorities, favoring corporate America, not displaced Haitians.

This far, IHRC has done little, dispensing less than 10% of the small amount of pledged aid delivered, rebuilding the international airport and clearing major urban arteries. Moreover, of over 1,500 contracts let worth $267 million, Haitian firms got only 20 worth $4.3 million. American companies got the rest, almost exclusively using US suppliers.

More is planned to make Haiti more than ever a colonized sweatshop, its people, the region’s poorest and lowest paid, exploited as near-slave labor. As a result, said Dupuy:

Whatever new government emerges from the recent, though flawed, elections will not change that basic reality.

In fact, Haiti’s new government is being chosen, not elected, to assure it, institutionalizing Haitian impoverishment, depravation, exploitation, and repression of resisters. A year later, Haitians find little to celebrate, knowing worse likely lies ahead, courtesy of US corporate predators and complicit Washington officials, plundering Haiti ruthlessly.

UNICEF estimates that more than 1 million people – 380,000 of them children – still live in displacement camps.

“The recovery process” as UNICEF says, “is just beginning.”

One of the critical questions is how many people remain without adequate housing.   While there are fewer big camps of homeless and displaced people, there has been extremely little rebuilding.  The UN reported that 97,000 tents have been provided since the quake.   Tents are an improvement over living under a sheet but they are not homes.  Many families have lived many places in the last year circulating from rough shelters to tents to camps to other camps to living alongside other families.

It is important to understand that families may leave the huge unsupervised camps and still be homeless someplace else – like a tent in another part of the city or country.   Moving from one type of homelessness to another cannot be allowed to be declared progress against homelessness and displacement.

The key human rights goal is housing, not moving out of the displacement camps.

One illustration of the housing challenge facing the Haitian people can be found in a recent report from the International Organization for Migration (IOM).  The IOM December report announced a reduction in the number of persons remaining in displacement camps.  The IOM then wrongly concluded that the number of people displaced and homeless was reduced accordingly. Why is this conclusion wrong?  Because the IOM report does not even try to track where displaced persons go after they leave a particular camp.   They equate homeless families moving out of displacement camps as families finding housing.

These types of erroneous conclusions are not only misleading but threaten to hinder badly needed relief efforts one year after Haiti’s devastating earthquake.

Careful consideration of the IOM report provides an opportunity to examine some of the many important housing challenges still facing Haitians.

IOM Assertion: “We finally start to see light at the end of the tunnel for the earthquake-affected population…these are hopeful signs that many victims of the quake are getting on with their lives.”  IOM reported there has been a 31% decrease in the number of internally displaced people living on IDP sites in Haiti since July.

Fact:  Getting on with their lives?  Of an estimated 1,268 displacement camps, at least 29% have been forcibly closed – meaning tens of thousands of people have been evicted, often through violent means.  Many who are forcibly evicted from one site move on to set up camp for their families in another location, which is often more dangerous.   This is not getting on with life; this is searching for less dangerous places for the family tent.

IOM Assertion: People with houses labeled red (uninhabitable or extremely dangerous) or yellow (in need of repair) have “chosen to return to the place of origin or nearby to establish a shelter.”

Fact:  As of December 16, 2010, only 2,074 of the estimated 180,000 destroyed houses had been repaired and a small percentage of rubble had been cleared.  Decisions by desperate homeowners to move back into still destroyed homes is hardly progress.

It is also not even possible for large numbers of people who were renters to return to their destroyed homes.  The destruction of more than 180,000 private residences coupled with influx of international aid workers has made Haiti’s rental market soar.  An estimated 80% of those rendered homeless by the earthquake were renters or occupiers of homes without any formal land title. Current rents are unreachable by the majority of displaced Haitians, many of whom lost their means of livelihood during the earthquake.  The IOM admits “The lack of land tenure and the destruction of many houses in already congested slums left many of those displaced with few options but to remain in shelters.”

IOM Assertion: “Some households rendered homeless after the earthquake left congested Port au Prince all-together going home to the regions.  Others sent their children to the countryside for a better life.”

Fact: Rural Haiti before the earthquake was home to 52% of the population, 88% of which was poor and 67% was extremely poor.  Rural residents had a per capita income one third of the income of people living in urban areas and extremely limited access to basic services.  Disaster response following the earthquake has not tackled the extreme structural violence that exists in rural areas, and Hurricane Tomas further destroyed livelihoods of rural communities.  People moving from displacement camps in the city to living in a tent in the countryside have not really moved out of homelessness, they have just moved.

IOM Assertion: “Surviving in poor living conditions during the long hurricane season has persuaded many to seek alternative housing solutions.”

Fact: Homeless people are always seeking “alternative housing solutions.”  Camp conditions even before Hurricane Tomas and the cholera outbreak revealed that displaced Haitians were in camps because they had no “alternative housing solutions.”  According to a study conducted by CUNY Professor Mark Schuller before both Hurricane Tomas and the outbreak of cholera, 40% of displacement camps did not have access to water, and 30% did not have toilets of any kind.  Only 10% of families even had a tent, many of which were ripped beyond repair during the hurricane season; the rest were sleeping under tarps or even bed sheets.  A study conducted even earlier by the Institute of Justice & Democracy in Haiti found that 78% of families lived without enclosed shelter; 44% of families primarily drank untreated water; 27% of families defecated in a container, a plastic bag, or on open ground in the camps; and 75% of families had someone go an entire day without eating during one week and over 50% had children who did not eat for an entire day.

Human rights promise housing, not just forcing people away from displacement camps.  Haiti needs practical and sustainable solutions for re-housing along with services and protections for the people still homeless.

One year later, it is critically important for the international community to assist Haitians to secure real housing.   The million homeless Haitians and the hundreds of thousands who have moved out of the large homeless camps into other areas are our sisters and brothers and still need our solidarity and help.

McLean, VA – Freddie Mac (OTC: FMCC) today announced it has ordered all evictions involving foreclosed occupied single family and 2-4 unit properties that had Freddie Mac mortgages to be suspended from December 20, 2010 to January 3, 2011.

‘If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays,’ said Anthony Renzi, Executive Vice President of Single Family Portfolio Management at Freddie Mac.

Because of the generosity of Freddie Mac, after these families have collected dozens of empty cardboard boxes from the local liquor store and stuffed their belongings into them, they will still have a little time to enjoy the holiday, even though the utilities may be disconnected, the cupboard bare, and, oh yeah, all the pots and pans sealed up with packing tape.

Maybe the kids can draw pictures on the Seagram’s box of a tree and the feast and presents they might have had if Mom hadn’t been laid off from Waffle House and Dad lost his job as a guard at the mall.

I was once fired on Christmas Eve. I worked for a big-city wholesaler that employed both highly paid union workers (men) in the warehouse and customer service people (women) in the office. The latter received slightly more than minimum. The president, who was off skiing for the holiday, left orders that everyone was to show up the weekend before Christmas to help with the inventory.

The warehouse guys were ecstatic. They would get double time and a half for Sunday. And they didn’t have to shop or cook. The customer service reps, who were stunned to lose the days they had planned to use for holiday preparations for their families, asked what they would get. “Nothing,” was the reply. “You are salaried.”

As assistant to the boss, I was exempt from counting stock, but as a single mom myself, I was furious, and I spoke out on behalf of the women, causing quite a ruckus. They did, indeed, come in–as a guarantee that they would continue to be employed–but on Christmas Eve I was called into HR, handed two weeks pay, and told that my talents were no longer needed. I went home and said to my sons, “Guess What?”

Times were better then, and I soon had a job where I got to work with actual human beings, but times have changed.

I live a fairly secluded life now, in a village that not only resembles the Bedford Falls of It’s a Wonderful Life, but is itself a “Falls,” and when I traveled to DC for the Thanksgiving holiday, I observed instances of a lack of good will that I had not experienced for some time.

At the airport a woman with whom I would have avoided sharing a conversation had I known what was coming, said something to the effect that to guarantee our safety, Muslims should have their own airline. My response was, “You are probably correct. I’m sure they would prefer to not travel with you.” End of conversation.

While I was in DC, I learned that the Giant grocery store chain had changed its policy regarding Salvation Army bell-ringers. Giant decreed that they can solicit contributions for only 12 days over November and December combined. On these days they are limited to four hours. The Salvation Army and other charities had previously been allowed 10 hours a day, six days a week. A spokesperson for Giant said the rule had been applied “in order to best serve our customers, and not hinder their shopping experience.”

In 2009, the DC Salvation Army raised half of their donations at Giant stores. While I disapprove of the Salvation Army’s anti-LGBT policies, they do provide help to many (Just don’t mention that you are gay.) Giant also supports food banks and other charities, but I believe they made a mistake in cutting the hours of the Salvation Army, whose kettle is one of the few constancies in our contemporary holiday nouveaux and whose help is sorely needed in the downward-spiraling economy.

On a personal note, I found myself very close to finding religion again while visiting the National Cathedral. Maybe it was the marble statues to which stone workers have dedicated their entire adult lives, or the sun streaming through the stained glass, but standing in the glow of its beauty made me long for something far in my past, when my working-class parents created our Christmases from little and then gave thanks for what they had. If only the poor and about-to-be-poor could be guaranteed merely that. Is that asking so much?

At the corner of 9th and Washington, there’s a quaint sign, “AVOID FORECLOSURE—215 543-4941.” At the corner of 7th and Washington, “WE BUY HOUSES FOR CASH—NO BANK NEEDED.” Strutting towards Philadelphia’s brand new casino, Sugar House, I pass a billboard promising me, personally, 23 million bucks if only I had the juju and stamina to outfox the Pennsylvania Lottery Board, Jesus and Satan. Luck favors the righteous, and that’s us, all right. Soon, every bum diddling settlement from sea to shining sea will have its own casinos. Do bet on it. There will be more certified dealers than playas.

Speaking of bums, there are more idlers than ever. What’s up with that? According to these gaseous experts, the recession has been over since last June, yet dazed loafers keep sprawling all over town, all over the country, actually. Just look around you. The newly homeless are easily identifiable by all the stuff they’re trying to hang on to. They pull wheeled luggage, push carts with way too much on them. They’re relatively clean, for now. Soon, they’ll let go of everything. On the median of Delaware Avenue, a man walks back and forth with the classic sign, “HOMELESS AND HUNGRY. PLEASE HELP. GOD BLESS YOU.” Poverty isn’t very original, is it? But I’ve also seen “FREE ADVICE. DONATIONS ACCEPTED,” “HELP SUPPORT MY MARIJUANA HABIT” and “NEED MONEY TO GET DRUNK SO 2 WOMEN CAN TAKE ME HOME AND MOLEST ME.” It’s not cool that jokers are mixing with genuine beggars, but we don’t have beggars anyway. That’s so Third World. We only have panhandlers.

A couple months ago, a visibly messed up old man in Detroit said to me, “I need $9.50 for my prescription, Mister. I beg you,” but he wasn’t a beggar. That’s so Third World. Actually, he wasn’t even a panhandler. I started the conversation. On freeway ramps into downtown, people stood with signs, begging, like they do all over America. Just look around you. In Richmond, I talked to a Vincent who grew up in Syracuse, then studied at Penn State. Divorced, with children 22, 16 and 12 years old, he had worked as a registered nurse most of his life. His last job was as a waiter at Red Lobster. Business was bad, so they cut his hours, then let him go. Taking out a title loan, he lost his car, then apartment. Vincent had been on the streets six weeks. His oldest kid was in college, the younger ones had been living with him, until everything fell apart and they had to go to their mom. This last fact humiliated him more than anything else, he said.

I’ve been broke many times, but I’ve never been homeless. More than once, I’ve gone to the supermarket with 26 pennies, the exact price for a packet of instant noodles. I waited until there was no line, so I could brave the cashier alone. Once, getting uppity, I counted out 159 pennies for a can of SPAM. As I added up, a line formed behind me. Once, down to two bucks, I bought a loaf of bread and stick of butter and survived for several days. I’ve made ketchup soup. Thankfully, those days are long gone. I’ve moved to the upper reaches of poverty. Never say never, however, which is, incidentally, the slogan of a new GMC ad. Bumper sticker in Detroit, “OUT OF A JOB YET? KEEP BUYING FOREIGN.” On license plate of the same car, “I WORK FOR FORD. I DRIVE A FORD.”

After a three-mile-hike, here we are, finally, inside Sugar House. Serving up drinks and cleavages, slim waitresses weave through the lardy crowd, made jiggly by decades of transfat and fizzy corn syrup. Baby boomers, most of them. Judging by weight per rear end, we’re not yet a poor country. In the semi dark, gamers are fixated, like dumb infants, by the cartoon characters, blinking lights and bright colors of the slot machines. GOLD RUSH. AFRICAN DIAMOND. FORTUNE COOKIES. CASH FEVER. CASH FOR LIFE. CASH INFERNO. Tired of being mugged, folks can take a breather by glancing up at a football game on TV. From an unseen corner, a live band plays classic rock, evoking nostalgia for less desperate times.

Ads for casinos are always filled with perfect, straight teeth smiles. White, black or beige, they are all tickled stupid by serial windfalls. For mere pocket change, they get to climax over and over, it seems, until Kingdom Come, at least. By contrast, real life chumps are uniformly grim. Suckers only laugh as they walk in, if that. Bored with this spectacle, I head back downtown. On the way home, I would pass a group of “Israelites” railing that the white man is the devil, and that God hates faggots. Next to them, a white guy holds a sign, “FUCK THESE ASSHOLES.” I would chance upon a man evacuating himself on Market Street, one of city’s two main arteries. By City Hall, I would see a woman coughing so violently that she may not make it through this winter, should she remain on the streets.

This is your America, America, but don’t worry. The recession is over.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee” — an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear — while the financial industry could end up skewered on its own sword.

California Precedent

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion … serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants … participated in a criminal enterprise affecting interstate commerce.”

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note …; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

By Their Own Sword: MERS’ Role in the Financial Crisis

MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”

MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept….

After MERS, . .. the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible …. The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

Axing the Bankers’ Money Tree

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

… The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail …

Nationalization of these giant banks might be the next logical step — a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.

With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot-free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

Five years after Katrina, tens of thousands of homes in New Orleans remain vacant or blighted. Tens of thousands of African American children who were in the public schools have not made it back, nor have their parents. New Orleans has lost at least 100,000 people. Thousands of elderly and disabled people have not made it back. Affordable housing is not readily available so tens of thousands pay rents that are out of proportion to their wages. Race and gender remain excellent indicators of who is underpaid, who is a renter, who is in public school and who is low income.

In short, the challenges facing New Orleans after Katrina are the same ones facing millions of people of color, women, the elderly and disabled and their children across the US. Katrina just made these challenges clearer in New Orleans than in many other places. Here is where we are five years later.

Overall population

Five years after Katrina, the most liberal estimates are that 141,000 fewer people live in the metro New Orleans area. The actual population changes will not be clear until official Census Bureau findings are released in November, but it is safe to say that over 100,000 fewer live in the City of New Orleans.

The New Orleans metro area is made up of several parishes, primarily Orleans, Jefferson, Plaquemines, St. Bernard and St. Tammany. Orleans had 455,000 people before Katrina, now they have 354,000. Jefferson had 451,000 before Katrina, now they have 443,000. Plaquemines had 28,000 before Katrina, now they have 20,000. St. Bernard had 64,000 before Katrina, now they have 40,000.¹

Displaced People

Louisiana residents are located in more than 5,500 cities across the nation, the largest concentrations in Houston, Dallas, Atlanta and San Antonio. A majority of displaced residents are women — 59% compared to 41% men. A third earn less than $20,000 a year.²

Lost housing

More than 1 in 4 residential addresses in New Orleans is vacant or blighted — by far the highest rate in the US. Though the numbers have been reduced somewhat in the last three years, 50,100 residential properties in New Orleans remain blighted or have no structure on them.³

About 58 percent of city renters and 45 percent of suburban renters pays more than 35 percent of their pre-tax household income for housing. Households should spend less than 30 percent of income on housing. Anything over 30 percent means that housing is not really affordable for that family and they are likely to cut back on other necessities.⁴

Over 5000 families are on the waiting list for traditional public housing and another 28,960 families are on the waiting list for housing vouchers – more than double what it was before Katrina and the government destruction of thousands of public housing apartments. Since the post-Katrina bulldozing of several major public housing developments, there has been more than a 75% reduction in the number of public housing apartments available.⁵

Rebuilding

Under Louisiana’s “Road Home” program to rebuild storm-damaged housing, rebuilding grants for homeowners on average fell about $35,000 short of the money needed to rebuild. The shortfall hit highly flooded, historically African-American communities particularly hard. The Greater New Orleans Fair Housing Action Center filed suit in 2008 against state and federal agencies charging that the grant policy was racially discriminatory and that black homeowners received far smaller grants than white homeowners. The judge in that case has opined that “on average, African-American homeowners received awards that fell farther short of the cost of repairing their homes than did white recipients” and while noting the parties’ commitment to rebuilding New Orleans, found it “regrettable that this effort to do so appears to have proceeded in a manner that disadvantaged African-American homeowners who wish to repair their homes.”⁶

At least 19,746 applications for rebuilding homes that are eligible for funding have not received any money from the Road Home Program grant program.⁷

Economic Health

The metro area has 95,000 fewer jobs than before Katrina, down about 16 percent.⁸

Black and Latino households earn incomes that are $26,000 (44 percent) and $15,000 (25 percent) lower than whites. White household income is $56,000, Latino household income is $41,000 and African American household income is $35,000 in the metro New Orleans area.⁹

New Orleans has a poverty rate of 23 percent more than double the national average of 11%. But because of the loss of people in New Orleans there are now more poor people living in the surrounding suburban parishes than in the city.¹⁰

Within New Orleans the majority of households are lower-income.

Public and Private Education

The number of students in public schools in New Orleans, which are over 90 percent African American, has declined by 43% since Katrina.¹¹

But an average increase of 5% a year in enrollment for the last two years (35,976 to 38,051 from 2008-2009 alone) indicates that people whose children attend public schools continue to return as housing and employment opportunities allow.¹²

In 2008, 85% of white students in New Orleans attended private schools, one of the highest percentages in a major city in the ¹³

New Orleans now has more charter schools than any other public school system in the country. Of the 89 public schools in New Orleans, 48, more than half, are charter schools. Sixty percent of students now attend privately managed but publicly funded schools.¹²

Metro area has recovered 79 percent of public and private school enrollment.¹⁴

People Receiving Public Assistance

Over one-third of Social Security recipients who lived in New Orleans have not returned. There were 74,535 in 2004 and 47,000 in December 2009.¹⁵

Medicaid recipients have declined by 31%: pre-Katrina enrollment in Medicaid in New Orleans was 134,249. December 2009 enrollment was 93,310.¹⁶

Supplemental Security Income recipients are down from pre-Katrina 26,654 to 16,514 — a 38% decline.¹⁵

Public Transportation

Total ridership declined down 65.7%. From over 33 million in 2004 to about 13 million projected for 2010.¹⁷

Crime

Violent crimes and property crimes have risen in New Orleans since Katrina and remain well above national rates.¹⁸

Oil Damage

Speaking of crime, there have been at least 348 intentional fires set in the Gulf of Mexico, controlled burns they call them, since spill.¹⁹

About 1.8 million gallons of chemical dispersant have been dumped into the Gulf, over a million on the surface and about 750,000 gallons sub-sea.²⁰

About 210 million gallons of oil (5 million barrels) were released by the BP spill. About 800,000 barrels were captured by BP – making it by far the largest oil spill into marine waters in world history.²¹

Wetland destruction

Since 1956, when measurements began, 23 percent of the coastal wetlands have converted to open water.²²

The challenges of post-Katrina New Orleans reflect the problems of many urban and suburban areas of the US — insufficient affordable rents, racially segregated schools with falling populations, great disparities in income by color of households, serious pollution from remote uncaring corporations, and reductions in the public services like transportation. Katrina made these more visible five years ago and continues to make a great illustration of the US failures to treat all citizens with dignity and our failure to achieve our promise of liberty and justice for all.

1. Source: Census Bureau.
2. Source: Dana Alfred, Louisiana Disaster Recovery Corps (2007).
3. Source: Greater New Orleans Community Data Center (hereafter GNOCDC), Benchmarks for Blight (May 7, 2010); see also, Michelle Krupa, Blighted Houses in New Orleans Dropping Steadily, Times Picayune.
4. Source: GNOCDC, Housing in the New Orleans Metro, October 13, 2009.
5. Source: Housing Authority of New Orleans.
6. Source: PolicyLink, A Long Way Home (2008) & Greater New Orleans Fair Housing Action Center.
7. Source: The Road Home Program, Road2la.org.
8. GNOCDC & Brookings, The New Orleans Index at Five, August 2010.
9. Source: Jesuit Social Research Institute, JustSouth Quarterly, Summer 2010.
10. 2008 US Census Bureau, ACS; GNOCDC, Who Lives in New Orleans Now? October, 2009.
11. Source: Southern Education Foundation. New Orleans Schools Four Years After Katrina. (hereafter SEF).
12. Source: Louisiana Recovery School District.
13. US.Source: SEF
14. GNOCDC & Brookings, The New Orleans Index at 5, August 2010.
15. Source: U.S. Social Security Administration.
16. Source: Louisiana Department of Health and Hospitals.
17. Source: Regional Transit Authority.
18. Source: GNOCDC & Brookings, The New Orleans Index at Five, August 2010.
19. Source: Deepwater Horizon Response, July 14, 2010.
20. Source: Marianna Nash, CNN, Scientists Dispersant Concerns Remain.
21. Source: Campbell Robertson, U.S. Puts Oil Spill at Nearly 5 million Barrels.
22. GNOCDC & Brookings, The New Orleans Index at Five, August 2010.