January 30, 2012

Neighborhood Networks and MoveOn and Take on The Banksters

We Tell Them to Pay Us Back!

The financial crash of 2008 destroyed the lives of millions. The top Wall Street investment/banking firms are the clear culprits, betting their depositors’ money on exotic financial instruments that in many cases were designed to self-destruct. It’s time to demand that Wall Street pay us back.

But whom should they pay? Let’s list them.

There are the home-buyers who were pressured, or seduced, to take out mortgages that they could never pay back. There are millions of workers who lost their jobs when credit dried up and the businesses that employed them flat-lined. There are the retirees living on 401(k) plans whose stock market losses plunged them into poverty.

Then there are the cities and states whose pension funds lost trillions of dollars in value. In turn, those losses hurt future retirees as governments cut back pension benefits or changed their plans to unreliable -- and Wall Street dominated -- defined contribution plans.

Taxpayers have been doubly hit. First they will have to make up for pension fund losses. Then the recession reduced government revenues, requiring tax increases to make up the difference. Most local and state taxes are regressive, so the burden of those increases mostly fell on low and working class residents. In Philly, real estate taxes, which are a terrible burden on low income homeowners and tenants, have exploded upwards.

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Homebuyers were hit three times; City Services Devastated

City services -- everything from schools to library services to health services to basic fire and police services -- also took it on the chin, as officials decided they couldn’t make up all of their budget deficits from increased taxes. According to Philadelphia’s Controller, we now have a School District that, despite drastic cutbacks, is near insolvency. Fire station “brownouts” have been with us for over a year, possibly costing lives.

Overextended and swindled homebuyers were hit on the way down three times. First by creating a housing bubble, the banksters crushed home values so that the equity in millions of newly bought homes disappeared. Then as servicers of homeowners’ mortgages, the same banksters collected enormous fees for pretending to find ways that would avoid foreclosures. Then they foreclosed anyway to get their money out.

These same fraud champions masquerading as honest brokers sold bond payment “protection” to cities and states all across the nation in the form of “interest rate swaps.” The purpose of these swaps was supposedly to insure that changes in interest rates wouldn’t leave governments with impossibly high payments to make on their bond obligations. But these deals only protected the banks. The City and School District of Philadelphia have now been forced to pay banksters over over $330 million to terminate these protection scams.

The banksters gamed the system, but we're fighting back.

The truth is that apart from the 1% who gamed the system for their own benefit, almost everyone else has been devastated by the ability of investment banks to use other people’s money in schemes to enrich themselves.

The worst part of the scandal is not even the financial part. The worst part, the most worrying part, is that the banksters have stolen our government. That’s why until a few days ago it seemed certain that they would be off the hook for all the myriad ways in which they’ve dragged us all down. The federal government was hammering state Attorney Generals to do a deal with the banksters tapping them lightly on the wrists for all of their crimes in exchange for token help to those who have been harmed.

But a funny thing happened on the way to the dotted line. MoveOn and its allied organizations, including NN here in Philly, went on the march. Thousands of people in cities all across the country demonstrated at Attorney General offices, Obama campaign headquarters and bank offices. Over half a million signatures on petitions demanding an investigation rather than a capitulation were delivered to the President.

The President heard our message and in his the State of the Union address appointed a high level task force to investigate the crimes and the fraud that have put us all into this dark night and to compel compensation for its victims. Headed by progressive champion Eric Schneiderman, we have every reason to believe this effort to make the banks pay is real. But if the Commission fails to produce real results, we will be back in the streets in ever higher numbers until justice is truly done. Stay tuned at this address for updates.

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