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December 29, 2009

That Old Time Trickle-Down Religion

Filed under: Corporatism, Health Racket Bailout — Tags: , — Russ @ 2:06 am

 

We are eye-witnesses and victims of a great crime, the terminal looting of America by the corporate power structure.
 
Led by the finance sector the feudalists have strangled all the productivity out of America and replaced it with a slave camp whose truly vicious and brutal nature was for a long time concealed by consumer debt, especially the debt blown up by the housing bubble.
 
But this couldn’t be sustained, and when the bubble inevitably burst the banksters crashed the economy completely. Now they are propping up their obscene profits through a taxpayer bailout for which they paid bribes of pennies on the billions of dollars. The government, our government, has been hijacked toward the avowed goal of maintaining this corporate tyranny.
 
Maintaining it, and further empowering it.
 
Corporatism is the defining political struggle of our age.
 
The basic question: Are you willing to sell freedom and become a slave for the sake of marginal material improvements? (Of course, these “improvements”, to extent they were ever delivered since the 70s, were based only on cheap oil and debt. Today they are mere propaganda lies. Today anyone who’s willing to make the freedom-for-materialism trade will get neither and deserve neither.)
 
Or is freedom the most important thing, to live as a human being and not as a slave, even if that did mean temporary material hardship – and yet would in the end mean a return to real prosperity, and our country would be ours again.
 
The current debate over the so-called “health reform bill” is exemplary of this more basic question. The health insurance racketeering bill will help no one but hurt many. Its alleged benefits – restrictions on rescissions and rejections based on pre-existing conditions; premium subsidies – will not manifest in reality. Anyone who’s familiar with the way this government handles regulation and social spending knows every alleged benefit of this bill is a lie. (These are the same pols who right now want a special autocratic commission to gut SS and Medicare! What can we say about the kind of person who thinks these “subsidies” will ever exist in remotely sufficient amounts? Or that rescission bans will be rigorously enforced? To use the kindest language, we can say such a person is not capable of learning from experience.)
 
Meanwhile the system is very serious about the mandates. Indeed they seem so obsessed with rounding up this conscript market in order to bail out the insurance racket that they’re willing to commit political suicide over it.
 
So we can describe the two fundamental divides between corporatists and anti-corporatists on health racketeering.
 
1. The “progressives” like Paul Krugman who support the bill favor incremental process over principle, and meager outcomes over policy spirit. In the end they’re willing to live as slaves if it meant they’d be adequately taken care of on a material level. (As I said, by now this is a delusion.)
 
They believe this bill will do the anemic things it says it will, so they support it.
 
But I’m not willing to live as a slave. My first question always is, Does this further entrench corporate power? Or help dislodge it?
 
Even if this bill were really to do what Krugman and the rest say it will do, it’s such an assault, such an entrenchment, such a radical leap in power, in tyranny, as to be odious to everything America and the constitution are supposed to be about. (Being forced to buy a private product? As the price of merely existing? Name a precedent for that!)
 
(As for the issue of individuals “free riding” on the system, no one who, through his support of this bill, countenances the very existence of the parasitic insurance rackets, the worst free rider of all, has any legitimacy to speak. They’re the same who say it’s OK for big banks to walk away from underwater billion dollar CRE loans, but that some poor schlub underwater on his home mortgage is a deadbeat if he does the same thing. It’s the bullying coward fascist mentality.)
 
So even if I did believe this thing would deliver the feeble benefits they claim it will, I’d still reject it. The power it bestows upon much greater malevolences would far outweigh a miniscule benefit.
 
2. But as I said, it WON’T deliver even these puling scraps. Where have these people been? Finance regulation? Consumer protection? Drilling and mining royalties? The environment? Big Ag?
 
Yet Krugman and the others, in some kind of faith-based wingnut fundamentalist way, claim that through some unspecified miracle these regulations will be enforced, these subsidies won’t be gutted, this Rube Goldberg machine will work.
 
(Always remember, the government cadres who are allegedly going to be so conscientious here are the same who cobbled this infernal bill into existence in the first place, and are performing the same anti-reform gutting for the finance sector, the same sector which they themselves allowed to destroy the economy for profit and pleasure in the first place.
 
Then there’s the silly self-contradiction when they say on the one hand that if progressives in Congress can kill the bill, Congress wouldn’t visit the issue for a generation, even though it’s Obama and the right wing Democrats who need to pass some kind of bill; but on the other hand if the corporatists get exactly the predatory bill they always wanted, which is the one being deliberated right now, they’ll then suddenly have a change of heart and rush back to start fixing it!
 
Religious delusion doesn’t get more ineffable.)
 
Rescission, pre-existing conditions; assuming they’re enforced at all, the racket will simply jack up the rates so they’re unaffordable.
 
In the end progressives have a religious need to believe in this system. They compel themselves to believe, flouting all the evidence, that this system will ever do anything other than assault and rape and loot the people. But it is utterly beyond redemption. Corporatism corrupts completely and irrevocably.
 
It’s becoming clear who really opposed Bush on policy, and who only opposed him out of hack partisanship and personal hate, but who had no problem with the policies. Who actually like the Bush policies, as demonstrated in their support of Obama’s continuing those same policies.
 
The key to understanding Obama is that he’s a corporatist by ideology (as opposed to being one just out of personal greed motives).
 
Like all corporate ideologues, he believes the purpose of a society and the wealth the people create is to expropriate that wealth for the benefit of a few big corporations. The people should then be allowed to receive only what trickles down. (So Obama was being totally serious when he fawned over Reagan’s memory. Reagan was truly his ideological mentor.)
 
Perhaps in theory most Democrats want a little more to trickle down than Republicans do, but both agree that the wealth of the country belongs to a few feudalists by right. The people have no right to the wealth they create. They should only be allowed to get back whatever the feudalists calculate is best for themselves.
 
Compare this to all the actions of Bush and Obama. You’ll see that no other way of looking at things better explains all the actions.
 
The health racket bill is the best example yet. For anyone who actually believes the purpose of the health care system is to provide better health care services, and that basic decent health care is a human right, and that the purpose of a society is the well-being of its human people, anything other than single payer would be a non-starter.
 
Nor would there be any debate over the very existence of the health insurance racket, let alone how much it should be allowed to plunder.
 
(And the only people would be human people. There wouldn’t be any such thing as corporate “persons”. How sickening is it to even have to use a term like “human people”?)
 
But as we’ve seen, right from the start Obama’s leading priority has been to ensure ever greater extortions by these corporate racketeers. This was the one and only reason he and the Dems even took up health insurance “reform” in the first place. This was the only reason to make this unconstitutional, regressive, reactionary mandate the centerpiece of the policy, the only part which was inviolable, the one and only line in the sand.
 
This is nothing but the Gangster Mandate Bill, ornamented with some potemkin trappings. That’s all. It’s corporatism at its most purely distilled.
 
That’s what makes it the defining Obama policy.
 
Corporatism is corruption and crime, by definition.  
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December 28, 2009

The Health Racket Mandate

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1. It looks like the health racket bill is going to end up far worse than even a pessimist like I imagined. Stripped of the lies, it’ll really be literally a de jure protection racket. They want to use the IRS to garnishee wages or extract punitive fines. Those who say there’s ANYTHING good about it are idiots or liars. There are no cost controls and there will be no effective subsidies. It’ll provide real coverage for no one currently uninsured but will degrade coverage for many who are insured, while costing everyone far more. It’ll literally be forcing the non-rich to pay huge chunks of their dwindling income for a worthless piece of paper.
 
(Those who are denying this apparently have founded a new religion whose dogmas include that in the case of this bill and this racket the racket and the regulators will behave in a fashion exactly opposite to that which ALL rackets and pretty much all regulation has behaved over the last several decades. Every other racket has sought to squeeze every drop of blood it can by legal, pseudo-legal, and if possible criminal means. the insurance racket has been as bad as anyone. Just as bad as the banks. We’ve seen their predatory, extortionate behavior all year, jacking up rates, issuing threats (AHIP report), suing for a guaranteed profit level in Maine.
 
But the devotees of the faith in Obamacare have dispensed the dogma that this racket will not behave this way once this bill is passed.
 
Every regulation has been gutted, and the deficit terrorists want to gut Social Security and Medicare itself. Yet the fanatical cultists of this bill chant that its subsidies are not only sufficient on paper but will remain intact in the future.
 
It’s the health “reform” Manson family.)
 
2. The system’s so far gone by now I guess any level of insanity is possible, but even so I still think I’ll be surprised if they really try to go forward with this suicide pact. I wouldn’t be surprised if they snap out of their current derangement next spring and say “what the fuck are we doing?!” and repeal the mandate.
 
3. If they actually tried to enforce such an impossible and tyrannical thing it would be veritable war by the government on a large section of the populace for the benefit of a few gangsters. Perhaps not on the same level as Stalin’s war on the peasantry during collectivization, but some steps along the spectrum toward that. It will be class war from above at an intensified level of viciousness, that’s for sure.
 
4. There’s one good thing it could do, which is force large numbers of people into the underground economy which will already be growing on its own. We need this post-oil, post-growth, decentralized, dedollarized economy anyway. It’s already a freedom-seeking political circumstance and action, in such ways as getting out of credit cards, putting money only in credit unions, having as little contact with banks as possible, saving seeds. This new real American economy is growing in response to the top down assaults upon the old middle class “American dream” which has been a lie for decades now. It’ll be ironic yet appropriate if this tyrannical overreach accelerates the process.
 
5. So we should spread the idea that this assault is coming, that it IS a criminal gangster assault, that it’s simple theft; that you have zero moral or constitutional obligation, as it’s immoral and unconstitutional; that you have zero legal obligation, as this is a rogue law which has no validity, any more than if they simply passed a law ordering you to pay x dollars to the Gambino family. [Is this a kind of bill of attainder? – What if the law simply said you must pay $x to a mafia family of your choice and gave you a list? – That’s exactly what this is.]
 
6. Let’s get ready for mass disobedience!

December 27, 2009

Some Thoughts for What’s Next

Filed under: Corporatism, Global War On Terror, Globalization — Tags: — Russ @ 2:04 am
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America’s political problem is basically simple. A relatively small group of corporations, led by the big banks, became large enough and concentrated enough wealth to entrench their positions and buy the government so as to transform the economy from production based quasi-capitalism to financialized feudalism based on parasitic rents and con jobs.
 
The looting of the country was concealed for many years by propping up the middle class with ever-increasing debt, while globalization was able to keep consumer prices low. Add in the IT hype, and for a while the “American dream” propaganda was successful.
 
Of course the only way to import cheap consumer products was to export real jobs. So the very consumer base the middle class ideology depended upon was cannibalized. It’s that same old contradiction of capitalism Marx analyzed all those years ago.
 
But the only way for the finance parasites to keep extracting profits from the debt dream machine was to keep blowing up ever more absurd bubbles. Each bubble was the same scam. You convince a bunch of people that the price of some asset (stocks or real estate are two favorites) will keep going up forever; get them to go into debt buying it (most of them intending to sell it to the next mark at a price higher than subsequent inflation); get the government and the mainstream media to be the cheerleaders; run a ponzi scheme where you pay off those taking profits with the new money coming in; gamble heavily on all the casino games you yourself have invented and are running and rigging; take out huge personal profits in the form of “bonuses”. And then, when the bubble bursts, you go into vulture mode. You use the government support you bought with bribes in order to use taxpayer money to collect on your own bets, make acquisitions among your less agile colleagues, and keep paying yourself those bonuses.
 
This scam cycle has been run several times, but we’ve now reached its ultimate plateau. There was no way the system could sustain the bursting of the mortgage bubble, because it was the last bubble propping up the simulated middle class. This middle class has nothing left – no jobs, no productive economy, no plan for the future, no solvent entitlement system, no political power. It had nothing but these ever-inflating housing values.
 
Similarly the finance sector had only two good extraction points left, the housing bubble and the permanent war. (They’ll now try to find new ones in a carbon bubble and a health insurance stick-up racket, but neither of these will be able to extract more blood from the already overbled turnip.)
 
So government policy is now completely dedicated to the artificial continuation of bubble conditions for looting. The Bailout War and the Global War on Terror are both artificial wars, wars of choice, private wars waged by medieval warlords upon their own serfs (and, in places like Iraq, Afghanistan, and Palestine, foreign serfs). The goal is to continue extracting through force the rents which can no longer be extracted through rigged economics. The bubble has collapsed; the reserve currency will collapse; oil will become scarce the moment demand resumes its former level.
 
That’s the precarious position of the American elite. That’s why their prostituted government has embarked upon the class war policy it has. This government will never again be responsive to the people. It’s been hijacked. It’s now the pure tool of finance tyranny. Its policy is permanent extortion. Forever. It’s our enemy. It’s lost to us. Anything we’re going to do we have to do from the bottom up.
 
 
The finance sector is the organizer of this Great Crime, the ringleader, the monarch among warlords. It grabbed all the choke points. It seized every critical position. It has written government policy, captured regulatory agencies, bought the very “souls” of legislators and jurists, become the MSM’s pimp.
 
They blew up the bubble, they saddled Americans with odious debt, they crashed the economy, and they forced the government to bail them out, and to keep bailing them out. The bailouts are intended to last in perpetuity.
 
We have to launch a bottom up educational campaign. Across America we need community workshops to explain the crisis, who is responsible, and how the people can fight back.
 
The agenda should be:
 
1. The basic description of globalization and financialization, the bubble, the bailout crime and hopeless state of the current polity.
 
2. Rap sheets for individual banks: their crimes in financializing the economy, corrupting the government, and blowing up the bubble; their crimes during the bailout, during the insolvency era; and how much they have looted and continue to loot through the bailouts.
 
Similar rap sheets for individual criminally corrupt officials, politicians, and media whores.
 
3. Commentary on the broader social contract and how it has been broken from the top down; how we owe nothing to the structure or any part of it, including where it comes to these predatory bubble debts which were foisted upon people in violation of Chicago’s own ideology (transparency? “information”? riiiight.).
 
How our great imperative and our great challenge is to rebuild the social contract from the bottom up. We can look to our friends, family, local communities to see what can be restored and how to get to work.
 
It’s not we the people who dissolved society. It’s really just a few scumbags at the top, in government and law and business and the media and academia.
 
If we could come to understand what’s happened, who has betrayed us, who we can trust, and where we can start rebuilding, that would be the first step toward a new America.    

December 25, 2009

Holiday Wish

 

“The only way to save Highland Park is to pave the way for subsistence farming”.
 
So declared a Detroit pastor contemplating the destruction of his city, and of all America’s manufacturing cities. These places seem broken and forsaken beyond redemption. Gutted vehicles and houses, deserted blocks covered with weeds and piles of gravel signifying infill where basements used to be, the remaining houses and buildings boarded up, or sporting endless broken windows.
 
The very graffiti cries out for help, as the wasted landscape testifies to a wasted soulscape, the abandoned and starved hopes of the people left to forage among broken promises and the vaguely understood intimations of monumental crimes.
 
A place like Detroit is a leading indicator, as they call it in biology. Globalization’s scorched earth has been coming home for some times now. The consumer could ignore it while it was only ravaging the manufacturing communities and while they could still gorge at the bubble trough. The middle classes had the sugar plums of asset inflation and the hype of the “information economy” dancing in their heads.
 
But since there is no economy but the real economy, since there is nothing but real work, and since in the end the world’s supply of slaves is finite, so globalization’s slave wave must engulf the homeland as well.
 
Today how many people must look under their Christmas trees and see not the labor of Mexico, China, Sri Lanka, but the emptiness signifying how their own labor reposes under the trees of the banksters, and of corporate executives, and corrupt politicians, and the rich of China as well?
 
Subsistence wage labor, like oil, is finite, and just as the Global War on Terror seeks to prop up the oil supply for as long as possible, so America’s domestic campaign against the position of the worker seeks to prop up the extraction economy for the benefit of the rich.
 
Middle class Americans have long been among the cosseted passengers, but on a sinking galley there’s simply not enough room for them anymore. They must join the slave rowers if there’s to be any hope to keep the heads of the rich passengers and all their luxury cargo above water.
 
American cities like Detroit are the future for almost all Americans.
 
 
Beyond the nightmare, what redemption can there be? And what can we start doing right now?
 
Can the abandoned land be reclaimed for farming and husbandry?
 
There’s the obvious political and legal obstacles, as the system will try to resist bottom-up claims of authority over large tracts of land. But the system has abdicated. If we’re to save ourselves, we mustn’t worry about the niceties and forms that were set up to enable fraud, larceny, and disavowal of responsibility.
 
I wonder what it would take to get organized on the level of moving into economically condemned, abandoned neighborhoods as organized squatters.
 
People who are economically beleaguered, tent city people, unemployed, but who are ready and able to work hard to build a community.
 
How to:
 
1. Get people in contact with one another, how to assure one another that they’re all willing to work hard and treat it as a community project.
 
2. Form liaisons with groups already in place in the community; how to coordinate farming and crafts education for locals and newcomers.
 
3. Organize restoration of the houses, gardening, an assertive neighborhood watch.
 
4. Legal services vs. possible political and absentee vulture resistance.
 
5. And also affirmative negotiation and publicity: with the city, with police, with the alleged nominal “owners”, where these even exist at all. The pitch: it’s a blighted neighborhood. A vacuum for crime. Property values moribund anyway. So how about instead of trying to run people off, legalize everything through long-term rent-to-own status. They’ll get zero otherwise. (And always the goal would have to be to prevent their running people off once the improvements had been made and the price might be higher, the way landlords normally like to do.)
 
There’s still the issue of soil contamination. There’s conflicting reports on how bad the soil of most of the city might be. The heavy industry was mostly concentrated in the southwestern part of the city, but particulate fallout could be more extensive. Here’s some links on the study of urban soil.
 
It may be necessary to start out with raised beds for food production (in which case procuring the soil is another challenge) while other kinds of plants, especially good at sucking out contaminants, are grown in the poisoned soil, to purify it.
 
What kind of long term, post-oil physical future does Detroit face? The city’s location, on a river between two Great Lakes, remains logical for any level of commerce. More broadly, the vicinity has lots of land redeemable for farming and foraging.
 
Needless to say, none of this could ever sustain any kind of “growth” economy. But of course America, or the globe, cannot sustain growth either. So one way or another we are going to have a steady-state economy.
 
As for the broader social and legal philosophy here, here again we have anarchy where the law has abdicated. The “authorities” have abdicated and have no legitimacy. So we need a legal transcendence. Power always lies with the people, and here by default it returns to the people.
 
This shall be the renewal of the American pioneer spirit. All the challenges: weather, soil, “Indians” (people who want to resist America’s rebirth) as well, are all part of the state of the new nature, the temporary anarchy, the conscious will to go beyond the old collapsing system and stick together venturing toward the new environment. That’s the mindset, the sense of challenge.
We shall reinvigorate the law by forming a new law through constructive action on the ground.

December 23, 2009

Toxic

 

Our education in the complete moral failure of the system continues. Part of my program is to describe the ways in which the big banks and their government flunkies are not citizens, are not moral actors, are not members of a community. They are clinical sociopaths.
 
Today I’ll discuss bank walkaways and two phony government programs meant to pretend the Obama administration is acting in the public interest but is really acting contrary to it.
 
As we would expect, all the coverage in the mainstream media centers on individuals walking away from their mortgages. But a far more destructive practice is where the banks themselves, after foreclosing on families who are the victims either of the bank-generated downturn or of predatory lending in the first place, then turn around and abandon the property like a totalled, uninsured car.
 
They do this where the local prices are so depressed that the costs of maintaining and reselling the property would be greater than the price they could get. Sometimes they don’t even bother to foreclose, saving themselves that cost as well.
 
These abandoned properties become the “toxic titles”.
 

A mortgage holder usually walks away from a property when it decides the house has such little value that it’s not worth the money and effort required to keep it in good shape or even to foreclose on it—a common occurrence in neighborhoods already scarred by foreclosures. The borrower is gone, however, often unaware the house hasn’t been taken, Lind said. A property might sit vacant for months or even years, an easy target for vandals who strip it of plumbing fixtures, wiring, copper, or anything else of value.
Walkaways wind up with “toxic titles,’’ Lind says. The mortgage company retains a lien, or a charge, on the house, but the borrower still is considered the owner. The property sits in limbo, with the mortgage usually exceeding what it would sell for, because of its decline. If the city has to tear it down, it adds its own $8,000 to $10,000 demolition lien. Not surprisingly, potential buyers aren’t exactly lining up. Non-profit neighborhood groups that could fix up the property face long and expensive legal battles to claim it.

 
Somewhere from five to ten thousand houses in Buffalo have been abandoned by the banks. There have been greater than 14000 foreclosures in the Cleveland area since 2007, an uncertain number of these toxic. Many of them seem to have no owner at all, so far as can be ascertained from public records.
 
This systematic irresponsibility causes the further blighting of already distressed neighborhoods. The very banks being bailed out by the taxpayers turn around and assault those same taxpayers by refusing to be held accountable for this “property” they usually make such a big deal about owning.
 
(Once again we see the psychopathic total-rights-zero-responsibility ideology which has destroyed this country.)
 
“They’re just dumping their trash in the Midwest”, says Cleveland law professor Kermit Lind (who coined the term “toxic title”). The problem is expected to get much worse over the next few years, as the mortgage meltdown continues. Lind likens it to environmental racism. It is in fact a from of pollution, another negaitve externality, another socialized cost after all the profits were hoovered up privately.
 
This attempt to evade accountability is another feature of the MERS system I wrote about last week. The point of the nameless, faceless conveyor belt mortgage chop shop is to let only the cash through but never the sunlight.
 
The idea is for the bank to be able to walk away and disclaim all responsibility and even knowledge of a toxic property. It’s supposed to be as if the earth opened up and swallowed it whole along with all memory or legal record of it.
 
They want this enshrined contradiction, this all-rights/no-responsibilities whack-a-mole. They want the court to take their word for their “ownership” when they do want to foreclose and take possession, even if they can’t produce the note. But where they want to walk away, they tell the court they own nothing.
 
On the principle that we’re entitled to deal with someone on his own terms, I’d say we should demand proof of their alleged right wherever they want to exercise a right, while imposing responsibility wherever they want to walk away, based on just a reasonable supposition of that responsibility.
 
Meanwhile in Buffalo, Cleveland, and elsewhere some decent public servants are fighting back. The basic tactic is for the court to place a lien on the abandoned property, and then demand satisfaction of that lien wherever that bank wants something in any other case in the jurisdiction. The bank has no choice but to take responsibility for these properties or else give up on doing business in the city. Cleveland has also sued 21 banks for demolition costs and the additional policing costs entailed by abandoned and unmaintained properties.
 
They’d have a right to go further. Simply condemn, demolish, and make the bill part of the lien.
 
A truly creative, constructive policy would be to set up rent-to-own programs with these now city-owned houses. Or perhaps encourage squatting on a stewardship basis, with the stewardship as banked capital toward renter and eventual ownership rights.
 
This kind of policy would give people a real stake in maintaining and rebuilding the community. (Of course the great danger is that they’d entice poor people into such community work and then, once some market value had been restored to the neighborhood, sell it out from under them. So a political movement based on such ideas would have to emphasize a legal framework to prevent that.)
 
The clear message for now, even as we build such movements for ourselves, is that the big banks and their political enablers have unilaterally walked away from their civic obligations.
 
Let’s be clear. If you as the homeowner can’t afford the mortgage payments, and especially when they give you a foreclosure notice, you both can (and according to the police must) clear out, free and clear. You no longer have any moral or legal connection to the lot. The bank has an absolute obligation. As for its being underwater, didn’t it price in the risk of that in the first place?
 
They don’t believe they owe the community or the individual anything, so neither the community nor the individual owe them anything.
 
Responsibilities precede rights.
 
And what’s the administration’s role in this whole farce? The main ploy has been the HAMP scam. (Hampscam? Is that as catchy as Abscam? Do people still remember Abscam? Seems pretty tame by today’s standards.)
 
The propaganda of the Home Affordable Mortgage Program (HAMP) was that distressed borrowers could apply for temporary mortgage modifications which could then be converted into permanent mods. It was supposed to help 3-4 million mortgage holders.
 
As per standard corporatist practice, the program was voluntary but included lots of supposed incentives for the banks to participate.
 
So what’s the result been? More than 750000 trial mods have been initiated, but only 31000 have been made permanent. Information is scarce because transparency was also made voluntary, and participants have simply gone for secrecy.
 
Meanwhile millions who dream of staying in their homes have applied for the program and continue to pay premiums they can’t afford based on the implicit promise that they’ll get a permanent mod. The administration and the banks keep promising this in theory, yet keep coming up with excuses for why the permanency conversion rate is so low.
 
The banks and government flacks keep claiming that the applicants don’t send in the requisite paperwork, or that it somehow got “lost” in the process, but housing activists think this is a campaign of intentional obstruction.
 
Then there are the many cases where the bank explicitly lies, notifying the applicant of his pending permanentization, only to foreclose anyway.
 
Often the foreclosure comes as a complete and terrifying surprise, since the Treasury Department itself wrote into the program application that the applicant waives all notification rights. Once you’re in the program, the bank can foreclose immediately, at will, not matter what lies it’s told you.
 
So we have the anemic numbers, the endless obstructionism, the clear bad faith on the administration’s part in how the thing was conceived in the first place, the banks’ being allowed to lie with impunity.
 
We have the way it was conceived as a purely voluntary program, with special incentives for participation. Never mind that the participants are the insolvent, bailed out banks we the people now OWN, such that they no longer have any right to do anything other than what’s in the public interest.
 
We have the way the politically embarrassed Obama is now reduced to begging the banks to do some little bit to help make him not look like such a prostituted wimp. (And the fact that the banksters can’t help but show their absolute contempt for him, not even bothering to show up for his snivelling little lecture.)
 
When you put all this together, it’s clear that the HAMP is nothing but a scam. With active administration abetting, through the device of a temporary mod, the goal is to induce the doomed borrower to make more payments with the false implicit promise (and often the explicit fraudulent lie) that he’ll get a permanent mod.
 
(To confirm this, with administration support the Senate just voted down for the second time allowing bankruptcy judges to force cramdowns on primary mortgages. Everyone agrees this is the most effective shorter term measure, and anyone who wanted to help distressed Americans would support it. So we see where the government’s at.)
 
For one more piece of the puzzle, we can look at Obama’s alleged plan to use TARP money to support lending to small businesses.
 
The idea, announced with much fanfare in October, was to use the TARP to assist community banks and credit unions. These are the real lending institutions which create value and help generate real economic activity and jobs. Of course nowadays they’re doing poorly as Main Street gets clobbered.
 
And as we can see, this is a feature and not a bug. That’s because TARP administrators are imposing far more rigorous “viability” standards on community banks than they ever have on the big banks. While the insolvent big banks were simply dogmatically declared from the start to be solvent and worthy of bailouts, and while propaganda like the “stress tests” were used to further propagate this solvency lie, the community banks are now being held to severe standards in excess of all reason. As a result, only 26 of the 64 applicants have been approved.
 
By the same standards, none of the big banks could ever have qualified. We could never have had a TARP in the first place.
 
Which goes to demonstrate why we did have the TARP and the whole bailout in the first place. It was never to help Main Street, but rather to help loot it. It was never to save Wall Street to save Main Street, but to save Wall Street to enslave Main Street. And so it continues today.
 
All this proves what we must keep teaching for as long as the system exists: America never needed the bailout. Main Street should have been directly bolstered, while the Wall Street parasite was left to die.
 
Save-Wall-Street-to-save-Main-Street was the same old trickle-down lie, the Big Lie, and the Shock Doctrine version of the lie.
 
Government bolstering could have gone directly to community banks, credit unions, small business, decentralization and relocalization groups, and individuals.
 
But obviously this would run counter to the power interests of the system, and that’s why they lied and did the opposite.  

December 18, 2009

Goldman

 

A few days ago Barack Obama tried to “shame” the great bankster magnates into doing more to permanently modify mortgages and help economically troubled Americans.
 
The planned sermon lost some of its zing when several intended recipients couldn’t be bothered to show up. John Mack, Richard Parsons, and Goldman Sach’s Lloyd Blankfein instead literally phoned it in because “inclement weather” allegedly stopped them from flying out of New York (which is odd because everyone else says the weather was fine). Jamie Dimon made it on his corporate jet, and in one for the thanks-for-nothing files so did lame duck Ken Lewis. I guess he’s already looking for excuses to get out of the house.
 
This public show of disrespect comes a few months after none of these CEOs could be bothered to show up for an Obama lecture right there in Manhattan. While I can appreciate their contempt for Obama, who seems to ask for it,  I still chalk this up primarily to the banksters’ innate arrogance.
 
It’s the same childish arrogance which inspired Goldman Sachs cadres to embark upon a PR campaign whose premise was that they’re doing “God’s work”, in Blankfein’s now infamous quip. While Goldman has tried to claim that was just a joke, it’s hard to say the same for Brian Griffiths’ October 20 speech in St. Paul’s Cathedral.
 
“The injunction of Jesus to love others as ourselves is a recognition of self-interest”, went this innovative piece of theological interpretation. “We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.” Ah, religious tolerance. It’s especially needed in the case of trickle-down, which by now can’t be sustained by anything other than fanatical believing because it’s absurd.
 
When we consider these prepared, carefully thought-out intonations, it puts Blankfein’s little joke in perspective, doesn’t it? This is what these psychopaths really think of themselves.
 
You need this level of self-confidence, or what anyone else would call insane levels of arrogance, to justify the primary activity of the banksters, which is looting the economy and their own banks on a personal basis while calling it “bonuses”.
 
If you need evidence that these people are literally insane on the subject and have no other way of looking at life, just look at the recent spectacle of Bank of America and now Citi rushing to pay back the TARP, weakening their own balance sheets to do so. Citi has tremendously embarrassed itself in the process, as the market has publicly smacked down its absurd claims to fiscal health.
 
BofA and Citi did this for only one reason: To get out from under the exec looting restrictions for TARP recipients. Similarly, at AIG we’ve seen CEO tantrums and a mutiny organized by the firm’s own general counsel, all of it over nothing but this demented sense of welfare entitlement. (As vile as AIG and everyone who “works” there are, they do have the virtue of being so stupid that they consistently say what everyone else in the biz clearly thinks but rarely says. So they provide a useful window into the real FIRE sector id.)
 
I discussed BofA, Citi, and AIG to offer some evidence of how utterly focused on their “bonuses” everyone on Wall Street is. Goldman Sachs is certainly no different. They’re every bit as greedy as anyone at AIG.
 
So therefore it’s somewhat important that the political heat they’ve been taking has been intense enough to get through to them and make them decide to modify their looting schedule somewhat. They’re now going to pay their top cadres in longer-term stock instead of immediate cash.
 
Everyone has assumed that they’ll try to compensate themselves for this hassle, that the real payout will end up even greater than what they wanted to give themselves right now, and no one takes the clawback provision seriously. I assume they’ll try to do all this as well.
 
But they still would rather have just grabbed the dough. They definitely wanted to simply hand out the bonuses to themselves immediately. And clearly they didn’t change their minds because of any fear of Obama, who they do not respect.
 
No, I think this means the bottom-up political pressure was enough to break through their wall of arrogance and actually get them to change their tactic. (According to reports they’re concerned enough that some are even trying to get pistol permits. Somehow the prospect of a Goldman banker packing heat sounds about as frightening as being sermonized by Obama.) This is just a small thing, of course, but it does prove that we don’t yet have a complete tyranny; that we the people do still have power. What’s happened so far has only been a uncoordinated groundswell of feeling. Imagine what might be accomplished by an organized movement deploying that power in a coordinated way.
 
What we’ve seen so far is that Goldman Sachs and its fellow bailed out banks may be rich and powerful, but in spite of doing God’s work they’re not infallible, and they’re not invulnerable. They’re part of the same political universe as anyone running for student council.
 
What about how smart Goldman is supposed to be? Is the fact that they lost money only three days this year evidence of their superhuman trading genius? Not according to this Zero Hedge analysis of the trades conducted by Goldman’s charity fund.
 

The observations above are troubling: Goldman’s trading is by no stretch of the imagination better than average. In fact, in 2008, the firm’s prop trading was on par with some of the worst performers on Wall Street. Which begs the question: just how has Goldman managed to transform itself into a behemoth that over the past 6 months has had only three trading days of losses? The answer is simple: with no Lehman and no Bear to curb its tentacular dominance of all aspects of the Fixed Income market, Goldman can now rely almost exclusively on its monopolist agency position vis-a-vis mutual, pension, and hedge funds who are desperate to maintain a good relationship and an open dialog with the firm which rewards its best clients with market moving information ahead of all others peasants.

 
Matt Taibbi elaborates:
 

Specifically, I’ve heard more than once from traders who tell me that Goldman makes all its money gouging its clients, who either don’t know any better or are reluctant to get on the wrong side of the bank, for obvious reasons. Also, the fact that not only Goldman but all the banks have made mountains of money this year by borrowing cheap from the government and lending dear to the rest of the world is also manifestly obvious (credit card interest rates went up more than 20 percent in the first six months of the year, despite vastly reduced borrowing costs for the banks issuing that credit).

 
So if this small window into Goldman’s activities is representative of the performance of all their trading, then it turns out GS isn’t some capitalist dynamo after all, but simply an entrenched parasite gorging on extorted rents. It’s a dug-in tick bloating itself sucking the blood that happens to flow by.
 
It seems that the perception of how “smart” Goldman is is just another example of people’s propensity to think attractive people are smarter than they really are. In this case, it’s Goldman’s alleged profits and their master-of-the-universe propaganda which look attractive in a way similar to the evil Queen from Snow White. But it’s an illusion. 
 
Even by MSM accounts Goldman has long since lost touch with its client-friendly roots and vaunted “greedy, but long-term greedy” culture. Blankfein’s tenure is simply the culmination of the ascendancy of the most venal, nihilistic, short-term greedy gutter trader culture. Goldman Sachs is simply a medieval land baron extracting grain from the serfs. It relies only on position and pull, not on intelligence or innovation. The evidence is it has little of these. It’s a feudalist, not a capitalist.
 
So they’re not that smart.
 
They are in fact a ward of the state. We the people OWN this welfare patient. Goldman Sachs would not exist today if it had not been the recipient of massive bailouts, both directly and indirectly to its own bottom line and to the financial system in general.
 
There was the $10 billion from the TARP, but that was just a small piece. There’s also $13 billion laundered through AIG, $28 billion in FDIC guarantees through the “bank holding company” scam (even though they were never held to any of the vaunted “restrictions” the MSM blathered about) plus no one knows how much in free money from Fed loans (also allowed thanks to becoming a “bank”; this is the part of the bailout the government is keeping secret; they’re simply afraid to tell us how much money they’ve stolen from us and handed over to the likes of Goldman; Bernanke shouldn’t be audited, he should be strung up). There’s also plenty of other goodies, government contracts, the pull to get preferential policy like the ban on short-selling, and on. Then there’s the Too Big To Fail premium and the oligarchy premium. And in general Goldman swims in a pool filled and heated by taxpayer money. Without the bailout the whole sector would just have flopped and gasped in a fast-freezing puddle.
 
We the people own these banks. All of them. And especially a phony bank like Goldman, who even more than a basket case like Citi is purely a creature of the casino, a casino which shouldn’t exist at all.
 
So they’re not so tough. They’re a soft, fat, coddled little welfare queen.
 
And why are they so coddled? Because in their most thorough-going feudal strategy they’ve infiltrated their personnel into the government so completely that the term Government Sachs isn’t even a joke, but an accurate depiction of the neo-fascist corporate state.
 
I won’t repeat here the long, long list of Goldman cadres who entered high-level government and government officials who went to work for Goldman, but you can read it here and here, just for a few examples. Put it all together and we can see how and why Goldman Sachs is the most preffered corporation by this corrupt government, and how this is the real basis of all its phony profits.
 
So let’s recap. Goldman Sachs is motivated only by greed, and has made so much money that it sees itself as anointed by God. Yet even in this arrogance it feels vulnerable.
 
This feeling of vulnerability is because it is NOT smart and NOT tough and NOT solvent. Rather it has only mediocre intelligence, strength, or solvency, if left on its own.
 
ALL of its strength, all of its savvy, is 100% dependent on preferential treatment from the government, and from the gangland extortion racket it is able to run based on this entrenched welfare state position.
 
So we the people, the rightful owners of Goldman Sachs, don’t have to worry about this entity as if it were some majestic and terrible Death Star. Goldman IS just another government welfare program.
 
So the goal is simply to end this particular welfare program. We take back the government, from the bottom up, and we can break these pigs.
 
I don’t have the whole answer yet on how to do that, but I hope we can start to realize that what we’re up against is really just a stupid, clumsy beast. It is big and bloated, but it’s not smart or tough.
 
It’s not God, and the reason they keep telling themselves they’re doing God’s work is out of a sense of vulnerability, not strength.
 
Only the people have strength, but only if they choose to use it.

December 17, 2009

Mortgage Desperadoes

Filed under: Civil Disobedience, Land Reform, Law — Tags: — Russ @ 8:20 am

 

When the peasants finally take up the torches and pitckforks and drive out the wicked land baron, they rush to the courthouse to seize the registry and burn the deeds of ownership. That’s how it happens in the movies and sometimes even in real life. It’s practical and symbolic. It’s the obliteration of hated feudalism, the break with the oppressive past, the slate wiped clean and renewal of true human community with the land, where a man farms what he owns. This is real creative destruction.
 
It seems today that such things are impossible. If you assume both the power structure and the internet will exist forever (ironically both are extremely top-heavy, unresilient, vulnerable to system collapse), then you assume the paper trail, in both physical and digitized form, must be unassailable.
 
But at the very center of the financial system, out of its own logic and procedure, it has grown a tumor. This is the system’s failure to maintain its own registry, its own paper trail, its own legal basis. It’s as if they already burned many of the deeds for us.
 
The people are already outraged at the crimes of the banks. We can join to this moral and political outrage an understanding of the structural anarchy and illegality of the system in itself. According to its own premise it has no legal basis, even a phony one, because the land ownership premise is that whoever holds the note has the right, so if there’s no note, there’s no right.
 
This philosophical and moral combination could provide the basis for a real reform movement. The goal is not just to take back the country from the banksters, but to restore the rule of law and order itself.
 
So let’s be clear: To be a revolutionary today is to be the advocate of law, while to defend the status quo is to be a lawless rioter.
 
Property ownership, duly recorded and registered, is the foundation of this legal system. Anarchy at this point equals anarchy throughout. You sell a property, you transfer the written deed. The legal owner, the piece of paper in hand. This has allowed for the orderly ranking and disposal of any claims on the property. Adjudication is not supposed to get hopelessly entangled right at the outset, in even figuring out who holds the note.
 
But the housing bubble’s fuel was a vast supply of mortgage loans passed along a conveyor belt of entities – lender, sponsor, depositor, trust – while being sliced and diced into tranche layers to then be securitized. Apparently the paperwork and fees and taxes payable at each transfer were too much for the banks to deal with so they simply set up their own extralegal system where any of the shell firms along the way could at any time be what the bank’s computer would call the “owner” (meanwhile the piece of paper often simply disappeared).
 
The banks (Citi, BofA, JPM, Wells), the Mortgage Bankers Association (MBA), Fannie and Freddie, the street-level sleazy lenders and servicers and others set up the Mortgage Electronic Registration System (MERS) as a front to carry out foreclosures and serve as the respondent in any court case. MERS simply claims to own the mortgage if anyone asks. It doesn’t really even “exist” in the sense of having many employees, etc. Where action is necessary an employee of the underlying bank, servicer or whatnot doubles as the MERS cadre.
 
For convenience sake, and to cheat on fees and taxes, they simply blew off centuries of property law, the rule of law as such. The result of all this is a system of accounting fraud and avoidance of legal responsibility in general. Anyone who has to deal with them, especially who tries to fight back, has to play Whack-A-Mole with this crazy bureaucracy where no one in particular has any responsibility, authority, or ability to do anything. It takes faceless, bloodless limited liability, the zero responsibility-total rights ideology, to the extreme.
 
Most ridiculous, the note itself often disappears. Demands to produce it lead to MERS or some similar shell simply vouching for itself, “I own it”, with zero proof.
 
For too long, corporatist judges have enabled this flouting of the law. They’re trying to prop up corporate anarchy the same way the government is trying to prop up the insolvent bank system. But finally we’re seeing judges who refuse to accept this fraud on the court.
 
In October we had a state judge in Massachusetts and a federal court in New York rule that lenders who could not produce the title or prove they were the real owners could not foreclose. In the federal case the judge actually wiped out the debt itself in an attempt to punish the would-be defrauders.
 
An August ruling from the Kansas supreme court was even stronger, finding that because MERS wasn’t a properly registered owner of an underlying property, it had no legal interest. Writing for the court Judge Eric Rosen was acerbic:
 

The relationship that MERS has to Sovereign [Bank] is more akin to that of a straw man than to a party possessing all the rights given a buyer… What meaning is this court to attach to MERS’s designation as nominee for Millennia [Mortgage Corp.]? The parties appear to have defined the word in much the same way that the blind men of Indian legend described an elephant — their description depended on which part they were touching at any given time. Counsel for Sovereign stated to the trial court that MERS holds the mortgage ‘in street name, if you will, and our client the bank and other banks transfer these mortgages and rely on MERS to provide them with notice of foreclosures and what not.’ (Landmark National Bank v. Boyd A. Kesler)

 
As the NYT’s Gretchen Morgenson analyzes:
 

By letting the sale stand and by rejecting Sovereign’s argument, the lower court, in essence, rejected MERS’s business model.

Although the Kansas court’s ruling applies only to cases in its jurisdiction, foreclosure experts said it could encourage judges elsewhere to question MERS’s standing in their cases.

“It’s as if there is this massive edifice of pretense with respect to how mortgage loans have been recorded all across the country and that edifice is creaking and groaning,” said Christopher L. Peterson, a law professor at the University of Utah. “If courts are willing to say MERS doesn’t have any ownership interest in mortgage loans, that may eventually call into question the priority of liens recorded in MERS’s name, and there are millions and millions of them.”

 
Or as Yves Smith writes at Naked Capitalism:
 

But it isn’t surprising that judges are plenty unsympathetic, and in cases, outraged. The law is all about sanctity of process, both the underlying law and court proceedings. Cases typically revolve around disputes of fact or grey areas of the law. This isn’t grey (whether a party has standing to file a suit is fundamental) and the law in this area is well established. Basically, the securitization industry tried creating rules outside any established legal framework and judges are having none of it….

And we have an even more interesting set of possibilities. Say servicers and MERS fail to clean up their act, and more judges start throwing out foreclosures. Kansas Supreme Court Judge Rosen didn’t just say he didn’t see an acceptable paper trail; elements of his ruling were a much more fundamental attack on MERS. If more judges start challenging MERS’s legitimacy, that could strike at the heart of foreclosures in securitizations. In other words, a few more of these rulings may accomplish what the folks in DC have been unwilling and unable to do: force banks to negotiate. The problem, of course, is the impact will be very inconsistent. Some jurisdictions and judges will no doubt be more sympathetic to this line of argument than others.

Stay tuned, this looks certain to get even more interesting.

 
All of this has met with the standard clueless arrogance from the crooks. One plaintiff’s attorney blithely argued that the scam was “standard operating procedure for many years” and should therefore be upheld. Rosen quoted the lawyer in the Kansas case as saying MERS holds the mortgage “in street name, if you will”. No, the court would not. Another federal judge in Ohio rejected the argument before his court, calling it the “Judge, you just don’t understand how things work” defense. (Reminds me of the teenage Henry Hill in Goodfellas trying to placate some police detectives who confront him, saying repeatedly in a soothing, patronizing voice “It’s okay.” As in, this is the way we do things. Don’t you understand?)
 
But as Judge Keith Long wrote in the Massachusetts Land Court case:
 

[T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents… What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.

 
That’s it. They were scoffing at the law, disregarding, disrespecting. If they don’t pay the taxes and fees upon taking “ownership”, not only are they criminal thieves, but how can they be the real owners? Why should government uphold any alleged right they claim?
 
Morally, philosophically it’s the radical opposite of the real basis of any economic right. Responsibilities precede rights, and rights follow from responsibilities. Corporate sociopathy is an affront to and contradiction of the basis of the human contract. We have a right to resist this aggressive anarchy.
 
Education must always hammer it home: Demand to See the Note! 

December 15, 2009

Meta

Filed under: Dance of Death — Tags: — Russ @ 9:44 am

 

Does it make any sense to buy CDS protection against US default? How would you collect under conditions of anarchy? Tyler Durden at Zero Hedge explores:
 

There has been much conjecture on whether using CDS is an effective way to hedge against US default risk. Many theoreticians, especially those of the post-March lows variety, have sprung up and are speculating that buying Credit Default Swaps on the US is ultimately a futile and pointless endeavor. The main argument: a US default would likely mean that interconnected dealers won’t recognize contracts on a US default event, as they themselves will be out of business. Even if they continued to exist, like cockroaches in a postapocalyptic world, the collateral which backs derivatives is mostly US Treasurys: the same obligations that would end up being massively impaired.

 
It reminds me of Homer Simpson: “Joke’s on them. If the core explodes there won’t be any power to light that sign!”
 
Durden thinks this can be effective for the seller as a kind of currency scam, since the contract of necessity would have to be denominated in something besides dollars. I guess that depends on the sort of sucker Homer was laughing at.
 
So Durden disagrees with Moody’s pessimistic assessment:
 

Firstly, an obvious point – major dealers are riskier credits than the U.S. government. The fact that they may put up collateral against their derivative obligations offers little relief because U.S. Treasuries (the very instruments on which the credit event would occur) represent a large portion of such collateral between counterparties.Secondly, given the interconnectedness among the major global dealers, the confidence-sensitive nature of their funding, and the very large exposures they all have to the U.S. market, we think that the “wrong-way” risk of buying protection on the U.S. from any major dealer is very high. In fact, the CDS market sends a similar signal as the correlation of CDS spreads – among the dealers and to the U.S. – is indeed quite high.

 
I like how they get at the core of the thing:
 

Still, we think that this is one of the cases where financial engineering is likely to be no match for practical reality.

 
These kinds of limits in physics or economics, or in energy where the two intersect, always remind me of the physical limit built into E=mc2. The more power, the more resistance it automatically conjures. There’s something cosmically just about it.
 
Or in this case, the more insanity and hubris….I love the matter-of-fact tone Moody’s has there in describing something they’re really saying is patently insane, even if they can’t bring themselves to see it that way.
 
[I also like the tepid euphemism “credit event” used to talk about something like this.
 
In another Simpsons, it turns out Mr. Burns doesn’t like the term “meltdown”. That’s just a “media buzz-word”.
 
He prefers “unrequested fission surplus”.]

December 14, 2009

Mortgaging the Moment

Filed under: Civil Disobedience, Land Reform — Tags: , — Russ @ 11:49 am

 

Obama Accepts Nobel, Defends War
 
Salon magazine headline
 
So even the MSM is getting into the act. We have a war president indeed. Meanwhile his party has also been on the warpath. Even as the bailed-out banks have refused to lend and refused to modify mortgages, House Democrats have once again rejected allowing bankruptcy judges to modify primary mortgages. (On the other hand modifying loans for any kind of luxury – second homes, boats, Ferraris or Hummers – is fine. Bankruptcy shouldn’t be onerous for the rich, now should it?)
 
Everyone agrees that bankruptcy mods, and better yet the repeal of the truly vile 2005 serfdom bankruptcy law, is the best and only way to stanch the foreclosure bleeding, to the greater good of America’s social stability and the well-being of American families.
 
Everyone, that is, except those whose priority is the profits of bailed out banks.
 
Meanwhile Obama has continued his resounding silence on the issue.
 
Decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent…
 
Winston Churchill, 1936.
 
The adminstration has trumpeted a bogus statistic. Private debt is falling! That’s great, right? Americans are paying down their debts, invigorating their personal balance sheets?
 
Not quite. On closer inspection it turns out that debts are being forcibly contracted through bankruptcies, defaults, banks writing off some bad debts, and most of all because the banks, who were bailed out upon the condition that they “resume lending”, are refusing to lend.
 
So this allegedly encouraging metric is really not a sign that America is retrenching its debt dependency, finding a new frugality, but rather yet more proof that the bailout was sold on a lie, and all that money was looted for bonuses and to reopen the casino.
 
It’s not constructive Change, but the Big Lie, the Bailout Lie
 
Meanwhile those who really could be responsible homeowners if they could get a conventional, “prime” mortgage, face a completely locked market.
 
The current rate for 30 year fixed mortgages is 4.8%, less than 60% of existing mortgages. It’s been driven this low by the Fed’s illegal program to buy $1.25 trillion worth of MBSs. Once this program is wrapped up sometime next year, rates are expected to jump back to around 6%. So the right moment is now for any solid would-be homeowner, and there are some of them out there. And this is the kind of lending which provided the bailout its premise.
 
But these loans aren’t being made. After blowing up the world’s economy with a subprime lending frenzy, suddenly they’re all about responsible, diligent lending in the biz. They’re simply vigilant “making good quality loans”, according to a Mortgage Bankers Association (MBA) cadre. They’re really about making very few loans at all, according to reality. This is because they know the system is a zombie, and all there is to do with the bailout loot is to gamble it in the casino and steal it directly as bonuses.
 
It’s really very “rational”, as Chicago would put it.
 
Government modification programs for loans guaranteed by Fannie or Freddie were supposed to refinance 4-5 million mortgages this year. As of September 30 they had done fewer than 120 thousand. Lender participation (that is, the bailed out insolvent banks) is voluntary, and they reject everything. One of their favorite tricks is simply “losing” the reams of paperwork they demand.
 
 
Lord I was born a ramblin’ man…..
 
– the Allman Brothers
 
American freedom is supposed to be all about mobility, social, physical; and the economy is all about velocity, of money, jobs, labor. Most of that’s pretty bogus, but that’s what the system’s still claiming to seek. On that front, here’s some trends running counter to one another.
 
New reports on “the rentership society” describe how some people underwater on their mortgages are wising up, realizing they can walk away, rent an apartment, and live for much less than throwing money down the hopeless rathole of their deflated property. They describe what a liberation this can be. (Actually some of those profiled in the article sound like they’re still pretty stupid, taking the freed-up money and spending it on luxury crap. But everyone doesn’t have to be that dumb. This can be an excellent tool.)
 
But where people haven’t yet achieved this level of consciousness liberation, where they still feel committed to these mortgages, the market doldrum is having the opposite effect. Those underwater, unemployed or underemployed, and unable to find a new job in their area, are unable to get a permanent mod, and therefore unable to sell in order to move to a more favorable region. “Arteriosclerosis of the economy.”
 
Normally in a recession worker mobility is counter-cyclical – they go where the jobs are. But if you feel trapped in your current mortgage and can’t unload the house because it’s underwater, you’re not very mobile.
 
The piece does say that these people also are starting to realize they’re going to have to just walk away.
 
 
And you walk away, walk away, I walk away walk away. I will follow.
 
-U2
 
And why not? The bailed-out banks themselves feel free to walk away from any property where taking title, and therefore responsibility for upkeep, possibly demolition, would actually be more expensive than abandonment. In the phenomenon called “toxic titles”, the banks bailed out by the taxpayers simply abandon a blighted lot, whole blighted neighborhoods, and leave any costs of policing, maintaining, demolishing a burned out dead zone for those same taxpayers.
 
An individual’s debt to any bailed-out bank has NO moral validity. And it should have no legal validity either.
 
Little by little we’re seeing protest, the lifeblood of politics, start to revive. I call attention to the program to Stop Usury Now, being run by Metro IAF, two dozen interfaith faith-based community groups affiliated with the Industrial Areas Foundation. Similar actions against payday lenders and other “bottom feeders” (Dick Durbin) are breaking out throughout the Midwest and on into the plains of Iowa.
 
In spite of a fraud like an “Islamic bond”, and of course the complete abdication of Western Christianity, usury remains a spiritual sin as well as a secular crime. It’s great to see people recovering this lost spirit and fighting for it, however small the beginnings.
 
(This may provide some insight into recent findings that organized Christianity in America is losing traction. The spiritual force of the people is flowing out in wild directions.
 

For the first time in 47 years of polling, the number of Americans who said that they have had a religious or mystical experience, which the question defined as a “moment of sudden religious insight or awakening,” was greater than those who said that they had not…….

Twenty percent of Protestants and 28 percent of Catholics said they believe in reincarnation, which flies in the face of Christianity’s rapture scenario. Furthermore, about the same percentages said they believe in astrology, yoga as a spiritual practice and the idea that there is “spiritual energy” pulsing from things like “mountains, trees or crystals.” Uh-oh. Someone’s God is going to be jealous……

For those keeping political score, Democrats were almost twice as likely to believe in ghosts and to consult fortune-tellers than were Republicans, and the Democrats were 71 percent more likely to believe that they were in touch with the dead. Please hold the Barack-Obama-as-the-ghost-of-Jimmy-Carter jokes. Heard them all.

The report is further evidence that Americans continue to cobble together Mr. Potato Head-like spiritual identities from a hodgepodge of beliefs — bending dogmas to suit them instead of bending themselves to fit a dogma. And this appears to be leading to more spirituality, not less. Cue the harps, and the sitars, and the tablas, and the whale music.

)

 
(There are also some signs of more violent action. Italian prime minister Berlusconi, general fascist, misogynist, philanderer and corporatist, has become the first head of state physically attacked since George Bush made the acquaintance of a shoe.
 
They’re of course calling it “terrorism”. Reminiscent of Apocalypse Now:
 

We must kill them. We must incinerate them. Pig after pig. Cow after cow. Village after village. Army after army, and they call me an assassin! Well, what do you call it when the assassins accuse the assassin?~

)

 
The protests are the kind of grass roots action we need in order to combat the demoralization the system seeks to spread. Action may seem hopeless if we look only at the magnitude of the problem, the seemingly meager resources up against such vast strength, the will to change against the inertia of a hijacked civilization. But remember how Beowulf defeated Grendel. Here too there will be opportunities for judo.
 
Most of all, the very momentum of the system fights for human renewal via the fact of the system’s unsustainability, that its entire ponderous momentum must render its fall all the more devastating and send sparks of opportunity flashing everywhere, giving who knows what strange and wonderful illumination and heat.   

December 11, 2009

Value-Destroying Taxes

Filed under: Neo-feudalism, Reformism Can't Work — Tags: — Russ @ 9:17 am

 

This NYT headline says it all: “Many See the VAT Option As A Cure For Runaway Deficits”.
 
For deficits, no less!
 
The article is clear about the way things are. Spending cuts? Not on any of the big-ticket piracy. Higher taxes on the rich? Don’t be silly.
 
No, as they quote a Reagan administration economist: “This strikes me as the best and most obvious way of doing it.” I’m sure it does.
 
The piece points out that, like universal health care, every civilized country has a VAT. Since this is not a civilized country, we should look to what happened with health “reform” to find the pattern for what would happen here with a VAT.
 
As was proven there (and is being proven with finance “reform” as we speak), any so-called “reform” proposal will actually be a Trojan horse. It will be disaster capitalism, a phony reform vehicle used as an anti-public, anti-reform weapon.
 
How will a VAT be weaponized? It’s already regressive. And look at this: “Invoking such a tax would probably require an overhaul of the entire federal tax code.” Yes – the advertised idea would be to replace “middle” class income taxes with the VAT. Of course it’s doubtful that this would even happen. In practice they’ll just lay the one atop the other. (In NJ, for example, the income tax was first instituted in the 70s with the promise that it would replace property taxes. Instead, they both exist, and both have risen tremendously.)
 
And what would happen with a phony “overhaul” of the tax code? It would be the goriest lobbyist feeding frenzy to date. Every kind of special interest, criminal, and parasite would win. Only the people would lose. They would lose hard, they would lose long, they would lose like they’ve never lost before. They would pay, pay, PAY.
 
And they want to use the loot to pay down the deficit!
 
Just as the obvious and only health care reform is single-payer, so the obvious and only tax reform is to render the entire code steeply progressive. That’s what the civilized countries did.
 
How about this for civilization: While progressively steepening the tax code in general, institute a VAT dedicated exclusively to paying for single-payer health care. In that context, the VAT would make perfect sense. This would also be in line with its anti-luxury consumption, pro-saving thrust.
 
But that’s rational, that’s moral, that’s civilized. Therefore we won’t do it.
 
[Appendix. On an different topic, but since the article made me think of it:
 
It gives this brief tutorial on how a VAT works:
 

Imagine the production of a new dress, in three steps:

¶A fabric store sells a tailor enough silk to make one dress, at a total price of $10 before taxes;

¶The tailor sews a dress and sells it to Macy’s for $30 before taxes;

¶Macy’s then sells the dress to a shopper for $50, before taxes.

 
What’s wrong with this picture? It doesn’t answer the obvious question, why do we need “Macy’s” at all? What value does it add? (This applies to big box stores like Walmart most of all, but really to all department stores.)
 
It’s best never to have Macy’s in the first place. That already means a society has reached a destructive level of complexity. This is because the moment Macy’s is entrenched enough it’ll simply use its entrenched position to extract maximum rents from both the tailor and the shopper. That’s the Law of Feudalism.
 
Sure, for a few decades it might have looked like department stores were adding value. But in the long run they were malevolent. To trade real jobs, greater self-sufficiency, community, self-respect, freedom, for the sake of temporarily lower prices (for crappier products, and which in the long run won’t even be cheaper), was never a good trade to make. Every supporter of “free” trade was and is a criminal against humanity.
 
The only way to maintain long run social value was never to have “Macy’s” in the first place.]
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