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Foreclose on the Banks: How to Give America Its Best Christmas Ever
NEW YORK - Citibank is suspending foreclosures and evictions for 30 days, until after the holidays.
Mighty white of them.
Who knew bankers could be so amusing? In an interview, Citi mortgage czar Sanjiv Das acknowledged that "moratoriums are not permanent solutions" and said his company was looking for "some long-term fundamental alternatives" to throwing people out of their homes because they've fallen behind on their payments. But he didn't offer a specific example.
Here, allow me. There's one "long-term fundamental alternative" that's righteous, makes sense, and legal: Let's foreclose on the banks. It's time for the U.S. government to show Mr. Das and his buddies down at the country club who is the boss.
Seriously. Yes we can.
But first, let's go back to February 2009. Ah, February: a new president, hope and change in the air. Especially for bankers.
President Obama's TARP program doled out hundreds of billions of federal taxdollars to gangster capitalists like Citibank and Bank of America, which get off on charging $4 for using ATMs and 29.99 percent interest in credit cards.
The big banks were supposed to use TARP cash to buy back "toxic assets" backed by home loans to distressed homeowners, thus loosening the mortgage credit market. In fact, The Los Angeles Times reported a few days ago, "The fund has done little to address that problem directly." Instead, the feds bought bank stock at over-market prices.
In exchange for those bailouts, the banks were expected to free up credit.
They didn't. They haven't. Instead, they gave obscene raises to their already overpaid executives. They remodeled their plush offices. Now their loan officers are sitting on their hands, laughing all the way to their own banks.
There's still money in the U.S. economy. But it's not moving around--and extreme lack of liquidity is the definition of a Depression with no end in sight. As anyone who runs a small business can attest, the same dirtbag bankers who were lending to anyone and everyone two years ago have suddenly become tightwad tight-asses. Consumers with high credit ratings have seen their credit limits slashed. Banks are even refusing to refinance high-interest home loans at today's rates, reasoning that lower property values have reduced the value of their collateral--thus ensuring still more foreclosures in 2010.
Because the Obama Administration didn't pressure them, the banks stonewalled the president's $75 billion loan modification program, which was supposed to reduce payments for the approximately ten million Americans who face foreclosure.
JPMorganChase, for example, blew off or rejected 85 percent of homeowners who asked them for help. That's better than Citibank, which enrolled 100,000 distressed homeowners in the program but only managed to actually modify loans to 270. And it's a lot better than Bank of America, bringing up the rear with a pathetic whopping 98 modifications out of the 160,000 borrowers who signed up as of the end of November.
More lowlights:
∑ One out of seven American homeowners will probably lose their homes by the end of 2010.
∑ Only 4.7 percent of distressed homeowners who enrolled in the modification plan have gotten any help.
∑ Out of Obama's $75 billion program, only $2.3 million has been spent--or 0.03 percent.
Obama's performance on the foreclosure crisis--along with unemployment, the biggest problem America faces--makes Bush's laissez faire approach to Hurricane Katrina look caring and loving in comparison. If ever there were a cause for impeachment, look no further.
No doubt recognizing political peril, Obama is now attempting to jawbone the banks into doing the right thing, even calling banking CEOs "fat cats" on "60 Minutes." Whatever.
"America's banks received extraordinary assistance from American taxpayers to rebuild their industry," Obama said after meeting with banking executives. "Now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy." But there were no teeth in his demand--just a polite pretty-please with a trillion-dollar-plus bailout on top.
But that's Obama's choice. If he wanted, he could foreclose on the banks--and personally give millions of desperate homeowners the best Christmas ever.
Here's how.
True, the Treasury Department didn't receive any written assurances from the banks that they would start lending again when they collected their bailout loot back in February. But as Obama recalled in the above quote, it was widely understood at the time that the federal government expected looser credit markets in exchange for the bailout. There were thousands of reports in the media to this effect, hundreds of statements by government officials, and--no doubt--dozens of discussions between government and bank lawyers to this effect. No one was confused. Everyone got it at the time.
Obviously Obama should have gotten it in writing. But the bailout-for-credit quid pro quo was a widely witnessed oral contract. And oral contracts are just as legally binding as written ones.
The classic example of an oral contract is two roommates who agree to share an apartment. The lease may be in the name of one person, but the non-leaseholder may not skip out on the rent. But the stakes can be bigger. Pennzoil made a handshake deal--no contract--to buy Getty Oil in 1984 but then reneged in favor of another suitor, Texaco. Pennzoil sued and won $11.1 billion in damages.
The United States government could, and should, sue Citibank, Bank of America, JPMorganChase and other defaulting miscreants for breach of contract. With one out of seven Americans having been foreclosed upon by one of these institutions, it would be difficult to imagine any jury finding them not guilty. Mercy, after all, wasn't something these banks showed their victims.
Since damages would likely exceed the defendants' ability to pay, the U.S. could then seize the banks. The newly nationalized banks, owned by we the people, could reduce or cancel outstanding mortgages to the unemployed, sick and other worthies. They could increase credit lines and start making loans again--you know, do what they promised to do. It wouldn't necessarily get us out of the Depression. But it would be a beginning.
Foreclose on the banks! It's fair. It's smart. And it's long overdue.
37 Comments so far
Show AllGive Sanjiv Das Boot!
Many of today's bankers are descendents of the bankers and robber barons who kept most Americans in poverty by creating a financial crisis at least once per decade until FDR's New Deal regulations prevented them from manipulating the system from 1935-1985. Its in the bankers' genes to rip us off. In addition to bonuses and embezzlement, the bankers are using TARP funds to create more bubbles (commodities, Hong Kong real estate, and pollution credits, for example). The bubbles created by unregulated bankers are pushing more Americans into poverty with each passing day.
Deregulation during the past 25 years has restored the bankers' license to steal. Obama and the Wall Street insiders he hired to run the country are working hard to assure that the bankers' license to steal has no expiration date.
I love Ted Rall - he is always angry. Count on him to call a spade a spade.
A $4 ATM charge to get YOUR OWN money back. Just that is enough to call for burning down the banking system. Obama should have let it fail and financed the bad mortgages directly. Sure, some overmortgaged rich scumbags would have made out, but all the real victims of the mortgage crisis would have been spared at a huge savings to the country vis-a-vis TARP. Of course, all that's socialism and thus taboo in our shining "democracy". Also, of course, Obama's change is bought and paid for by Wall Street.
Yes, failed banks would have been a problem for a while, but tearing them down from the inside and rebuilding the financial system as an asset to our citizens would have saved us the trouble of burning it down later. The financial crisis gave us the opportunity of a century to radically change the corrupt, top-heavy, plutocratic system that controls our money and our lives. Guess we missed the boat on that one, eh Rahm?
Nationalize the scumbags. Send the ceos to jail, preferably for LIFE. Fire everyone who has decision making power in the baking industry and let them fend for themselves in finding a new job. Jack up THEIR mortgage rates to where THEY can't pay them. Make THEM find other ways to live their lives than screwing people. The banks were NEVER supposed to hold power over the gov't, and now they OWN it.
Write laws that REMOVE PERMANENTLY "corporate personhood". Companies should NEVER have been granted the rights of humans. Write some campaign finance laws that make private money in ANY election ILLEGAL and a cause for jail time with NO parole.
It's time for the PEOPLE to matter again in this country. And we will NEVER get there with money as the decision maker. HUMANITY needs to stand up and kick some corporate ass, and put them back into a place where THEY can be controlled, NOT be the controller.
Screw the bankers and their greed. It's costing ALL of us our very lives. Time to fight back, and HARD.
Obama will take Rall's advice to foreclose on the banks, and great advice it is, about the same time he pushes thru single-payer health care and does anything at all substantive to curb global warming. Anyone ready to hold your breath? Sorry, Ted, you're absolutely right, but it's mega-corporate/financial system control from here to eternity. The duopoly has so ruled. We peons can carp and complain all we like. The fat cats know we'll never do anything to upset their yacht parties, golf tournaments or black-tie state dinners.
BLEACH make a great writing tool on the old green. Lets get out to the elite's golf courses of an evening and write some poetry where we know they will read it
And yes squash the banks they have not honored their oral agreement, audit the fed and end corporate personhood.
The police state will roll over us whether we rise up or not.
Meditate, resist, sabotage, wildcat, trash their offices and make no demands, refuse their money it confuses the bourgoisie...
We dont need to smash the state, the state has smashed itself, Anarchy Always.
Corporate personhood... I'm scrating my head here. These are the same folks who have declared the "terrorists" as non-persons. I'm telling ya, that the best way to attempt to grasp this cosmic madness we're living in is to apply the backwards rule to everything: war is peace, good is bad, up is down, cold is hot, a corporation is a person but a person is...well...not a corporation but certainly not a person either sooooo...
Heard a very brief notation this week in the very wee hours of the morning on CBS Nightwatch (or whatever they call it). The anchor said the IRS quietly cut a deal last week with Citi to give them a huge tax break. Haven't hear a word about it since.
I heard the same thing. The tax break enabled Citibank to tell everyone they were paying back the federal loan so they would look good to the taxpayers.
Yeah, NPR mentioned it a couple days ago, too. I just about barfed up my breakfast.
Ted Rall wrote, "It's time for the U.S. government to show Mr. Das and his buddies down at the country club who is the boss."
Maybe so. But unfortunately, as this year has punctuated so clearly (even sensationally), "the boss" isn't the U.S. Government, the People of the United States, or anything even remotely connected to the U.S. Constitution. No, all of those things are merely tools to the real "bosses" who run corporate America.
The REAL bosses of America are doing just fine, unfortunately. And that's not likely to change in the foreseeable future.
"With one out of seven Americans having been foreclosed upon by one of these [banking/mortgage] institutions, it would be difficult to imagine any jury finding them not guilty."
Unfortunately, nothing is easier to imagine. Americans can be easily duped into believing anything the MIC wants them to believe (Obama's election is just one of many examples).
Furthermore, regardless of what they believe about the bankers, Americans' instinctive reverence for the wealthy and powerful overrides any incipient impulse toward rebellion.
Wanna really make a bet on Amerikan stupidity? Just last month, jury in Manhattan let a bunch of Wall Streeters accused of having been instrumental in this mess go scotts free. If nothing else, at least learn never to underestimate the stupidity of that grand race called Americans.
DemocracyNow! had this bit on the other day that, even if of very little consolation, at least made me laugh real hard:
Study: Hospital Cleaners Create More Economic Value than Bankers
And a new study from a progressive British think tank says low-income workers, such as hospital cleaners, have a far higher economic value to society than bankers. The New Economics Foundation says bankers take away seven British pounds for every one pound they earn. By contrast, hospital cleaners create ten pounds of economic value for every pound they earn. The study’s authors say the findings suggest pay structures should reward jobs that create societal benefit, not profit.
http://www.democracynow.org/2009/12/17/headlines
Cockroaches create more economic value than bankers.
Both are negative balances, but the bankers are wa-a-ay bigger. You cannot foreclose on your roaches, but they will not foreclose on you.
Panglossian Empire ePie December 19th, 2009
Is the gloss in the pan
the flash of the man?
Show perpetual glee
for the empire we.
Check in with your casters
The stage is for blasters.
happy pursuit ones
virtual joy ones
Mark in,.. with your masters,
the marginal stashers
the flimflam mammon muckers
the ‘lay me in the sediment’,.. pavers
for walls without balls behaviors,
the naked and primal ones
subliminal awe and sublime,.. yet full ones,..
full and tribal
So paint me up for war
jack my Chevy up for score.
The gloss in the pan
the flash is of the man
the ‘sure we can’
the empty we
the empire we
A bit of gloss left in the pan
bounce your booty for the man
low,.. low,..
rider.
Show some flash
It’s final.
.....with the cash
Bounce with glee
for the empire we
the low, low, rider.
Rall is usually right on the button, but this starts with a mistake: "Ah, February: a new president, hope and change in the air. Especially for bankers.
President Obama's TARP program ..."
Obama was not yet elected when the TARP program was rolled out in OCTOBER of 08. The deal was set and done before he was inaugurated. Slamming him for things he didn't do is wrong. It allows the actual perpetrators to slide.
Make no mistake, the TARP program, the Bailouts and the mess that brought them on were all products of the previous misAdministration. They are the inevitable products of the Republican/Corporate agenda. To turn that over and blame Obama for them, not bothering to mention that this was inherited, makes it LESS likely for Obama to distance himself, not more, if he already "owns" it, he now has to make it work.
Try not to help the Corpos any more than necessary.
And BTW, Rall was already hating on Obama befor the election, so his protestations of disappointment are false.
Let's not forget "Senator" Obama's voting record. In October 2008 he voted YES in FAVOR of TARP--and he knew exactly what he was doing. Obama is first and foremost a political opportunist who, along with John McCain, was not about to deny Wall Street its bailout prior to the November election. His Administration recently decided to extend the program through October, 2010. Make no mistake: It's every bit his program.
There is no "Republican/Corporate agenda." Did you miss the Clinton Administration? Clinton, a democrat, greatly advanced the cause of our now pathological neoliberal economic system, which contributed directly to our current financial crisis. Obama now employs many of the former Clintonites who contributed to the dismantling of our regulatory system (See Matt Taibbi's latest Rolling Stone piece). This gets said repeatedly here on CD, but I guess it must be said again: there is no ostensible difference between the two political factions. To quote Joe Bageant, Republicans and Democrats "both serve at the pleasure of the same criminal syndicates." This is nothing new, by the way, just becoming more glaringly obvious. For example:
From 1890: "Wall Street owns the country. It's is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street.... Our laws are the output of a system which clothes rascals in robes and honesty in rages...."--Mary Ellen Lease, Populist orator from Kansas.
From 1911:
"Our democracy is but a name. We vote. What does that mean? It means that we choose between two bodies of real -- though not avowed -- autocrats. We choose between 'Tweedledum' and 'Tweedledee'."--Helen Keller, on politics
No, I didn't miss the Clinton Administration. I didn't miss the Gingrich Revolution, either. Clinton was faced with a rolling coup for almost his entire tenure and was force-fed many of the most obnoxious pieces of legislation by a veto-proof majority led by a rabid Neo-Con and backed with huge Corporate money and Media. He came in with a progressive agenda and was beaten back by a concerted effort on the part of the GOP/Corporate interests. He was handed what was, at the time, the largest Federal Deficit in history and a Congress that used Deficit Reduction as a bludgeon to prevent "a Liberal Agenda" from going forward. The People of this country wanted our economy to recover from the mess the Republicans left and Clinton accomplished that despite the obstacles.
And why did the Corpos go to such expensive and difficult lengths to destroy Clinton's administration? Because he was an interuption of the trendlines put in place by the Reagan/Bush gang. Look at all the economic timelines through the past 4 decades and you will see a clear trend one direction under Republicans and a counter trend under Democrats.
When the Republicans are in power, Corporations are allowed to remove more value from the economy, by concentration of wealth and by putting resources behind societally useless things, like wars. That can only go on for just so long before it hits the skids. Invariably, the Republicans have left office in recession, in huge debt, with an unhappy populace. They leave such a mess that it takes most of a first term to clean it up.
Under Clinton, working people got their first raises in ten-twelve years, Minumum wage and indeed, all of the lower bracket wages didn't move in the eighties AT ALL. It was the beginning of Mega-Conglomeration, buying up companies, stripping assets and shipping jobs overseas and if you raised a fuss, you were out. Reagan's first shot as President was to fire the ATCs and let Labor know, they had an adversary in charge, remember that?
Clinton restored the Department of Labor and improved labor law, that gained him the support of Labor Unions. He increased the diversity in the courts and the Administrative agencies, bringing a measure of relief to many people that the Previous and Following administrations tormented.
He left office with a record federal surplus, a furious economy, and didn't start a shooting war before leaving to dump in his predecessor's lap, like Bush pere did to him and Bush fils did to Obama.
That "Not a dime's worth of difference" meme is not only dangerously wrong, it's a quote from GEORGE WALLACE! It shows me someone who hasn't dug into the actual history, is relying on someone else's interpretation that they have bought as is, having not lived through the period themselves.
Don't be fooled. There are concrete differences between the parties. There is a very definite GOP/Corporate agenda and admittedly, there are far too many Democrats that are coopted by that agenda. That "far too many" is about 6 out of 60 in the Senate and about 22 out of 262 in the House. To say that the entire Democratic Party is the same as the Republican Party is false.
And from a practical political standpoint, it enables the GOP/Corporate agenda to promote that meme.
And btw, don't assume that I'm a Democrat.
Wow. I must have hit a raw nerve.
I'm not a Republican--not by any stretch of the imagination--I'm a socialist, so you're mistaken if you think I'm not painfully aware of the damage done to this country, particularly in the last 30 years, by Republicans-- as well as Democrats-- which was part of the point I was trying to make. Mainly, however, I was merely trying to point out your apparent naivete' regarding Obama and his nefarious obsequiousness to Wall Street. This is a man who accepted nearly $40 million in presidential campaign contributions from Wall Street--more than any other candidate in history. You incorrectly stated that he had nothing to do with the TARP program and I merely pointed out that he not only voted for it as a senator, but has extended it as president. He and his entire economic team have everything to do with it.
If you think Obama--or any politician--has any loyalty at all to 'We the people' or 'democracy' in general, I suggest you re-examine American history. We live under the auspices of a pathologically profit-driven, autocratic, plutocratic oligarchy with deeply entrenched conservative social 'values' yet which, for public relations purposes only, enjoys masquerading as a representative democracy. Obama and the rest of our political 'representatives', with rare exception, are merely courtiers to the oligarchs--they do their bidding, not ours. I'm still amazed by how many people are fooled by these criminals.
By the way, you might want to re-read history, as well, as it pertains to Clinton's military actions in Iraq and Yugoslavia. He was no dove. He was certainly no liberal either-- he also eliminated Federal welfare programs.
By the way, for someone who claims not to be a Democrat, you sure sound like one.
I don't need to re-read history, I was there when it happened, watching VERY closely. And I protested Clinton's continuation of Bush's sanctions on Iraq and tried to limit our involvement in the Balkans, I have no illusions of Clinton's diety. He was only a Liberal by comparison to the RightWing extremists that preceeded and followed him. in reality he was just about in the center of the spectrum. But his program started off Progressive. The defeat of his HealthCare overhaul made him a lame duck before his first term was halfway done. Is that how you want Obama's Presidency to go? Give him an adversary Congress and let them rope-a-dope him for the next three years? Then follow that with a Palin/Huckabee Administration with a veto-proof Republican Congress? Because that's what you are going to get on this trajectory.
And that Welfare "reform" thing was yet another piece of GOP/Corporate legislation that was veto-proofed and force on him. But of course, that doesn't fit the Lefty narrative of "Clinton was EVIL", so that detail is conveniently glossed over, isn't it?
Since the banks "...own the place.." as Sen Durbin noted a while ago, WHO in government is supposed to do the foreclosing? As a practical matter, Mr. Rall's idea amounts to asking the banks who own the government to foreclose on themselves.
Rall would better use his wit and creativity to help us figure out how WE the people can first take back what is supposed to be OUR government.
Nothing's gonna change till THAT happens.
"the Depression"
Let's start calling it by it's real name - Depression.
Even TR has been reduced to offering redundant fantasy.
Frankly. The. Banksters. Own. The. Place.
The Managers hired to run The Place They Own will not, and cannot, 'foreclose' on their Owners' money-raking machine.
We The People could, on the other hand, fill the Wall Streets with loud, angry protesters 24/7, cancel all credit cards, pull all of our money from Bankster-owned/controlled institutions, chase 'our leaders' around town like paparazzi demanding action and answers, deluge R-nut sites/message boards with truth, flood the ERs and beat the bills to highlight the need for Universal Health Care...
For starters, I mean. Or we could try Ted's way. Whatever ya think has the best chance of making a difference...
Frank1569 -- Capital Suggestions!
Oops....let me rephrase that: Excellent suggestions!
Democratize the money system. The Constitution allows it but doesn't demand it. State owned banks could give investors a decent return on savings (5%) and, as fractional reserve banking allows for 9-1 lending, give house loans at 2%. For each $1 million in savings (costing $50,000 per yr. interest) we'd earn $180,000, a $130,000 profit, which could offset taxes. Banking should be a public utility. Private banks are (aside from immoral) a drag on the productive economy, the part that creates wealth.
A Vote of Confidence Amendment will give American voters the power to dismiss any federal officeholder at any time.
VOCA, Now !!
FREE AMERICA
REVOLUTIONARY (DIRECT) DEMOCRACY
F*ck 'em, f*ck their owners and f*ck all the people who put their money in them!!!?
Yes!
Is this a joke? For instance... Dude, what if the government like totally sued the bankers and then took all their money away, wouldn't that be awesome dude???
Anyway, we had a chance to stop the bankers. The banks were failing and libertarians said let those corporate scumbags fail, let the free market do its work and let them fail. But liberals like Krugman said we have to give the bankers lots more of our money because they are so important and we couldn't have a successful economy without them. The free market libertarians said no way let them fail we don't need those scumbags and idiots. But the liberals won and we gave the banks a ton of money.
The country already has federal banks and there is a fight supported by both the left and the right to audit them because they have too much power and can't be trusted. So who would run these new nationalized banks? I'll tell you in case you haven't been paying attention... the same people who run the banks now. Nationalizing the banks would just shift the money and executives around a little bit and we'd be in the same place. The difference is that the banks would have complete and absolute totalitarian power over the economy and our money. You think they exploited the bailouts? Wait until you see how they exploit that kind of system!
Also, arguing for more federal banks is like arguing for war. A main reason for nationalization from Lincoln to Hitler to today has always been to fund war and genocide. Do you really trust giving that much power to our government after Obama's Nobel Prize speech?
I guess you have to ask who owns the banks or the federal reserve? John Kennedy was the only president since 1913 that planned to use green back dollars as part of the economy. Greenbacks, are not borrowed money from private corporate owned banks. The money is what needs to be nationalized, and regulated by the banks. Of course I think the president would have to consider the risks.
You know I was just thinking it's funny that Rall suggests suing the banks considering how infamous he is with other cartoonists for being a litigious jerk:
http://en.wikipedia.org/wiki/Danny_Hellman
I guess Rall really loves lawsuits like most jerks.
Does anybody remember Hank Paulson? TARP is an artifact of W, not Obama. And borrowing money is what got us into this mess, who gives a rat's rectum if the banks aren't lending? Businesses need customers and credit, not bank loans. What a strange fantasy world we are living in.
The banks were given huge amounts of taxpayer money partly so they could lend it out in order to help revive the economy (or so the story goes), so the fact that the they didn't lend much of it is very much worth a rat's rectum in concern.
You wrote that "Businesses need customers and credit, not bank loans", but credit is just a form of borrowing.
You've got it all wrong--it's not the banks who should be accountable to Obama--It's Obama who is accountable to the bankers. Do you think Obama fears the voter's wrath? Do you think he feels that progressives have any real power? Obama is confident that he can finese, obscure, mollify and talk his way out of this. I have news for the White House although I don't think they will listen-- too many people have been hurt, too many people are suffering for this tactic to work much longer. Let's stop talking about what we want Obama to do-- as though we had any influence over him and his corrupt crowd of cronies. Let's talk among ourselves about how to make sure he is out of a second term. Let's let our local party leaders and union bosses know that we will not support them if they support Obama. Let's talk about what we will do when he is out of office.
Don't like the rich banksters? Then quit giving them business! Manage your money through a credit union instead of a bank. Right now, mortgage rates are incredibly low and refinancing your home through a credit union could save you a lot of money. My wife and I got locked in through our local credit union for a 30 year fixed loan at 4.875%. In addition to saving money, you can sleep at night knowing that your money isn't being used to pay corporate lobbyists to leverage for bailouts.
http://articles.moneycentral.msn.com/Banking/BetterBanking/DitchYourBankForACreditUnion.aspx
The best approach to rescuing the small banks is for local government agreements with the BigBox retailers to include an agreement that the BigBox retailers will open and use accounts in the local banks . As it stands now the BigBox gang move in , grease a few palms and pay little or no local taxes and the profits go to their home offices which drains local neighborhoods of what little cash they have and destroy's the small local banks . Only greedy politicians like Chicago's mayor allow this to happen to the very cities they live in . The BigBox retailers never replace the jobs they destroy in the neighborhoods nor do they replace the loss in tax revenue . Many want to blame the people in Washington but the real culprits that are laughing all the way to the bank are your local officials .