Looking Backward: S & L Crisis Artifact

Happy New Year. Took a long break for the holidays.

Let’s hope for less darkness and more light in 2009.

Meanwhile, while focusing on the current economic meltdown, I came across a flier I made about 20 years ago, shown below.

Gone but not forgotten, is our last financial crisis — the big (at least for the 80s) S & L bailout.

The flier was never used as was intended, to mobilize a demonstration against banking crimes against the community.  However, it was actually distributed far and wide — published in a magazine, distributed at the highest management meeting at Bank of America, and was partially responsible for launching negotiations of a very successful community reinvestment agreement in L.A. between Communities for Accountable Reinvestment and Security Pacific, both of which are now defunct.

So, here’s that story, in case its hard to read….

It’s the late 80s.  Security Pacific had three branches in South Central L.A. with deposits totallng about $85 million.  And although they had quite the loan portfolio, only three of those home loans ever hit South L.A.  There were community protests, community reinvestment challenges, and in self-defense, Security Pacific eventually announces a fairly vague $1 billion dollar commitment to community needs.  This was a big deal.   Nobody then ever said billion the way we do everyday today.

Meanwhile, our community coalition of the time, had filed a Community Reinvestment Act challenge to a proposed merger between the bank and another bank — an unusual case where Security Pacific was buying 20% of a Japanese bank (Mitsui).  

The L.A. City Council even supported the community protest and wrote a letter to that effect to the Federal Reserve.  This was also new and different at the time.

In a really, really, really unusual move, the Federal Reserve rejected Security Pacific’s application and actually suggested that the bank reapply after they had come up with a more responsible community lending plan.  

All of this business as usual and business not as usual is going on during the big Savings & Loan crisis and bailout, and Security Pacific, like all the other big banks, wanted to get in on that action.

So Security Pacific puts in a bid to buy the failed Gibralter Savings Bank which had recently been bailed out by the Resolution Trust Corporation.  

The punch line?  

Security Pacific paid $150 million for the bank, taxpayers paid $400 million to subsidize the bailout, and in return, Security Pacific received 83 branches, $5 billion in deposits, and as a new owner, the right to do whatever they wanted, which was to:

  • sell the branches
  • fire the bank workers (about 1500)
  • and keep lending as usual (not in South L.A.)
Sound familiar?
Stories about more recent adventures in what economic historian Niall Ferguson calls “Planet Finance” coming soon.

Comptroller Says CRA is Good for the Economy

from "Color of Money," Atlanta Constitution, 1988

One of the most misguided finger-pointing activities around the banking crisis comes from corporate and right wing pundits that blame the Community Reinvestment Act — a not-strong-enough law that was intended to curb “redlining” by banks and end discrimination in lending.

Redlining created conditions such as those described in the 1988 Atlanta Constitution investigative report entitled “The Color of Money.”  Among other things, this Pulitzer Prize winning series showed that at the time, low-income whites were much more likely to receive a mortgage loan from local banks than affluent blacks.

But today’s finger-pointers assert that the economic crisis was caused by the government forcing banks to make bad loans to poor people (read: people of color).

Right.

If only that were true.

For the record, the U.S. Comptroller of the Currency says it isn’t so.  Here is an excerpt from a recent speech:

Given recent public discussion, it is appropriate to ask about the role that CRA plays in the credit challenges we face on so many fronts. In my view, it plays a very positive role. Unfortunately, however, current market disruptions have clouded the accomplishments that CRA has generated, many of which we recognized last year during its 30th anniversary. There are even some who suggest that CRA is responsible for the binge of irresponsible subprime lending that ignited the credit crisis we now face.

Let me squarely respond to this suggestion: I categorically disagree. While not perfect, CRA has made a positive contribution to community revitalization across the country and has generally encouraged sound community development lending, investment, and service initiatives by regulated banking organizations.

CRA is not the culprit behind the subprime mortgage lending abuses, or the broader credit quality issues in the marketplace. Continue Reading »

Why Subsidize Big Three? Best Argument by Jon Stewart

Yes, it’s all over the web. But I couldn’t resist.
Neither could the Detroit Free Press: “Too Bad for Big Three Jon Stewart Isn’t In Congress.”
I mostly appreciate the comparison to the big bad bank deal.

The Daily Show With Jon Stewart M - Th 11p / 10c
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Best Article on the Economic Crisis

My favorite article that explains how we got into the current world economic mess is by Niall Ferguson.  The article is “Wall Street Lays Another Egg” from December’s Vanity Fair.  Check it out.

Ferguson is a Scottish (hence the name) economic historian who teaches both in Harvard’s History Department and Business School.

Accordimg to the publisher, his new book, The Ascent of Money, looks at financial history as the backbone of historical events.  I haven’t read it, so this is not an endorsement.  But I am intrigued as an organizer who for years starts strategic analysis with the rule:  “follow the money.”

So its on my list.

Just Economics

from Just Economics workshop
…and now, $700 billion

Even as our elation at Obama’s election peaked, you could see the hard work ahead mirrored on our new President’s face.

And front and center to all of us who organize is the fact that after thirty years of escalating devolution, cutbacks, privatization, and the whole neoliberal nine yards, we have our work cut out for us in the battleground of ideas.

Ideas about what is fair.  Ideas about who should decide that.  Ideas about whether the economy really has to be a game of winners and losers.

If there is one thing that we can all learn from the current crisis, it is that economic and financial policy is too important to be left to economists and policy wonks.

These questions bring me back to a  great moment of about 10 years in my life when I was a proud member of an economics popular education collective that brought this kind of economic analysis and thinking to regular people, and lots of them.  The group was called Just Economics, and I will upload some of their greatest hits here over the next few weeks.

And the best news coming out of the mess of the world economy is that it has motivated several Just Economics folks to reassemble this weekend in Los Angeles to ply our art at interpreting the structures and policies behind the current crisis and what we can do about it.

Coming soon.  Just Economics, revived.

Taming the Perfect Storm

Addressing the Impact of Public Health, Housing and Law Enforcement Policies on Homelessness and Health in South Los Angeles

A Human Rights Approach to Health

Perfect StormSAJE has been working closely with a health clinic (St. John’s Well Child and Family Center), health promoters from rttc member Esperanza Community Housing, and homeless organizers Los Angeles Community Action Network for many years, battling the collision course between slum housing, gentrification, and displacement.

This year, we collectively interviewed over 400 homeless people in South Los Angeles to elicit their experiences with the housing crisis, public health, and the criminal justice system which combined into a “perfect storm” that undermines everyone’s quality of life.

The report, which is called Taming the Perfect Storm (Addressing the Impact of Public Health, Housing, and Law Enforcement Policies on Homelessness and Health in South Los Angeles), is available on the online Harvard International Journal for Health and Human Rights, presents the data and a human rights approach to the problem – the right to housing, health and security. 

Key findings include:

  •  42% of the homeless people who rented in the last five years became homeless because they could not afford a rent increase;
  • 3 out of 10 experienced an eviction.
  • 72% had no usual source of medical care
  • 1 out of 3 had an interaction with law enforcement in the past year
    • 60% had to move from where they usually slept or stayed because of the interaction
    • 21% of the homeless received a ticket or citation in the last year
    • Less than 25% were offered any shelter or services by law enforcement

Here is the link to the Health and Human Rights Journal, featuring the report:

http://hhrjournal.org/blog/articles/taming-the-perfect-storm/

 

Notes from Brazil: Oded Grajew

I am blogging from Brazil, where I attended my first annual meeting as a Synergos Senior Fellow and had the privilege of spending time in discussion with about 40 social advocates from Argentina, Brazil, Chile, Inida, Kenya, Mexico, Namibia, Pakistan, Palestine, Philippines, South Africa, Tanzania, Uganda, U.S., and Zimbabwe.   

Synergos is the brainchild of Peggy Dulany, a person who chose to turn her inherited wealth, influence, and networks outward to shape new alliances and tools to reduce world poverty and inequality.  Steady work.

odedA high point of the week, of which there were several, was a keynote address (transcribed below) by Brazilian industrialist, philanthropist, compulsive social entrepreneur, Oded Grajew.

Oded’s resume presents a counterpoint between power and social justice.  A former toy manufacturer, and a succcessful one, he started the Abrinq Foundation for Children and Adolescents Rights while he was President of the Toy Manufacturers Association of Brazil.  He is Chairman of the Board of the Ethos Institute of Business and Social Responsibility, and was instrumental in creating several other initiatives that promote education, accountable development, and responsible entrepreneurship. 

Most recently, he helped forge Movimento Nossa Sao Paulo (Our Sao Paulo Movement), which he describes in more depth below, providing food for thought for our own Right to the City movement.

Oded is the founder of the World Social Forum and still sits on its Board.

He is a special advisor to the popular Brazilian President Lula (Luiz Inácio Lula da Silva — today Brazilian newspapers report a 77.7% approval rating — across all Brazilian classes).  Oded is also a member of the Advisory Board of the United Nations Global Compact.

…Thank you for having me come here to speak to so many women and so few men.  But this is something that we can think about because as we are talking about public policies, we are talking sexually about men’s issues.  Men make politics.  This is not simply my point of view.  It is very good to have so many women in politics.

…If we want to talk about social change, sustainable development, we must talk about public policies.  Because without public policies, I personally don’t believe that we can achieve anything.  Anything.  Because the public policies will decide the rules of the game.  They decide our life.  They decide the rules of economics, social issues.  Public policies appear at a big scale.  And if we talk about education, health, violence without an inference to public policies — I personally don’t believe that we will succeed.  Its like trying to dry up water when its open and raining.

I would like to give you an idea of how politics and how public policies are being inferenced — because a lot of people inference public policies and not, most times, in the public interest, but in specific interests.  And in Brazil, and not only in Brazil, as you know, who decides public policy are the politicians.  The majority decides.  And how does the majority act today?  If you want to be elected — and I don’t talk about all of them, I talk abut the majority, and the majority decides — you must have money to be elected.  And every day more money.  And the first obligation of the majority, of the politicians, is to give big back investments that contributors gave to them.

In Brazil, 99% of the money in elections comes from companies.  Then you spend half of your term giving back to your investors.  Because I don’t know any companies that don’t invest in their interests.  Its an investment.  You have to give back to them.  And the other (half of the) term…you try to give back also for the future investors, because they want to have money for the next election.

Then, the pubic policies, the majority, is for the interests of who pays for campaigns.  I can give you many examples about how public policies are made for specific interests.  For example, private health companies in Brazil put a lot of money in campaigns.  Private education put a lot of money in campaigns. I don’t believe that they really have interests to have good public education or good public health.  Because that would finish their business.  Only to give some examples.

Second. The companies don’t like to have their name on the list of who supports campaigns.  They don’t want to be where public opinion would raise the question, “why are you doing this?” and so on.  70 or 80% of the money in campaigns in Brazil in campaigns is illegal money.  Illegal money. 70 — seven zero, eight zero, not one seven — 70, 80.  Its illegal money, from illegal activities. Illegal money comes from illegal activities.  A lot of politicians are making service to illegal activities.  Imagine what kind of public policies you will have from this.  And every day more.  Because the campaign needs every day more money.

As money is very important in the campaigns, the system of public services is — you have a system where — every time you change government in Brazil, every four years, everybody changes.  Change thousands of people.  Because this is a way to conserve power.  Because you are bringing your friends, your parties — the parties of the political coalition — and you distribute the functions.  Its not like you contract a head hunter to get the best person.  They are friends, family, party, coalition.  Imagine what kind of public services you have in this system. Because these people are part of the power system.  They bring your money in the party.  For example, you have a big demand for functions that have big budgets. Because when you have big budgets who can handle this by giving money, corruption, and so on.  And one part is for you, one part is for the party, for the next election. You know all this — you who are Brazilian know exactly what I am talking, but its not only for Brazil. Continue Reading »

August 29: Katrina, New Orleans, and N.Y.

On August 29, Right to the City held a national day of action in all its allied cities to acknowledge the ongoing crisis of Katrina and parallel displacement in cities around the country that are caused by human-initiated economic disasters.  Here are press links from the New York City event, which included a march through China Town and a vigil in front of One Police Plaza.  Contributed by Right to the City, New York.

NY 1

1) Market: New York. NY [NY] [1] HUT: 7,391,940 DMA%: 6.55
Date:  08/30/2008  Time:  5:00am  Aired On:  NYI  Affiliate: NY1 Show: News First

05:00:11.16 New york rescue crews are packing up and heading to mississippi. They leave today to help coastal residents deal with preparations before hurricane gustav arrives. The city remembers the three-year anniversary of hurricane katrina, holding a march and prayer service in manhattan. Many katrina survivors relocated to the five boroughs. Sen. John mccain and his new running mate, gov

05:03:13.21 Its been three years since hurricane katrina slammed into the gulf coast. Here in the city, new yorkers came together to show support for those displaced by the storm. The event was dubbed a call to action, a day of unity. Protesters marched though the streets of the lower east side and chinatown. They hope to draw attention to the plight of the working class residents who have been displaced by gentrification. “This country allowed katrina to happen, this country allowed the disaster to occur. And they allowed people to be displaced.” // “We not only march for the people of new orleans, we march for those in chinatown

05:30:27.07 New york rescue crews are packing up and heading to mississippi. They leave today to help coastal residents deal with preparations before hurricane gustav arrives. The city remembers the three-year anniversary of hurricane katrina, holding a march and prayer service in manhattan. Many katrina survivors relocated to the five boroughs. Sen

 Associated Press

NYC group commemorates Katrina anniversary

August 29, 2008
NEW YORK - A New York City coalition has scheduled a rally and march to show solidarity for residents displayed by Hurricane Katrina on the third anniversary of the disaster.

The “Call to Action, A Day of Unity” event, set for Friday afternoon in Chinatown, is one of many events across the country marking the anniversary.

The Right to the City NYC, one of the organizers, says it also wants to show that the issues affecting many New Orleans residents are not unlike those many low-income New Yorkers face.

The group says New York’s gentrification, high cost of living and lack of public housing are creating hardships for working-class and immigrant families.

___

On the Net:

Right to the City NYC: www.righttothecity.org)

http://www.newsday.com/news/local/wire/newyork/ny-bc-ny–katrina-nycrally0829aug29,0,6689457.story

http://www.silive.com/news/index.ssf/2008/08/nyc_group_to_commemorate_katri.html

http://nola.live.advance.net/newsflash/index.ssf?/base/news-41/122003697382550.xml&storylist=hurricane

http://www.sunherald.com/218/story/780450.html

Continue Reading »

Katrina Remembered in the Wake of Hurricane Gustav

Based in New Orleans, Jordan Flaherty is an editor of Left Turn magazine –  tagline: “notes from the global intifada” and the magazine is truly that.  Jordan just completed his first stint as a correspondent for Democracy Now!, covering the ongoing crisis of Katrina in the wake of Hurricane Gustav.  His letter to friends and allies, with links to youtube video and resource sites, follows below:

Friends and Allies,

New Orleans filmmaker Lily Keber and I recently completed our first
work as correspondents for Democracy Now, with a special report we
filmed in the hours before Gustav landed in Louisiana. The report
features Saket Soni from the New Orleans Workers Center for Racial
Justice, Bill Quigley from Loyola Law Clinic, Carol Kolinchak from
Juvenile Justice Project of Louisiana, and many others. We tried to
highlight some of the concerns people feel around both the evacuation,
and the state of New Orleans three years after Katrina.

The report aired on Democracy Now on Tuesday.  Below are two links to
the report, as posted on Youtube. The first was posted by Democracy
Now and has higher resolution video, but the end is cut off.  The
second version was posted by us, and is lower-res, but the end is
intact.  The third link is the link for the entire episode of
Democracy Now that aired the report.

http://www.youtube.com/watch?v=6dxtoUreG-4&feature=related
http://www.youtube.com/watch?v=GtfcMkdoNhk
http://www.democracynow.org/shows/2008/9/2

For more info and current updates, including info from much harder hit
places in Louisiana like Houma, and also reports from the virtually
unmentioned casualties in Haiti, please see the following links:

http://gustavsolidarity.org
http://gustavinfo.org/
http://www.haitiaction.net/
http://news.yahoo.com/s/ap/20080903/ap_on_re_la_am_ca/tropical_weather

Thanks to everyone for your thoughts and kind wishes.

in solidarity,

Jordan

August 29: Katrina, New Orleans, and L.A.

On Friday, August 29th, the local regions of the national Right to the City Alliance hosted events and actions in cities across the country to recognize the yet unresolved problems resulting from Katrina, the subsequent neglect, and links to the parallel displacement, gentrification, and criminalization that plague cities across the country.  

I was at the L.A. event which was co-sponsored by East Los Angeles Community Corporation, Esperanza Community Housing, Koreatown Immigrant Workers Alliance, South Asian Network, Strategic Actions for a Just Economy, and Union de Vecinos — a truly mulicultural gathering that included Azteca dancers, Korean drumming, son jarocho music, excerpts from the excellent first-person documentary Trouble the Waters, and speakers from the sponsoring organizations. 

19-year-old Rogers Youngblood flew out from New Orleans to share his experience with Katrina, ironically and unfortunately at the exact moment that his family and neighbors were preparing to evacuate in anticipation of Hurricane Gustav.

Rogers experienced the the terror of the Katrina floods as a 16-year old, and shortly after became an activist and an organizer with Safe Streets, Strong Neighborhoods and the Fyre Youth Squad . While still in high school, he attended the summer MAPP organizer training program offered by the Center for Third World Organizing.  Rogers came to L.A. right after a summer stint as a teacher in a small village in India. 

His remarks are transcribed below and express the old soul of an exceptional young man:

What do you think after seeing that? (excerpt from Trouble the Waters documentary). That’s five minutes of what folks went through — there are so many aspects of what was to be in that situation.

Introduction: my name is Rogers Youngblood.  New Orleans native. I come from uptown New Orleans and I stayed not to far from there …We stayed through the whole storm like that.  Man.  It’s amazing how someone had a video camera through the whole thing!  When I first saw it, the only thing I thought about was — the Blair Witch Project.  So scary like that. It was so dark…Especially the scene when they were in the attic…

And I can remember at 4 o’clock in the morning…And the storm blew out the window where we were staying at. I was blessed enough that my grandmother didn’t wake up, because if she had woke up, she would have never have went back to sleep.  So I was fortunate that my grandmother could stay asleep.

Man, where do I start? That’s the question.  Where do you start? To explain the situation that we as New Orleans, we as Americans, are in, and forced to have to deal with.  As you can see, I am a Black young man…  A target. For a lot of abuse. By the New Orleans Police Department.  A lot of things we are faced with is about the mentality, the mentality of us as a people — is what we struggle with most. Continue Reading »