Amy Goodman reports on "Occupy Our Homes" for Democracy Now

This week 60 Minutes gave viewers a good look at some of the widespread criminality that created the Wall Street mortgage boom and led to our ongoing financial crisis. They also saw some of the overwhelming evidence of illegal activity on the part of big banks, and were reminded that none of those banks' executives have been prosecuted.

As ugly as the situation is, there is some logic behind the government's actions - and its inactions. They're acting on a tragically incorrect (but internally coherent) set of assumptions that can be summed up in one sentence. It goes something like this:

"To preserve the health of the American economy, banks must be allowed to keep preying on their consumers."

That's it. That's the logic.

But there are two exciting "Occupy" developments this week that could change the equation - "Take Back the Capitol" in the District of Columbia, and Tuesday's "Occupy Our Homes" events around the country. Think of them as complementary actions: One is taking place at the site of our greatest government power. The other is bringing the action to homes where people have been victimized by bankers.

People may not realize it, but there's power in those homes, too.

The Logic of Injustice

Despite their destructive behavior, the people who bailed bankers out and are giving them a free pass for their crimes aren't necessarily evil or corrupt. Well, okay, people like this guy are. But others have merely been so infected by misguided economic thinking that they really believe that the only way to save the economy is to keep shafting consumers and pampering mega-bankers.

The thinking goes something like this: Our largest banks are too big to fail, and since we lack the will or the motivation to break them up or regulate them we must protect them at all costs. We've propped them up with TARP, quantitative easing, and $7.7 trillion in secret Federal Reserve loans, but they're still shaky as hell. If we prosecute any of their executives, their stock prices will fall and they'll collapse again. And they'll take the entire economic system with them.

That leads to some grotesque miscarriages of justice. Nobody at Wells Fargo has been indicted for money laundering, for example, despite the fact that the bank has paid millions to settle charges of laundering cash for the Mexican drug cartels that have murdered more than 35,000 people. As an experienced bank investigator working for the Senate observed, "There’s no capacity to regulate or punish them because they’re too big to be threatened with failure."

The Bailout Nobody Knows

And banks don't just need protection from their own criminality. They also need protection from their own lousy management. Their balance sheets are filled with toxic risks from their long run of incompetence, negligence, and greed. That's where you and I come in. Some powerful folks are afraid the banks will fail if they're forced to write off the bad loans on their books, or to stop profiting from loans sold deceptively or irresponsibly.

TARP may be over, but there's another massive bank rescue going on. Who's funding it? We are. Every time we pay a usurious interest fee on a credit card, we're propping up the banks. Every time we make another month's payment on an underwater mortgage, we're propping them up too. Every time we pay an overpriced consumer loan of any kind, we're making another payment into the consumer-funded bailout that's keeping the big banks afloat.

It would be great if politicians in Washington stopped using American consumers to subsidize banks that shouldn't even exist. But they haven't. That's where "Occupy Our Homes" comes in.

Occupy Our Homes

Tuesday, December 6, has been declared a National Day of Action to Occupy Our Homes. Its goal is to focus attention on the corrupt banking practices that led to the mortgage boom and today's ongoing economic misery for most of the 99 percent.

It's also a day for helping people in our communities who have been victimized by predatory lending, criminal bank forgery, unfair or illegal foreclosure practices, and other bank abuses that victimize the public. Occupy Minnesota has already occupied an illegally-foreclosed home, and plans to do the same thing with another home tomorrow. Here in Los Angeles, where an inspiring victory has already taken place, OccupyLA will help two brave families re-occupy their illegally foreclosed homes.

One of those homes belongs to a three-earner family that includes a gainfully employed woman with cerebral palsy named Ana Wison. Ana's household clearly seems capable of making its mortgage payments, but her bank's foreclosing anyway. And in one of ironies that have become all too common, the bank in quesion is none other than that Mexican drug cartel money-laundering outfit, Wells Fargo.

The Occupy movement hopes to focus the public's attention on people like Ana Wison. In the words of the Dylan song: "Things should start to get interesting right around now."

Demonizing the Victim

Resisting illegal foreclosures is a good first step. It brings attention to Wall Street's criminality, venality, and plain old inhumanity toward the people they call their"customers" - but treat like serfs.

It does something else important: It counteracts the brainwashing, driven by Wall Street and dutifully echoed by the media, which has demonized the victims of bank misbehavior. (We were trying to fight that brainwashing back in 2008, without much luck.) The Occupy movement has already won several battles in that war. If the public's attention can now be focused on people like Ana Wison, that can be a powerful blow against the Wall Street/corporate media "they deserve it" hype.

What about the millions of people who have suffered because of the banks' predatory mortgage lending but aren't behind in payments or in the foreclosure process? We need to re-open the debate about the fairness of forcing any underwater homeowners to pay underwater principal on homes that their banks knew, or should have known, were going to decrease in value. After all, the same conglomeration of banks and corporate media that demonize homeowners as "greedy" and "irresponsible" spent most of the last twenty years convincing people that real estate was a sure-fire investment.

Banks made an extraordinary amount of money off the bubble they created. The total mortgage amount outstanding in this country went from $6.2 trillion in 2002 to $11.9 trillion in 2009, a meteoric rise. And while banks feed off the Federal Reserve's unusually low rates, they've renegotiating very few home loans.

Consumers also owe nearly three quarter of a trillion dollars in credit card debt, much of it being paid at unconscionable rates of 12 percent to 29 percent - while their banks enjoy rates from 0 percent to 3 percent, thanks to the government institutions created by those same consumers.

Occupy Our Homes. Occupy Our Credit Cards. Occupy Our Payday Lending ...

What will happen if consumers stopped blaming themselves? What if they demanded that the banks take responsibility for their irresponsible and/or predatory lending? What if they refused to stop this country's perverse economic role reversal, where customers have become the ATMs while banks keep making the withdrawals?

If 10% of America's homeowners declared a mortgage strike it would rock the banking world. If everybody paying exorbitant credit card interest declared a moratorium on payments all at once, Wall Street would change forever.

Think about it: "Occupy ALL Our Homes." "Occupy Our Credit Cards ... Our Payday Loans ... Our Buy-and-Drive Loans ..." I'm not saying these are necessarily the right tactics, although they very well may be. But what's most important is that we understand that consumers have far more power than we usually realize - provided we act together.

Many of Washington's leaders will cringe at the thought, of course. "That could hurt our biggest banks," they say. It would be tempting to reply, You say that like it's a bad thing. Here's a better response: Then start planning to break them up in an orderly fashion. We're done living a life of indentured servitude just so we can subsidize their greed.

Those are the discussions that we should be having. If powerful people on Wall Street and in Washington aren't worried about Occupy Our Homes , they're not paying attention. But with any luck, they soon will.

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(If you've been a victim of mortgage abuse you can tell your story here. If you want to find an Occupy Our Homes event near you, you can look for one here.)

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Because reality right now is telling us that austerity is not only painful but wholly counterproductive. Here's an excellent report from the Wall Street Journal on the wide social unrest that austerity has caused in Greece:

Greece shook global markets, intensifying fears of a default, as tens of thousands of demonstrators protested a new round of budget-cutting plans and its prime minister offered to step down to try to preserve them.

Protests across the capital sometimes turned violent as Prime Minister George Papandreou sought an agreement with opposition parties on austerity measures demanded as the price of a new bailout by euro-zone nations and the International Monetary Fund.

The report also notes that austerity has actually exacerbated the sovereign debt crisis and hasn't made bond holders any more willing to buy Greek bonds at lower interest rates:

Yields on Greek government bonds leapt to new highs, with two-year paper yielding 29%. Bond yields on other troubled euro-zone economies like Portugal and Ireland also moved higher, and stock markets in the U.S. and Europe sank as fears of contagion picked up. The euro plunged 1.9% against the dollar.

Needless to say, it's not only the wacky anarchist college kids who are pissed off about all this. Mama and Papa Greece are none too pleased either:

John Petru, 41 years old, said he had come to block parliamentarians from arriving to debate the budget cuts. "We do not trust them," he said of the politicians. The recession has eaten badly into his cleaning-service business. "Business is down, and prices are up, and we are not sure about anything," he said.

Greeks have already suffered multiple rounds of budget cuts since last year, but they have failed to build confidence in the economy. The budget deficit has turned out to be wider than projected then, with the government failing to cut spending or raise revenues as much as promised. But the biggest gap in its finances has opened up because private investors have refused to buy new Greek government bonds at interest rates the government can afford.

Many protesters said they had gone along with previous budget cuts and wage reductions on the belief that those sacrifices would be enough to right Greece's fortunes. "They have asked us to reduce our wages, to live another standard of life," said Angeliki Kachrimani, a 42-year-old worker for Greece's postal service. She accepted a 15% wage cut; her husband, a history teacher, is unemployed.

And look, this is all pretty simple to understand: Greece is in this mess right now both because its government lied for years about its budget deficits (with an assist from everyone's favorite investment bank Goldman Sachs) and because its monetary policy options are limited by the European Central Bank. In other words, investors know Greece can't print its own money and thus will never be able to pay them back. The problem is exacerbated by the austerity measures that result in cuts to government jobs, cuts to wages and a drop in overall demand. These things aren't exactly making investors feel good about Greece's future economic prospects either.

"Why should I give a damn about this?" you ask. Well, it's pretty obvious that America's own austerity backers, led by Paul Ryan, have similar plans for us as well. And it would behoove us to point to the examples of Greece and Ireland and the U.K. and shout at the top of our lungs, "AUSTERITY DOESN'T WORK, YOU TOOLS!!!!!" Because frankly, I'm not looking forward to widespread social unrest. God forbid the streets of America come to resemble third-world hellhole streets like those of Vancouver.

Happy Holidays

This holiday season, credit card companies are giving the gift of unexpectedly high interest rates. According to an exhaustive report in The New York Times, credit card companies are doubling or tripling interest rates with little warning or explanation, forcing thousands of Americans to pay unreasonable and unwarrantedly higher bills. The slightest slip--like paying a utility bill late--can lead to a rate hike, with card companies "acting like modern-day loan sharks," writes The Times. Halliburton isn't the only one overcharging America.

Economist Joe Stiglitz told Bloomberg that Wall Street is hyping up the economy to sell stock:

Jan. 7 (Bloomberg) -- Nobel laureate Joseph Stiglitz said investors are “talking up” signs of a global economic recovery in a bid to boost equities.

“Wall Street is talking up the recovery because it would like to sell stocks,” Stiglitz told reporters at a conference in Paris today.

The MSCI World Index of stocks has surged 73 percent since its low of last March even while the economies of advanced nations grow below their potential rates following the worst recession since the Great Depression.

Stocks are rallying because interest rates are low and companies have been cutting costs by reducing payrolls, factors that suggest economies remain weak, said Stiglitz, a professor at Columbia University in New York.

“Whenever rates are low, stock markets are often high,” he said. By contrast, economists are “almost universally pessimistic.”

[...] He recommended a tax be introduced on financial speculation as a way of generating revenue and forcing investors to focus on the longer-term.

Wait, wait, I can hardly read these sad statements through my tears - of laughter! This, from the people who brought us this entire house of cards that just collapsed? The people whose lobbyists have stacked the financial deck against people like us with late fees, pre-payment penalties and unregulated interest rates are actually telling us IT ISN'T FAIR?

WASHINGTON -- The banking industry is aggressively lobbying the Treasury Department to make it less costly for financial institutions to get out of the Troubled Asset Relief Program.

The move could prove controversial for the banking industry, which is busy deflecting criticism about higher fees it is charging consumers for credit cards and other products and services.

At issue are "warrants" the government received when it bought preferred stock in roughly 500 banks over the past six months as part of TARP. The warrants allow the government to buy common stock in the banks at a later date so taxpayers can receive more of a return on their investment when the banking industry recovers.

Many banks want to return their TARP money and, as part of that effort, want to expunge the warrants. To do that, banks must either buy them back from the government or allow the Treasury to sell them to private investors.

Today, most of the warrants are essentially worthless, because their exercise price is higher than where most banks' stocks are trading. But the government believes the warrants still have value, since they give the Treasury the right to buy common stock at a set price for 10 years.

Bankers say it is unfair to charge what amounts to a "prepayment penalty," which makes it additionally onerous to escape TARP. Bank representatives say the cost of buying back the warrants could be equivalent to paying 60% annual interest on short-term loans. That, they argue, would exacerbate banks' existing problems.

After years of brutal and what should be criminal business practices by America's credit card industry, it appears that some relief may be in sight.

WASHINGTON – Federal regulators on Thursday adopted sweeping new rules for the credit card industry that will shield consumers from increases in interest rates on existing account balances among other changes.

The new rules aren't set to take effect until 2010, but they're welcome nevertheless.

The new rules prohibit:

_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.

_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.

_Unfairly computing balances in a computing tactic known as double-cycle billing.

_Unfairly adding security deposits and fees for issuing credit or making it available.

_Making deceptive offers of credit.

I've had to deal with several of the above issues in the past and know first hand how quickly credit card fees and increased interest rates can bloat your balance and spiral out of control. Luckily, I was able to stop the bleeding, but thousands of people have not been able to do so and have ended up in financial and personal ruin. These regulations are long overdue.

Ever since Kevin Drum invented it, centuries ago in blog years, Friday Cat Blogging has been a tradition in the reality-based community. So, here's a collection of Friday Felinity, in no particular order, they're all cute, dammit. (After giving image and the name of each cat, I've added a parenthetical that links to the cat's staffperson).

The Mighty Fang (Bad Tux, gold bug stomper).

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Ryan responds to the WATB complaints by the Repubs over the the new spending bill that was just passed.

Download | play Download | play (rough transcript)

Ryan: ...on top of all that they [Republicans] leave the new democratic majority an absolute budget catastrophe for us to deal with. And over to course of those 14 years the republican congress and the republican president borrowed more money, more money from foreign interests than all of the previous presidents combined. So now we're going get lectures from the republican majority on how to run the budget process. Now we're going to get lectures from the most incompetent, ineffective congress in the history of this institution, Mr. Speaker, the history of this institution.

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Check out this video from ABC News: "Rising interest rates squeeze homeowners to the breaking point."

(h/t Joan)

I have to laugh at this transparent ploy: Let us keep our usurious interest rates, Senator, or your American Express card is gonna get it! Apparently the fine folks of the credit card industry seem to believe they have an inherent right to obscene profits. Uh, ixnay, fellas. Usury is not only a sin, it's bad economic practice. Legislators have a right to control your out-of-control industry because credit has become something akin to a necessary public utility - especially when people can't even get a job due to a poor credit rating.

Seems to me it's time these companies learned to trim their expectations to fit current reality. I wonder if credit card executives have been asked to take off one day a week to save their company a day's pay?

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

[...] As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.