Abayomi Azikiwe, editor of the Pan-African News Wire, holding a leaflet at Cobo Conference Center in downtown Detroit. MECAWI won a federal court order related to its ability to distribute information on the foreclosure crisis. (Photo: Cheryl LaBash).
Originally uploaded by Pan-African News Wire File Photos
By Special to Workers World
Published Apr 10, 2008 1:36 AM
The newly formed Ad Hoc National Network to Stop Foreclosures and Evictions is hoping that its planned protest against the Mortgage Bankers Association’s policy conference in Washington, D.C., on April 16 will be pivotal to launching a massive national campaign for an emergency moratorium on home foreclosures.
On April 16, buses, cars and vans from more than 20 states will be bringing people in to the capital for a 3 p.m. rally and demonstration in front of the MBA’s two-day conference at the Washington Court Hotel, located at 525 New Jersey Ave. NW.
The Network, which has been joined by housing and social justice activists and groups across the country, is planning for the April 16 protest to be followed by locally coordinated demonstrations demanding that an immediate moratorium on all foreclosures and evictions be enacted by the government, at the state level and by Congress.
Several hundred mortgage bankers representing all of the major banks—including Bank of America, Wells Fargo, Bear Stearns, and JPMorgan Chase—will be attending the bankers conference.
The MBA’s call to their Washington conference states: “It’s time for Congress to hear from the real estate finance industry. Join your peers in Washington for the 2008 National Policy Conference, and speak to members of Congress about issues that directly affect your business.”
In response to the bankers’ call the Network to Stop Foreclosures and Evictions has launched a campaign directed at Congress, demanding that members of Congress refuse to meet with delegations of mortgage bankers that will be descending on Capitol Hill during their conference to lobby against any government action that would in any way stop the foreclosure epidemic.
More than 50,000 messages have been sent to members of the banking and finance committees of the Senate and the House telling them to refuse to meet with bankers until the MBA formally endorses a moratorium on foreclosures and evictions.
Commenting on mortgage related measures that Congress is debating, April 16 protest organizer Sharon Black stated: “The mortgage relief measures that the U.S Senate is considering amount to half-measures that will not stop or even slow down the rate of roughly 8,000 home foreclosures each day. So far, congressional action to save homes is reminiscent of the kind of political posturing and cynical neglect that characterized the government’s response to Hurricane Katrina three years ago.”
Ms. Black said, “The major features of the so-called mortgage rescue package coming out of Congress involve providing counseling to workers who have lost their homes, along with tax breaks that appear to help bankers more than workers.”
Jerome Goldberg, a Network organizer in Detroit, said: “Detroit is almost ground zero for the national housing depression. Entire neighborhoods have been destroyed by home foreclosures.”
Mr. Goldberg added, “The Federal Reserve Bank promised bankers that it would do whatever was necessary to avoid bank failures, so we demand that government do whatever is necessary to stop home foreclosures; and that means, at a minimum, declaring a moratorium.”
What lurks behind Bear Stearns bailout?
By Milt Neidenberg
Published Apr 10, 2008 1:17 AM
The banks are made of marble
With a guard at every door
And the vaults are stuffed with silver
That the workers sweated for
—Folk song by Les Rice
The week of March 10, the fourth-largest U.S. investment bank, Bear Stearns, collapsed. Panic-stricken investors, shareholders, employees and other creditors simultaneously demanded their money in a run on the bank, which had become the second-largest trader in speculative financial instruments.
Fear of a capitalist meltdown spread through the financial markets. Giant commercial banks CitiGroup, Bank of America and Wachovia, plus investment banks Lehman Brothers, Merrill Lynch and a host of others, were also swept up in a tsunami of risky investments. All were flooded with subprime mortgages, faulty structured investment vehicles, opaque credit default swaps and other over-valued financial instruments. They were forced to write down hundreds of billions in losses.
Britain’s Northern Rock went belly up, forcing the government to pick up the pieces. Swiss bank UBS, Germany’s Deutsche Bank and other European banks were also caught up in the whirlpool of risky financial instruments.
Was this the beginning of a 1929 meltdown? Or would bailing out the banks avoid a crash?
On the weekend of March 14-16, the leaders of the Federal Reserve Board and the government met in all-night sessions, panicked and fearful of a financial meltdown. Most important, JPMorgan Chase, one of the most powerful banking conglomerates in the world, was invited to join the conclave. It became the key player, dominating the negotiations and demanding big-time collateral and guarantees to buy out Bear Stearns and alleviate the fears of Wall Street.
Federal Reserve Board chair Ben Bernanke and President Timothy Geithner of the New York Federal Reserve, architects of the Bear Stearns bailout, were soon called before the Senate Finance Committee. They “compared the turmoil that weekend to the Panic of 1907 and the Great Depression-era run on banks.” (Bloomberg.com, April 4)
JPMorgan Chase is an amalgam of the infamous banking houses of Morgan and Rockefeller, widely heralded as the robber barons of yesteryear. They built empires of high finance off the blood, sweat and tears of mainly immigrant labor.
J. P. Morgan began his career by selling defective rifles to the government during the Civil War. He parlayed those profits into railroads built on stolen public land, and proceeded to build giant steel mills on the bones of small entrepreneurs.
John D. Rockefeller made his start in big oil by blowing up small rival oil operations, then expanding into mining and real estate. JP and JD came to dominate other monopolistic industries like auto and finance.
Both empires provoked wars abroad to consolidate their wealth, ruthlessly fought unions and brutalized workers, and created company towns and stores that kept workers in a constant state of debt and poverty.
Fed blesses Morgan buyout
In January, Bear Stearns stock had traded at $171 a share. By March, Jamie Dimon, head of JPMorgan Chase, saw a chance to steal this 85-year-old Wall Street dynasty at $2 a share. Although the price was later raised to $10, Bear Stearns shareholders and employees were totally wiped out.
For a pittance, JPMorgan acquired $1.2 billion in prime midtown property along with Bear Stearns’ premier assets. It arrogantly refused to take over most of the risky financial instruments, forcing the Fed, and eventually the worker/taxpayer, to assume that liability. The Fed blessed JPMorgan with a $29 billion credit line.
The swindle was worked out in secret meetings among powerful Wall Street players and led by the Fed, regulator of more than a thousand banks associated with the system. The government was represented by the Treasury Department, the Securities and Exchange Commission, the Comptroller of the Currency and other governmental agencies. These are the movers and shakers that influence the stock market.
Following this financial coup, the Dow Jones average of industrial stocks climbed nearly 400 points. For the next few days the market elites were claiming the capitalist crisis was over.
Although the stock market is an integrated sector of the financial services industry, it is also the most prominent representative of capitalist production. All industry, agriculture, commerce and the means of production pass through the hands of stock exchange operators.
Workers bear the burden
When Fed chair Bernanke, savior of banking institutions, finally used the “R” word—for recession, no news to broad sectors of the working class—it was a confirmation that the financial crisis had drawn in the broader capitalist economy. In March 80,000 jobs were officially lost and the unemployment rate rose to 5.1 percent. However, these figures understate the extent of the assault on the workers and oppressed, who have lost more than 10 million jobs since the “jobless recovery” of 2001.
Increasingly, the workers and oppressed are faced with hard choices. Pay for gas to get to work? Stint on groceries? Pay the mortgage or the rent? Or buy the prescriptions? They have seen pensions disappear and wages sunk by hyperinflation—an enormous leap in the cost of staying alive. And the economy continues to stagnate.
One factor in rising inflation is the flood of money printed by the government, which is sinking the dollar. Others are the stoking of the war in Iraq and Afghanistan and the growing fear over the unprecedented debt and the credit crunch. “The Federal Reserve and other global central banks have been hosing the world with new money in their efforts to avoid a financial crisis.... The cheap money didn’t stop a Wall Street bank run—it was the Fed’s bold plan to absorb subprime debt that did that—but it may add fuel to the inflation fire,” warned the Washington Post on April 3.
Multibillionaire Victor Soros, a prominent Wall Street global investor, says a super-bubble is growing in the commodities markets. (“Wall Street Journal,” NBC-TV, April 6) Rising prices in metals, food, energy, services and a host of other staples are fueling hyperinflation, while the subprime housing crisis has yet to reach bottom. Is Soros talking about another 1929 crash?
A debate is going on within the ruling class—is the economy in a short-lived cyclical recession or will there be a capitalist economic crash?
The extreme volatility and sharp ups and downs in the stock market reflect the debate.
A similar discussion took place in the latter part of the golden 1920s. The argument was settled by the devastating 1929 stock market crash, which led to the Great Depression of the 1930s.
Missing from the debate are the fundamental and material interests of the masses. There is an absolute necessity for an independent, class-wide, massive wave of demands, programs and strategies emanating from the needs of workers, the oppressed and their organizations. Radicalization of the multinational working class is inevitable. A struggle against the banks, the financial institutions, corporate monopolies and their stooges in government will be a good beginning.
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