"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Big Business’

The Martin Luther King Legacy And The Global Economic Crisis: Can One Influence The Other?

In Uncategorized on April 5, 2011 at 7:27 pm

Oldspeak: “Martin Luther King was a Champion of poor, disenfranchised, marginalized people. He was anti-militaristic, anti-capitalist, anti-corporatist, anti-poverty, pro-life, pro-love, pro-union, for inclusion, freedom and equality. Today In Obama’s america, young people, poor people, people of color, and the unemployed are being ignored. The U.S. is waging 4 wars. Income inequality is at depression era levels. Workers rights are being usurped. Access to education is being eroded. The food supply is facing existential threats from GMOs and rampant financial speculation. Public spending and services are being cut. More and more public entities and institutions are being commodified and privatized. Meanwhile Obama’s benefactors in Banking, and other sectors of the Oligarchy are doing better than ever. Brother Martin has to be rolling in his grave at seeing his legacy forsaken and trampled upon by one of his own…”

By Danny Schecter @ Truthout:

Before he went over that mountain top in that week in April like this one back in l968, Martin Luther King Jr. said he had already seen the other side as he spent his last days on earth fighting for the garbage men of Memphis, while speaking out about the twin evils of war and poverty.

A few days earlier, a great, black American essayist and historian, Manning Marable, died suddenly just before his new and definitive book on Malcolm X came out showing how America’s best-known Muslim martyr had moved from a focus on the domestic politics of racial confrontation to the international politics of global revolution.

(Among his findings: The US government spied on Malcolm as he globe-trotted, linking up with like-minded activists. This was offered up as a new revelation. I had to smile since I did an investigative report for Ramparts Magazine in 1967 on how the CIA was trying to discredit him in Africa.)

We live in a world of constantly redrawn battle lines where new generations displace the old ones and some of yesterday’s leaders move to higher levels of consciousness, while many others, like Libya’s human rights abusing leader Qaddafi along with some civil rights leaders, years ago, secretly joined Washington’s crusade against Malcolm.

Washington is now crusading against Libya. The war there was first declared a humanitarian intervention before it turned into a military intervention in a civil war, and is on its way to becoming a stalemate. Already NATO has bombed the rebels in one of those mistakes all too common in Afghanistan and Pakistan.

The US has apparently decided it no longer wants to throw good money after bad – perhaps because it has finally dawned on the White House that we are running out of money. So, we are declaring victory and moving on.

Even imperial projects have to be tempered as our wars abroad turn into follies and our economic turnaround at home is also not what it has been advertised to be.

As the AFL CIO noted while the administration was celebrating a downtick in unemployment:

“While the official unemployment rate is 8.8 percent, it’s 15.7 percent if unemployed, underemployed and those who have given up looking for work are included – more than 24 million people …

“Young people and people of color continue to experience the worst jobless rates which have remained high, with 24.5 percent of teenagers out of work and 15.5 percent of black workers and 11.3 percent of Hispanics jobless. Some 7.9 percent of white workers are jobless, as are 7.1 percent of Asian workers.”

At the same time, better-paid government jobs are being chopped, leaving workers in lower wage, private sector jobs that pay less money for more work. Many of those workers say their salaries don’t cover their expenses. Foreclosures are up even as bank profits (and CEO salaries) soar.

We are just learning the full extent of the Federal Reserve Banks loans to banks the world over, while a promised crackdown on fraud has yet to come. A bailout costing trillions was kept secret until a reporter’s lawsuit just forced a disclosure.

Still hidden is the role government plays in manipulating markets or pumping them up through the Plunge Protection Team, a shadowy agency I discuss in more detail in my book, “The Crime of Our Time” (Disinfo Books).

Wall Street’s “swinging dicks,” as they are called, are back in the saddle. They have neutered financial reform and seem to have silenced the president, who seems to want o cheer up the people rather than inform them about what’s really going on as food and gas prices rise while inflation begins to rear its ugly head.

Veteran investor Jim Rogers told the Daily Bell: “It’s already happening; prices are going higher. Now the blame game starts and the government will blame it on draught or crop failure or whatever. Politicians will do and say anything to avoid explaining that inflation is a monetary problem. Their reactions are always the same and it’s always astonishing to me. As President Ford said, “there is no problem” – and even if there is, it’s not his problem. Well, there are always people who are in denial; then, the problem gets worse not better.

Wall Street’s hedge funds are having a field day. The New York Times reports that wealth among executives in that part of the financial labyrinth is so concentrated that 25 hedge fund managers “pocketed a total of $22.07 billion … At $50,000 a year, it would take the salaries of 441,000 Americans to match the sum.”

Who is speaking out against this? Not the Republicans, for sure. Not many Democrats either. Not even the president or his “more wealth for the wealthy” booster Treasury chief Tim Geithner.

Wall Street is stronger than ever. Its “reforms” are proving to be a joke. No big executives who profited from pervasive mortgage fraud have gone to jail as prosecutions dwindle.

There has been a respite in Wisconsin as a state judge shoots down the GOP’s attempt to outlaw collective bargaining, but similar laws have passed in Ohio and New Hampshire.

In a globalized world, we are all interdependent. What happens to one part of this web affects us all. That’s why we have to pay attention to the falling economic dominoes in Europe, where Portugal may be next to go with Spain and Ireland not far behind. So far, protests by hundreds of thousands in Britain have not dented, much less changed, the government’s cutbacks in the name of austerity.

Serious critics may have the facts on their side, but are still being marginalized. They are considered ranters, not reasonable. Journalist Chris Hedges was honored when he wrote for the New York Times. When he left, and was finally able to speak his own mind, he began challenging the false promises of globalization

He writes, “The refusal by all of our liberal institutions, including the press, universities, labor and the Democratic Party, to challenge the utopian assumptions that the marketplace should determine human behavior permits corporations and investment firms to continue their assault, including speculating on commodities to drive up food prices. It permits coal, oil and natural gas corporations to stymie alternative energy and emit deadly levels of greenhouse gases. It permits agribusinesses to divert corn and soybeans to ethanol production and crush systems of local, sustainable agriculture.

“It permits the war industry to drain half of all state expenditures, generate trillions in deficits and profit from conflicts in the Middle East we have no chance of winning. It permits corporations to evade the most basic controls and regulations to cement into place a global neo-feudalism. The last people who should be in charge of our food supply or our social and political life, not to mention the welfare of sick children, are corporate capitalists and Wall Street speculators.”

So, once again, a gauntlet has been thrown down, but so far activists, advocates, unions and even progressive journalists stay submerged in fighting partisan wars and are not taking on the deeper fight for economic justice.

If we want to walk in the footsteps of Dr. King, we need to broaden our understanding of the scale of what needs changing and target the banksters on Wall Street as well as Republican politicians that do their biding.



5 Ways Big Business Has Found To Profit From The Economic Suffering On ‘Main Street.’

In Uncategorized on February 13, 2011 at 5:57 pm

Oldspeak:” Need food stamps? JP Morgan Chase profits. Have bad credit and need a credit card to eat or pay rent? First Premier Bank profits. Can’t afford to pay back taxes? Bank of America profits. Living paycheck to paycheck and need a short-term loan to get by? Pay Day Loansharks profit. Need a Degree to get that job that 100’s of others are applying for? Diploma Mills like University of Phoenix profit. Disaster Capitalists are making big money off Average Joes in these uncertain times. Finding all kinds of new and inventive ways to squeeze every last penny out of an ever shrinking middle and working class.  Profit is Paramount.”

From Joshua Holland @ Alter Net:

The ruins of the American economy represent a massive crime scene. Wall Street built a house of cards on fraud and misrepresentation, it crashed, and Americans’ aggregate net worth is now more than $12 trillion off of its peak. Unemployment remains sky-high and the prospects for a robust recovery anytime soon are dim.

But as Naomi Klein artfully laid out in her book, The Shock Doctrine, a catastrophe for you and I usually presents an opportunity for the Titans of capital. And the grievous economic crisis affecting so many American families is no exception — big business has found a number of ways to profit, directly, from Main Street’s economic pain. Like vultures descending on a rotting corpse, they’ve come up with a variety of innovative methods to pull the last scraps of meat off the bones of America’s middle-class.

Here are five ways these scavengers are making coin from our economic devastation.

When Americans Go Hungry, JPMorgan Profits

It’s been widely reported that 43 million Americans now require help meeting their basic nutritional needs. Less well known is that JPMorgan is the largest servicer of food-stamps in the U.S., offering benefit cards in 26 states. As Mary Bottari wrote for AlterNet, “The firm is paid per customer. This means that when the number of food stamp recipients goes up, so do JPMorgan profits.”

Perhaps that doesn’t get your blood boiling. If not, Bottari adds: “JPMorgan is taking its responsibility to keep the U.S. unemployment rate high by offshoring the servicing of many of these contracts to India, according to ABC News.” Yes, they’re profiting off of our pain, and offshoring the work required to do so.

JPMorgan was the recipient of $25 billion worth of taxpayer bailout, and its CEO, Jamie Dimon, took home $17 million in compensation last year – the biggest windfall on the Street.

Good Old-Fashioned Biblical Usury

When First Premier Bank first offered a credit card with a top interest rate of 79.9 percent, it evoked outrage. So they lowered it…to 59.9 percent. And, as Michael Snyder at the Economic Collapse noted, “Not only are the interest rates on those cards super high, but they also charge a whole bunch of fees on those cards as well.”

They include:

  • $45 processing fee to open the account
  • annual fee of $30 for the first year
  • $45 fee for every subsequent year
  • monthly service fee of $6.25

Some argue that anyone who would sign onto a deal like that must be “stupid.” But these are cards pitched to those with bad credit – an ever larger group thanks to the recession. It’s easy to scoff at such rubes until one realizes that the lion’s share of these “stupid” people have no choice but to take on even very costly debt if they want to eat or pay the rent. 6.2 million Americans have been out of a job for 27 or more weeks; 3.9 million saw their benefits run out entirely last year.

CNN reported that 700,000 people have signed up for the card, and between 200,000 and 300,000 new applications are coming in each month. That’s a lot of bread for First Premier.

Dunning the Desperate for Fun and Profit

One sector in this moribund economy is doing quite well: collection agencies. But they’re not your father’s collection agencies –the business is different today.

Across the country, savvy investors are buying up the debts of those who have run into difficulties for just pennies on the dollar. They then turn the screws on borrowers in order to get a return on their investments. As the Sarasota Post-Star reported, “Debt collectors often use threats and insults to intimidate consumers. But in recent years, collection has become more aggressive, more litigious and more prone to fraud.”

Creditors will call neighbors and family members in search of the consumer, and reveal information about their debt. They will contact the consumer’s place of employment and threaten to get them fired with repetitive calls. They will say harsh and insulting things to force the person to pay.

“Around 9/11, a debt collector said to my client, ‘After all those people died in the towers, you won’t pay your bills,'” said [attorney Ron] Kim. “It was an absurd statement, as if the two were connected, but she was so upset and ultimately ended up filing for bankruptcy.”

They’ve increasingly resorted to filing lawsuits, which are often settled by borrowers who don’t have good legal representation, even when the lender’s claims are suspect. According to research by the Legal Aid Society, debt buyers filed over 450,000 lawsuits in New York City alone between January 2006 and July 2008, over 90 percent of which ended in judgments against consumers who “likely weren’t aware they were being sued and only 1% of whom were represented by an attorney.”

According to Moe Bedard of LoanWorkout, a newsletter about the loan modification industry, the now familiar robo-signing scam is popping up in the market for consumer debt as well as home-loans.

According to the Consumers Union, the nonprofit publisher of Consumer Reports magazine, collectors are increasingly taking disputes to court without proof that they own the debt in question, or even that the debt is valid.

Consumers Union points to automated software used to file lawsuits by the thousands and the proliferation of “robo-signers” who falsely claim to review and verify debtors’ records before taking legal action.

For a while after the crash, Americans had unloaded debt, but with wages stagnating and unemployment remaining above 9 percent for 21 straight months, the trend has reversed and they’re again taking on mountains of debt to stay afloat. All of this means that while the recession takes its toll on the American middle class, the shaky debt industry is booming.

Pay-Day!

So-called pay-day loans are sold as short-term, stop-gap measures for people living paycheck to paycheck, but their interest rates often start at an annual rate of 600 percent – and some go much higher than that.

This recession has been great for the industry. Congress has tried several times to put a cap on their usury, but as the Huffington Post reported last year during the financial reform debate, “The influential $42 billion-a-year payday lending industry, thriving from a surge in emergency loans to people struggling through the recession, is pouring record sums into lobbying, campaign contributions, and public relations.”

It worked, they killed off any meaningful limits on the vig they can charge and business is booming.

A similar ripoff for the working (or the not-working) poor are those rent-to-own schemes that allow people to pick up a couch with no money down, only to end up paying far, far more than they would have otherwise paid. According to ABC News, “The rent-to-own industry has a history few retailers would envy but recent sales most would covet.” And contrary to popular belief, people rarely rent these items in order to own them at the end of the day; industry officials told ABC that “just 5% of their customers end up buying their products; customers are simply looking for short-term solutions when critical appliances go kaput.”

Can’t Afford to Pay Back Taxes? There’s a Ripoff That’s Right for You!

A lot of folks are struggling with all sorts of costs, and some can’t afford to pay the property taxes on their homes. The Huffington Post Investigative Fund dug into the problem, and found that Bank of America and a hedge fund called the Fortress Investment Group had “spotted a fresh money-making opportunity — collecting the tax debts of tens of thousands of people.” What do they do with it? Well, the banksters add interest charges and fees, and then they bundle the debts into securities and sell them off to investors. (Sound familiar?)

In late May and early June, proxies for the two institutions quietly bought hundreds of millions of dollars in homeowners’ property tax debts in Florida by bidding at a series of online auctions held by county tax collectors. They didn’t use their names but donned multiple other identities, dominating the auctions and repeatedly bidding on the same parcels — in the case of Walker’s small home, more than 8,000 times.

Then, in September, Bank of America’s securities division packaged $301 million worth of the tax liens it and Fortress had acquired into bonds pitched privately to major investors. The anticipated return — estimated at between 7 to 10 percent — is possible because buyers of tax debts can assess a panoply of interest charges and other fees. When the debt goes unpaid long enough, the liens buyer can seize properties through foreclosure.

That’s Just Big Finance

All of these scams probably add up to a fraction of what the financial industry has gained from the Treasury’s bailouts and the free money the Fed has showered on them.

But it’s not just Wall Street that’s profiting from the wreckage of our once-mighty economy. Good old fashioned wage theft is on the rise. With all sorts of subsidized programs to retrain workers – and with Americans feeling, rightly, that they need as much education as possible — fly-by-night diploma mills are proliferating. Walmart, which had seen its profits languishing, isnow making a killing on the cheap goods it imports from its overseas sweatshops.

It’s the essence of the Shock Doctrine: never let a crisis pass without exploiting the potential to profit.

 

Joshua Holland is an editor and senior writer at AlterNet. He is the author ofThe 15 Biggest Lies About the Economy (and Everything else the Right Doesn’t Want You to Know About Taxes, Jobs and Corporate America)Drop him an email or follow him on Twitter.