Wednesday, July 30, 2014

System of World-wide Foreclosures

The Language of Expulsion

Wednesday, 30 July 2014 10:27By Saskia SassenTruthout |
2014 730 exp sw(Photo: Zoriiah / Flickr)When we discuss rising inequality, poverty, imprisonment, FORECLOSED HOMESand other injustices, simply engaging in familiar discussions about these increases in disparities does not capture the larger reality we must face. We need new language. I use the term "expulsions" to mark the radicalness of that necessary shift. [1]

For instance, we need new language to express the fact that a growing number of adult men in poor neighborhoods in the United States have not ever held a JOB; the phrase "long-term unemployment" is much too vague and fails to capture a radical structural condition. Our language must recognize that the 52 million people identified by The United Nations High Commissioner for Refugees (UNHCR) as "displaced people" are almost never returning home, because their "homes" have been replaced by a new luxury building, a plantation, a war zone. Both the long-termUNEMPLOYED and the long-term displaced have, in fact, been expelled from society.

These, and many other expulsions take on specific forms in each location of the world, and they have specific contents in diverse domains: economy, society, politics. Indeed, they are so specific in each place and domain - and are usually studied in these very specific contexts - that it is difficult to see that they might be the surface manifestations of deeper trends that today cut across the familiar divisions. To return to the two examples mentioned here: Experts on long-term unemployment in the 

Global North do not really study the displaced in the Global South, and vice-versa. And yet, at ground level, these displacements share a simple, common element: There are people being (usually permanently) cast out of what had been their lives.

We must find ways to discuss the systemic edges hidden deep inside the territory of the national. These edges are not to be confused with national borders or other politico-administrative divisions, even though they may coincide in some cases. Further, once the unemployed or the displaced, or so many other versions of the expelled, cross this systemic edge, they become a bit invisible; they are less likely to be counted in measures of GDP per capita or in a census. This is BECOMING a bit invisible as it applies to people, places, failed small businesses, neighborhoods destroyed by hurricanes, neighborhoods destroyed by MORTGAGE FORECLOSURES, and more.

All these expulsions, and so many others not mentioned here, coexist with growth in "the" economy, even if the space of that economy is shrinking. This coexistence of growth (as conventionally measured) and these expulsions further add to the invisibility of those who are expelled from job and home.

Complex forms of knowledge we admire come into play in many of these expulsions - notably, advanced mathematics for the algorithms of finance and complex legal innovations to enable the massive land-grabs that took off in 2006. I see this mal-deployment of knowledge as a major issue in our current global political economy. It brings to the fore the fact that forms of knowledge and intelligence we respect and admire are often at the origin of long transaction chains that can end in simple brutalities. One example of a simple expulsion would be the low-paid unhealthy JOBS that are part of the complex logistics of outsourcing. These complex forms of knowledge produce grand expulsions, as when one builds an enormous dam that buries whole villages and farmlands, thereby making visible its destructive side.

Certain extreme cases make that mal-deployment of knowledge sharply visible. For instance, the so-called subprime mortgage developed in the 2000s was a financial project aimed at developing new types of asset-backed securities and collateralized DEBT. It is not to be confused with the state-sponsored, sub-prime MORTGAGES of an earlier period, aimed at genuinely helping modest-income families to own a home.

The new versions of subprime mortgages used the modest homes involved TO MEET the growing demand for asset-backed securities by investors, in a market where the outstanding value of derivatives was $630 trillion, or 14 times the value of global GDP.

Investors were clamoring for some real assets backing securities, not just derivatives on interest rates and so on in long chains of hypotheticals. The complexity offinancial engineering was deployed to de-link the actual (modest) value of the house and of the mortgage from the asset-backed security aimed at the high-finance circuit. Various financial maneuvers were used to camouflage the modesty of the actual material assets. A high-finance instrument was developed on the backs of "the little people." The challenge was to delink such that even if the buyers of the house could not pay, it really did not matter - the high-investment circuit would have made its money, and only those who had held on to the mortgages would suffer with the eventual crisis.  

When this short and brutal history was over in 2010, over 13 million such contracts had been signed and 9 million households - that could be about 30 million people or more - had lost their homes, according to the Federal Reserve. Now this instrument is circulating in Europe, where every year several hundred thousand households are losing their homes. Some of the highest numbers of FORECLOSURES IN Europe are happening in Germany, the country we think of as having avoided all forms of the crisis.

When we consider them all together, the diverse expulsions across countries may well have a greater impact on the shaping of our world than the rapid economic growth in India, China and a few other countries. Indeed, such expulsions can coexist with economic growth as counted by standard measures.

These expulsions don't simply happen; they are made. The instruments for this "making" range from elementary policies to complex techniques requiring specialized knowledge and intricate organizational formats. And the channels for expulsion vary greatly. They include austerity policies that have helped shrink the economies of Greece and Spain, and environmental policies that overlook the toxic emissions from enormous mining operations.
Historically, the oppressed have often risen against their "masters." Today, despite movements of resistance around the globe, such opposition is often prevented by the way in which the oppressed have been expelled and survive at a great distance from their oppressors. Addressing this reality full on will require recognizing the radical character of these expulsions - a bit more JOB growth, a bit more help with housing: None of this will be enough to restore a measure of social justice in this world.

[1] This essay and the talk for the Disposable Life series is based on my latest book,Expulsions: Brutality and Complexity in the Global Economy (Harvard University Press/Belknap 2014).
SASKIA SASSEN    is the Robert S. Lynd Professor of Sociology and cohair of The Committee on Global Thought, Columbia University (www.saskiasassen.com). Her books include The Global City, Guests and Aliens, Globalization and its Discontents, and more. She has received diverse awards, ranging from multiple doctor honoris causa to named lectures and selection for various honors lists. Her new book isExpulsions: Brutality and Complexity in th

Teamster Labor Hero Jimmy Hoffa Sr.

Jimmy Hoffa Went Missing 39 Years Ago Today 

| Wed Jul. 30, 2014 6:00 AM EDT
Teamsters Union President James R. Hoffa, left, stands with Anthony Provenzano, right, and fellow union members during Hoffa's visit to New Jersey. AP
 
On this date in 1975, Jimmy Hoffa was last seen around 2:45 p.m. outside a Detroit area restaurant. His unlocked car was found at the restaurant, but there were no other signs of his whereabouts. Hoffa's disappearance sparked numerous theories as to what might have happened to him, and where he might be buried. In 1982, on the seventh anniversary of his disappearance, Hoffa was legally declared dead.
 
Jimmy Hoffa poses for a photo on July 24, 1975, just six days before his disappearance.  Tony Spina/MCT/ZUMA Press

Tuesday, July 29, 2014

Pensions Refunded by Labor Board


Labor board orders L.A. Council to rescind pension cuts for workers

A Five-member panel that handles labor complaints at Los Angeles City Hall handed a stinging defeat to the city's political leaders on Monday, voting to strike down Los Angeles' bid to rein in retirement costs for civilian employees.
The Employee Relations Board voted unanimously Monday to order the City Council to rescind a 2012 law scaling back pension benefits for new employees of the Coalition of L.A. City Unions, on the grounds that the changes were not properly negotiated. That law, backed by Mayor Eric Garcetti when he was a Councilman, was expected to cut retirement costs by up to $309 million over a decade, according to city analysts.
Ellen Greenstone, a lawyer for the labor coalition, described the vote as a “huge, big deal” -- one that shows the city could not unilaterally impose changes in pension benefits on its workforce.
Coalition chairwoman Cheryl Parisi said in a statement that the reduction in benefits, which included a hike in the employee retirement age, “devalues middle-class city workers and their dedication to serving the residents of Los Angeles.
"It's appalling that city officials continue to try to make city workers pay for the city's bad financial decisions," Parisi said in a prepared statement.
Garcetti is on vacation and his spokesman has refused to say where he is. A lawyer in City Atty. Mike Feuer's office could not immediately say how the city would respond. City Administrative Officer Miguel Santana, a high-level budget advisor, said the 2012 cuts had been a critical part of "bringing the city back to fiscal stability."
"The city will explore all of its options," he said.
The city’s labor board is a quasi-judicial body that reviews complaints from unions, managers and individual employees. Under the city’s labor ordinance, the panel has the power to invalidate decisions by the council, said the board's executive director, Robert Bergeson.
If council members do not agree with Monday’s decision, they can file legal paperwork seeking to have a judge overturn it, Bergeson said.
City officials have previously argued that changes in the RETIREMENT BENEFITS of future employees do not need to be negotiated. The 2012 law rolling back benefits applied only to employees hired after July 1, 2013. Budget officials had hoped that the reductions would trim the city's retirement costs by more than $4 billion over a 30-year period.
The board’s decision comes as the city's contributions for civilian employee retirement costs have climbed from $260 million in 2005 to an estimated $410 million this year, according to a recent budget report.
Garcetti and Council members could now find themselves attempting to negotiate cuts in pension costs at the same time they are also trying to reach salary agreements with coalition representatives. The city has been trying to keep a lid on raises -- yet another strategy for containing growing retirement costs.
The coalition's contract expired on July 1.

Tuesday, July 15, 2014

Obama Must Veto CISA

July 15, 2014 | By Nadia Kayyali

EFF Joins 35 Organizations, Companies, and Security Experts Calling on President Obama to 

Veto CISA

EFF joined a group of thirty-five civil society organizations, companies, and security experts that sent a letter on Monday encouraging President Obama to veto S. 2588, the Cybersecurity Information Sharing Act (“CISA”) of 2014. The letter states:
CISA fails to offer a comprehensive solution to cybersecurity threats. Further, the bill contains inadequate protections for privacy and civil liberties. Accordingly, we request that you promptly pledge to veto CISA.
Bad cybersecurity bills appear to be habit-forming for Congress. CISA, which is appropriately being called a “zombie bill” by privacy advocates and journalists, rehashes two similar (and equally flawed) bills: the Cyber Intelligence Sharing and Protection Act (CISPA) of 2012 and CISPA of 2013. Both bills were soundly defeated after major outcries on the Internet and distaste in the Senate for a bill with insufficient privacy protections.

But some lawmakers aren’t getting the message. The letter points out that, while CISA has made a small number of cosmetic changes to CISPA:
CISA presents many of the same problems the Administration previously identified with CISPA in its veto threat. Privacy experts have pointed out how CISA would damage the privacy and civil liberties of users.
As we've emphasized in the past, the bill fails to provide privacy protections for Internet users and allows information sharing in a wide variety of circumstances that could potentially harm journalists and whistleblowers. Like its previous iterations, it also contains overbroad immunity from lawsuits for corporations that share information. As the letter points out, it even contains “a broad new categorical exemption from disclosure under the Freedom of Information Act, the first since the Act’s passage in 1966.”

You can read the full text of the letter and see the signatories here. You can also take action today: tell your Senator to vote no on a bill that fails to make the Internet safer and invades the privacy and civil liberties of everyday Internet users.

CITIBANK FINED $7 BILLION

Citigroup: The Original Gangsta

Posted on Jul 14, 2014
By Robert Scheer

Radu Bercan / Shutterstock.com

Barack Obama’s Justice Department on Monday announced that Citigroup would pay $7 billion in fines, a move that will avoid a humiliating trial dealing with the seamy financial products the bank had marketed to an unsuspecting public, causing vast damage to the economy.

Citigroup is the too-big-to-fail bank that was allowed to form only when Bill Clinton signed legislation reversing the sensible restraints on Wall Street instituted by President Franklin Roosevelt to avoid another Great Depression

Those filled with Clinton nostalgia these days might want to reflect back on how truly destructive was his legacy for hardworking people throughout the world who lost so much due to the financial shenanigans that he made legal.

“Today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority,” a beaming Clinton boasted after signing the Financial Services Modernization Act into law in 1999.Ads by save onAd Options
Called the Citigroup authorization act by some wags at the time, those antiquated laws, the Glass-Steagall Act primarily, had put a safety barrier between the high rollers in Wall Street investment firms and the staid commercial banks charged with preserving the savings of ordinary folk. The new law permitted them to merge. Clinton handed the pen that he used in signing the new law to Citigroup Chairman Sanford Weill, whose Citicorp had already merged with Travelers Group before the law was even officially changed. On an earlier occasion, Weill had informed Clinton about his merger plans in a telephone conversation. After hanging up, Weill then bragged to his fellow banking executive John S. Reed, who was on the call, that “we just made the president of the United States an insider,” according to Wall Street Journal reporter Monica Langley in her book on the Citigroup merger.
In 2000, just before leaving office, Clinton went much further in radical deregulation of the financial industry when he signed the Commodity Futures Modernization Act. In one swoop this eliminated from the purview of any existing regulation or regulatory agency the new financial products, including the mortgage-backed securities at the heart of the financial meltdown and the subject of the $7 billion fine levied in what has to be viewed as a copout deal.
This is not just because the fine is paltry compared with the far greater damage Citigroup wreaked upon working Americans who lost so much but because, without a trial, there will be no public accountability of the cynicism that Citigroup’s leaders visited upon unknowing consumers.
That cynicism begins with Robert Rubin, who was selected from his leading position at Goldman Sachs to be Clinton’s Treasury secretary. It was Rubin who as much as anyone is responsible for pushing through the legislation that ended the effective regulation of Wall Street and made the merger of Travelers Group and Citicorp possible. Rubin was a darling of the mass media while in office, and the fawning adulation continued even as he moved through the revolving door and took a $15 million a year job with Citigroup, the megabank he had helped make legal. Rubin was at Citigroup during the years when it engaged in most of the practices involving subprime and other questionable mortgages that resulted in the fines the bank must now pay.
Rubin’s deputy in the Treasury Department, Larry Summers, who replaced him for the last years of the Clinton administration, was particularly important in pushing through the legislation that freed Collateralized Debt Obligations from any regulation. Summers worked to silence Brooksley Born, the heroically prescient chair of the Commodity Futures Trading Commission who had warned of the dangers posed by unregulated CDOs. Her reward for such insight was to be denied reappointment by Clinton and denounced by Summers. 
Summers set the gold standard for out-of-touch stupidity when he testified before a Senate committee that the “largely sophisticated financial institutions” were “capable of protecting themselves from fraud and counterparty insolvencies,” and “given the nature of the underlying assets involved—namely supplies of financial exchange and other financial interest—there would be little scope for market manipulation.”
Summers later made $8 million in 2008 in speaking fees from Citigroup and other banks and consulting for a hedge fund before being tapped by Obama to be his top economic adviser. Summers was instrumental in guiding the Obama administration’s efforts to keep the bankers whole while largely ignoring the fate of their victims.
The collapse of the derivative market that Summers predicted was immune to “fraud and counterparty insolvencies” plunged U.S. household worth $16 trillion or 24 percent between the third quarter of 2007 and the first quarter of 2009, according to a study by the Dallas Federal Reserve Bank.
That’s trillions of dollars, not the $7 billion fine that Citigroup just got slapped with as a means of avoiding the harsher judgment in a court of law that the bank and its politician enablers so richly deserve.