Pork Barreling and Horse Trading with Ryan’s Healthcare Disaster

New Orleans  They might have the votes, and they might not have the votes to get this mess of a healthcare abomination out of hardcore ideologue and Speaker Paul Ryan’s House, but all signs point to a squeaker that will smell like it crawled out of a dumpster by the time it gets to the Senate.

We already know that the President and his people will say virtually anything without regard to fact or fantasy, and they seem to be using that proclivity in hyper-fashion with recalcitrant House of Representative moderates, saying that the Senate will fix and modify the mess. Most folks on the used car lot that Congress has become would walk away from that lemon.

For the suicidal, largely anonymous so-called Freedom Caucus, they have bent over backwards to take something terrible and make it even more horrid. They want work mandates for Medicaid despite all evidence that establishes that not only are these ineffective, punitive, and needless, but that people need healthcare to get well, so that they can work. Ok, here you go! Some of them want funding of some programs to stop immediately rather than in 2018, so, hey, let’s accelerate the death spiral for another vote or two. Anything goes these days.

And, talk about pork barreling and horse trading for votes in this district or that, and any principles go out the window. Congressman from upstate New York want to push the share of the Medicaid bill from the county coffers to the state for a billion or more, no problem, if these couple of Congressman are Republican and the Governor of New York is a Democrat. Heck, make him pay up. Some coal miners with black lung realizing that they could be hammered by cutbacks in Medicaid that are keeping them alive, no problem, write in an exception for coal miners with black lung.

Are you seeing a pattern here? Even if something emerges, it is going to be jerry-rigged like a Rube Goldberg contraption. They are already asking the American people to pretend this will be some kind of viable health plan, and now they are going to ask us to pretend it will actually work.

No one likes this thing. Republican and Democratic governors are aghast. Doctors, hospitals and the elderly associations are up in arms.

This is clearly no longer an exercise in healthcare policy. This is all about big league politics now. They need to prove on the first bill coming out of the Trump barn that they can win. No matter what or how bad the smell.

Whatever happens in this first vote, no one can believe anymore that this is going to end well.

***

Please enjoy Big Boys  from the late great Chuck Berry.

Preservation Hall Jazz Band Santiago.

Thanks to KABF.

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A Worrying Cycle of Housing Exploitation

New Orleans   I can’t exactly prove this yet, but the pattern is pretty gross already, and if I were a bettor, I would lay odds on the outcome. This is about housing and how things slide downhill when no one is watching and no one really cares. This sad story starts with the foreclosure crisis triggered by sloppy, scandalous, and speculative banking practices and may end in even more exploitation when some of these same houses end up almost a decade later deteriorating neighborhoods and in even more exploitative contract for deed “sales” in the credit desert for lower income communities still lingering in the wake of the Great Recession.

Ok, everyone knows that millions of homes ended up in foreclosure when the residential real estate market crashed in 2007-2008. Banks were over-leveraged in securitized loans heavily populated with mortgages that unsupervised brokers had patched together, often in a mixture of fact, fantasy, and falsehood. The government bailed out banks to the tune hundreds of billions, including taking over quasi-public FNMA and other government insurers of these mortgages. The homeowner, trying to hang on, got precious little help because the government allowed banks to administer the modification and forbearance programs, giving financial institutions little incentive to write down the mortgages to post-recession market prices which would have allowed some buyers to hang on, but would have weakened the balance sheets of the banks.

Although there is still outrage that none of the top dog bankers were really held accountable, the Justice Department and other agencies and some states have won multi-billion dollar settlements from the banks for their irresponsibility. Most of the settlements required them to pay fines to the government, but also required them to modify mortgages more extensively. Critics of the settlement terms always raised the fact that allowing the banks to use some of their penalty money to write down mortgages, essentially was giving them permission to move money from one pocket of their pants to another, which counts as a reward, rather than a punishment.

It is now clearer in reporting done by both the New York Times and the Wall Street Journal that another big loophole, especially for big Wall Street financial titans like Goldman Sachs, allows them to satisfy the terms of the settlements by purchasing foreclosed properties from FNMA and flipping them for a profit. Goldman successfully scooped up two-thirds of a recent FNMA auction which translated into 8000 homes with unpaid balances of $1.4 billion costing Goldman $5.7 billion. The settlement requires they provide $1.8 billion in relief so by their reckoning this transaction could get them close.

Overall the Journal reports that Goldman has acquired 26,000 homes from Fannie and more from Freddie, private sellers and others. Rather than modify or repair, many end up in another foreclosure and are sold off in bulk as well through a subsidiary, MTGLQ Investors LP. I would bet a bunch of this inventory is also being off loaded to other bottom fishers, hedge funds, and shady operators to then be recycled through predatory contract for deed and rent-to-own arrangements at high interest and no equity to continue the vicious cycle of exploitation and neighborhood destruction. The surest bet is that none of these financial institutions are offering standard mortgage loans in these low-and-moderate income communities given the higher credit scores and other lower loan levels required.

I’d like to be proven wrong, but this is where the trail is leading, and none of the paths are pretty.

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Temporary Employment Agency Workers are Organizing in Montreal

Conchita Poonin and her co-workers strike for a $15 starting salary. Thousands of Quebec nursing home workers have walked off the job in their first-ever series of coordinated strikes. Photo: Immigrant Workers Centre

Montreal   While in Quebec with the ACORN Canada head organizers, several of us stopped by to meet with our friends and partners at the Immigrant Workers’ Center in Montreal. We talked to Eric Shragge, president of the board, and longtime activist and academic as well as other long time staffers. In addition to the work and campaigns that they have been pushing consistently during the fifteen years since their founding, we caught up with several exciting and important new initiatives that are central in Center’s current focus and work, especially because it is critical to understand that the Immigrant Workers’ Center in Montreal is not a job training and placement or social service center, so common in the United States and even Canada, but is better understood as an organizing center for immigrant workers.

Most intriguing to me was the activity of the Temporary Agency Workers Association (TAWA). Many of the issues this association is targeting are the common complaints of most workers employed through such placement agencies, but foreign and immigrant workers are obviously even more vulnerable and precarious with fewer resources and protections on these jobs. It also goes without saying that many jobs they find working through the agencies are dangerous and low paying.

All of this resonated deeply with me, remembering that in 1971, as ACORN was expanding our work in Arkansas past housing project tenant issues and welfare rights issues, we started two additional, area-wide rights-based affiliated organizations, the Vietnam Veterans Organizing Committee and the Unemployed Workers Organizing Committee (UWOC). The central issue for the UWOC quickly became their lack of rights and exploitation by temporary employment agencies or buy-a-job shops, as we called them. We ended up winning some legislative reforms guaranteeing rights for temporary workers as well as better guarantees for employers picking up the fees and making some jobs permanent. Nevertheless in the way that labor has been squeezed and union strength has diminished over the last 45 years, the growth of non-contract, unprotected temporary work has ballooned making some companies the largest US private sector employers after Walmart, handling jobs at all skill positions.

In Quebec all fees are paid by the employers, but most of the rest of the issues are the same, except worse, as we learned from the Immigrant Workers’ Center. They had won a campaign recently with a group of workers from Mauritius who had been trapped in bad workplace conditions when immigration laws changed in Canada no longer guaranteeing permanent residence after four years of employment and won their residency despite the regulation.

The TAWA key demands are easy to support. They want a living wage for their work, and have joined the campaign for $15 per hour that has been a signature effort of the Immigrant Worker Center over the last several years. They want to shut down the fly-by-night operators, which are little more than labor contractors involved in bait-and-switch exploitation of workers. Importantly, they want to win some co-employer guarantees between the contracting employer and the agency hiring the workers to prevent the efforts to bypass provincial labor standards.

We need to follow the work of TAWA and the IWC in Montreal. They could break a new path for precarious and informally employed workers that all of us should follow.

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Vision Property Management: Exploiting Lower Income Home Buyers as a Business Model

New Orleans   In writing about Vision Property Management, the predatory and unscrupulous rent-to-own real estate company, reporters for The New York Times obviously struggled for a way to describe where to place Vision and other bottom-fishing realty companies that exploit lower income and working families’ hopes of home ownership. They ended up just talking a walk and euphemistically referring to these operations as operating in “this corner of the housing market.” If it’s a corner, it’s a very dark and nasty place.

Vision, based in Columbia, South Carolina, owns more than 6000 houses, many of them purchased at rock bottom prices from the foreclosure inventory dumped on the market “as is” by the quasi-governmental housing finance giants Fannie Mae and Freddie Mac. The Times described their modus operandi succinctly:

Vision markets its homes on a website, with most of the transactions taking place either over the phone or by email. Sometimes the photos of the properties are several years old and do not reflect what they actually look like.

You’re wondering how that would not run afoul of truth-in-advertising laws aren’t you? I thought the same thing, but to the degree that state and federal laws do not seem adequate to regulate operations like Vision, this dark corner of the real estate market, whether called contract-for-deed, rent-to-own, lease purchase, or whatever, is based on transactions where the “looks” of the place may be the least of the problem. No inspections, no appraisals, and agreements based on condition “as is,” make it easy to hide problems as severe as lead poisoning and roof leaks in Baltimore, lack of water, heat and good sewage in Arkansas, and unaddressed code violations and thousands of dollars in fines in Cincinnati, all of which reporters were able to document from disgruntled and exploited wannabe home buyers. Even a recent photo on the Vision website would not have revealed the horrors that awaited these families – and thousands of others.

As we’ve noted over recent months, contract for deed land purchases, like a bad weed, have grown in the credit desert since the Great Recession for lower income families still hoping to own their own homes. In the wake of these horrible stories of exploitation, some states are finally looking to tighten up regulations. A bill in Illinois is progressing that would give buyers some additional rights, especially once they have paid more than 10% of principal and interest. A bill proposed in Maryland had less luck, as the real estate industry muscled up to prevent reform even in the wake of lead paint poisoning in some of the homes, arguing that over worked and undermanned city inspection teams needed to do better. The Uniform Law Commission is evaluating whether to draft model legislation on contract for deed purchasers in the wake of all of this shame and scandal, but that will also take years.

Exploited home buyers shouldn’t have to crouch in this dark corner of the market waiting for relief. Signing light on the problems is valuable, but this is a situation that cries for action, since the words aren’t working.

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The IRS Enables the Return of Refund Anticipation Loans

New Orleans   Refund anticipation loans or RALs, as they were known, were one of the most predatory products on the market in their heyday targeted solely to low-and-moderate income workers who were most desperate for their tax returns. They were on the other side of the digital divide so less likely to file with the IRS electronically. The money was theirs, and tax preparers, especially the big boys of the market, H&R Block, Jackson & Hewitt, and Liberty Tax Services all exploited this desperation.

This was a 21st century national campaign for ACORN, and we forced the first negotiations with H&R Block after 330 actions in a 6 week time period during the height of the tax season, and eventually ended up with agreements with all three of the companies to wind down RALs. Disclosures of the interest rates were part all of the agreements, but it didn’t really matter since even if it said the interest rate on the loan to get their money one week earlier than the IRS would deliver it would cost them 349%, displayed in a poster or on the computer screen, if you have to have the money to pay rent or buy groceries or fix the car and you have to have it right now, disclosures, no matter how predatory don’t matter. Eventually we got HSBC to withdraw as the primary lender to the companies for RALs for what they termed, “reputational reasons” because the loans were so exploitative. Finally, the IRS and eventually other government agencies jumped in and also condemned RALs, and they finally faded from the market.

Now, thanks to the IRS, they are back, and there is even less doubt about the potential victims now. In 2017, the IRS decided to deliberately delay refunds until February for any taxpayer that claimed the earned-income tax credit or the child tax credit. These credits are only available to lower income workers. Presidents from Clinton to Bush to Obama have argued that EITC is the best and largest “anti-poverty program in the United States.”

On their website the IRS claimed they were concerned about an “error rate” of between 20 and 27% for filers in order to justify these delays. Something is fishy here. This is the IRS. The error rate should be an exact number based on information they have at hand on how many corrected filings they required, so giving a fudged number raises questions in my mind. Furthermore, their advice is to preparers who enable incorrect filings, which the IRS concedes are largely based on the complexity and confusion involved in the EITC program. Why was the pain not pushed to the preparers, rather than the families filing who were delayed unreasonably in receiving their returns? Oh, and meanwhile the number of audits of higher income filers is in the dumps now!

The preparers saw an opportunity and seized it by offering RALs again. Admittedly, these were no-interest loans this time offered against the amount of the return, and they had loan limits depending on the company’s policies. The big boys report over 1.5 million RALs are reported already this tax season with a month to go. Block did 840,000, Liberty175,000, and Jackson Hewitt 485,000. For the preparers, this is just the cost of customer acquisition, since it is cheese in the trap to catch low-income workers who would be forced to fork over the preparation cost to get their refunds.

No matter how much sugar you put in the coffee, this is once again the IRS partnering with private preparers to expand their businesses. The only real question is how long it will be before RALs are back in full and terrible force again?

The only good news in this tawdry story is that overall filings are down so far this year, so some people at least have decided to wait all of the vultures out.

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A Day Without Women Here is a Day About Women Everywhere

A rally at Washington Square Park in Manhattan to mark “A Day Without a Woman” on Wednesday. Credit Todd Heisler/The New York Times

Little Rock   The limits of action without organization are hard to escape, and in the United States the call for a strike and actions by women to show America how badly the country would suffer without the contribution of women and their economic power was bound to suffer from the “revolution of rising expectations” set in motion by the mammoth women’s marches earlier in the year. There were some school closings in Washington. Some businesses were impacted, and of course the impact of reduced purchases or, alternatively, purchases in women-owned businesses are impossible to measure except anecdotally. Ironically, there were many women who said they in fact couldn’t strike either because their work was vital in terms of caring for other women’s health for example or they couldn’t afford to lose the income or the job by acting alone, much of which proves even more emphatically how important women are in the workplace.

I’m reminded of one of ACORN’s less successful tactical actions 45 years ago against Arkla Gas to protest rising gas rates when we called for a Shutoff Arkla Day. Organizationally, it is impossible to prove the negative. But, no matter, the important thing is that women were standing up either physically, symbolically or sympathetically as a reminder that there will be prices to pay for the continued governmental assaults. It was also nice that American women didn’t flinch at joining in solidarity with women around the world who for years have now made March 8th their day.

The history of the day is momentous. The first Women’s Day was originally organized at the end of February 1909 by the Socialist Party of New York. Although some of this story is surrounded in myths of historic protests and strikes, none of that has been confirmed. Driving from Greenville to Little Rock yesterday, I heard the claim that the first Women’s Day was in reaction to the disastrous Triangle Shirtwaist Fire that killed 146 largely young immigrant women workers in New York City, but that tragedy was actually two years later in 1911. It was likely more a matter of the Socialist Party thinking it was the right thing to do, and though that doesn’t sound as epic, perhaps its very solemnity and morality, speak even more loudly. March 8th became important – and historic – when a century ago in commemoration of Women’s Day, women went on strike in St. Petersburg, Russia demanding an end to World War I, and end to food shortages, and an end to czarism, helping trigger the Russian Revolution. In 1965 the Russians made it an official holiday. China did so even earlier offering a half-day off for women in 1949.

Finally, the United Nations in 1975 adopted March 8th as International Women’s Day encouraging all countries to celebrate the date. What goes around, comes around, and now to their credit, March 8th became a day to remember in 2017 for women – and men – in the United States as well.

Now, if we could just make every day, women’s day in what still is too much of a man’s world.

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