Promises Broken and Settlements Sidetracked for Homeowners Facing Foreclosures

Fannie-Mae-and-Freddie-MacLittle Rock           I’m sorry. Here we go again spinning like a broken record on the amazing and devastating ineptness of the US government and its various agencies and branches to seriously solve the problem of bank intransience and offer real relief to borrowers needing loan modifications to escape foreclosure and right size their loans.

The government announced another multi-billion dollar settlement for fraud in packaging mortgages. This time it was Citi agreeing to pay $7 billion with $4 billion going to the  government in fines and whatever and $3 billion going supposedly to help homeowners with principal reductions or refinancing. Of course that means $3 billion they get to essentially backwash and return to their own accounts. Using a fraud settlement for a modification means that if they reduce principal by $100000 for a homeowner in Phoenix, they count that $100000 on the ledger allowed by the fine print on this big settlement. If the average modification or adjustment per homeowner averaged $100,000, then on the high side this might help 30,000 borrowers of the millions caught in the mess. Experience says it will be a whole lot fewer, since that has been the case with everything announced over the last 5 years that was supposedly going to impact millions of homeowners.

We also have a pattern established on these settlements now. Outfits like Bank of America, whose time is still coming, may pay their Wall Street lawyers millions to delay, shuffle, and stall on future settlements but pretty much any of us now could pull up a chart on what percentage of the mortgage business and bundling a bank had in 2007, and calculate the amount they are going to have to pay to make this go away in 2014. B of A will pay a truckload because of its own activity and its Countrywide purchase, but the number of people helped will also be a small piece of the load.

And, at the same time that we could read the report on the Citi settlement, we were also able to read about another government agency that promised much in terms of homeowner relief and delivered almost nothing. This time it’s the FHA or Federal Housing Administration and their highly touted program to help homeowners that were underwater, owing more than the value of their homes.

“…only about 4,600 F.H.A. loans have been originated under the program, a far cry from the 500,000 to 1.5 million borrowers the Department of Housing and Urban Development estimated could be helped when it announced the program in 2010.”

Yes, four years of trying and less than 5000 borrowers helped. What’s the math there? Something like 1 out of 1000 projected to be assisted actually benefited.


Well, the right hand of the government didn’t care what the left hand might have been trying to do to help homeowners.

“Fannie Mae and Freddie Mac, the government-sponsored enterprises that hold a majority of the country’s mortgages, decided early on not to participate, because the program requires lenders to reduce the borrower’s principal balance. This strategy is not condoned by the Federal Housing Finance Agency for loans backed by Fannie and Freddie.”

But, what goes around comes around. I’m not just saying this was the feds dropping the ball. They also made participation by our friends, the bankers and lenders, voluntary, which means they didn’t have to do anything, and there’s little doubt that in fact they did anything then, nor are the planning – or being forced by these settlements – to do much of anything still.

UAW Playing the Long Game, Ready for the Short Game at VW in Chattanooga

0218-vw-uaw-630x420Little Rock     Chairman of Volkswagen announced in Germany with the Tennessee Governor and US Senator Bob Coker from Tennessee hanging on every word, that the company will add 2000 workers, spend $600 million adding a new SUV line at the Chattanooga plant, and collect $166 million from the State of Tennessee in tax and other subsidies as well as $12 million in lagniappe to throw at job training for the new workers. On this score everyone can agree, but after that confusion reigns.

Senator Coker, speaking for the red-meat, union haters in the local and statewide business community, when asked for his reaction to both the plant expansion and news recently that the UAW had opened an office, chartered a local, and was hunkering down in its ongoing effort to unionize the plant, snarled through an office statement, “Any union can rent space in any city and open an office.” Well, that’s good to know, Senator? The Governor seemed more rooted in the emerging reality and praised the workers and the fact that the VW decision was a vote of confidence in them.

On the other hand from the UAW’s statements we are all getting closer and closer to a look at the real deal, which continues to closely hew to what I have predicted here.

Gary Casteel, the U.A.W.’s secretary-treasurer, said the union had reached a “consensus” with VW: Once the new local signed up “a meaningful portion” of the plant’s work force, “we’re confident the company will recognize Local 42 by dealing with it as a members’ union that represents those employees who join the local…The fact that the new line is being announced four days after the rollout of U.A.W. Local 42 in Chattanooga reinforces the consensus that the U.A.W. has reached with the company.”

Now, Coker and his gang are never going to be happy until they start taking deep breaths, hope some of their mad dogs learn to live and let live, and go on with their lives, because Casteel’s statement is both clear and very interesting: the UAW is there to stay in Chattanooga, and that’s fine with VW, so get over it.

The UAW is opting to play both the long and short game in my view.

In the short game they will have a local, office, and organizers. The new 2000 workers won’t be added until the line is ready in 2016. If they have the majority to win an election, and they file before 2016 and win, then, bam, those 2000 are automatically accreted into the union. If they were committed to playing an NLRB strategy, any organizing department would try to get it done before the uncertainty of 2000 new workers is added to the mix, since those 2000 will be walking on eggs, glad to have a job, and not ripe for an election until possibly 2018.

The long game that the UAW’s Casteel is also embracing is exciting for labor in the USA. He is flatly saying that VW is willing to recognize them as a “minority union” on a “members’ only” basis, which is common in the public sector in non-collective bargaining states, and common elsewhere in the world, for example in the United Kingdom where a minority expression of interest wins consultation rights with the companies for your members.
Add the German-based features of a “workers’ council” and the UAW with VW’s active consent and support, can legitimize the union on the shop floor, represent its members thoroughly and aggressively, and win the hearts and minds of the workers one way or another, while signing up their members, collecting dues, and being able to negotiate directly with the company.

The only thing missing will be a collective bargaining agreement, and for what it’s worth, Senator Coker can hang his hat there, because except for a piece of paper somewhere saying “exclusive,” the Chattanooga plant will de facto be a 100% union anyway you look at it.

If we can go cold turkey about our obsession with a contract, and embrace membership, representation, and negotiation instead, there are lots of deals to be made and millions of workers who will rush into unions. This could be the start of something big for unions everywhere in the USA!


Please enjoy this new song by The Both called Volunteers of America, thanks to Kabf.

The Terrible Challenge of Building Resources for Change on a Global Scale

Global SecurityNew Orleans      Some time ago there was an op-ed in the Times that caught my eye, even though it was coming at me from a weird and somewhat disturbing angle. Juan Zarate and Thomas Sanderson had written a piece on the challenge that national security interests face in dealing with terrorist and other radical change and sometimes violent groups because they have gotten more adept and creative at devising ways to fund their operations. Their ways and means are horrendous including kidnapping, drug running, and whatever, which we abhor, but sadly it makes points that we cannot ignore in tough economic times and unfriendly environments as we attempt to figure out ways to finance organizing that builds power and makes change on a larger scale.

Part of the point Zarate and Sanderson made involves what they call the “governance and charity model” popular in the Palestinian conflict. They could have made the same point though about scores of guerrilla efforts around the world as well as the “soft power” and occupation strategies being tried by the U.S. military in Afghanistan particularly and in Iraq while we were there.

In community and labor organizing a milder part of this debate, when it happens, focuses on the interplay of providing services as opposed to direct advocacy, action, and organizing. Throughout the history of ACORN and it’s organizing, both domestically and internationally, we have argued that you cannot separate the two, first because it is what the members demand, but of equal importance is the fact that it is easier to finance service activities than organizing, and, when welded together, they create fungible resources which is critical. So, yes, these are apples and orange’s comparisons, but these are still orchards that can see each other in the distance.

Here is their argument:


The metastasized, Qaeda-inspired terrorist movements have learned to raise millions of dollars locally, while the conflicts in Syria and Iraq have resurrected the terrorist funding networks of old. Terrorist funding is now both local and global. Donors and everyday citizens from the Persian Gulf and other sympathetic corners of the world, witnessing the humanitarian crisis in Syria, have been funneling money to the most effective forces fighting the regime of Bashar al-Assad there, namely Qaeda-affiliated groups and ISIS. Smartly, these groups have realized they must match their brutal militancy with charitable services, akin to the governance and charity models of groups like Hezbollah and Hamas. This makes it difficult to differentiate funding to alleviate the suffering of Syrian refugees from support for terrorism.


Of course these guys specialize on the backend. How to stop the networks once developed. Community and labor organizing though work the front end. If there are real vehicles for change that are allowed to operate freely and aggressively, and if they are also connected and legitimized, by being allowed and enabled to provide needed services and benefits that they are uniquely able to identify and deliver, then there might be more progress upstream as well before the mess and mayhem are out of hand.

Increases in the Minimum Wage Correct Inequalities in Wage Distribution

Capital_in_the_Twenty-First_Century_(front_cover)Kiln     One of my projects for my wor-cation had been to finally finish reading Thomas Piketty’s Capital in the Twenty-First Century.  I had ordered the book from the first notice, read 50 pages, and then just couldn’t see hauling the weight on airplanes.  I even read that Amazon e-book surveys based on noting “underlining” on Kindles and other devices found that the Piketty book was setting new records for how few people actually read the book.  Having finished it and made notes throughout, it’s a shame, because it in fact it really is an excellent book, if you care about equality, citizen wealth, and what’s happening in the world anyway.

            A small example concerns the still raging issue about the critical importance of the minimum wage in creating any kind of equality for lower waged workers.  Piketty is very clear:

Inequalities at the bottom of the US wage distribution closely followed the evolution of the minimum wage:  the gap between the bottom 10 percent of the wage distribution and the overall average wage widened significantly in the 1980s, then narrowed in the 1990s, and finally increased again in the 2000s.

Comparing the US to France, where for a long time that country continued to keep pace with inflation, Piketty notes that,

As in France, changes in the minimum wage played an important role in the evolution of wage inequalities in the United States.  It is striking to learn that in terms of purchasing power, the minimum wage reached its maximum level nearly half a century ago, in 1969, at $1.60 an hour (or $10.10 in 2013 dollars, taking account of inflation between 1968 and 2013.)

            On the other hand Professor David Neumark from UC-Irvine continues to rail against minimum wage increases, but largely these are two ships passing in the night without seeing each other.  Neumark wants to argue, as he does in the Wall Street Journal, recently that the issue is about whether or not the minimum wage reduces poverty, rather than helping achieve wage equality.  These are actually two different issues, as he surely must know, so his argument is all about the apples and oranges and hoping to create confusion.  With a student’s research he makes the case that “…to raise the minimum wage to $10.10 nationally, 18% of the benefits of the higher wages (holding employment fixed) would go to poor families.  Twenty-nine percent would go to families with incomes three times the poverty level or higher.”

            The first response to Neumark still has to be, “so what?”  That sounds like a win compared to where we stand now, dude!  And, as Piketty notes where we are now on wage and capital inequality (and, yes, these are different, too) is comparable to the historic highs ever, and getting worse.

            There really isn’t an honest, factual argument any more for not raising the minimum wage.

Ironically, both Piketty and Neumark come to agreement, even from their different directions, on the fact that moving to $15 per hour or higher could have what Neumark calls “sizable employment losses that would likely result from such a large minimum-wage increase,” and Piketty’s note that, “If the minimum wage were doubled or tripled, it would be surprising if the negative impact were not dominant.”

Either way you cut it, there’s no excuse not to at least bring us up to $10.10 per hour so that we can buy as much with that wage as we could back in 1969, forty-five long years ago.



Population is Moving to Bigger, Poorer, and Warmer Cities

Delhi, from The Hindu

Delhi, from The Hindu

Kiln     United Nations population estimates for the next five to fifteen years make it clear that in this period of rapid urbanization and increasing inequality by 2030 we will see huge population centers dominated by larger cities with poorer populations in warmer settings.   By 2030 more than one-third of the population will live in cities with more than a million people.

The poor will not only “always be with us,” but they will be everywhere in huge numbers.  Of the top 30 cities the UN figures estimates that only six of them will be in countries they classify as “high income:”   Tokyo, New York, Osaka, Los Angeles, Paris, and London.  Of that group, only Tokyo will be in the top ten cities in population.  I looked at the list of megalopolises with interest because ACORN International works in almost one-third of these cities directly or through our partners:  Delhi #2, Mexico City #4, Mumbai #6, Buenos Aires #13, Manila #18, London #27, Jakarta #28, Seoul #29, and Lima #30.   We’re not up to the task, and I doubt anyone is.

The UN director of the study made a number of observations:

“Many countries are urbanizing at lower levels of development” than in the past, said John R. Wilmoth, the director of the population division of the United Nations. As people leave the countryside because of decreasing need for agricultural workers, he said, the important question will be whether cities have an industrial economy that can provide jobs and an infrastructure that can allow the new residents to live in acceptable conditions.   He said that it was easier and less expensive to provide such services as housing, health care, education, electricity and clean water to urban residents than to a similar number of people living in rural areas. But, noting the slums surrounding some cities in poor countries, he added that it was much more difficult to accomplish that after those slums grow.  “It is much better if the planning takes place before they arrive,” he said. “Hopefully, this report is something of a wake-up call.”

Some of Wilmoth’s questions are easy to answer.

Do these burgeoning cities “have an industrial economy that can provide jobs and an infrastructure…to allow the new residents to live in acceptable conditions?”  Heck, no!

He didn’t ask it directly, but do many of these cities have a planning or financial structure to prepare for this growth before it arrives?  Absolutely and categorically not!

Most of these cities are unable to handle their current lower income populations and are homes already to some of the largest mega-slums in the world.   Wilmoth is certainly correct that on a per unit basis it would be cheaper to provide “housing, health care, education, electricity and clean water to urban residents,” but he can walk with me or any of ACORN’s organizers where we work in most of these cities and find that they don’t need a “wake-up call,” they need to answer all of the phones that have been ringing off the hook for years already from millions who lack all of the items on that list.

2030 is about 5 minutes from now.  Ready or not, people are coming.  And, these cities aren’t ready, and it’s going to take a lot of pushing and shoving to get them ready, and god knows what it might take to make them able.  What a wild world waiting for us!

UAW Back in Force at VW in Chattanooga – Told You So!

092112_WEB_a_VW_Sign_t618Kiln     Steven Greenhouse of the New York Times is pretty much the dean of what is left of the labor press in the United States.  He expresses surprise at the news that the UAW is establishing a local union in the Chattanooga Volkswagen plant where they narrowly lost an election earlier in the year.  It’s pretty clear Steve is not on the ball here and neither listened to nor read the Chief Organizer’s report on April 22nd entitled, “UAW Objections Withdrawal a Sign that They Want a Second Shot Soon.”

Here’s Steve:

In an unorthodox move, the United Automobile Workers announced …that it was forming a union local in Chattanooga, Tenn., to represent workers at the Volkswagen plant there even though a majority of the plant’s workers voted in February against joining the union.  U.A.W. officials said the new local — which will have voluntary membership and not be recognized by the automaker — would serve as a collective voice for its members and would also facilitate Volkswagen’s efforts to form a German-style works council made up of workers and management.

Here’s the Chief Organizer looking at the UAW’s options and explaining why I believed that the union’s withdrawal of their objections in April after losing the election in February meant that they were hunkering down for the long haul to go big and win this thing.

The other choice, which is bolder organizing, is to immediately get the clock ticking for a second election, and this is clearly what the UAW is doing, signally in truth that they are committed to the campaign and in fact that they like their chances inside the plant and, perhaps as importantly, with Volkswagen.  You can bet that UAW organizers have done extensive work in the last three months to reassess their “yes” votes and gauge the hardness of the “no” votes and whether they can turn them if they can offset the onset of fear and panic before the last vote count.  You can also bet that UAW leaders have had extensive discussions with Volkswagen union leaders in Germany, who have board seats in the company, about how a second election would work and how the company would react.  The signs have obviously been encouraging on both counts.

The issue is not starting a local with or without collecting dues now but the fact that the union is saying they want to “…serve as a collective voice for its members and would also facilitate Volkswagen’s efforts to form a German-style works council made up of workers and management.”  Like I said, there’s little question that Bob King, the president of the UAW then, and Dennis Williams, the president now, have had some serious discussions with the company and know they have a place at the table, no questions asked.

The local business community needs to start learning to adapt to modern life and the 21st Century and come to grips with the fact that expansion on the line with another 1000 workers and continuing economic injections from Germany just aren’t going to happen without labor peace in Chattanooga.  They’re all still in it to win it, and as I said before and I’ll keep saying again, this is exciting for the labor movement in the South and everywhere else.


Please enjoy Beck’s Heart is a Drum, thanks to