Austerity: A Wealth Transfer from Poor to Rich

We’re Not Broke: The Corporate Tax Cheats of America

Directed by Karin Hayes and Victoria Bruce (2012)

Film Review

We’re Not Broke exposes so-called “austerity” for what it really is: a massive wealth transfer from poor people to rich people. This wealth transfer occurs in two ways – by shifting the tax burden (through tax evasion) from rich people to poor and middle class people and by cutting the public services (schools, libraries, clinics, public transport and infrastructure such as roads, bridges and water service) that create the real economic wealth in society.

This documentary mainly focuses on tax evasion by American corporations who profit off US government infrastructure (especially the court system) but avoid US income taxes by registering their companies in tax havens, such as Ireland, the Bahamas and the Cayman Islands. Among the major US companies that pay no US income tax are Exxon, Chevron, City Group, Pfizer (the drug company that manufactures Viagra), GE, Bank of America and Wells Fargo. Google pays US income tax amounting to 2% of its net profits in US income tax.

I was particularly astonished to learn that US defense contractors (Cisco, Lockheed, Caterpillar, GM and Verizon) – whose primary client is the US government – also participate in these tax avoidance schemes.

The film also focuses on the work of US Uncut, a grassroots organization formed in early 2011. It was modeled after the group UK Uncut. The purpose of both groups was to educate the public about the extent of corporate tax evasion. Sadly the US group seems to have been subsumed by Occupy Wall Street in late 2011. Their website has morphed into a general Internet news site – earlier this year, they endorsed Bernie sanders for president.

In contrast, UK Uncut member groups continue to mobilize grassroots actions protest and civil disobedience around Britain. Their efforts (in conjunction with the Panama Papers scandal) have resulted in new legislation cracking down on British overseas territories (Virgin Islands, Cayman Islands and Jersey) that serve as tax havens. See UK Tightens Tax Laws

Wall Street: More Deeply Corrupt than We Thought (No Really)

Flash Boys: A Wall Street Revolt

By Michael Lewis

W W Norton (2015)

 Book Review

 Flash Boys is a true story about front running, the unethical practice of a stockbroker executing orders on a stock while taking advantage of advance knowledge of pending orders from elsewhere in the market.* From the bleak picture Lewis paints, it appears that investors – whether institutional or private – have virtually no way of protecting themselves against front running.

Like Lewis’s 2010 book The Big Short, Flash Boys reads just like a thriller, complete with exquisitely drawn heroes and villains. In this case, the heroes are crusading Canadian banker Brad Katsuyama and the assorted geeks and nerds who helped him start his own stock exchange. Katsuyama started IEX in 2013, after the Royal Bank of Canada and the Securities and Exchange Commission (SEC) refused to support his efforts to expose and end the practice of front running. By purposely slowing their transmission rates, IEX makes it impossible for high frequency traders to “front run” the trades occurring on the exchange. This has enabled Katsuyama to protect investors who use his exchange, while simultaneously collecting data on suspicious trades.

Flash Boys, a bestseller, originally came out in 2014. The 2015 edition includes an afterward in which Lewis describes being viciously attacked by the big Wall Street banks and brokers. He also enumerates a number of prosecutions of high frequency traders and brokerage firms (by the FBI, SEC and Financial Regulatory Authority) resulting from from the publicity Katsuyama’s work received from Flash Boys’ publication.

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*The way this works in practice is you order 10,000 shares of a stock at a given price and a high frequency trader somewhere buys 10,000 shares at that price and resells them to you at a slightly higher price. Complex computer algorithms enable high frequency traders to exploit minute differences in transmission frequency to execute these secret trades – which usually take place in “dark pools” – private stock exchanges which keep no public record of their trades. All the major investment banks (Goldman Sachs, JP Morgan, Bank of America etc) have dark pools and high frequency traders pay for the privilege of trading in their dark pools.

How to Stop a Foreclosure

Or Get a Cash Settlement Following Foreclosure

In 2014 most home foreclosures can be stopped, through a myriad of federal and state programs that have sprung up. Given that hundreds of thousands of families continue to lose their homes every month, it’s really sad how few Americans are aware of these programs. Clearly Wall Street banks and the corporate media don’t want struggling families to know about them.

Fix My Payment (www.fixmypayment.com) is a free website and advisory service for homeowners who have lost homes to foreclosure or who are currently struggling with mortgage payments.

Many of the mortgage relief programs listed on the Fix My Payment website stem from settlements the banking industry has made with the Department of Justice, the Federal Reserve, the Office of the Comptroller and various states following criminal indictment for predatory lending practices (i.e. banks sold subprime mortgages to low income borrowers they couldn’t possibly repay) and fraudulent so-called “robo-signing” foreclosures. Others are federal programs enacted in 2009 as part of the Obama administration’s recovery package.

Below are some specific programs:

1. Department of Justice Settlement with Ally/GMAC, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo in predatory lending indictment

Homeowners (and foreclosed homeowners) with mortgages issued by any of the above banks are eligible for mortgage relief under the following conditions:

• Financial hardship ($17 billion available for principal reduction)
• Upside down mortgages in which the property is worth less than the mortgage loan ($3 billion in refinancing relief)
• Borrowers lost property to foreclosure between January 1, 2008 and December 31, 2011

2. Federal Reserve and Office of Comptroller settlement with Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Aurora Loan Services. MetLife Bank, PNC Financial Services Group, Sovereign Bank, SunTrust Banks and US Bancorp in wrongful “robo-signing” foreclosure indictment (i.e. banks foreclosed on homes without proof of legal title).

Borrowers with mortgages with the above banks are eligible for $3.3 billion in cash settlements if they have lost their home due to foreclosure and $5.2 billion in principal and/or interest reduction to existing mortgages (in cases of financial hardship).

3. Home Affordable Modification Program (HAMP)

Federal assistance the Obama administration enacted in 2009 providing financial incentives for banks and loan servicing companies to rewrite loan terms to help troubled borrowers (excludes mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac).

4. HAMP-VA, HAMP-FHA, HAMP-USDA

The above programs provide incentives for banks and loan servicing companies to write loan terms for mortgages guaranteed by the VA, the Federal Housing Administration or the US Department of Agriculture. (excludes mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac).

5. Housing Affordable Refinance Program (HARP)

Federal assistance the Obama administration enacted in 2009 providing financial incentives for banks and loan servicing companies to rewrite loan terms to help troubled borrowers with mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac.

6. Keep Your Home California (KYHC)

California residents are also eligible for four state programs:

• The Unemployment Mortgage Assistance Program – helps homeowners who are currently unemployed and receiving California EDD unemployment benefits.
• The Mortgage Reinstatement Assistance Program – helps homeowners who have fallen behind on their payments and need help in reinstating their loan.
• The Principal Reduction Program – helps homeowners who have experienced a financial hardship along with a drop in the home’s value.
• The Transition Assistance Program – provides relocation up to $5,000 in relocation funds to help eligible homeowners transition into a new housing situation after going through a deed-in-lieu or short sale.

Free Personal Assistance

In addition to the numerous options listed on their website, people can also phone (909) 937-2400  or visit a mortgage adviser (without charge) if they live in Los Angeles. In addition to recommending specific programs homeowerns can apply for, Fix My Payment customer service representatives seem to know exactly what documents to file to halt foreclosure proceedings.

The Non-Existent Recovery

Economists predict no end in sight to the present foreclosure crisis. Despite manipulation of the “official” unemployment rate by the Obama administration and the corporate media, the percentage of employed Americans of working age has flat lined. According to the Department of Labor’s own statistics, the percentage of American families in which no one has a job stands at 20%. The percentage of unemployed working age adults stands at 41%. Prior to the 2008 economic downturn, this figure had been stable at 35-37% for nearly a decade.

With the recent news that the US economy shrank by 2.9% in first quarter 2014, the potential for new job creation looks extremely bleak. The technical term for a shrinking economy is deflation. Deflation leads to a downward spiral. A shrinking economy means less money in circulation. Low demand forces retailers to reduce their prices, while consumers postpone purchases in anticipation prices will drop further. As sales continue to decline, companies lay off more workers, which makes finding new jobs even more difficult.

photo credit: JefferyTurner via photopin cc

A Rebel Comes of Age by Stuart Bramhall

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I was really touched by this review, by a teen blogger, of my young adult novel. It gave me a warm fuzzy feeling that “teenage-related problems” made the book seem more real for her. Her revelation that she has never read a book like this also grabbed me. I guess it’s pretty rare to encounter books on protest and political change in modern bookstores and libraries.

Squatting 101

(Another post based on my research for A Rebel Comes of Age – with specific advice on how to stop your bank from foreclosing on you. A new ruling in US bankruptcy court means that roughly half the foreclosures which have occurred since 2008 are illegal.)

Squatting is becoming increasingly common with the worsening recession and continuing foreclosures and evictions. The foreclosure crisis has many US cities with whole blocks and neighborhoods of abandoned homes (which are quickly stripped of their plumbing and electrical fixtures). The problem turns out to be extremely expensive, both due to plummeting property values and tax take and higher crime rates and demand for (police and fire) services (see). Thus it’s no surprise that the city of San Diego recently sued Bank of America to stop foreclosures in their city. Prior to their recent bankruptcy proceedings, Detroit was paying people to move into abandoned homes.

The simplest form of squatting is remaining in your home when the bank or mortgage company tries to foreclose on your property. Owing to the recent scandal over illegal foreclosures, mortgagees who miss payments now have a range of legal options they can pursue (see * below).

Grassroots Remedies

Take Back the Land is a Miami-based social justice groups formed in 2006 with local action groups in New York, Boston, Chicago, Madison, Toledo, Portland, Rochester, Washington DC, Atlanta and other cities. Where they can use legal means, these local groups often organize “live-ins,” moving dozens of community activists into foreclosed homes to block evictions. In several cities, Take Back the Land activists work to rehouse homeless families in abandoned foreclosed homes. Volunteers break into the houses, clean, paint, make repairs and change the locks. Then they help move homeless families into them. More often than not, getting off the streets enables homeless parents to keep and find jobs, making it possible to pay rent and move into their own place.

Hands-Off Approach by Police and Banks

For the most part neither city police nor the banks that own the homes interfere. In Miami, for example, the city takes the position that it’s the responsibility of the bank to initiate eviction proceedings. The banks who own the homes seem even less keen to eject squatter than the police. In most states, this requires initiation of formal eviction proceedings in court. Moreover banks know full well that perpetually vacant homes eventually become worthless, due to vandalism, and have to be demolished (at additional cost to the owner).

Meanwhile neighbors concerned about their property values are ecstatic to see foreclosed homes occupied and fixed up (even by squatters), as abandoned property is a magnet  for vandalism, prostitution, drug and gang activity and fires (see and)

In addition to the good work of Take Back the Land and affiliate groups, in many places homeless families are occupying foreclosed properties on their own.

The Law of Adverse Position

Things get really interesting when homeless families occupy abandoned property for five years or more (longer in some states) and attempt to claim title (ownership) under Adverse Possession laws claim title (ownership) under Adverse Possession laws. It has also opened up a lucrative market for ambitious entrepreneurs who fix up abandoned properties and rent them out to tenants. In December 2010 Mark Guerette, the owner of Saving Florida Homes, Inc pleaded no contest second degree fraud for renting out 100 foreclosed properties.

It turns out that Gurette notified all the banks who owned the vacant the homes that he was claiming them under adverse possession – and only received a response from two of them. Owing to the banks’ disinterest, the state of Florida couldn’t really charge him with trespassing. They could only charge him with fraud by finding tenants willing to testify that he had misled them. All his rental agreements included an addendum explaining that he was occupying the property via “adverse possession.” So he ended up with a slap on the wrist – two years probation and a court order not to file any “adverse possession” claims for two years.

The 1862 Homestead Act

The legal principle of “adverse possession” – the origin of the expression “possession is nine tenths of the law” – is recognized in most cultures. In the US, its basis in law dates back to the Homestead Act Abraham Lincoln signed into law in May 1862. The Act stipulated that anyone “improving” unoccupied land could fill out an application and file for a deed of title after five years. The law was abolished in 1976, except in Alaska which continued a state version of the Homestead Act until 1986.

Nevertheless common law and most states provide for a person to obtain land through use. For example, your neighbor puts a driveway between your homes to enable him to get to the rear of his property. In doing so he takes a strip of your property six feet wide. If you do nothing, your neighbor could end up owning that part of your property. In failing to challenge your neighbor with a lawsuit, you technically abandon the rights to your property. This is the foundation of adverse possession. One feature that makes squatting on foreclosure home so attractive is that it falls under civil law, rather than criminal, law. Unless you break in or damage the property in some way, the police can’t file criminal charges. Moreover the rightful homeowner has to go through a formal eviction, which can be very expensive, to get rid of squatters.

In Florida, Take Back the Land and individual squatters are utilizing an 1869 statute that says if a person takes a property (and pays property tax) and the owner does not claim the property for seven years, the squatter gets to keep the property. With the damage done to vacant homes by vandals, improving the property usually means fixing the fences, cutting the grass and repairing broken windows and doors. Requirements differ in other states, although all require you to occupy the property openly and make improvements to it. California, Nevada and Iowa are the most favorable states for squatting as they only require you to occupy property (and pay property tax) for five years before applying for a deed of title.

* Legal remedies against foreclosure:

1. MERS foreclosures

A US bankruptcy court and many states have ruled that roughly half of US mortgages are illegal and that tens of thousands of foreclosures have been fraudulently executed by Wells Fargo, J P Morgan Chase, Bank of America (and other banks), Fannie Mae.

Prior to the 2008 meltdown, mortgages were traded and changed hands so frequently that banks simply registered them with the Mortgage Electronic Recording Service (MERS), rather than executing a title transfer. State lending laws specify that only that actual owner of a mortgage can initiate foreclosure action. In many cases banks are filing fraudulent court documents alleging that they own the loans, when they are merely servicing them on behalf of the lender.

Home owners threatened with foreclosure need to immediately do a Securitization Audit to determine who actually owns the mortgage and deed (and is legally entitled to foreclose).

2. Predatory mortgage loans

Mortgagees victimized by predatory mortgage loans (tricked into accepting mortgages they can’t possibly repay) can request Forensic Loan Document Review. There are federal laws that protect against predatory lending, which you can use to force the bank to negotiate.

3. Fraudulent mortgage charges

Also Bank of America was caught in a related scam in which they were adding backdated insurance charges to mortgage payments to push mortgagees who missed payments into foreclosure. This means it’s essential to check your mortgage statement for unexplained charges.

4. Chapter 13 bankruptcy

Families may be able to save their homes from foreclosure by filing for Chapter 13 bankruptcy.

photo credit: gruntzooki via photopin cc

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In A Rebel Comes of Age, seventeen-year-old Angela Jones and four other homeless teenagers occupy a vacant commercial building owned by Bank of America. The adventure turns deadly serious when the bank obtains a court order evicting them. Ange faces the most serious crisis of her life when the other residents decide to use firearms against the police SWAT team.

$3.99 ebook available (in all formats) from Smashwords:

https://www.smashwords.com/books/view/361351

The Rally

A Rebel Comes of Age – release date Dec 21, 2013

Another Excerpt from my young adult novel (from Chap 22)

When Clemente finally took the microphone, the stretch of McDonough between Patchen and Malcolm X was wall-to-wall people. The hip-hop activist, an attractive, thirty-something Latino woman with short, curly black hair and enormous gold ear loops, wore a dark blue hoodie in honor of Trayvon Martin.

“Brothers and sisters, look at us,” she proclaimed. “When hip hop fights back, watch out.” At this, the crowd broke into ecstatic applause, accompanied by whistling and cheering. When the uproar died down, she called up all eighteen Freedom House residents and their sixteen Mandela House counterparts and lined them up on either side of her. “This isn’t a building we’re fighting for today. We’re here to support this phenomenal group of young people. They are our soul and conscience. Like Van Jones says, it’s time to change from fighting against something to fighting for something. No matter what we believe, what we all want, nothing advances or happens without organizing. Lots of it.”

Reverend McLeod came to the stage in a dark gray ski jacket rather than his usual suit and overcoat. Ange assumed that this was to distinguish between his activist and ministerial role. He began by complaining how sick he was of Wall Street’s longstanding pattern of theft from the African American community.

“Yah suh,” a woman in the front row came back, as if they were in church.

“First, it was our supermarkets, then our schools and now our homes. Surely the time has come to say enough.”

“Um-hmn,” the woman agreed.

“The time has surely come,” another woman echoed.

“Marches and rallies aren’t enough to check this power. The time has come, brothers and sisters, to put our bodies on the line. As Reverend Martin Luther King did. People of conscience are called on to break unjust laws, just like our brothers and sisters in Occupy Brooklyn who secured a home for brother Carasquillo and his family.”

He paused dramatically for this to sink in. “Where will you be, brothers and sisters, when the sheriff comes to put these young people out in the street? Will you all be comfortably at home watching American Idol or whatever nonsense they are showing now? Or will you be here with them?” His voice soared. “I tell you where I will be, brothers and sisters. I will be here in front of this building. No matter if the sheriff’s officers come at dinner time or midnight or three in the morning, they will have to walk through me.” He paused again. “Who will join me?”

The reaction from the crowd was stunned silence, followed by quiet murmuring. When Ange turned to look around, she saw the ten live-in protestors and six Occupy activists tentatively raise their hands. “Um-hmn-um,” McLeod vocalized reprovingly. “Looks to me like a long, lonely night.”

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A Rebel Comes of Age can be pre-ordered from the following links:

• Kobo: A Rebel Comes of Age

• Apple ibooks (iTunes): A Rebel Comes of Age

• Nook Book: A Rebel Comes of Age

• NEW:  Kindle edition:  http://www.amazon.com/dp/B00HAPBLB0

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An Occupy Wall Street Novel

My new novel, A Rebel Comes of Age, is scheduled for release (as a $3.99 ebook) on December 21, 2013.

It’s a sequel to my first young adult novel, The Battle for Tomorrow. In the first book, sixteen-year-old Angela Jones is arrested and sent to juvenile hall for participating in a blockade and occupation of the US Capitol. The sequel takes place a year later, when she and four homeless teenagers occupy an empty commercial building owned by Bank of America. Their goal: to transform it into a teen homeless shelter.

Over the next five months, they work through all the typical problems of inner city teenagers – including raging hormones, the temptation of drugs and alcohol, racial tensions, and pregnancy – as they struggle to win community acceptance. When Bank of America obtains a court order evicting them, the adventure turns deadly serious as they realize lives are on the line. When the other residents decide to use automatic weapons to keep the police SWAT team out, Ange experiences a major personal crisis and is forced to re-examine her attitudes towards guns and violence.

The Lost Generation – Life After Work

A Rebel Comes of Age explores the question of life after work. In the five years since the 2008 economic meltdown, 25-40% of 18-30 year olds still find themselves permanently excluded from the workforce. What we are looking at, in essence, is an entire generation sidelined to the fringes of society. Despite all the government and media hype, the capitalist economic system is incapable of creating jobs for them.

We are all conditioned to believe that life without full time work is unlivable. I seriously question the validity of this viewpoint. As a species, human beings occupied the planet quite happily for 250,000 years without selling their labor to a wealthy elite. Two centuries ago, the concept of waged work was virtually unknown, and most of the world’s current seven billion inhabitants are officially classified as “unemployed.”

With more equitable distribution of economic resources, freeing people from the drudgery of work opens up infinite possibilities for more creative and socially productive activities. Some analysts attribute the Arab Spring and Occupy Wall Street to unemployed youth taking up social and political activism as an alternative to work.

A Rebel Comes of Age provides a brief snapshot of a group of homeless, unemployed teenagers who find themselves building a movement, without quite realizing this is what they are doing.

My next post will feature an excerpt from Chapter 1.

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A Rebel Comes of Age can be pre-ordered from the following links:

• Kobo: A Rebel Comes of Age

• Apple ibooks (iTunes): A Rebel Comes of Age

• Nook Book: A Rebel Comes of Age

• Kindle edition available after Dec 15

 

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