What US Collapse Looks like

USA on the Brink: Poverty in the Pandemic

 

Directed by Kristell Bernnaud and Matthieur Faurous (2020)

 

Film Review

 

USA on the Brink recounts how more than a million middle class Americans fell into poverty virtually overnight at the start of the Covid “pandemic” in March 2020. At the time of filming (in mid-2020) more than 2 1/2 million Americans had lost their jobs, with many losing their homes and struggling to feed themselves.The French filmmakers begin with some great scenes of thousands of cars (many luxury cars) lined up at a Los Angeles foodbank.

Producing a 33% drop in GDP, the Covid pandemic triggered the worst US recession since the Great Depression. As the lockdowns forced many restaurants into bankruptcy, many farmers also went bankrupt when lack of demand caused the price of milk and other food commodities to collapse.

Filming prior to the September 2020 eviction moratorium, the filmmakers also present heart breaking scenes of sheriffs evicting jobless tenants unable to pay rent with no paycheck. In Columbus Ohio, the eviction court works directly with a local charity that helps newly unemployed families avoid eviction by paying their back rent. In Missouri, a similar charity puts newly evicted families up in hotels.

At the time of filming 156,000 people were homeless in California, with the number expected to increase by 30% by the end of the year. One solution near Los Angeles is to offer families living in their cars a secure parking lot to sleep in.

In Midland Texas, viewers are is introduced to a Latino family who have no health insurance after losing their business and owe $11,000 for a hospital bill when their son breaks his arm.

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*The movie was filmed prior to the CDC’s Eviction Moratorium went into effect on September 4, 2020. It expired on July 21, 2021, when the Supreme Court blocked an effort by the CDC to extend the moratorium to October 3, 2021. Several states passed their own eviction moratoriums.

Greeks Fight Back Against Austerity and Fascism

Love and Revolution

Directed by Yannis Youlountis (2018)

Film Review

Love and Revolution is about the growing anarchist movement fighting Greece’s deepening austerity cuts (which have cut salaries and pensions in half and ended health care access for a million patients). The film consists mainly of interviews with anarchists over the specific projects they are organizing. The documentary emphatically challenges the recent announcement by the IMF and the European Central Bank that Greek austerity has ended. After years of brutal austerity resulting in thousands of deaths, the Greek government is further than ever from repaying its debt to European bankers.

Among the projects that most impressed me are

• a social kitchen that regular provides free meals on the street.
• an anti-eviction movement that has been by occupying and shutting down eviction hearings at the District Court.
• an ongoing squat that has provided accommodation to more than 6,000 refugees in the last five years.
• an antifascist campaign that has shut down Golden Dawn* offices in Athens and established Exarcheia, a fascist-free zone that also effectively excludes Greek police.
• a campaign to block the construction of a new airport in a pristine rural/agricultural area.
• a YouTube channel dedicated to Greek news from the viewpoint of anti-austerity activists, rather than police and banks.

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*See Greek Austerity and the Rise of Fascism

Hidden History: The Great Depression, Henry Ford and Detroit’s Unemployed Workers Councils

1929 The Great Depression Part 1 – A Job At Ford’s

PBS (1993)

Film Review

This is Part 1 of a fascinating 7-part PBS series on the Great Depression, one of the many topics Americans never study in school. The series reveals much hidden history unfavorable to the ruling elite – I doubt that PBS would air documentaries this honest in the current political landscape.

This first episode examines the rapid US industrialization of the 1920s, exemplified by the stellar growth of Ford Motor Company.

Henry Ford’s goal in perfecting assembly line manufacturing was to produce Model T’s so cheaply they would cost less than a team of horses. Ford’s River Rouge complex in Detroit was the largest industrial plant in history, employing 50,000 workers and producing 6,000 cars per day. The availability of credit, another new phenomenon, to purchase cars and other durable goods also played a major role in post-World War I expansion.

Squeezing Workers to Cut Costs

By paying the unprecedented wage of $5/hour, Ford attracted workers from all over the US and Mexico. Over time, however, he cut the hourly wage and sped up the assembly line to further reduce costs. He also created an extremely repressive private security force that relied on 9,000 worker/informants to weed out employees who couldn’t keep up or expressed anger and/or frustration with the speed-ups.

Detroit’s Unemployed Workers Councils

Following the Wall Street crash in October, 1929, the US was the only industrialized country without a government safety net (eg unemployment insurances, old age pensions, welfare benefits, etc) for the millions of Americans who lost their jobs. President Hoover believed the solution to the Great Depression was to increase business investment (and production)* and called on charities and local government to provide relief for homeless and starving families.

The city of Detroit provided relief to destitute families for over a year but ran out of money as unemployment climbed from 20 to 50% in 1930. It climbed to 80% in August 1931, when Ford closed his factory and laid off 60,000 workers.

Assisted by Communist Party organizers, Detroit’s unemployed workers formed a dozen unemployed workers councils, which organized marches and rallies demanding jobs, unemployment compensation and protection against evictions.** The councils also organized direct actions to block sheriff’s officers from removing families’ furniture from their home.

In March 1932, 3,000 unemployed workers organized a hunger march on the Ford factory. In addition to using fire hoses to spray them with freezing water, local police and Ford’s private security force shot 25 of them (many in the back). Four, including a New York Times photographer died instantly.

Ford’s Anti-Semitism

This episode also explores Ford’s anti-Semitic writings in the Dearborn Independent and his book The International Jew, as well as the mutual admiration he and Adolph Hitler shared. It fails to mention the considerable direct and indirect assistance Ford provided the Third Reich in rebuilding the German military machine. See Ford and the Fuhrer

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*Hoover’s views flew in the face of most economists, who viewed the Great Depression as a crisis in overproduction and under-consumption.

**At the height of the depression, 150 Detroit families were evicted everyday and someone died of starvation every seven hours.

Homelessness: The Low Income Housing Scandal

Poverty in America

Frontline (2017)

Film Review

Poverty in America is about the massive corruption scandal behind homelessness and the dearth of affordable housing for low income Americans.

Despite the nearly ten years that have passed since the 2008 economic crisis, 2.5 million Americans are made homeless through home eviction every year. The limited stock of affordable housing has no way of absorbing this many new renters. This, in turn, drives up rents at a time when real wages are decreasing. In many cities, families are forced to pay over 50% of their income in rent – a precarious situation leaving them one family emergency away from the streets.

This documentary focuses on two grossly inadequate federal programs dedicated to increasing access to affordable housing. The first is the Section 8 voucher program enacted in 1968. Under this program, the Department of Housing and Urban Development (HUD) awards vouchers to low income renters that pay the different between the rent a landlord charges and the rent a tenant can afford based on income.

There are currently 2 million Americans on the waiting list for Section 8 vouchers and only 25 percent will ever receive vouchers. The filmmakers follow three women who have waited six years or longer to qualify for Section 8 vouchers. None of them can find a landlord willing to accept their voucher within the 90 day limit they are given.

The second federal program Frontline explores is one in which the IRS allocates tax credits to states to grant to developers – who, in turn, sell the credits to investors. An entire tax credit industry has grown up around this scheme. Owing to inadequate IRS monitoring (only seven companies have been audited in 29 years), the scheme has been plagued by bribery and kickback scandals.

In Florida, for example, developers routinely cheat the program by over inflating the cost of development projects and either pocketing the difference of siphoning it off to shell companies (including one in Costa Rico specifically created for this purpose).

Despite heroic efforts of a handful of Department of Justice attorneys and Senator (R) Charles Grassley from Iowa, there seems to be little interest on the part of federal or state authorities to end this corruption. The IRS and HUD declined to be interviewed for this program.

New Hope for Underwater Borrowers

 

One for Our Side

Anti-eviction activists were thrilled with a November 25 ruling by the Federal Housing Finance Administration (FHFA), which seems to reverse the position taken by the Obama administration in federal court. Prior to the new ruling, homeowners foreclosed by Fannie Mae or Freddie Mac (the Enterprises)* found themselves in the painful position of watching their foreclosed homes being sold for much less than they paid for them.

Deadbeat Homeowners vs Deadbeat Banks

As the 2008 economic collapse caused over inflated real estate values to plummet, more than a fifth of all mortgage holders (7.5 million) discovered that – through no fault of their own – they owned more on their mortgage than their property was worth. By December 2013, the percentage of underwater (aka negative equity) mortgages had decreased to 13% (6.4 million)  By December 4, 2014, thanks to an October “rally” in home prices (i.e. new real estate bubble) , this figure had dropped to 8% (4 million) .

Prior to the new ruling, both Fannie and Freddie (both owned by the taxpayer since they were nationalized** in September 2008) required homeowners who had been through foreclosure and wanted to buy their home back had to pay the entire amount owed on the mortgage. The Enterprises argued that allowing former home owners to repurchase their homes at the true (lower) market value created a “moral hazard” because it encouraged deadbeat home buyers to default on their mortgage to repurchase their property at its real value. I find this really rich, given that it was deadbeat banks and mortgage companies who caused the economic downturn to begin with.

Thanks to the new FHFA policy, both Fannie and Freddie must now permit the sale of existing real estate owned (REO) properties to any qualified purchaser (including the former owner) at the property’s fair-market value.

Old Policy Violated Massachusetts Law

A year ago, two Massachusetts residents filed suit against Freddie Mac, with the support of the Boston anti-eviction group City Life/Vida Urbana, for violating a Massachusetts consumer protection statute that explicitly forbids this type of refusal. On November 18, the Obama administration argued that state laws are non-binding on Fannie and Freddie while they’re under federal receivership. Extremely unfavorable publicity may partially explain the FHFA’s surprise ruling a week later. Now that the pressure of mid-term elections has passed, it’s quite a safe lame duck type decision.

City Life/Vida Urbana

City Life/Vida Urbana was first started (as the Jamaica Plain Tenants Action Group) in 1973 to pressure inner city slumlords to property maintain their buildings and to pressure the city of Boston to enact rent control. Since the 1980s, they have also campaigned against property speculation, gentrification and condominium conversion. Since 2008, defending against foreclosure and other evictions has been their primary focus. Joining forces with Occupy Our Homes, which grew out of Occupy Wall Street, they have employed a two prong approach. In addition to helping home owners fight fraudulent foreclosures legally in court, they also organize local activists to block evictions through mass occupation and civil disobedience in foreclosed homes. In many cases, the negative publicity this generates will pressure lenders to renegotiate more reasonable repayment terms.

Thanks to trainings City Life/Vida Urbana conducts across the US, many communities are starting grassroots anti-eviction organizations.

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* Roughly half of all US mortgages are held by two government sponsored enterprises (GSEs), nicknamed Fannie Mae and Freddie Mac because federal bureaucrats kept getting the two confused. The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, was founded in 1938 under the New Deal. Its purpose was to expand the secondary mortgage market. The latter attracts new capital for mortgages by buying mortgage loans from banks and bundling them as securities to on-sell to pension funds, insurance companies and hedge funds. This allows lenders to reinvest their assets in more lending, theoretically increasing the supply of funding available for home purchases. Fannie was privatized in 1968 to become a publicly traded company. The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a publicly traded GSE created in 1970 to further expand the secondary mortgage market.
**On September 7, 2008, George W Bush nationalized Fannie and Freddie by placing them under FHFA conservatorship and causing them to issue new senior preferred stock and common stock warrants to the US Treasury amounting to 79.9% of each GSE. In 2010 both were delisted from the New York Stock Exchange after Fannie’s stock traded below $1 a share for over 30 days. Since 2010 both stocks have continued to trade on the Over-the-Counter Bulletin Board.

photo credit: Mike Licht, NotionsCapital.com via photopin cc

Also published in Veterans Today

Corporate Predators Invade San Francisco

Guest blog by Steven Miller

 (This is the 5^th of 6 guest posts in which Miller discusses the corporate vultures descending on the Bay Area)

San Francisco’s Invasion by Corporate Predators – Part V

These are the best of times…. or so it appears. San Francisco is succeeding Detroit as the pre-imminent manufacturing city in America… except it does not manufacture tangible products. This development is amazing, since the city is isolated on a peninsula and never developed a large manufacturing base in the Industrial Era. For decades a Western center of finance, San Francisco is becoming the center of the high-tech industry, which produces intangible digital products, an extension of Silicon Valley 50 miles south.

The city’s population is over 800,000, the highest in history, as tech workers flood the city. Carl Guardino, president and CEO of the Silicon Valley Leadership Group notes that well over 100 of his 391 member companies “either have headquarters or a strong physical presence in San Francisco”. (15)

The economy of the Bay Area has reached pre-2008 levels, but with 200,000 fewer jobs. The difference is in the greater use of electronic technology, which inevitably means laborless production.  (16)

In this respect, the economies of San Francisco and Detroit are moving in the same direction. This trend, reflected throughout the US and the world in general, gives the lie to glib pronouncements by politicians that they will create more jobs. The hard reality is that there will be fewer and fewer jobs because technology needs ever fewer production workers.

Electronic technology is now so productive that it no longer requires people work 40 hours a week. Thus corporations are engineering Temp World right before our eyes. Part-time workers, permatemps, precariats, contingent workforce, outside contractors, flexible contract workers, personal entrepreneurs – the names change, but a new model of work is being imposed. (17)

One of the city’s vaunted hi-tech start-ups is Task Rabbit, where someone posts a job on line – anything from moving a couch to creating a website – and a mob of desperate workers, many with advanced degrees, compete to place the lowest bid. This is the hi-tech version of the day laborer shape-up that happens every morning as construction workers, mostly without papers, battle each other to work for contractors. This trend reflects capitalism’s latest production model of outsourcing production through chains of sub-contractors.

At the other end of the pole, well-off techies have suddenly discovered the wonders of capitalism and wax profound about the libertarian virtues of a society where everyone free-lances. Though they believe they are creating the new glamorous world of work, they are simply establishing the visionary model of capitalist work in the electronic era, articulated in the 1994 Fortune Magazine article “The End of the Job”:

“As a way of organizing work, the traditional job is becoming a social artefact, created in the 19th century and well suited to the demands of a newly industrial world, but poorly adapted to a fast-moving, information-based economy. Its demise confronts everyone with unfamiliar risks — as well as rich opportunities.”  (18)

Laborless production generates the polarization of wealth, the polarization of the job market and the polarization of society. Techies can afford to pay super-high rents. Immediately after the Melt Down, a massive wave of evictions swept the country. Many of these have been shown to be completely illegal. Now a new wave of evictions is being implemented across the city, leading to the eviction of working class families across the city. Evictions of entire buildings for purposes of sale are up 170% since 2010. (19)

Rebecca Solnit describes the Google buses that roam the San Francisco, picking up tech workers to carry them to Silicon Valley, “Most of them are gleaming white, with dark-tinted windows, and some days I think of them as the spaceships on which our alien overlords have landed to rule over us. (20)

The new evictions really reflect the penetration of speculation through the economy. Wall Street’s new campaign is to turn rental homes into cash cows! The banksters caused the 2008 Meltdown by bundling predatory mortgages together as “a security” that could be bet on, either for or against. Now they are securitizing rents themselves to serve as fodder for the new amped up Casino Economy. When the next crash hits, will Americans again be so gullible to accept the “too big to fail” line once again?

Dave Ransom reports on how this is going down in the San Francisco Bay Area:

“Oakland-based Waypoint Homes, for instance, calls itself “a next generation real-estate company.” It holds title to more than a thousand homes. And it is attracting serious capital to buy several thousand more—$2 billion from Silicon Valley venture capitalists and real-estate investors.

 “Waypoint buys foreclosed homes from banks or in auctions on the courthouse steps, generally at a steep discount. After fixing them up, it rents them out for a good deal less than the original mortgage payment.

 “That sounds good until you realize that, if the banks had offered the families living in the homes the same deal they offered Waypoint, those families could probably have avoided foreclosure entirely.

 “This spring, the Obama administration announced a plan to sell foreclosed homes owned by the government’s housing agencies—Fannie Mae, Freddie Mac, and the FHA.

 “But the hedge funds and private-equity firms are pressuring the administration to offer them cheap financing and guarantee they will be bidding on lots of as many as a thousand homes at a time.

 “Who currently holds the mortgages to these homes? We the People do—the 99%. Fannie Mae, Freddy Mac, and the FHA—all government backed and bailed out by the taxpayers—hold half the country’s mortgages, dumped there by the banks when the housing bubble burst.  (21)

Thom Hartman describes the same phenomenon nationally in his book The Crash of 2016:

“Among the firms and big banks buying up America’s real estate is the Blackstone Group, the largest private equity firm in the world. The Blackstone Group alone has bought nearly 40,000 houses across America, spending $7.5 billion in the process.

“Blackstone, for example, bought 1,400 homes in Atlanta in one day, and owns nearly 2,000 houses in the Charlotte, North Carolina metro area.

“So why are Blackstone and other Wall Street firms buying up foreclosed homes all across the country? It’s simple. By renting these homes back to Americans, and securitizing America’s home-rental market, they can bundle up rental payments the same way they used to bundle mortgage payments, and sell them to investors.”

“The predators are again up to their old tricks. Nothing has changed.” (22)

This is madness! The speculative section of capitalism is in the driver’s seat, but the only solution they can offer to any problem is… more speculation. They use carbon futures to speculate on the very atmosphere, and intend to make a profit all the way through Global Warming and the end of human society, as we know it.

References and Resources

15)  Patrick May, “Is it now the ‘Silicon Bay Area”? Oakland Tribune. 11-13-2013

16)  Caroline Said. “S.F. Bay Area economy thriving despite challenges”. 3-17-2012

17)  NPR Staff. “A ‘Permatemp’ Economy: The Idea Of The Expendable Employee”. January 28, 2013

18)  William Bridges. “The End of the Job”. Fortune. September 19, 1994

19)  SF Chronicle. City Insider. 12-29-13

20)  Heather Knight. City Insider, SF Chronicle, 12-15-2013

21)  Peoples’ Tribune, October, 2013

22)  Thom Hartman. “Are the Bankers Now Setting Up the Crash of 2016?” 12-3-2013

To be continued.

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Steven Miller has taught science for 25 years in Oakland’s Flatland high schools. He has been actively engaged in public school reform since the early 1990s. When the state seized control of Oakland public schools in 2003, they immediately implemented policies of corporatization and privatization that are advocated by the Broad Institute. Since that time Steve has written extensively against the privatization of public education, water and other public resources. You can email him at nanodog2@hotmail.com

Originally posted at Daily Censored

photo credit: Wikimedia Commons