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‘Bail out the people, not the banks’

Occupy foreclosed homes!

Published Oct 30, 2011 10:49 PM

Jerry Goldberg
WW photo: G. Dunkel

Taken from a talk by Jerry Goldberg, a Detroit WWP organizer, at the Oct. 8-9 Workers World Party National Conference in New York City.

While the economic crisis is a product of low-wage capitalism, it was the action of the banks, inducing millions of workers to sign over their homes in mortgage refinancings through a criminal enterprise based on fraud and deceit, that staved off the crisis for a number of years by artificially pouring trillions of dollars into the economy, and then caused the bubble to burst with the crash we are still experiencing.

As a result, an estimated 9 million families will have lost their homes to foreclosure from 2009 to 2012 — another 13 million face potential foreclosure in the future. The total lost home-equity wealth due to foreclosures is expected to be $1.9 trillion for the years 2009-2012. Foreclosures this year alone are expected to total a record 3.8 million homes. The oppressed communities were especially targeted with predatory, racist, subprime and exotic loans, and are suffering from the complete collapse of housing values, which was the fundamental repository for what wealth may have existed.

When the housing crash hit, the banks, every one of which was a participant in the criminal conspiracy, had their losses covered first by the 2008 $700 billion TARP bailout. But what is less exposed and even more significant is the continuing bailout engineered through the federal takeover of Fannie Mae and Freddie Mac.

In 2008, Fannie Mae and Freddie Mac, which had formerly been quasi-governmental agencies established to back mortgage loans, were taken over by the federal government. Fannie Mae and Freddie Mac began purchasing toxic and failing mortgage securities, paying full price to the banks and financial instruments for mortgages that in fact had lost 50 to 75 percent of their value.

This bank bailout — which will cost taxpayers between $389 billion and $1 trillion — means Fannie Mae and Freddie Mac, along with HUD [Department of Housing and Urban Development], now control about 75 percent of all mortgages. When your home goes into foreclosure, the government pays the bank the full amount of your fraudulent loan, and then it’s the government that throws you out of your home. Incredibly, the federal government through Fannie and Freddie is actually more aggressive than the banks in pushing foreclosures and less willing to reduce principal on loans.

People before ‘banksters’!

It’s time to insist that this nationalization of the housing market be utilized to benefit the people and not the banks. Since the government controls 75 percent of mortgages, President Obama has the absolute authority to put an end to foreclosures by executive order, implementing a moratorium on foreclosures that would allow families to remain in their homes based on whatever they can pay. We need to implement this moratorium just like the unemployed councils won foreclosure moratoriums in 25 states during the Great Depression: by direct action to stop evictions, moving the furniture back in when the bailiffs remove it.

Fannie Mae and Freddie Mac owned 242,000 empty homes as of June of this year as a result of foreclosure-related evictions, and this number grows every day. We paid for these homes. They belong to the people. The Occupy Wall Street movement has every right to take over all these homes, turn them over to the homeless, and demand a federal jobs program to train youth to repair them and insure their viability.

In addition, why should the same banks that destroyed the tax base of governmental units at every level have first claim on taxpayer dollars to pay off debt service while public services are destroyed and public workers are laid off? In Detroit, property values have declined by an average of 75 percent due to foreclosures with a resulting decimation of the tax base. Yet, 80 percent of state school aid goes to the same banks that destroyed the city to pay off debt service, while schools lack funds to pay for toilet paper. Casino tax dollars, hailed as the savior of the city, go to a trustee to be turned over to the “banksters.”

We need to join with workers and oppressed people from around the world, from Greece to Latin America, in demanding a moratorium on debt service to these criminal banks.

The Occupy Wall Street movement provides an opening to raise these demands and take direct action to demand that the government “bail out the people, not the banks” as a transition to eliminating the capitalist system and creating a socialist world where the capitalists are relegated to the dustbin of history where they belong, and people’s needs dictate the agenda.