Congress: Extend unemployment to the jobless NOW

Join the push to ensure that our electeds in Washington do right by the people that elected them. Visit the AFL-CIO Day of Solidarity campaign to find out how you can get involved.

Stand up to corporations that attack working families

I’m up to here with corporations that take advantage of working families, and now Del Monte is on my “you-know-what list.” Share the widget document below and pass on the word about the march on Monday, November 22 in Denver to show solidarity with the Del Monte workers whose jobs were cut. It’s a National Day of Action!

Denver Takes A Stand –

The New Robber Barons: The Mortgage Thieves are Back

My friend, Christopher Earle, is an accomplished writer, editor, and photographer living in Englewood, Colorado. His background includes journalism, business writing, technical writing, and procedure writing. He has worked on a freelance basis for NPR and the Associated Press, just to name a few. He spent his early childhood in the Caribbean and has spent 12 of the last 20 years in Asia. He is a progressive thinker, involved in local and national politics, as well as interested in topics ranging from consumer protection to the environment and how these affect regular people.

I’ve asked Christopher to talk to us about a subject that inspires lots of passion in him, the mortgage industry.

Guess who is coming to your mortgage refinance negotiations? According to an article in the New York Times, it’s the man accused in lawsuits, including one filed by the comptroller of New York State, of misleading his investors about risks the company was taking and being well aware of risks of sub-prime mortgages to both his company and homeowners. These unethical mortgage and business practices resulted in the near total collapse of Countrywide Financial and the devastation and destruction of countless lives from the resulting foreclosures.

The man is Stanford L. Kurland, ex-President of Countrywide. The man who sold his interest in Countrywide for nearly $200 million just before leaving the company is now head of Private National Mortgage Acceptance Corporation, d.b.a. PennyMac. The name is appropriate. They’ve been going around buying up, for pennies on the dollar, the same type of delinquent sub-prime loans that Kurland helped create. The loans are being bought from the Federal Deposit Insurance Corporation (FDIC), who acquired them from failed banks. The bank failures were a result of the same type of industry wide greed and lack of ethics he helped foster while at Countrywide.

The financial backing of PennyMac is coming from major players like BlackRock, the investment manager, and Highfields Capital, the hedge fund. In addition, Kurland has put in some of the $200 million he made from the sale of his Countrywide stock just before leaving he left the firm.

PennyMac paid the FDIC $43.2 million for $560 million worth of delinquent residential mortgages. That is 7 cents on the dollar. Did you get that? Seven cents. Although these loans weren’t originated by Countrywide, they are the charred remains of the now insolvent and FDIC owned First National Bank of Nevada. These loans resemble the types that Countrywide once offered, many with initial teaser rates that would go up suddenly, leaving homeowners unable to make the new and “improved” payments. PennyMac is allowed to keep 20 cents of every dollar it collects on the defaulted mortgages. Eventually, they will be allowed to keep 40 cents. They are planning on building their current $800 million dollar portfolio to around $15 billion within the next year and a half. That could translate into nearly $5 billion dollars in additional profits. Profits for the same people who have already made billions from now failed banks and finance companies bought and bailed out by you, me, and everyone else who pays taxes.

The way it is working is like this:  PennyMac buys a $500,000 mortgage from the FDIC for 7 cents on the dollar. This works out to $35,000. They then offer to cut the homeowner’s interest rate from 7% to 3%, cutting the homeowner’s payments almost in half. They can do this because they paid virtually nothing for the loan. They are allowed to keep 40% of the new loan value, which is $250,000. Their return on their investment is $100,000. The FDIC, which is really you, me, and other taxpayers, get $150,000 plus the initial $35,000 that PennyMac paid for the loans. We get $185,000. The interest paid by the homeowner on the initial loan is locked securely away in the bank accounts of people like Kurland, BlackRock and Highfields Capital.

Better than nothing? Sure. The thing is this: Kurland, Countrywide, and the entire banking industry made obscene profits writing these loans in the first place. We are now rewarding them by giving them obscene amounts of money to work as a glorified collection agency undoing the mess they created in the first place. Look at the numbers. The FDIC could hire at a couple of people for $100,000 to renegotiate loans directly with homeowners. We taxpayers wouldn’t get as bad of a deal as we are now getting. We wouldn’t be rewarding the greed of Kurland and his type.
And what of Kurland? It seems fundamentally wrong that he personally made $200 million dollars from writing these bad loans. Now he will make tens or hundreds of millions from cleaning up his own mess. He, and everyone else involved in the sub-prime mortgage mess, should be prosecuted for racketeering. Since that isn’t likely to happen, they should, at a minimum, be banned from ever working in the mortgage or banking industry. Would this be a “brain drain” for the mortgage industry? These people are the ones whose greed created the problem. Are they the “brains” you want in banking and finance? I sincerely hope not.

SCHIP Vote Soon! Call your Reps TODAY!

From the Coalition on Human Needs:

Congress plans to vote on children’s health this week!  Make sure no kid falls through the cracks – Call your Representative & Senators TODAY!

Dial 1-800-828-0498* and ask to speak to your Representative and Senators’ offices.

Tell them: Support reauthorizing SCHIP so millions of uninsured children can get health coverage and remove restrictions delaying coverage for children in need.

Background:
The new Congress has decided to take swift action on the State Children’s Health Insurance Program (SCHIP), the same program President Bush vetoed twice last year. This legislation expands health care for kids who are in working families that make too much to qualify for Medicaid, but who don’t make enough to afford private insurance.

The House of Representatives could vote as early as tomorrow, January 14. The Senate will soon follow. Once this happens, we hope the two chambers will reconcile their differences quickly – and it should land on the President’s desk soon.

It is critical Congress act quickly. With our economy in crisis, SCHIP is more important than ever. More than 1 million children have lost their health coverage because their parents were laid off and lost their employer-based coverage over the past year. The proposed legislation would provide essential health coverage to those kids already enrolled in the program and allow an additional 4 million children to qualify for coverage.

It is also important that Congress pass an SCHIP bill that addresses existing inequities in our health care system. Currently, legal immigrant children and pregnant women must wait five years before they become eligible for federally funded Medicaid and SCHIP. Congress should include the “Legal Immigrant Children’s Health Improvement Act” (ICHIA) in SCHIP reauthorization to remove this arbitrary waiting period. No child should have to wait five years for basic health care.

*Toll-free and action alert language provided by our friends at Families USA

Sign up for emails from the Coalition on Human Needs at http://www.chn.org/signUp.jsp.

De la Torre: The Bible Demands Economic Justice

I just read a wonderful opinion piece by Dr. Miguel de la Torre, provided to me by Fidel “Butch” Montoya at the H.S. Power and Light Latino Faith Initiative.  De la Torre is a Cuban-American and is the director of Iliff’s Justice and Peace Institute and serves as the associate professor for social ethics.  Dr. De La Torre is also editing the Encyclopedia on Hispanic American Religious Culture, a 2-volume set (ABC-CLIO, 2009), is the series editor for the 12-volume Latino/a Religious Thought for the New Millennium (Baylor University Press), and is on the advisory board of Religous Perspective on Contemporary Ethical Issues (Rowan & Littlefield Publishers).  The article is originally printed at the Associated Baptist Press on January 5, 2009.  Read on:

The Bible Demands Economic Justice

(ABP) — Even before the economy crashed we were using oxymoronic terms like “a living wage” or “the working poor.” Shouldn’t all wages sustain a life? Should those who work remain poor?

Somehow we have moved away from the biblical principle that not paying a living wage is stealing, for we steal from our employees when we extract a full week of labor and refuse to compensate them with the basic necessities to live a full week.

Full-time workers who are paid the legal minimum hourly wage still fall thousands of dollars below the poverty line, thus proving that in this country, hard work can no longer lift the poor from poverty.

Jesus teaches us that the employer has certain responsibilities toward the laborer. Take the biblical parable in Matthew 20:1-16.

One early morning a vineyard owner set out to hire laborers. He found willing workers, negotiated a fair day’s wages (a denarius) and sent them to his fields. Several hours later, he employed additional workers and also sent them to his fields. This process was again repeated at noon, and in the mid and late afternoon. At the close of the day, the vineyard owner first paid those who were hired last and only worked a few hours, using the wage scale offered to those first hired. Some worked all day, some just a few hours, yet everyone got the same amount of money.

Reading this parable from a position of middle-class privilege leads to a spiritual interpretation that reduces the meaning of the parable to symbolism. The denarius signifies grace, which all receive equally regardless as to when they come to the Lord.

Jesus, however, preached this message to the poor of his time, fully understanding that poverty prevented those who were created in the image of God from participating in the abundant life he came to give.

A literal reading of this text reveals that Jesus attempted to teach us economic justice.

These workers had no control over when they would be hired to work. Regardless of when they were chosen, they needed a denarius to meet their basic needs: food, shelter and clothing.

To be chosen to work for only half a day and to be paid half a denarius was insufficient. Half a denarius meant that several family members would not eat that day. Only an uncaring and unmerciful heart will declare it just that these laborers leave without being able to meet their basic needs.

The biblical teaching is that those who are economically privileged, like the vineyard owner, are responsible for those who are not, while laborers are responsible to provide a full day of work unless prohibited by circumstances beyond their control.

Jesus defines justice as ensuring that each worker obtains a living wage, regardless of the hours worked, so that all can share in the abundant life.

Contrary to U.S. capitalist paradigms, it did not matter how many hours a laborer worked. What mattered was that at the end of the day, she or he took home a living wage so that the entire family could survive for another day.

When we consider that Jesus spoke more about money and its use then he did about grace, salvation, heaven or any other topic, we are left asking why churches ignore or avoid dealing with unjust economic arrangements. To continue ignoring economic injustice, or worse justifying it in spiritual terms, threatens our very democracy.

The collapse of the middle class can usher in the collapse of our democratic ideals as the concentration of wealth in the hands of the few imposes their will (through, among other ways available to them, political action committees).

While some of my colleagues of the cloth, from the safety of middle-class privilege, provide some excellent textbook analyses that justify the maintenance of our present economic system, the fact remains that such classroom theories simply collapse when applied to the economic realities of the disenfranchised.

While such pundits may see the cause of poverty to be laziness or buying too much tobacco and alcohol products, the poor realize they are trapped in an economic structure designed to keep them impoverished.

For our economy to work at top efficiency, an “acceptable” unemployment rate is required. Corporate America needs a reserve army of under-skilled and under-educated laborers to keep wages depressed. Not surprisingly, these under-skilled and under-educated laborers are usually people of color.

Full national employment means companies are paying too much to attract and retain employees, which negatively affects their profits. Our economic system is designed to prevent segments of our population from keeping part of God’s Third Commandment, “Six days you shall labor.”

During the ’80s and ’90s, the United States experienced the greatest growth in wage inequality among Western nations, contributing to the smallest (proportionately) middle class among 17 industrial countries. This wage inequality means that the richest nation in the world has the highest percentage among other industrial nations of its residents living in poverty, of which 14.5 million are children. Among all industrial nations, the U.S., at 14.8 percent, has the largest rate of child poverty!

How can this be? During the booming economy (1990 to 1995) when most corporations reported profit increases of up to 50 percent, the average CEO’s pay rose from $1.9 million to $3.2 million, while the average worker, during that same time period, experienced a pay drop from $22,976 to $22,838.

Yet as the doomed middle class continues their downward spiral, do they look toward the economically privileged segments of our society as the cause of the economic plight? No, because they blame downward.

Job loss is attributed to scapegoating (i.e., affirmative action and undocumented immigrants stealing “our” jobs are the culprits du jour) who are offered up as sacrifices to the gods of capitalism, redeeming the privileged of their sin of hoarding.

No wonder the words of the prophet Jeremiah are ignored by “Christian” capitalists today, “Woe to the one who builds their palace by unrighteousness, their upper rooms by injustice, making their compatriots work for nothing, not paying them for their labor.”

To make matters worse, we have moved away from any resemblance of true capitalism as this present economic crises continues the strategy of socializing losses while privatizing profits. The sight of corporate leaders of the automotive industries sitting before Congress asking for a bailout best demonstrates this point.

Their bailout, through the use of taxpayers’ funds, spreads corporate losses among all of us. Yet to suggest that any profits they might eventually make also be spread among the taxpayers would raise accusations of communism. Why is socialism acceptable when we talk about bailouts but not profits?

It is inconceivable for me to understand how any minister who reads the biblical text, specifically the message of the prophets to assist society’s most vulnerable members (the widow, the orphan, the alien), can choose to make a preferential option for the rich by accepting another’s suffering as necessary for the general good. But I must be patient. For you see, I too once fused and confused fancy abstract economic theories with religiosity to justify my own privilege.

For 13 years I ran a real-estate company of 100 agents. I founded it when I was 19. I paid the minimum wage to my seven-year secretary while company earnings soared to six figures.

I shook my head in disbelief when she used her 18-percent-interest-rate credit card to pay for her son’s medical bills (I refused to provide health care).

Supply and demand justified my stealing of her labor, based on the fact that desperate and plentiful replacements gratefully sought the chance to catch scraps from my bountiful table.

May the Lord forgive the sins of my youth, for even though I was a deacon at my Baptist church, it wasn’t until I made a preferential option to be in solidarity with the poor that I found my own salvation. My penitence is to fight for economic justice for those who lack voice.

Please join me in the call for a living wage, even in these difficult economic times, so that the words of Jesus could be fulfilled, “The worker is worth their keep (Mt 10:10).”

-30-

– Miguel De La Torre is associate professor of social ethics at the Iliff School of Theology in Denver.