Banks get paid first

Something going on every night this past week. The usual bell choir rehearsals on Monday and Tuesday. Church meeting on Wednesday. On Thursday off to see the simulcast of the taping of the NPR show Wait, Wait, Don't Tell Me which was a lot of fun (though one ponders those familiar radio voices go with those faces?). And an orchestra concert last night. This morning was another bell rehearsal (concert tomorrow). And a People's Assembly this afternoon. I took notes (I'll have to remember to take pen and paper next time).

The assembly was held at Central United Methodist Church in Detroit. We were welcomed by Ed Rowe who said the meeting was very much the business of the church. I like his concept of church.

The first program host was Debbie Johnson. She characterized the current state of things as a war having been declared by the rich on the poor.

The first speaker was Helen Moore, an attorney and public education advocate. She talked about how education is set up so that "No rich child left behind" -- all others made ready for prison. The Detroit school system has been devastated. When the residents fight back (and win court cases) the law changes and they must start over. She handed out a fact sheet about the Education Achievement Authority (EAA), the current darling of Gov. Rick Snyder. This is a school system created out of the "worst" 15 schools in Detroit and Snyder is hot to take it statewide, to take over failing schools. But, according to the fact sheet, the teachers are inexperienced (those who bother to stay), lesson plans are revised for special needs students without parent consultation, the buildings have a high rate of violence with insufficiently trained staff to counter it, the students aren't learning, and the money to pay for it all is being sucked out of the regular Detroit Public Schools.

Next came Aliya Moore (don't know if related to Helen). She is a mother of a student in one of the more successful Detroit schools and one that serves special needs kids. It is being closed and students sent to nearby schools that are in worse shape and not set up for special needs.

Rev. Bill Wylie-Kellerman is the pastor of St. Peter's Episcopal Church in the Corktown neighborhood of Detroit. He says that one of the ideas of Milton Friedman was Disaster Capitalism (though Friedman didn't give it that name). A disaster (such as Hurricane Katrina) is an opportunity to impose (perhaps through violence) restructuring on an economy (and you can guess, from Friedman's Libertarian leanings, who that would benefit). Wylie-Kellerman says that conservatives have expanded that idea -- no convenient disaster? Make one. A lot of Detroit's problems are manufactured.

A young man (a lot of people were delighted to see someone young) by the name of B. Anthony works with cooperative economics. He said that banks are a power and that he has been following the money. He finished with a rap on what the banks are doing to us and what we need to do in response. While he (and everyone else) spoke I was thinking about powers as oppressors (something I've been linking to frequently lately).

A young woman with the name At Peace has been working as a youth organizer. Teens are wondering how they fit into the world. She guides them into creating and performing songs as a means of taking charge of their lives and challenging powers. She sang one of those songs.

The second host was Andrea Egypt. She said the city was sucked into a predatory lending deal and city services were offered up as scapegoats.

A generous round of applause welcomed Vanessa Fluker, a people's foreclosure attorney. She reviewed the mortgage disaster -- predatory lending was pushed to minorities in which deals were designed to fail (documented by Sen. Carl Levin). The banks bet against their bad loans, crashing the economy and sending many mortgages underwater. In the deal the gov't worked out to bail out the banks, they get full price of the mortgage (plus fees) only if they foreclose on the house. No wonder there is no incentive to negotiate. These banks then don't pay property tax, they don't keep up the property (many times stripping it), and thereby crash the property values of the neighborhood. Investors buy up these houses for dirt-cheap prices and become landlords. The original residents are ruined. The gov't is perfectly fine with all this, including the judicial system. The solution: Take to the streets first. Then the laws will change.

JoAnn Watson of the Detroit City Council spoke next. She's quite the firebrand. She connected several problems together (I wasn't quick enough to list them all) and said it is all about the same people getting paid. The problem is much bigger than Detroit and much bigger than the current USA government.

Another firebrand and angry speaker was Abayomi Azikiwe. He is angry that the media has ignored that this mortgage mess has driven 237K people from Detroit -- that's one quarter of the population. He is angry that citizens overturned the Emergency Manager law and the legislature promptly reinstated it and made it so we can't overturn it. He is angry because many conservatives claim that workers and people of color are not able to govern themselves, so we had better take that away from them.

Michael Shane is part of the group that used Freedom of Information Act requests to look into Detroit finances. They had to go to court to enforce it and got 3000 pages. They know there is more hidden in the records and are prepared to sue to get the rest. Of course, the office to handle FOIA requests is understaffed. Shane readily admits he doesn't understand all the deals. He is fortunate a union (he wouldn't name which one) and a law firm volunteered services and accounting expertise to explain it all. They're still figuring it out, but what they've seen so far he says shows criminal intent. That law firm got involved because they expressed delight in suing the banks. The documents are at Detroit Debt Moratorium.(actually in a Google Docs folder so you must have a gmail account to see them).

Shane had a PowerPoint presentation, complete with charts and graphs. All those subprime loans (the heart of the mess) were popular with banks because they generated 8 times more profit than regular loans. But they're based on massive fraud (which, as mentioned, Levin documented -- you can ask Levin's office for a copy). But nobody has been prosecuted for those crimes. As Eric Holder has said, the banks are too big to jail. So, those fraudulent loans (and the incentives to foreclose) hit 67K homes in Detroit -- 20% of the total housing stock. These banks own so many homes they owe $57M in property taxes (though many times they evict then "forget" to fill out the paperwork for ownership -- can't be taxed for what you don't own -- creating a zombie owner that haunts the evicted party). These same banks put together a deal to help the city deal with the shrunken tax base. I can't tell you the details, other than to note Shane says it was fraudulent.

The city has been taken over by an Emergency Manager. The law installing him says (1) the city must live within its means, (2) the banks get paid first, and (3) the EM has authority to rip up all existing contracts (such as with unions). This is a recipe for sucking all remaining value out of Detroit. It means there is money only for paying the banks. The city would have enough money for everything that's needed if it didn't have to pay these fraudulent deals.

Though the EM is forbidden to prosecute those fraudulent deals, the unions and lawyers are not. They're still building the case. Unions and other financially messed up cities are paying close attention, and helping out where they can.

Yesterday, Roy Roberts, the second Emergency Manager for Detroit Public Schools (not to be confused with the EM for the city), has resigned. The district's finances are better than when he started 2 years ago, but still not balanced. Shane says that departure was prompted by a comment Roberts made, that Roberts was hired specifically to "blow up the district and dismantle it." That leaves behind charter schools (for profit) and the EAA to educate Detroit's kids. Now remember that comment about, "No rich child left behind."

Something for your calendar: Detroit Eviction Defense has convinced leaders of Fannie Mae and Freddie Mac to come to Detroit to see the damage they've done, then face the people. A People's Hearing will be on Monday, May 20 at 4-6 pm at UAW Local 600 Hall, 10550 Dix Ave at Wyoming, Dearborn.