Ponzi schemes are illegal-unless they’re run by Wall Street bankers delivering fat profits to wealthy speculators. Then such scams are legal, unregulated, and have respectable banker monikers like “subprime mortgage pools.”
The ongoing collapse of the subprime loan scheme has been widely reported, including stories about millions of foreclosures, billions of dollars in losses, and even a couple of Wall Street CEOs getting the boot. Less attention has been paid to one group of Americans who had no role in the scam, yet now find themselves homeless as a result of it: renters.
Across the country, landlords took out big loans with adjustable interest rates to build apartments-especially in low-income areas. When interest rates zoomed up, landlords began defaulting on these loans. Renters are suddenly getting eviction notices from faraway corporate strangers. Unbeknownst to tenants, the landlord mortgages were sold by local lenders to some investment pool created by a Wall Street bank, which resold the loans to faceless investors.
When the landlord defaults, the new owners of the apartment complex are the investors, living in places like Hong Kong, Hollywood, and Go-To-Hell, Texas. These are not people who’re going to deal with your plumbing problems. The investment pool puts the property up for sale, abrogating leases and tossing out tenants on the theory that vacant buildings are easier to sell.
When Ponzi schemes like this are on the rise, the money flows to the top. When they collapse, the trouble rushes to the bottom. U.S. Rep. Barney Frank, a Democrat from Massachusetts, plans to introduce federal legislation to help renters who are finding the subprime loan scam crashing down on them.
It’s another Olympic year-that quadrennial spectacular of athletic prowess, international goodwill, and government spying on all who attend.
The government this time around is the authoritarian regime of China. Like those in all host countries, Chinese leaders are eager to put their best foot forward by building world-class sports facilities, removing poor people and beggars from sight, and generally putting polish on everything.
But look around. Isn’t that a surveillance camera up there, over there, and back behind you, too? The host city, Beijing, will have almost as many cameras as visitors-and there has been a gold rush of U.S. corporations to get the multimillion-dollar contracts to set up high-tech surveillance before the summer games.
Honeywell International Inc. is working with state police to install elaborate, computerized monitoring systems to analyze feeds from cameras throughout one of the main Olympic areas. General Electric Co. has sold China its powerful VisioWave system, which allows authorities to control thousands of video cameras simultaneously and automatically alerts authorities to “suspicious” behavior. IBM Corp. has provided a computer system to analyze and catalogue people’s movements.
Officials claim this surge in techno-spying is necessary to protect visitors from terrorists. The system’s targets seem more likely to be democracy activists and dissidents. Cameras are to be installed, for example, in Internet cafes, places of religious worship, and even in the Olympics media center. When the games and visitors leave, the see-all spying apparatus will remain in place.
In the interest of quick profits, Honeywell, IBM, GE, and the rest are putting an American imprimatur on Chinese authoritarianism, providing the regime with the most advanced tools of repression. Not exactly the Olympic spirit, is it?
SICK AND SICKER
Our country faces a growing health care crisis that leaves 47 million Americans with no health insurance-an increase of 7 million since 2000. But the crisis is also hammering the growing number of insured families who find themselves paying more and more money for policies that deliver less and less care. Out-of-pocket costs for health coverage are skyrocketing-some 61 million Americans are now in families that will spend more than 10 percent of their incomes on medical costs this year, according to a recent report by Families USA, a nonpartisan advocacy group. That’s a jump of nearly 20 million people since 2000, and the vast majority of them have insurance. More astonishing is the finding that nearly 18 million Americans are in families now spending more than 25 percent of their incomes on health costs.
Meanwhile, credit card debt continues to pile onto the backs of American families, and there’s now a worrisome surge in the number of serious delinquencies and defaults. That matters, because more and more financially squeezed families have been paying their ever-rising health care bills with credit cards.
These interrelated facts explain why American voters are telling pollsters and politicians that access to affordable health care is their No. 1 domestic concern in this year’s elections. Not only does a large majority want the federal government to guarantee that every American has health coverage, but 60 percent say they are willing to pay higher taxes to get it done.
For more information on Jim Hightower’s work-and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown-visit www.jimhightower.com.