“A crisis of credit, housing and jobs” is confronting the country today, warned Marc Morial, president of the Urban League, at the Congressional Black Caucus Town Hall meeting. Several hundred people gathered to hear panelists address the ongoing crisis and its repercussions. The meeting was held under the theme, “Foreclosure Crisis: Reasons, Repercussions and Real Solutions. Morial continued, “What we need is a program to rebuild America, a Marshall Plan to rebuild cities, bridges and infrastructure.”
Over 2 million homes are now in foreclosure with no end in sight. A bill to address the foreclosure crisis was to have been discussed by Rep. Barney Frank (D-Mass).
Panelists spoke directly to origins of the current worldwide banking crisis as lying in “predatory loans” deliberately directed at Black and Latino home buyers. Predatory loans were defined by the meeting as loans three percent higher than those given a bank’s normal customers. Such loans initially begin with low interest payments that balloon after a short period to much higher rates along with big penalties for early repayment. “Banks take advantage of the ‘financial illiteracy’ in the Black community,” said one panelist, who went on to indicate that many don’t read the fine print.
Jarvis Tyner, CPUSA executive vice chair was in the audience and remarked, “We used to always say, racism was the Achilles Heel of capitalism. With the sub-prime crisis causing an international banking meltdown, we can see why.”
The sub-prime crisis has precipitated the largest wealth loss in African American and Latino history. According to Mike Calhoun, president of the Center for Responsible Lending, in a recent study, “almost half of all African American family mortgages are sub-prime mortgages.” “These sub-prime mortgages go into foreclosure at 21 times the normal rate, commented CBC panelist Kenneth Wade, chief executive officer of NeighborWorks America, a nonprofit established by Congress in 1978.
Former co-chair of the McCain campaign and still close adviser Phil Gramm is known to have been intimately involved in the deregulation of the banking industry that began those loan-sharking practices in the first place. The Gramm-Leach-Billey Act repealed the previous regulation that had governed banking in 1999. However, Gramm’s role didn’t end there. Politico.com notes “A year after the Gramm-Leach-Bliley Act repealed the old rules Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm.”
George W. Bush’s much touted “ownership society” was the slogan under which the banking schemes were manipulated noted panelists.
Morial warned of an October surprise: ‘King’ Henry Paulson dropped “an economic nuclear bomb 40 days before the election.” “We don’t want to find out that we are victims of ‘financial mustard gas’ that may have been a ‘mirage,’” he warned.
The Urban League president concluded. “We have to have the highest turnout in our history in the midst of this crisis. Some will use deceit to try to discourage the vote. It is really important to register before the deadline.”