…we’ve got a crisis that’s approaching, and it’s a crisis in two parts. Part of the crisis is for Wall Street, and we’re not really worried about that part. These for-profit colleges, which collect between them $32 billion in federal student aid money of one kind or another, these are actually not educational institutions. They are set up as pass-throughs for those federal monies. And so the absence of these institutions may in fact be a very good thing. They sap what little economic vitality is left in poor and black communities by stringing out people on years of debt and giving out diplomas, when people do manage to graduate, that aren’t worth much in the workplace.
…the other part of the crisis is the one that hits those people who are the students who have flocked to these institutions because nobody else was serving them. And that’s why they were a group to be plundered by the shysters headquartered on Wall Street.
For the $1,225 a month she pays for the three-bedroom house in the quiet suburb of Lilburn, Culpepper thinks it isn’t too much to expect that her landlord, Colony American Homes, make the necessary plumbing repairs to eliminate the smell. But her complaints have gone unanswered, she said. Short of buying a plane ticket to visit the company’s office in Scottsdale, Ariz., she is out of ideas.
"You can not get in touch with them, you can’t get them on the phone, you can’t get them to respond to an email," said Culpepper, whose family has lived with the problem since the day they moved in five months ago. "My certified letters, they don’t get answered."
Georgia: still a plantation economy
But Warren, with a grass-roots army of enthusiastic supporters and a yen to deliver on her early promise, makes headlines crossing the street. And the foreclosure review debacle represented an excellent test case to expose the corrupt dealing between banks and the regulators who are supposed to curb their excesses, and also to pit Wall Street denizens getting rich off these crimes against ordinary victims who lost their homes. You couldn’t tee up a better issue for Warren, or a better entryway for traditional media to report it.
Last Thursday’s hearing on the reviews, the first congressional hearing on foreclosure fraud in over a year, provided the perfect set piece. Warren, along with Jack Reed, Sherrod Brown and other Senate Democrats, pounded the regulators for protecting the banks and ignoring homeowners suffering from illegal foreclosures. Warren highlighted that nobody will ever learn the precise extent of harm suffered at the hands of banks, and that without a true accounting, adequately compensating homeowners would be impossible. Brown focused on the role of the third-party consultants who operate as shadow regulators, performing work when the agencies lack capacity, but without any independence from the banks.
Over the last decade, the UC Board of Regents has engaged in risky deals with Wall Street banks called interest rate swaps. Banks sold swaps to the university and other public institutions as insurance against rising interest rates on variable rate bonds. Under a swap agreement, borrowers such as the university paid a fixed rate to the bank in exchange for the bank paying the university a variable rate based on the markets’ interest rates for borrowing.
Now these swaps have turned out to be losing bets. UC is taking huge losses because interest rates plummeted following the financial crisis of 2008 - allegedly in part because of illegal manipulation by the same banks that sold the swaps - and have stayed at record lows. Swap deals already have cost UC nearly $57 million, with $200 million more in losses anticipated. Of the $250 million UC expects to receive from Prop. 30, some $10 million a year will go to swaps payments unless the deals are ended.
In other words, the UC Regents forgot the first rule of casino gambling: The house always wins. Now the rest of us are paying the price.
I saw it on a sign at a protest in the mid 80s and it still stands up today: Ruck The Feegents