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Vol. 12 Issue 26…Dedicated to the Dialogue on Race…June 28, 2009

Intuit's Vibe

Recession! What Recession?

By Ivor. E Hogg

Without the wherewithal to buy

I go without the food I need

whilst richer people overfeed.

I'm free to starve in poverty.

I must rely on charity,

does nothing for my self esteem.

Never in my wildest dream

did I realize that I could be.

Without a job without a home

By circumstances forced to steal

but my hungers all too real.

A spell in jail would be welcome.

At least inside I would be fed.

Not root in dumpsters for my food.

I'd rather work as a man should

to earn my daily crust of bread.

My firm downsized and fired me

because their profit margins fell.

A matter of economy

consigning working men to hell.

The world is run by greedy men

who are obsessed with balance sheets.

So I may never work again

but live and die upon the streets.

Hood Notes

Buffett's Prognostication

According to the Commerce Department, new home sales fell in May. And, while median sale prices rose slightly, existing home prices are expected to continue to fall due to rising unemployment and foreclosure. On Thursday, the Labor Department released data showing initial claims for jobless benefits rose to a seasonally adjusted 627,000. Since the recession is supposedly easing, economists expected a drop. It did not take the Labor and Commerce Departments' latest figures to inform average Americans that jobs are scare and more workers are joining the ranks of the unemployed and homeless. Apparently, nor did it take these government figures to persuade Warren Buffett, the Oracle of Omaha, the worst of the recession is not behind us.

In an interview with CNBC's anchor Becky Quick on Wednesday, billionaire investor Buffett was downright bearish compared to Federal Reserve Chairman Ben Bernanke and economic talking heads and bullish investors. According to Buffett, "Everything I see about the economy is that we have had no bounce. There were a lot of excesses to be wrung out and that process is still under way, and it looks to me that it will be under way for quite awhile. In the annual report, I said that the economy would be in shambles this year and probably well beyond, and I think that is true."

Buffett's prognostication does not bode well for American workers. He believes unemployment will continue to be a drag on the economy, since income from employment drives consumer demand for everything from automobiles and homes to vacations. Buffett believes the government will need to continue taking steps to reduce unemployment.

While Buffett believes more government intervention will be necessary, he does not see it as painless or without side effects. One adverse side effect is inflation. According to the Oracle, "We have done things that raise the probability of high rates of inflation at some point."

Kucinich Sticks to His Guns

By John Burl Smith

One among the crowded field in the 2008 shout-out for the Democratic Presidential nomination, Rep. Dennis J. Kucinich (D-Ohio) pledged to fight for American taxpayers. Sticking to his guns, once the campaign fight was over, unlike other Democrats, who caved in under pressure from the Obama White House, Kucinich pressed the attack. He excoriated the Treasury Department for failing to adequately trace banks' use of taxpayer bailout money they were awarded last year and demanded better oversight by the Obama administration.

Targeting deceptive practices, chairman of the domestic policy subcommittee for the House Oversight and Government Reform Committee, Kucinich opened with this salvo, "When the American people find that their tax dollars, which were supposed to be used to get us out of this financial crisis, instead are being used to ship jobs and investments overseas, there will be outrage." His comments are contained in the subcommittee's report released on March 9, 2009. The subcommittee's report accused banks of spending Troubled Asset Relief Program (TARP) money on "questionable transactions" and criticized the Treasury Department for inadequately supervising them.

Questioning the propriety of Treasury's scheme, the subcommittee zeroed in on an $8 billion Citigroup Inc. loan to Dubai, a $7 billion Bank of America investment in China Construction Bank Corp., and a $1 billion investment in India by J.P. Morgan. The three financial institutions got a total of $120 billion in tax dollars through the bailout program. Although not illegal, Kucinich questioned the wisdom of transactions that direct money to foreign governments rather than the domestic economy.

"How does a multibillion financing deal to Dubai ease the liquidity crisis in the United States of America? The report took shots at other spendthrift gimmickry of banks, "What about other kinds of uses of TARP funds: corporate spending on lavish parties, the continuation of contractual agreements to pay for naming rights on professional sports stadiums, corporate sporting event sponsorships?"

Kucinich bulls-eyed "significant shortcomings in Treasury 's oversight in dispersing money through TARP." The committee report asserted that the department hasn't questioned any TARP recipient about its use of the money. "In spite of broad investigative and audit authority, Treasury has chosen not to request detailed and comprehensive information from TARP recipients about the use of funds. As a result, Treasury has limited ability to detect or prevent waste and abuse."

The report also put Goldman Sachs's $2 billion repurchase of its own stock in December in its cross hairs. The repurchase caused Goldman Sachs share value to increase almost 20%. That was a significant financial benefit for senior executives, who own large amounts of company stock. Congressional investigators are looking at whether this insider deal was an inappropriate way to enrich those top employees despite a public clamor for strict limits on executive compensation. "This is a textbook definition of a taxpayer's nightmare."

As the new sheriff, guarding the public purse, the subcommittee fired a shot across Secretary Timothy Geitner's bow. "Treasury has not safeguarded taxpayers' money, yet Treasury is prepared to keep investing in a failed economic strategy when they don't even know what happened to the money they gave in the first place." Kucinich asked, "Are these ... large investments and loans to foreign entities among the kind of transactions American taxpayers should be supporting with TARP monies when we face significant credit problems at home?"

The 20 financial institutions that received the most money through the Capital Purchase Program -- the largest of five TARP programs -- are required to file reports with Treasury. But hundreds of other CPP fund recipients are exempt from Treasury reporting guidelines altogether. The mandated reports -- known as monthly intermediation snapshots -- are too vague, committee members said. They do not provide details on transactions, no matter how large, and do not address specific investments other than new lending.

Anthony Sanders, a professor at the W.P. Carey School of Business at the University of Arizona explained, "Treasury has trouble monitoring TARP spending partly because the money is fungible (interchangeable) and is difficult to separate from nonfederal dollars. Despite our accounting and regulatory reporting on these institutions, the TARP funds seemingly sink into an abyss."

Virtually alone in this shootout with Treasury, Kucinich is the last man standing out of a band of bailout renegades on the congressional side. Obama and the Democrats have sacrificed our grandchildren on the altar of debt to the gods of free enterprise. What the bail out has done is make the American people slaves to debt and the banks slave masters of the next generation.

Venue for an Artist

Perspectives on Closing Racial Wealth Gap

By Nina Jacinto

This morning I sat in on a webinar hosted by The Media Consortium and Insight Center's Closing the Racial Wealth Gap Initiative. The briefing aimed to summarize the ways in which black, Latino and Native American communities have been affected by disproportionate rates of foreclosure and predatory lending. Speakers urged journalists in particular to investigate the racial angle of the economic downturn in order to encourage policy changes and assist in closing the racial wealth gap.

Michael E. Roberts, President of the First Nations Development Institute, spoke about the research done to expose the prevalence of predatory lending among Native American communities. With an increase in predatory lending practices, there has been less income going to impoverished households and less money circulating throughout the first nations. Research refutes the myth that generous wealth opportunities have been created by the Indian gaming industry. Only 225 of the 561 federally recognized tribes have gaming contracts, with only the top 20 operations making up over half of the total portion of Indian gaming revenue.

Combined with the fact that non-Native Americans hold three-fourths of the jobs created by the gaming industry, tribes continue to struggle with the highest rates of poverty, unemployment and inadequate healthcare than any other ethnic group in the US. Roberts noted that further research and investigative reporting must be done to evaluate and prevent future predatory lending.

Dr. Avis A. Jones-DeWeever, director of the Research, Public Policy and Information Center at the National Council of Negro Women (NCNW) discussed a new study released by her organization in collaboration with the National Community Reinvestment Coalition (NCRC). The report, which investigates race and gender disparities among mortgage lending practices, found that in over 84 percent of the metropolitan areas studied, black women were twice as likely to receive high cost loans than their middle and upper income white female counterparts. Rankings were created to show the worst disparities for communities based on race and gender: black women fared worst in North Carolina whereas Latinas faced the highest disparities in the DC area.

Dr. Jones-DeWeever recommended a strengthening of the Community Reinvestment Act, which was passed in 1977 to reduce discriminatory credit and lending practices in low income areas, and remarked that banks must be held accountable for their discrimination and should provide data on race and gender in relation to their lending practices.

Janis Bowdler, Deputy Director for the National Council of La Raza (NCLR), also stressed the urgency of holding banks accountable, by passing the Predatory Lending Bill, which has failed twice in the Senate in the past. With Latino borrowers are almost four times as likely to receive high cost loans compared to whites, individuals are unable to support themselves and their extended families or build savings after applying for credit. According to Bowdler, "The nonprofit lenders and credit unions that aim to serve low-income and immigrant communities have been "beat out in the marketplace" because of other banks' high return on toxic mortgages."

The speakers all called for in-depth investigation of how low income communities of color are losing their opportunities for gaining wealth and supporting their families. There needs to be an emphasis on funding for training communities of color so that they can competitively pursue green jobs. In addition, regulations must be created and enforced to discourage predatory lending practices. It seems that there also needs to be more work done to investigate other low income communities: Asian Pacific Islander and Middle Eastern American groups are often left out of the conversation on racial wealth and predatory lending. Finally, instead of blaming the victims of the foreclosure crisis for poor spending or living outside their means, journalists have a duty to expose the consequences of racial inequities and further report on the individuals who have suffered as a result of predatory lending.

About Me: Nina Jacinto is a freelance blogger living in the Bay Area. Her writing focuses on issues of race, gender, and media representation. A graduate of Pomona College, she loves South Asian Diaspora narratives, bargain shopping, and the Internet.

Disgruntled wants to know: California Gov. Arnold Schwarzenegger is not shy in discussions about his state's fiscal health. According to the governor and California state finance officials, the state will run out of cash to pay its daily expenses on July 28. No one expects state government to come to a "grinding halt," as the governor has claimed, but there will be pain as some of the services normally funded by the state and counties are either stopped or get cut back. These include an array of social programs, certain road projects and student financial assistance. California's fiscal health or lack thereof is the result of a steep recession, which has caused a shortfall in sales and income tax revenue, and years of lavish living. California needs to slash spending. By law, the state cannot file for bankruptcy, even if it is drowning in a sea of red ink. State lawmakers must pass a balanced budget by July 1 to prevent fiscal Armageddon. State Republicans and Democrats are feuding over where and how to make the necessary cuts. The situation is not pretty. Question is, since California has long been a leader, whether in fashion, fads or propositions, will the expression "as California goes, so goes the rest of the country" hold in the case of its fiscal instability?

Disgruntled feels: Dubious! On Wednesday, Federal Reserve policymakers held their key banking rates at a record low range of zero to 0.25 percent. The Fed, under Chairman Ben Bernanke, says the recession is easing and inflation is tame, even though the central bank has vastly increased the volume of dollars in circulation. China, which holds about a trillion in dollar-denominated assets in its reserve, has repeatedly cautioned the US of late about printing more dollars and diluting the currency's value, hence the value of its holdings. As a student of economics, I remain dubious when the Fed claims it can print dollars ad infinitum with no negative impact on the dollar's value. Furthermore, historically when a country opens up its printing presses as the US has done during this recession, inflation is a problem just over the horizon.

Disgruntled says: The Obama administration is proposing to overhaul the way government regulates financial markets. Its reform measures will expand the Federal Reserve oversight powers and create a new consumer financial products agency. It is noteworthy that the financial market, which caused the most severe recession, if not depression, since the Great Depression, is opposed to the new consumer agency. It claims the new agency will stifle innovation and new products, such as those that fed the housing bubble, the bundling of toxic mortgages and the ensuing boatload of financial problems. With plenty of TARP money with which to lobby Congress, thanks to the government bailout, any final reform of financial markets is likely to conform to its wishes.

Mailbox: E-Mails, Faxes and Telephone Calls

Email www.ap.com NC remembering victims of sterilization program...By Gary D. Robertson...North Carolina recalled a regrettable side of its history on Monday by unveiling a roadside marker remembering poor people, mental patients and prisoners who were sterilized against their will by state officials. The cast aluminum sign in downtown Raleigh provides a permanent remembrance of the program intended to keep thousands of people considered mentally disabled or otherwise genetically inferior from having children. More than 7,600 people were sterilized by "choice or coercion" under the state's so-called eugenics program between 1933 and 1973, according to the marker's text. North Carolina was one of more than two dozen states that ran such programs after social reformers began advocating for the approach a century ago.

Email caseystroud@gmail.com...RI closer to changing state name over slavery ...By Ray Henry ... The country's smallest state has the longest official name: "State of Rhode Island and Providence Plantations." A push to drop "Providence Plantations" from that name advanced farther than ever on Thursday when House lawmakers voted 70-3 to let residents decide whether their home should simply be called the "State of Rhode Island." It's an encouraging sign for those who believe the formal name conjures up images of slavery, while opponents argue it's an unnecessary rewriting of history that ignores Rhode Island's tradition of religious liberty and tolerance. The bill permitting a statewide referendum on the issue next year now heads to the state Senate.

Email leodoyle@yahoo.com...Segregated high school proms divide Georgia's students...By Leonard Doyle...In early summer when Georgia peaches are at their sweetest and high school seniors can't wait to be loosed on the world, separate proms are part of the bitter aftertaste of segregation that persists in parts of America's Deep South. For nearly 40 years state school pupils have been educated together. They have played sports together and developed close bonds of friendship, before finding themselves face to face with a cruel ghost from America's past. The annual prom held by high schools across America near the end of the academic year is big event, for which students and parents spend months preparing. But in a handful of Southern towns, parents still insist on whites-only proms which blacks are not allowed to attend. The election of Barack Obama did nothing to change attitudes that go back generations in the small rural towns of Montgomery county, Georgia; the surge of pride black people felt in the election of the first black President was met by frosty silence by whites. The county, which is two thirds white, voted overwhelmingly Republican last November and attitudes have hardened as the months have passed.

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