democracy

SQUAWK OR WALK: MORE PROTESTERS NEEDED TO SAVE MBTA, PUBLIC TRANSIT STATEWIDE

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Photos by Chris Faraone

March 18, 2016

BY JASON PRAMAS @JASONPRAMAS

Last week, the MBTA Fiscal and Management Control Board—appointed by Gov. Charlie Baker in 2015 to run the transit authority—voted to hike fares by 9.3 percent. Claiming the move is absolutely necessary to stop the T’s perpetual budget crisis from worsening. Which is just pathetic. Because if ever there was a manufactured crisis, our state government’s refusal to properly fund its multiple mass transit systems is a prime example.

In 2000, the Commonwealth reversed its previous “backward funding” policy of simply paying any MBTA costs that fares didn’t cover at the end of each fiscal year. The move to so-called “forward funding” has been a disaster for mass transit in the Bay State ever since. The goal was to make the MBTA function like a for-profit company—which would somehow do more with a restricted budget allotted at the start of each fiscal year—and less like the indispensable public service that it is. The funding policy was later adapted for the other 15 regional transit agencies statewide. But in practice, as is often the case with such privatization moves, it has forced them all to struggle for survival. Leading to endless deficits anddoubling MBTA fares since its introduction.

There is a straightforward solution to this non-crisis. The state must go back to fully supporting the MBTA budget, must increase the mass transit budget statewide, and must raise taxes on the rich and corporations to cover any conceivable budget shortfalls for such an important public good.

But that simple, just and obvious solution isn’t “realistic” to neoliberal legislators, pundits and advocates that prefer to squirrel around the edges of the problem in ways that let the rich and corporations that they serve off the hook. While allowing critical mass transit systems to continue to deteriorate. And I count all five members of the Control Board among the “realists”—including union leader Brian Lang,whose yes vote on the fare hike was especially disappointing. Although he did successfully push some amendments that softened the blow for low-income riders.

The problem is not the lack of solid policy solutions. The problem facing MBTA riders in the Boston area and riders across the other regional transit agencies statewide is a lack of a big enough popular movement to push through such solutions. And therefore a lack of political power.

This is not to say there aren’t transit advocacy groups. There are over a dozen area organizations with solid track records in transit policy. Most are members of the Transportation for Massachusetts (T4MA) coalition—which has made good progress toward the broad goal of properly funding public transit statewide through the passage of initiatives like the 2013 Transportation Finance Act. But even such gains are constantly under threat, and difficult to defend—let alone build upon—without lots of active public support. As we’ve seen with the state reneging on the portion of the act that “guaranteed” that MBTA fare hikes would never be more than 5 percent every two years going forward. So much for that, right?

What’s missing is basically a larger statewide version of the T Riders Union (TRU)—a project of T4MA member Alternatives for Community and Environment. Many of you will already be familiar with TRU because if there’s a media-savvy protest on transit issues in Boston, they’re probably at the center of it.

The problem is similar to the one I outlined last week when discussing the difficulty labor unions have turning their members out for public protest actions in light of the success of the BPS student walkout. Groups like TRU, and their allies in coalitions like T4MA, can turn out dozens to protest key government meetings as they did for the most recent MBTA Control Board meeting and the series of public hearings on the fare hikes before that. They can occasionally turn out more people, hundreds, for rallies and marches. But they can’t turn out thousands, and tens of thousands, on transit issues.

Yet that’s what’s needed. If a political movement doesn’t have money like big business, then it needs lots of people protesting to have significant effect on the progress of key public debates.

Numbers like the 2,000-plus BPS students that turned out last week—in the right places at the right times—can change what’s politically “realistic” overnight. Smaller, largely symbolic protests generally cannot do that.

Also, smaller organizations and coalitions have a hard time mustering enough troops to deal with the ever–expanding number of issues in a broad policy area like mass transit. For example, MBTA advocates don’t just have the fare hike to deal with. There’s also the late night bus debacle. And the unrelentingattacks on unionized transit workers. And the idea of privatizing more services by handing them off to companies like Uber and Lyft (because handing Commuter Rail service off to corporations has beenworking so very well). And the increasingly savage Green Line Extension fight. And that’s just Greater Boston. Start looking at the crises facing the regional transit agencies, and there are dozens of other issues that need more public attention.

That’s why it would be great to see TRU—and all the transit organizations already on the ground—get stronger. And it would be awesome to see groups like TRU sprouting up all over the state wherever they don’t currently exist. The more grassroots, the better. All linked together more tightly than they are today. In every neighborhood, town, and city served by the MBTA and the regional transit agencies. Because that’s what’s ultimately going to make it possible to win the simple, just solutions that will get mass transit out of hock in Massachusetts, and back on the global cutting edge.

The more people in the streets for transit justice, the better the outcome for Massachusetts. A pretty simple political equation.

Think that over. Then act. Before public transit is just a memory.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

BPS STUDENTS TAKE TO THE STREETS, MAYOR WALSH FEELING THE HEAT

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Photos by Chris Faraone

March 10, 2016

BY JASON PRAMAS @JASONPRAMAS

With their schools facing up to a $50 million deficit next year, over 2,000 Boston Public School students from all over the city marched on the Massachusetts State House and Boston City Hall this week to demand that BPS be properly funded going forward.

Clearly the messaging and targeting of the action owed a lot to BPS parents groups and teachers unions who have become more militant of late as the funding situation has grown worse. Thanks to budget-stealing charter schools being pushed by Mayor Marty Walsh and Governor Charlie Baker—and the pair’s shameful recently inked deal to throw upwards of $270 million in public funds and tax breaks at General Electric to move their headquarters to Boston. Resulting in lots of “Million$ for GE, Budget Cuts for Schools” stickers and at least one “Fuck GE” sign being sported by the young activists. Plus at least one other student yelling “One Term Walsh” from a megaphone opposite Boston City Hall during the demo, according to Universal Hub. But no one forced these kids to take to the streets. They know when they’re being screwed. And who’s doing it.

All of which foreshadows the political payback to come. In part from the many BPS student protestors who will be able to vote in the next mayoral election. Leaving Walsh on the defensive at a speech to the Boston Municipal Research Bureau—a business-oriented think tank— the day after the student protest. Trying to explain how the massive giveaway to one of the worst corporate criminals on the planet is a fine idea that will somehow make Boston the first polity that it doesn’t completely screw over.

Which probably explains the Boston Globe subsequently reporting that the mayor was “fuming” about the protest in a piece that went fishing for evidence that the teachers unions were manipulating the students for their own ends. Walsh is running scared. Unfortunately for him, although coming off as rather eager to point the finger at union-led pro-public education coalitions like the Boston Education Justice Alliance (BEJA) and the national Alliance to Reclaim Our Schools, the Globe discovered that the students really did organize the big protest themselves—with coalitions like BEJA playing only supporting roles. The Boston Herald, meanwhile, contented itself with straight union bashing.

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What’s unspoken is that the best proof that the unions didn’t have much of a role in the protest is that historically they’ve shown little ability to mobilize significant numbers of students in the Bay State. Typically, union-backed coalitions like BEJA will pull a few dozen to a few hundred people to such protests. Students or non-students, the story is always the same. The people who turn out will be a mix of union and nonprofit staffers—paid advocates, although often not specifically paid to work on a particular campaign and doing so in their spare time—and dedicated activists from the involved communities. That is, the generally small number of people who are motivated enough to take a stand on any given issue. Even one so important as the future of public education.

For really important actions, unions (and allied nonprofits) will do their best to bus in members from around the region. But even then, numbers will often be disappointing because—right-wing conspiracy theories to the contrary—unions don’t control their members. They can pay for transportation to make it easier for members to turn out to political actions from a broad enough geographic area to bulk up their usual numbers, but they have no way of forcing members to participate. Especially when important local and state hearings are often held at inconvenient times for working people and students alike.

If their control over their members is minimal, union control over K-12 students is nonexistent. This is one reason why last month’s BEJA-led protest drew only a couple hundred activists. A portion of whom were students who had been activated by BEJA member-organizations like the Boston-area Youth Organizing Project (BYOP). Yet it is precisely the ability of groups like BYOP to educate young people on important issues like public education funding over years that was really behind Monday’s action. Students, as human actors, are perfectly capable of looking at the available information on a topic like education reform and making their own decisions. But even the best grassroots political organizers can’t predict when or even if their educational work will ever pay off with mass mobilization on their core issues. Plus with every issue having at least two sides, it’s always possible that students will back the charters—and some definitely do.

In this case, and to their credit, lots of Boston students have decided to back the underdogs in the charter school debate—teachers unions, parents groups, and other advocates for a strong public education system. Rather than the extremely well-funded pro-charter groups. Many students heard about the looming cuts to the BPS budget, on the heels of years of similar cuts, from both the news media, their unionized teachers, advocacy coalitions like BEJA, and youth organizations like BYOP. Then they got angry. Then they got active.

So the big props for this student action go to the young people who turned out their classmates for what was—for many of them—their first protest. From Snowden International School students who sent out an initial call on social media last week to other incipient student leaders from Boston Arts Academy, both Boston Latin campuses, Jeremiah Burke High School, Brighton High School and many more, Boston’s best and brightest young people organized a cross-class, multiracial walkout. On a school day. At significant risk of getting disciplined by their pro-charter administration. To demand redress. To demand that their city and state governments fund their right to a decent K-12 education.

Some of the student protestors, including key youth organizers, were connected to the existing pro-public education coalitions that were inside the State House on Monday morning testifying to the Joint Committee on Education to #KeepTheCap on the number of charter schools allowed in Massachusetts. But it was the existential crisis facing BPS students that impelled so many of them to take action on their own behalf. On their own terms. Making it, without a doubt, one of the best grassroots political demonstrations Boston has seen in quite some time. Much like the Market Basket workers movementtwo years ago. And that’s why the students made such a powerful impression, and immediately won over large swaths of the general public over to their cause. Locally and nationally.

Mayor Walsh may be angry that the students were bold enough to call him out on the charter issue—and related issues like the GE Boston Deal. But he has only himself to blame. He can’t have it both ways: sucking up to the rich and powerful, and being a man of the people. He has to choose. Is he for the students of Boston? Or against them? Right now, it’s looking like the latter.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

GE BOSTON DEAL: THE MISSING MANUAL, PART 4

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February 29, 2016

BY JASON PRAMAS @JASONPRAMAS

In May 2012, three former GE executives were imprisoned after being convicted on multiple charges of conspiracy to commit wire fraud and defraud the United States. Dominick Carollo, Steven Goldberg and Peter Grimm had all worked for GE Capital—the financial division that operated as a semi-legal “shadow bank,” and that accounted for about half of its parent corporation’s profits until the global financial collapse it helped precipitate began in 2007. Between 1999 and 2006, the trio conspired to skim millions from municipal bond investment contracts. With the full approval of their bosses.

According to Rolling Stone’s Matt Taibbi, the scam worked as follows for the company that Marty Walsh, Charlie Baker and cheerleaders like the Boston Globe have welcomed to Boston with open arms: Municipal governments commonly partner with big banks to sell bonds to pay for significant capital costs—like building schools. The banks invite investors to buy the municipal bonds and deposit the resulting funds in tax-exempt accounts from which all necessary project expenses can be paid. However, since all the bond money does not get spent at once, municipal governments typically hire brokers to find major financial institutions to invest it for them through a public auction process. In general, it is legally required that brokers get bids from at least three financial institutions—and the one that offers the highest annual rate of return wins the contract to invest the spare cash from a given bond fund.

But for GE Capital—and a host of other major financial institutions—the process was rigged from top to bottom. In the case of GE’s Carollo et al, the defendants conspired with executives at the brokerage CDR and financial institutions like Bank of America, JPMorgan Chase, Wells Fargo, and Morgan Stanley to divvy up investment contracts for municipal bond funds. CDR would drum up business with local politicians around the country—often bribing them with various kinds of campaign donations and gifts. The pols would then reward CDR with contracts to invest unspent funds from municipal bond issues, while CDR would work with the GE Capital—in concert with the other major financial institutions—to illegally decide which corporation would win which auction for such investment contracts in advance. The “winner” of each auction would collude with the other bidding financial services companies on the bid rate to ensure that the “winning” bid was as low as possible. The agreed upon rate was usually lower than a fair market rate by just a few tenths of a percent. But that was enough to make a killing.

For example, if a fair bid in an auction might have been that GE Capital would invest a municipal government’s unused bond funds at a 5.04 percent annual rate of return, CDR would coach the company to only offer 5 percent. The other bidders would purposely offer lower rates, losing in exchange for winning future rigged auctions. GE would then pocket the .04 percent windfall. A municipal bond fund that might have $200,000,000 to invest in its first year would return around $80,000 extra to GE in that fashion. Which doesn’t sound like much. But such bond funds would be invested by GE Capital for years until they were spent down fulfilling their original purpose to build schools and the like. And GE Capital and CDR colluded on huge numbers of such illegal arrangements, pouring vast sums into GE’s coffers. While depriving municipal governments of that same money. GE Capital then kicked back some of its take to CDR as “fees.”

Given the complexity and ubiquity of this practice, no one knows exactly how much was stolen. But since fines paid by large corporations to governments at various levels for such crimes tend to be vanishingly small, it’s possible to get an idea of the scale of the crime. According to the Securities and Exchange Commission (SEC), GE paid a $70 million coordinated settlement in 2011 to the SEC, Department of Justice, Internal Revenue Service, and a coalition of 25 state attorneys general. The SEC alleged that “from August 1999 to October 2004, [GE Capital] illegally generated millions of dollars by fraudulently manipulating at least 328 municipal bond reinvestment transactions in 44 states and Puerto Rico.”

GE committed yet another massive crime against the public interest. And got away with it. In November 2013, Carollo, Goldberg and Grimm were freed on appeal. The reason? The government had taken too long—ten years—to build its case against the former GE executives.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

GE BOSTON DEAL: THE MISSING MANUAL, PART 3

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Image by Kent Buckley

February 15, 2016

BY JASON PRAMAS @JASONPRAMAS

Returning to our ongoing look at General Electric’s recent and inconvenient history of violating the public trust, in part 2 of this “missing manual” the corporation got out of the subprime housing loan market just in time to avoid destruction in late 2007. But it could not escape from the consequences of an economy based on selling toxic home loans to poor people who were defaulting in vast numbers by 2008.

That year, everything began to unravel for GE—as it did for all other large interlocked financial services companies that derived a substantial percentage of their profits from predatory loans in the same period.

According to Fortune magazine, after reporting an unprecedented first quarter loss of $700 million, GE’s stock price began spiraling downwards in April 2008. Failing to sell off its light bulb, appliance, and private-label credit card businesses over the summer due to the worsening economic climate stopped the corporation from making typical course corrections to get back on its feet.

In September 2008, GE’s stock price crashed after Lehman Brothers—a financial services titan—collapsed on the heels of Bear Stearns’ disintegration that March. The company became starved for operating funds. But the private credit markets were frozen in terror.

On September 30, GE made two desperate moves. At 7:30 am it sold $3 billion in preferred stock to billionaire investor Warren Buffet’s Berkshire Hathaway Inc. on very bad terms. At 1:44 pm, GE announced its deal with Buffet and said it would sell $12 billion of common stock the next day at prices far lower than it had paid to buy back $15 billion of its own stock over the preceding year. Meaning it was selling the stock at a huge loss in exchange for ready cash.

The next day, the coup de grace: Word spread throughout the markets that GE would be unable to cover billions in regular payouts to holders of its commercial paper. Basically a kind of I.O.U., commercial paper is a kind of short-term promissory note that big corporations like GE are able to issue on an ongoing basis to raise money to cover things like daily expenses. There is no collateral behind commercial paper. Only the good name—and, ideally, top-flight credit rating—of the company issuing it. In normal times, it’s a far cheaper way to borrow money than a line of credit with a commercial bank. But 2008 was not a normal time. At one point that year, GE had over $100 billion dollars out in commercial paper as it tried to stay afloat.

Executives clearly knew their company was doomed unless the government bailed it out. Already on September 30, a GE spokesperson “e-mailed the media with a message that Congress must act ‘urgently’ on the pending financial bailout package.” But the company didn’t wait for congressional action. Since it was not a traditional bank, GE did not qualify for a significant direct cash infusion under the infamousTroubled Asset Relief Program (TARP). So it spent the next few weeks brokering a backroom deal with the Federal Deposit Insurance Corporation (FDIC).

According to the New York Times, on November 12, 2008 the FDIC announced that it would back GE’s commercial paper for up to $139 billion under the Temporary Liquidity Guarantee Program (TLGP). A program that the federal government changed overnight to allow GE to qualify—just as TARP was changed to benefit Goldman Sachs et al—according to Pro Publica and the Washington Post. GE had “joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates.” The company was able to sell $74 billion in government-backed commercial paper and longer-term notes by Spring 2009.

And how did GE survive the period between its early October 2008 financial collapse—when it was still short on funds despite the precipitous sale of $15 billion of its stock—and its November 2008 bailout by the TLGP program? In 2010, Pro Publica reported that Federal Reserve Board documents released that year showed that GE had effectively borrowed $16 billion more dollars at that time by selling commercial paper through the Fed’s Commercial Paper Funding Facility (CPFF).

So General Electric was saved by two government programs that provided it with upwards of $90 billion dollars of cheap credit. According to the corporation’s own September 30, 2009 10-Q filing to the Securities and Exchange Commission, GE paid only $2.3 billion in fees for its participation in the TLGP and CPFF programs. Meaning that GE got unbelievably good loan terms—the equivalent of a flat 2.56 percent interest rate. Less than the rates that Americans pay on most any other loans. Including the housing loans that wrecked the economy in 2007-2008. And the student loans that could very well lead to another financial catastrophe before this decade is out.

That is how GE got to survive the recession it helped create. By gaining access to a massive pool of public funds totally unavailable to its tens of thousands of subprime housing loan victims. The same company under the same leadership that Massachusetts officials are paying $270 million to bring to Boston. Excelsior!

Coming soon in part 4: GE’s municipal bond scandal and other amusements.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

MANCHESTER DIVIDED: SEIU ‘FIGHTS FOR $15’ IN NH WHILE ITS CANDIDATE FIGHTS FOR $12

Photo by Derek Kouyoumjian

February 8, 2016

BY JASON PRAMAS @JASONPRAMAS

The “protest pit” outside the Republican Presidential Debate at Saint Anselm College in Goffstown, New Hampshire on Saturday evening was a fenced-in area in a field about a quarter mile down the road from the main entrance to the campus.

Bumper to bumper traffic ran in front of the pit. Odd given that NH State Police were letting few cars onto the campus. Most were told to turn around. No one that Republican leadership didn’t want in was getting anywhere near the Carr Center where the debate was taking place.

Powerful lights shone down on the scene from one side—lending it an eerie cast. Behind the fence facing the road were a couple hundred supporters for a few of the Republican candidates. But that was just the first layer. Behind them were about 500 activists with the Fight for 15 campaign—organized andbankrolled for $30 million as of last August by the Service Employees International Union (SEIU). Whose leaders had bused in SEIU staff and members; student activists; and allies from other unions and immigrant organizations from around the region. At least 13 busloads from southern New England overall, according to the campaign’s registration form for the event.

A respectable showing, if not the “massive crowd of underpaid workers” that SEIU’s press release had promised.

So there they were. Supporters of a $15 an hour federal minimum wage. A fairly diverse group. Standing in a snowy field on a back road, enthusiastically waving banners—some quite creative, cylindrical and glowing from within like Japanese lanterns—and periodically trading chants with the mostly white right-wing activists in front of them.

Photo by Derek Kouyoumjian

Their presence was part of SEIU’s current tactic to raise the profile of the Fight for $15 campaign byprotesting presidential debates and other high profile events like the Super Bowl in recent months. Which makes sense as far as it goes.

What doesn’t make sense is why SEIU pulled out 500 people onto a chilly windswept hill in suburban New Hampshire to protest for a laudable reform that their chosen presidential candidate, Hillary Clinton, absolutely does not support.

Clinton, like Barack Obama, has come out in favor of a $12 an hour minimum wage. Bernie Sanders, the only candidate whose politics are in line with labor unions like SEIU, is also the only candidate who publicly supports the Fight for $15 campaign’s main goal—a $15 an hour minimum wage. Barely a living wage at all in many parts of the country. Hardly the huge ask that opponents make it out to be. Especially given the wage freeze imposed on most Americans by corporations and our political duopoly since the 1970s.

Photo by Jason Pramas

Yet the leaders of the 1.9 million member SEIU backed Clinton last November. Joining the heads of a number of other large American unions in supporting the candidate with a proven record of pushing policies completely antithetical to union demands. Like the insurance industry scam known asObamacare instead of “Medicare for all.” And they have alreadypumped millions to Clinton Super PACs over the heads of their largely voiceless members.

In response, a coalition of progressive unions and activist union members has formed Labor for Bernie to win as many union endorsements for Sanders as possible. Even as Sanders hasamassed a $75 million warchestfrom mostly small donations—without the truckloads of cash that labor unions have traditionally lavished on Democratic candidates over the past few decades.

With Sanders doing very well in the NH polls as of this writing, and clearly capable of staying in the race all the way to this summer’s Democratic National Convention, it appears that SEIU leadership made a serious miscalculation this election. And the fallout from that miscalculation is already playing out in the very state where they organized the standout for their Fight for $15 campaign over the weekend.

Two New Hampshire SEIU locals—560 (Dartmouth College workers) and 1984 (NH State Employees’ Association)—broke ranks with SEIU leadership last fall and backed Sanders for President. Both locals were present in Goffstown on Saturday.

Whether Bernie Sanders wins the nomination and election or not, current SEIU leadership—and the leadership of every union marching in lockstep with the worst elements of the Democratic Party—is going to face increasing pressure from its rank-and-file members to stop supporting pro-corporate anti-labor candidates like Clinton. Likely culminating in major grassroots insurgent campaigns aimed at removing union leaders perceived as sellouts—as has happened on many occasions in labor history. It remains to be seen whether such internal reforms will happen before the major unions collapse under the death of a thousand cuts being inflicted on them by their traditional political enemies and their erstwhile allies alike.

SEIU and less democratic unions like it could forestall the looming civil war in their own ranks—and increase the American labor movement’s chance of survival—by learning from the more democratic practices of the 700,000 member Communication Workers of America (CWA)—whose leadership stepped aside last year and let their members directly decide: a) If they should endorse any candidates for POTUS, and b) Which candidate they should endorse.

CWA members, some 30 percent of whom are Republicans, voted to back Sanders in December.

This article is syndicated by the Boston Institute for Nonprofit Journalism — and stands in for this week’s Apparent Horizon column. Jason Pramas is BINJ’s network director. He has been a member of three SEIU locals (925, 285 and 888) over the past 17 years, and helped lead a successful union drive with SEIU Local 509 last year at the cost of his job.

GE BOSTON DEAL: THE MISSING MANUAL, PART 2

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Image by Kent Buckley

February 1, 2016

BY JASON PRAMAS @JASONPRAMAS

Two weeks after the first installment of this Missing Manual, we now know that GE will receive up to another $100 million of Boston’s largesse in the form of reopening the Old Northern Avenue Bridge and $25 million in state money for work on roads, pedestrian walkways, and bike lanes near the corporation’s new Seaport District HQ. Pushing the total giveaway to over $270 million in public funds.

Gov. Charlie Baker, Mayor Marty Walsh, and boosters like the Boston Globe claim that the investment will be worth it. Yet GE’s record of slashing jobs, despoiling the environment, and evading taxes says otherwise. And their role in the subprime mortgage crisis further repudiates such official optimism.

Back in 1999, the Glass-Steagall Act—a critical piece of Depression-era social legislation that put up a firewall between commercial banks and investment houses—was torpedoed by Congress. One of the excuses for the deregulatory push was the claim that so-called “shadow banks”—institutions that perform banking functions outside of the traditional system of federally-regulated banks—were doing great business with less regulation. The now-diminished GE Capital was then one of the largest shadow banks, since as the finance arm of an industrial concern it was not classified as a bank. Thanks to that fact and the happy coincidence that GE Capital owned a small Utah savings and loan operation, it was allowed to “engage in banking under the lighter hand of the Office of Thrift Supervision.” Rather than the more strict banking regulations overseen by the Federal Reserve—which do not allow banks to engage in commerce—according to a 2009 report by ProPublica and the Washington Post.

Ironically, the deregulation of the banking system proved to be a key factor in the 2007 subprime mortgage crisis and the resulting 2008 financial crisis. And the much-praised practices of shadow banks like GE Capital were precisely the ones that nearly wiped out the US economy. GE had long used GE Capital, equivalent to the seventh largest banking company in the US until 2008, to fatten its bottom line. According to Maureen Farrell of the Wall Street Journal, “GE got into lending decades ago and grew that arm of its business steadily in the years before the crisis, as it was able to leverage its triple-A credit rating for access to cheap capital. Before the credit crisis, GE relied upon lending for around 50 percent of its earnings.”

So in 2004 GE Capital had plenty of ready cash to buy California-based WMC Mortgage Corp.—a company that specialized in foisting subprime housing loans on poor families that couldn’t really afford them, using highly unethical sales tactics—for about half a billion dollars. According to a 2012 report by Michael Hudson of The Center for Public Integrity, even before the purchase, WMC “… was producing $8 billion a year in subprime home loans and boasting profits of $140 million a year.”

Then in 2006, US housing prices declined sharply. Subprime borrowers with no reserve cash were unable to refinance their home loans as their adjustable-rate mortgage payments increased mercilessly. Subprime lenders then began to automatically slap late-paying borrowers with even higher penalty rates. More and more people defaulted on their loans. Lenders like WMC suddenly went from being cash-rich to being cash-poor.

GE Capital was hemorrhaging money by 2007. During the first half of that year WMC lost over $500 million as the mortgage industry “spun into chaos.” By October 2007, the Center for Public Integrity report concludes, “WMC Mortgage was effectively out of business, dead after having pumped out roughly $110 billion in subprime and ‘Alt-A’ loans under GE’s watch.”

Meanwhile, GE Capital, like many other financial institutions of the period, had rolled packages of subprime mortgage debt into Residential Mortgage-Backed Securities (RMBSs)—which it then sold to investors. Including institutional investors like government-sponsored housing lender Freddie Mac. When the WMC subprime mortgages collapsed in 2007, the GE Capital RMBSs based on them followed suit. And the whole house of cards built on bad mortgages to poor people fell down. GE Capital immediately put hundreds of millions of dollars aside to pay off its investors. But not its mortgage holders. WMC-issued mortgages failed at rates of up to 75 percent in some areas. Ruining the lives of tens of thousands of working families in the process.

GE had gotten out of the subprime racket just in time to stay solvent into 2008. The most significant federal blowback from the episode came in 2011 when the Federal Housing Finance Agency that regulates Freddie Mac sued General Electric for selling them $549 million in subprime-based RMBSs. According to American Banker, they “charged GE’s former mortgage lending unit with presenting a false picture of the riskiness of residential mortgages behind securities that were sold to Freddie Mac.”

GE settled the suit in 2013 for just $6.25 million.

Coming soon in part 3: the 2008 financial crisis and federal bailout of General Electric.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

GE BOSTON DEAL: AN ACTIVIST HANDBOOK

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Images (from 2012 protest against GE in Boston) by Chris Faraone

January 28, 2016

BY JASON PRAMAS @JASONPRAMAS

Say friend … is a multinational corporation with a terrible reputation, a limitless PR budget, and a penchant for backroom deals with fawning politicians bleeding your state for hundreds of millions of public dollars that would be better spent on virtually anything else? A multinational named General Electric?

Are you afraid of the consequences of such malfeasance for your community and for democracy itself? Want to do something about it? Then look no further. What you need is a corporate campaign. Sourcewatch—a fine resource for journalists and researchers alike—has a concise definition of the term:

Corporate campaigns were developed in the mid twentieth century by activists and organizers such as Saul Alinsky, and honed in recent decades by labor unions and non-governmental organizations in the environmental, social justice and consumer movements. The goal of a corporate campaign is to publicize undesirable behavior or practices by a corporation through various strategies and tactics that can force change upon the company and thus allow the campaigning organization to claim a victory for its cause. At any given time organizations and even individual citizen activists are waging scores of corporate campaigns, some of which last for years, with varying results.

In my own experience, a corporate campaign is a limited strategy. It does not automatically lead to a broader democracy movement in a society, but can be a stepping stone along that path. It is not always a progressive strategy, although progressives probably use it more than any other political current. NIMBY activists in rich towns use it to keep apartment buildings and wind farms out. Right-wing Christians use it to attack companies that publicly support things they oppose—like reproductive rights, gay marriage, and the wheel.

That said, a corporate campaign is still a useful arrow in the proverbial quiver of justice. And here’s how you can run one.

First, decide that a campaign is needed. Gather some like-minded friends into a loose organization, and agree to work together towards a common goal.

Second, see if there’s already an organization running such a campaign. If there is, check them out. Do they seem to be a real grassroots expression of the needs of some definable community? If they do, then consider joining them or working with them in coalition. Or do they look like what seasoned activists call an “astroturf” group—a fake organization typically set up by some powerful interest or other to help confuse its antagonists and stop them gaining public support. If so, give them a wide berth and spread the word that others should do the same.

Third, start researching your target corporation. Talk to librarians, journalists, academics, and experienced campaigners for advice. Find out everything you can about the company —with a focus on their recent activities. Look for proof of bad behavior in their business and political dealings.

Fourth, research possible remedies. What have other communities done to reign in the power of your target corporation and corporations like it? Court action, regulation, and legislation are all good avenues to pursue.

Fifth, publish your evidence. Papers, articles, broadsides, podcasts, and videos are all good ways to get the word out.

Sixth, if you haven’t already, start fundraising. You’ll need money to win a corporate campaign. You might get some small grants from open-minded foundations early on, but your lifeblood will (and should) be donations you raise from your personal network, your new organization’s network, online via crowdfunding using platforms like GoFundMe, and through fundraisers of various types. You’ll never have anything like the money of your opponents. But you’ll have the strength of your convictions, and—if you do your job well—the support of your community. And can therefore overcome any obstacle if you persevere.

Seventh, organize your allies. Pull together community organizations, religious groups, non-profits, labor unions, friendly politicians—anyone who is going to aid your campaign and is willing to work with you.

Eighth, build a solid social media presence. Make use of widely available free communications technology to make friends and turn them into supporters. Create a page on Facebook, and a central Twitter account—both with your campaign’s name on them. Regularly feed your presence with updates about campaign activities and links to relevant material. Converse directly with your followers as interaction is key on social media. Keep in mind that you may never have to create a full website for your campaign if you make good use of social media, but it’s usually a good idea to at least launch a blog on one of the many free blogging communities.

Ninth, prepare your public relations campaign. Develop contacts in the press. Plan events and actions that will get and hold the public’s attention. Encourage journalists to cover those events and actions.

Tenth, hold your events and actions: open forums, lobby days, protests, and boycotts are all good ways to pressure politicians and corporate leaders to change their policies.

Finally, mobilize as many people as you can to support your campaign. Be sure to give them simple things they can do to show their support and attract even more people: like wearing one of your campaign buttons or putting one of your bumpers stickers on their car. If you’ve done your job well, so many people in your community will agree with you that it will become possible to win your campaign goals—whatever they are.

For a useful model, check out the recent successful #NoBoston2024 campaign—which wasn’t a traditional corporate campaign, but that nonetheless had all the elements of one. And it was a slam dunk resulting in a resounding popular victory against putting the City of Boston in hock for decades for a sporting event with a long history of corruption.

Questions? Feel free to contact me at jason@binjonline.org. And for those of you who might launch a corporate campaign against GE: let’s be careful out there.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

GE BOSTON DEAL: THE MISSING MANUAL

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Image by Kent Buckley

January 18, 2016

BY JASON PRAMAS @JASONPRAMAS

The saga of GE’s flight from Connecticut began with the June 2015 passage of a very much needed package of state tax increases aimed at raising an extra $1.1 billion over the next two years. By extending a temporary 20 percent surcharge on its corporate profits tax and by implementing a more straightforward way of calculating corporate taxes, the Constitution State expects to pull in $700 million of that total from major corporations. The money will be used to fund social programs and improve mass transit. Imagine that.

GE brass immediately flipped out. And followed through on a threat to move their headquarters out of Connecticut. They began publicly courting cities around the US to get the best possible deal. Boston moved to the front of the pack by the fall. Then last week, GE officially announced that they would be moving their HQ to the Hub—specifically the so-called “Innovation District” on our soon-to-be-flooded waterfront.

What followed has been one of the most disgusting spectacles of press release transcription by the Boston mainstream news media in memory. Fulsome praise was lavished on Gov. Charlie Baker, Boston Mayor Marty Walsh, and their busy lieutenants like John Barros for literally selling out the people of this city and this Commonwealth. A massive giveaway of $25 million in city “property tax relief” and $120 million in state “grants, tax incentives, infrastructure improvements, and help with real estate acquisition costs” to GE was treated as if it was the product of genius, rather than another nail in the coffin of democracy. The record of one of the most vicious and capricious corporations in world history was soft pedaled by focusing on the supposed benefits of the deal to the people of the Bay State. Which are … what exactly? The 800 predominantly transplanted jobs at the new GE Boston HQ? The up to 600 jobs at the new Marlborough branch of GE Healthcare Life Sciences by 2017? The assertion that the company will “base a new division, focused on lighting and energy, in a to-be-announced location in the Boston area” at some point? Airy claims about GE’s presence attracting other businesses to the state? Blather about “corporate philanthropy to the arts?” And something about “bragging rights?”

Stuff and nonsense. For starters, the vast majority of jobs that will be created locally by GE in the coming years will be professional/managerial level. Worked by the kinds of helicopter yuppies that will then buy some of the expensive condos that are being built all over the region. These few new jobs are not the jobs that are needed. They are not the tens of thousands of regular jobs that are going to help get beleaguered working and middle class families back on their feet after the economic depredations of the last 40-plus years. Depredations that GE pioneered.

The company had 13,000 mostly unionized workers in Pittsfield, MA decades back. Last fall, the Saudi Arabian-owned remnant of the former GE plastics division based there announced that it was leaving for Houston and taking the last significant group of ex-GE jobs, 300 in total, with it. GE had over 12,000 mostly unionized workers in Lynn, MA as recently as the early 1980s. Now there are about 1,400 unionized workers left, and 3,000 workers overall. GE closed its plant in Fitchburg, MA in 1998—taking 600 good jobs with it. GE is closing its Avon, MA plant later this year. Another 300 jobs gone. Cuts that devastated a number of communities, and contaminated the Housatonic River around Pittsfield with PCBs that GE is still fighting to avoid fully cleaning up—an issue capably reviewed by International Business Times last week.

Over the past year, GE leadership has continued such labor “innovations” by cutting medical and life insurance benefits to all non-unionized retirees over 65 on January 1, 2015. And cutting the same benefits to all unionized retirees over 65 at the start of this year. Tossing a mere thousand bucks a year to tens of thousands of GE retirees around the country and telling them to buy their own supplemental medical plans somehow.

Given this disturbing backstory, the claim by feckless pols that property taxes and other taxes that GE will eventually have to pay Boston and Massachusetts will soon outstrip the $145 million being handed to them beggars belief. GE is a vast corporate behemoth that employs hundreds of tax specialists to avoid paying any taxes at all. According to Citizens for Tax Justice, between 2010 and 2014, GE earned $33.5 billion in profits but claimed federal tax refunds of $1.4 billion—an effective tax rate of -4.3 percent. And paid a combined state tax bill of only $530 million—an effective state tax rate of just 1.6 percent for the period.

This is GE. This is the corporate scofflaw that Charlie and Marty and their many business buddies cut a bad deal with. Now what are readers going to do to stop it and #makeGEpay?

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

STOP THE ICE RAIDS: FIGHT FOR THE ‘RIGHT TO THE WORLD’

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Image by Kent Buckley

January 13, 2016

BY JASON PRAMAS @JASONPRAMAS

Over 100,000 undocumented immigrants from Central America have entered the US since 2014—seeking to escape what the mainstream media like to vaguely call “violence and political instability.” And they have been living in abject terror since the Obama administration’s Immigration and Customs Enforcement (ICE) began deportation raids against 121 of their number in December. Raids which come just as right-wing Presidential candidates whip up hysteria against immigrants and refugees. As if these “huddled masses yearning to breathe free” are somehow the cause of our many societal woes.

These latest ICE raids against undocumented immigrants are reprehensible, and anyone who believes in democracy should oppose them. Especially because—as has been pointed out repeatedly by immigrant advocates—many of the people getting deported stand a good chance of being killed by reactionary governments or gangs if they’re forced to “go back where they came from.”

But also because Americans all bear some responsibility for electing governments who have made a series of decisions over the last century that have resulted in the immiseration of the countries that undocumented immigrants have left.

Such immigrants come here largely fleeing poverty—created by US hemispheric policy aimed at increasing profits for American multinational corporations and in maintaining control over the region. Time and time again, in each of the countries at the center of the current crisis—El Salvador, Guatemala, and Honduras—and many other countries besides, the US has moved to crush governments that show any sign of pursuing political and economic democracy.

For example, leaders like then-Secretary of State Hillary Clinton and the rest of the Obama administration backed a coup d’etat in Honduras in 2009 against the popular government of President Manuel Zelaya. To the great benefit of the Honduran military, a small number of elite landowning families, and some huge American corporations.

The country is now essentially run by criminals, and has one of the highest murder rates in the world. Similar processes continue in Guatemala. And in El Salvador. Which finally has a progressive government, but which faces a hostile US Congress, truculent local elites, and greedy multinational corporations. Plus, major gangs like MS-13 that owe their existence to US machinations in the region.

It’s worth noting that once here, undocumented immigrants (and refugees) almost universally work hard, pay taxes, and contribute to their communities. So arguments that they are somehow stealing something or “taking jobs” from American citizens and documented immigrants remain ludicrous on their face.

The only way out of this dilemma is to not only institute a humane and just immigration system—a hard enough challenge in the present political moment—but also to enshrine the “right to move” freely between nations in international law. And ultimately the even more democratic “right to the world” that Vassar College professor Joseph Nevins recently explained as follows:

A right to the world complements a “right to the city”—the right to radically remake places and those who inhabit them in ways that are inclusive and socially and environmentally just and sustainable—that many on the political left champion. A right to the world envisions more than a right for those who already inhabit a place, however. It also seeks a right to a just share of the earth’s resources and to a sustainable “home,” and a right to traverse global space, especially for the globally disadvantaged.

In other words, a right to a world where people mired in structural poverty and violence—like the current wave of immigrants from Central America or the even larger wave of refugees from Syria—would have the freedom to move to countries where they have the possibility of building a new life. And the right to have their basic needs met wherever they go. Without being branded “illegal” and treated like criminals for doing what any one of us would do in the same circumstances.

Readers looking to help stop the latest round of ICE raids, and to work on the long-stalled federal immigration reform process, should get in touch with the Mass Immigrant and Refugee Advocacy Coalition and their network of allied immigrant organizations right away.

Those who want to fight for the right to move and the right to the world are going to have a less straightforward path—as they’ll have to help build a new movement for migrants rights from the ground up.

A good start towards that larger goal would be to join the National Network for Immigrant and Refugee Rights in pushing the US to ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. Steps beyond that will likely take a decades long fight.

For Americans feeling swayed by the anti-immigrant election rhetoric dominating both the news and paid campaign advertisements, I can only say this: take a careful look at the history of US relations with other nations in the Western Hemisphere and around the world. Notice what our political and corporate leaders did to those countries over the last century, and then reflect on where most immigrants and refugees are coming from. And why.

Then you might better understand why I’m saying that Americans owe immigrants and refugees a much better deal than we’ve been giving them of late.

It also wouldn’t hurt to remember that anyone who isn’t Native American is basically descended from immigrants. But please don’t embarrass us all by thinking that every one of your ancestors came here “legally.” Or that this land wasn’t stolen lock, stock, and barrel from its rightful owners.

If you’re looking for a book to read up on these and related matters, Howard Zinn’s A People’s History of the United States is still a fine choice.

La lucha continua.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

SILENCE IS COMPLICITY: GREATER BOSTON’S WHITE COMMUNITIES NEED TO SUPPORT #BLACKLIVESMATTER

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January 5, 2016

BY JASON PRAMAS @JASONPRAMAS

The #BlackLivesMatter movement is hitting the streets again in a renewed wave of protests for racial justice around Boston and America. Not that it has ever really stopped since Trayvon Martin was gunned down in 2012—as fresh injustices against Black people continue week after week, day after day. The latest being the unconscionable acquittal of the white cop who murdered 12-year-old Tamir Rice in cold blood for playing with a pellet gun in an “open carry” state.

#BLM is an impressive and necessary political phenomenon, led here as elsewhere by young Black activists. Which is as it should be. And there are significant numbers of allies from other communities—including white activists who have learned enough about the profoundly racist history of this country to be inspired to take action as well.

But there aren’t enough white allies. Not by a long shot. Especially in a tremendously segregated region like the Greater Boston area.

So the fact that hundreds of young white college students in Boston, Cambridge, and Somerville have marched under the #BLM banner is commendable. Yet not enough of a groundswell to spark a real change in attitude in largely white neighborhoods in the city proper or in the many largely white suburbs.

And that is by design. The segregation of Black people from white people was the result of a series of racist housing policies starting after the Civil War that culminated in Black people being packed into redlined neighborhoods in cities like Boston—and stopped from moving into most suburbs post-WWII until the Civil Rights Movement forced some improvements. The story was much the same for Latinos, Asians, and Native Americans. These policies continue in various forms to this day. Laws or no laws.

People in the predominantly white neighborhoods, cities, and towns are currently free to ignore #BlackLivesMatter. As long as that is the case, there can be no real justice for Black people in America. Because white people who are able to live apart from Black people will likely never confront the monstrous truths that #BLM—the new Civil Rights Movement—is exposing. Including the fact that their relative privilege is built on legal, political, economic, social and cultural systems designed to subjugate Black people. And in not confronting it, they perpetuate those racist systems. Silence, in this case, is truly complicity.

This situation will only change if the #BlackLivesMatter movement comes to them. Directly. In person. Every damned day from now until justice is won. And that cannot happen unless white allies step up in every white enclave. Beacon Hill. Back Bay. Hingham. Needham. Sudbury. Wakefield. Stoneham. Reading. Danvers. Marblehead. Any local can come up with a much longer list in their sleep.

Walk around these white areas and look for a #BlackLivesMatter or a #JusticeforTamir sign. You will see few—and those mainly outside some progressive houses of worship. And a disturbing number of the signs that you’ll see have been vandalized or otherwise messed with over the last year.

So here’s what has to happen to start to make things right. White people living in predominantly white communities have to start getting a lot more #BlackLivesMatter signs up. Then, when you all hear about major #BLM actions, spread the word to your friends and family. Go to the actions. Watch. Listen. Learn. Go back to your community. Find other local allies and call solidarity protests and vigils in public places. Organize community forums on the core #BLM issues. Always invite #BLM organizers to speak. Be respectful. Build political alliances. Figure out where to go from there.

This is how Americans can change a racist power structure that produces white cops who can cut down a Black child in a hail of bullets without so much as a warning. By tearing it up at the roots, one neighborhood at a time.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.