Foreclosures: costs and movements

video_button_white_dred.gifThis video extract from Democracynow.org of 29 November discusses the social and human cost of foreclosures in the US, the number of which has nearly doubled to 225000 in the Month of October.

Also shown is an interviews to activists from NEPAD, an NGO who is asking Investment Banks to aknowledge their responsibility in this crisis and donate their holiday bonus to prevent furhter foreclosures. About 2 million home owners are potentially facing foreclosures when their adjustable rate mortgages resets at higher rate. Their campaign must have just been outflancked by the recent Bush’s administration move towards an interest rate freeze which just came up with an agreement with mortgage industry towards a temporary rate freeze. The New York Times however reports the deal contains numerous limitations that would exclude many — if not most — subprime borrowers. For example, any homeowner who is behind in mortgage payments will not be eligible for the deal. Another interviewed here is an activist from Changer, another NGO which organizes home owners. Not really clear what this organizing does, but I have not heard reports of foreclosed home owners marching in the streets and rioting in front of Wall Street (a part for the demo against “unscrupolous lenders” called by Jasse Jackson on Dec. 10). What is quite unsettling in these interviews is the moralistic tone, the comparison with cases in other products markets, like when toys produced for Mattel by Chinese factories were recalled because they were poisenous. The activists are making the case here (I guess) that these mortgage products were as dangerous, hence borrowers should get compensation. Why do we insist to moralise capital’s discourse instead of counter-pointing different values to it? In Mattel’s case, you either take you crap products back or you’ll never buy one again from you. Very clear case of interests against interests within a relation of buyers and sellers. In the sub-prime case, as in any case of financial speculation, the product-mortgage is crap only to the extent it does not deliver an increase in wealth because house prices have not increased as expected. But who is to say that house prices have to keep increasing? To go back to the banks and say “oh, we did not know this” — even if this is the case because of their often fraudolent activities — and organise on this basis, it seems to me is self-defeating. This at least for two reasons. First, it is a discourse that does not confront the state intervention to divide opposition through its “governance”. Bush comes in, freezes interest rates but only to those who are not in arrear with payments, hence allowing a certain degree of families bankrupsy and dividing the front. The paramount thing is that the principle of debt re-payment is upheld as a sacred totem. Second, the “oh we did not about this” type of argument individualises responsibility, and put it on the shoulders of those who have not read the small print. It backfires. The key point is that sub-prime mortgages were affordable to the poorer borrowers only to the extents house price kept on increasing. The Jasse Jackson’ “unscrupolous lenders” were matched by “unscrupolous borrowers”. This is the harsh reality of money and debt. The key thing that must be highlighted politically is that poor borrowers became speculators as a way to make ends meet, to reproduce their labor power in condition of declining real wages. It is this logic that must somehow be overturned with a movement that seek to disentangle reproduction from both capitalist markets and speculation. But to recognise this is also to recognise the connection between US working class drive to debt and casualised overwork, and Chinese workers factory overwork and pitiful wages, manifested in the US trade deficit and its financing mechanism.

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