Wednesday, October 5, 2011

It's about the banks, stupid.

"Don't blame Wall Street, don't blame the big banks, if you don't have a job and you are not rich, blame yourself!" - Herman Cain

"I don't have facts to back this up, but I happen to believe that these demonstrations are planned and orchestrated to distract from the failed policies of the Obama administration." - Herman Cain

Herman Cain is right about one thing - he doesn't have the facts to back up what he's saying.  Cain made these statements in a recent Wall St. Journal interview - irony indeed.  Clearly, Mr. Cain has no idea what these protests are about and why should he?  Herman Cain probably uses an ATM to get cash as often as I fill up from the premium unleaded pump.  I'm sure he has no idea that it was things like the introduction of new bank and ATM fees by Bank of America that helped spur these protests.  In the narrow-cast minds of the Wall St. coddling conservatives, every time someone with less money in his pocket than you complains, it's "class warfare".  See, poor people aren't allowed to be angry, middle-class people aren't allowed to be angry, because if they were really angry, they'd just stop being poor or middle-class, it's that simple!  Don't like not being a millionaire?  Then go be one!  Nobody's stopping you!  Cain isn't the only presidential hopeful who just doesn't get it, either.

"I think it's [the occupy Wall St. protests] dangerous, this class warfare," - Mitt Romney

There's that old dog whistle again - class warfare.  That's the catch-all label for any time someone who isn't as rich as you complains about anything.  See, to these clueless conservatives, the whole of the occupy Wall St. protests - and the other protests happening in major cities all over the U.S. - are simply about people who don't have money bitching about people who do and sitting there with their drum circles and their pup tents waiting for Comrade Obama to force those poor millionaires and billionaires to give away all their money so these whiny, smelly college kids can get a free hand-out for doing nothing.  Of course guys like Romney and Cain would see it that way, they're bought and sold by the very banks and financial institutions that the OWS protesters are demonstrating against.  How could a guy like Mitt Romney - who's never wanted for anything in his life - possibly understand what it's like to be a struggling, middle-class American in today's economy?  Herman Cain though... he really has no excuse.  He prides himself on his humble upbringing, constantly telling the story of how he made his fortune at every opportunity, to make himself seem more "in touch" with the working man, yet he is just as clueless and arrogantly out of touch about the OWS protests as Romney.  Does he not understand that, if he were still struggling along with his poor, lower-class family, that something like a $13 a month account fee and a $5 monthly ATM fee at his bank would kind of be a big deal?  Especially when that bank just foreclosed on your house last summer?  That same bank that posted record profits for the last 2 years, bought up nearly a dozen other banks and became the largest financial house in the country in those same 2 years?  I'm sure Cain would take a different view of these "poor" banks he defends if he were one of his family members that he doesn't talk to anymore because they just always ask him for money when they see him...

Conservatives and their Tea Party sycophants love to decry taxation.  They love to rail against unfair taxes that haven't even been levied yet by the imagined socialist regime of the Obama administration, but they're perfectly fine with defending what is essentially a punitive tax on the middle-class through these new bank fees.  There are some basic truths about the banking habits of average Americans that come to play with the implementation of these new fees by BofA and the other major banks.  The basic truths mean that these fees will disproportionately affect middle-class and lower-class families more than they do the wealthy.  I'll explain...

Most working-class families use their ATM debit cards frequently.  They make small purchases, buy gas, get money out to pay bills or go shopping and essentially rely on the use of their debit card as an alternative to carrying cash on them.  It's been this way for a while, so nothing new here.  The wealthier an individual, the less likely they are to make a myriad of small purchases and cash withdrawals using an ATM or debit card and the more likely they are to earn special considerations - including the waving of these new fees - as an incentive to keep doing business with their banks.  Large depositors are valued by the big banks, the more money you keep and invest with your bank, the more perks you are given as a reward for that patronage.  Many wealthy individuals also use charge cards - like American Express - and pay the balances off each month.  This makes expense accounting easier and, since most wealthy individuals file long-form tax documents, easy expense accounting is a good thing.

So, let's do some quick and dirty basic math here.

The new BofA fees are about $13 per month to maintain a checking account and $5 per month to use your debit card.  These fees are waived if you maintain an average deposit of $50,000.  Right off the bat, this is a fee that only applies to customers with low average deposits - i.e. middle-class and lower individuals.  So, you're looking at about $20 per month in new fees simply for the privilege of being able to spend your own money.  This doesn't include overdraft protection, which is more likely to be used by lower-income households who find themselves often in the position of having to overdraft their accounts to cover bill payments and the like.

Now, assume an average middle-class income of $50,000 per year, or about $4,166 per month before taxes.  Subtract federal, state and local taxes and the average annual take-home pay is somewhere around 3,300 per month.  A $20 fee works out to 2% per $1,000.  Now, for a frame of reference, the Tea Party was started just because of the suggestion of raising taxes on the wealthy by 4%.  Charging a 2% "banking tax" on the middle-class is apparently perfectly fine, though...

Keep in mind, also, that these are just "new" fees and there are still the same old fees that disproportionately affect lower-income account holders, like overdraft fees and account maintenance fees.  These fees are typically all waived for high-dollar depositors, so they primarily target the "99%'ers".  It's not uncommon for a struggling, working-class family to overdraft their accounts trying to keep up on the bills and squeak by from month to month.  Fortunately, it's easy to opt out of overdraft protection, but for many Americans the cost of overdrafting their account is a necessary evil compared to having utilities shut off, not making an important payment or being unable to buy food for their families or gas to get to work.  A $35 charge for the ability to keep the lights on another month is a trade-off that too many working-class Americans are faced with making these days.

The bottom line is, for the average American family, the "privilege" of being able to keep your money safe in a bank and access it as if you actually have the right to do so means paying anywhere from 2-5% or more per month in "bank taxes".

These are the same banks who were handed nearly a trillion dollars of our tax money in 2008 in order to stave off a financial collapse that they created by playing casino with the stock market and knowingly trading in junk mortgage-backed securities.  They were given this money so that they could continue lending and maintaining consumer confidence, provide mortgage relief to distressed homeowners, as well as help to keep small businesses afloat through the loans that are essential for those businesses to cover payroll and operational costs.  As we all know, these banks didn't do any of those things.  Instead, they used that money to buy smaller, failing banks, reinvest at the bottom of the market and earn so much profit so quickly that they paid back all of that bailout money in just over a year.  In the aftermath of the financial meltdown of 2008, 4 mega-banks took control of over 90% of all monies in the country.  As for the mortgage relief... well, it would take almost another trillion dollars in additional taxpayer money for the few remaining banks to even begin considering working with homeowners desperate for some relief.  Even now, less than 500,000 of the millions of distressed homeowners sitting on underwater mortgages have received any kind of relief - and that relief has been primarily in the form of reduced interest payments, not principle reductions that would help them get out from under the boot of being underwater on their home loans.  Here in CA, in the central valley where I live, the average homeowner is anywhere from $50,000-$200,000 underwater on their home loans.  Personally, we are about $100,000 underwater on ours.  The law will change next year so that anyone who sells their home at a loss of profit and has that debt difference forgiven by their lender will be subject to taxation on that debt forgiveness as if it was earned income.  So, this will be the year of the great walk-away for those few remaining homeowners who have been holding out for some meaningful mortgage relief and getting nothing in return.

Perhaps the ultimate slap in the face over this whole mortgage relief debacle is that every bad loan these banks currently hold has already been paid for by the government!

That's right.  Under the Troubled Asset Relief Program (TARP), banks and lenders had the bad mortgage loans on their books paid back based on the original loan amount.  That means if a bank bought your mortgage loan from a failing smaller bank in 2008 and you owed - say - $250,000 on a $300,000 loan for a house that was only worth $150,000, the bank got paid the difference between the $150,000 current value and the $300,000 initial loan amount, or $150,000.  Now, if you short-sold that house and only got $100,000 for it, the bank then got 80% of that difference reimbursed, or $40,000.  Additionally, depending on what state you live in, you may have been required to still pay back the outstanding balance on that loan - or $100,000.  So, add all that up and the bank just made $140,000 profit from you losing your house.  And people wonder why the banks won't return their phone calls when they're asking for loan assistance!

As if that wasn't bad enough, many of these banks don't even hold the original deeds to the houses they're foreclosing on, making those foreclosures completely illegal.  In fact, if you challenge your home loan in court and the lien holder cannot provide the original deed of sale, then you can have your entire home loan dismissed.  Regardless, this hasn't stopped tens of thousands of families from being illegally forced out of their homes by unscrupulous banks who then double-profited from the bad debt that they conspired in the creation of in the first place.

So, now that the banks are richer, bigger and more powerful and influential than ever, they have decided that being the most profitable industry in America next to the oil industry isn't enough and now they're assessing even more fees and charges to working-class Americans.

And guys like Herman Cain, Mitt Romney and the rest of the Republican politicians and Tea Party lapdogs still think it's just about "poor people being jealous of rich people" and class warfare?

It's about the banks, stupid.

It's about the rampant, unchecked greed that has brought our economy to the brink of collapse and stunted the economic growth of 99% of the country for nearly 5 years.  It's about rewarding that greed with over a trillion dollars in government handouts, sponsored by the very same tax-paying Americans who have been victimized by that greed.  If the banks were people, they would be the guy who raped you while you were walking home one night and the government ruled that you were responsible for paying them for the pain and suffering of hurting their penises by raping you in your improperly-lubed anus.

It's about the continued economic uncertainty that remains in the wake of the 2008 meltdown.  The fact that the global economy is still on the brink of collapse because all the major banking institutions around the world pulled the same extortion scam on their governments that the American banks pulled on ours.  First they stole trillions from the markets by playing casino with the house's money, then they stole trillions more in bailout money through the fear of economic armageddon and now they're going after the change that's still left in the pockets of the working man through nickel and dime fee increases.  You know how you just paid your rapist a big fat settlement because your butt hole hurt his dick?  Well, after you handed him the check, he spit in your face and called you a whore.

That's why there are tents popping up in the financial districts of every major city in the country and why the crowds are growing every day.

That's why the OWS movement is gaining steam and support from a broad base of people and organizations who understand that rampant, unchecked greed on the part of banks and financial institutions is wrecking our country, destroying the middle-class and ruining people's lives - all for the sake of even more profits.

That's why the financial corporations and the media empires they control are dismissing these protests and their mouthpiece lapdogs like Herman Cain and Mitt Romney are marginalizing the protesters and playing the tired old "Class Warfare" card again and again.

That's why we can't let the banks win.  Why we can't give up the fight.  Why everyone who cares about preserving the American Dream, defending the middle-class and ever seeing the light at the end of this dark economic tunnel we're in needs to do something to help fight against these banks.  Join a credit union, or at the very least stop banking with BofA, Wells Fargo, Chase or Citibank.  I know, that doesn't really leave a lot of other options, but nothing worth doing is ever easy.  You don't have to camp out in front of a bank or city hall for weeks on end, but don't just sit back and say "But what can I do?"  You can stop giving your money to these greedy bastards and funding their "Class Warfare" against the 99% of us who aren't members of their privileged club.

Most of all, start voting for your own self-interests instead of against them.  Stop defending greed, stop justifying your own victimization.  Don't complain about the greedy bastards at the bank who just jacked you for $50 in fees this month while simultaneously supporting the politicians who want to give those banks even more power to keep screwing you over.  Stop letting millionaires tell you that you're just jealous of them because you aren't as special as they are.  Stop believing that money is the only measure of a person's worth.  Stop thinking that just because someone has more money than you that they're automatically smarter, better and more correct than you.  Rich people are smart in this respect - they know which side their bread is buttered on.  They know who's policies to support in order to stay rich and get richer.

Understand, though, it's not about hating someone because they're successful, because that success is what the American Dream is all about.  It's not about simply rallying against those who have money, because a lot of successful small businessmen and women have wealth and they're using it to create jobs and do good things for their communities.  I'm not saying you should hate someone or view them as the enemy simply because they have more money than you.  I'm saying that if rich people are smart enough to vote for the policies that benefit them, then it's time the other 99% started doing the same thing.  Rich people aren't the enemy.  It's not about "Class Warfare".

It's about the banks, stupid.

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