President Bush announced a plan last week to freeze interest rates for some homeowners facing foreclosure. But critics say the plan’s strict guidelines will leave out the most vulnerable. We speak with the Rev. Jesse Jackson, who is helping to organize a march on Wall Street today dubbed “Save Our Homes — Fight Home Foreclosures, Defend Our Economic Rights.” [includes rush transcript]
AMY GOODMAN: The nation’s housing crisis has been called the biggest immediate threat facing the US economy today. Amidst growing unease, President Bush announced a plan last week to freeze interest rates for some homeowners facing foreclosure. But critics say the plan’s strict guidelines will leave out the most vulnerable. The Center For Responsible Lending says Bush’s plan will only help about 7% of subprime borrowers, or about 145,000 families.
A subprime loan offers borrowers a mortgage, but at a disproportionately high rate they often can’t afford. The subprime market has fueled a record one million foreclosures this year, with an estimated two million expected in 2008.
A growing coalition of housing and civil rights advocates are calling for federal intervention to protect homeowners from foreclosures. Today, those calls are coming to the hub of the lenders and investors behind them. Demonstrators will gather in the heart of Wall Street for a march dubbed “Save Our Homes—Fight Home Foreclosures, Defend Our Economic Rights.”
The Reverend Jesse Jackson and the Rainbow/PUSH Coalition have helped organize today’s march. Rev. Jackson joins me now in the firehouse studio, just blocks from where he’ll lead the rally at noon today. Welcome.
REV. JESSE JACKSON: Thank you very much. This is indeed a huge economic crisis. It is sinking banks around the world. Goldman Sachs has a two trillion dollar-plus impact. It’s put us into a long-term economic recession. So we’re not just saving the home borrowers; we’re now saving the entire economy.
AMY GOODMAN: Who’s at fault here?
REV. JESSE JACKSON: The bankers who precipitated and abused the subprime loan — what was a scheme became a scam. The rationale at first, Amy, was that for people who had low credit scores — sometimes artificially low, I might add — this was a way to get them loans. But this was abused rather quickly. You have evidence of redlining and targeting and steering; targeting seniors, for example, who are on fixed incomes, and to refinance beyond their ability to pay, sometimes not giving them good information about escrow, where they pay on the interest but not pay on, you know, taxes and insurance, that type of thing, and taking seniors from — the predators take your home; the vultures buy you out.
But by now — I was in Prince George’s County this weekend. 13,100 folks in one county, impact of $3 billion loss in value — it’s the size of the entire county’s budget. It’s a big deal.
AMY GOODMAN: President Bush made his announcement dealing with the crisis on Thursday.
PRESIDENT GEORGE W. BUSH: The rise in foreclosures would have negative consequences for our economy. Lenders and investors would face enormous losses. So they have an interest in supporting mortgage counseling and working with homeowners to prevent foreclosure.
The government has a role to play, as well. We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could never afford. Yet there are some responsible homeowners who could avoid foreclosure with some assistance.
AMY GOODMAN: That is President Bush speaking on Thursday. “Reckless,” Rev. Jackson?
REV. JESSE JACKSON: He offers an umbrella when we need a tent, number one. We put together a resolution — a Reconstruction Finance Corporation to bail America out of the Great Depression, similar to the Resolution Trust Corporation, the S&Ls in the 1990s. This thing is so big it’s beyond, in some sense, blame. If the house is on fire, you can’t focus on the five books or the — you need ladders and windows. You also must have some kind of reconstructing corporation where the most egregious filers like Countrywide would invest in such a fund. In the meantime, you’re looking at record levels of evictions and foreclosures. And when you cannot pay taxes, it undermines schools and public transportation and healthcare. And that’s why the government has a role to play. Bush recognizes a role to play. He covers maybe 7% and leaves 93% out in the rain. We need a much more massive approach than this by our federal government, a kind of mortgage Marshall Plan.
AMY GOODMAN: You’re targeting Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers and Bear Stearns. Why these?
REV. JESSE JACKSON: Well, it’s not just them. We’re saying that Wall Street had a role to play in the subprime lending scheme, and they then loan not to people, but they loan to the predators, who then — the brokers, who then sell to the people. And so, it is so big. So without government regulation of the banks, without transparency, it was open season on the people. And so, the government has a role to play, because its lack of diligence allowed the banks to run amok to get these fast profits. And then the banks used their freedom, in fact, to set these abusive subprime sub-crime scams on — I might add, a lot of targeting, racial targeting. For example, in Michigan — 20% white, 20% Latino, 55% African American — a lot of targeting went on, a lot of seniors targeted in this process.
So I’m marching up the stairs today in New York. We want massive restructuring over repossession of homes; restructuring of loans, not repossession of homes. And we’re marching in New York today; on the LaSalle Street in Chicago at the Federal Reserve Bank; at Countrywide in Atlanta, Georgia; Countrywide in LA. Around the country we’re now fighting back, saying, “Borrowers, do not surrender. Fight back!”
AMY GOODMAN: Now, you’re asking these banks to give back, to put into — calling on investment banks to donate holiday bonuses to a foreclosure prevention fund?
REV. JESSE JACKSON: Indeed, because they should not be making huge profits at the expense of people who are losing their homes, because they made profits based upon this exploitative scheme. And Mr. Greenspan said he did not recognize — he didn’t see this coming. Well, it’s an economic tsunami. We see it coming now. Unless we move quickly with some kind of government infrastructure, you’re looking at three-and-a-half million homes in foreclosure, maybe another seven million that are in subprime loans. Its impact on cities, on small towns will be absolutely devastating. We’re going to pay to not save the people’s homes, bill that we pay to keep them in their homes over long-term interest, restructured loans, as opposed to repossession of homes en masse.
AMY GOODMAN: One of the places that you’re going to, Rev. Jackson, is your hometown, Chicago. How has it affected Chicago?
REV. JESSE JACKSON: 30,000 homes in foreclosure, 80,000 with late payments, and it just keeps — and you can see the target, you can see the neighborhoods that have been targeted and set up in this way. Some of the people were given deals where it was beyond their ability to pay, and they inflated their ability to pay, because they were like set up to do so. In other instances, we see seniors targeting, who were offered products that they could not afford to pay, but they were made false promises. At some point, you must be able to trust your doctor or trust your bank. When trust breaks down, tyranny sets in.
AMY GOODMAN: Do you see subprime as a crime? Do you see the whole scandal?
REV. JESSE JACKSON: The scandal is subprime sub-crime scheme. What was a scheme is now a scandal. The original idea in 1980 was that a significant body of people who could not afford conventional loans, because sometimes artificially low credit scores, sometimes artificially kind of driven down, but — and the idea was to make available loans to them. Early on, high above what was a help became exploitation, and now it has run amok.
And if in fact we do not stop it, its impact upon — why is Schwarzenegger involved in California convening Countrywide and others? Because it’s going to sink his economy. Why are mayors involved? Because mayors’ cities will go down the tube, unless we in fact make a massive move. So Mr. Bush’s plan is too little and very late and not — it does correspond to the size of the problem. So for the Reconstruction Finance Corporation that brought us out of the Depression — it’s bigger than that, by the way; the numbers are much bigger — or Resolution Trust Corporation out of the S&L crisis, now we need a Resolution Trust Mortgage Corporation to bail us out of this situation. People pay back, but over a longer period of time.
AMY GOODMAN: The comparison to the Marshall Plan?
REV. JESSE JACKSON: It’s comprehensive. When Europe could not make it back on conventional rates we made available to Europe — fifty-year loans at 2%, government-secured — we bailed out the economy. It helped Europe, it gave us the market, it gave us a strong defense, it gave us allies. We thought bigger than one bucket of water trying to dip in the ocean. We thought in big terms. Reconstruction Finance thought in big terms.
That’s why I hope that those who are running for the presidency, all of whom have some idea, some plan, but they need to make this issue of bailing out American homeowners and bailing out cities as central to their campaigns. We know everybody wants to get out of Iraq and questions who says what, when, how soon. We must put the same kind of focus we put on Iraq now on our own economy, which is in — between the debt to China and this long-term recession we’re looking at and the Iraq war, it will sink our economy.
AMY GOODMAN: Let me ask you — you mention the candidates — about the candidates. Fellow Chicagoan Oprah Winfrey was in Iowa, New Hampshire, in South Carolina, campaigning for Barack Obama. The largest campaign rally in this campaign happened in South Carolina —-
REV. JESSE JACKSON: Maybe ever.
AMY GOODMAN: —- something like 30,000 — right, maybe in history. In Iowa, 18,000 people came out. How significant is this?
REV. JESSE JACKSON: It’s a big deal. As you look at Oprah as a key campaigner for Barack, and Bill for Hillary, in this instance, it remains to determine, will these crowds see this as entertainment or involvement, and that becomes key. I think Oprah may have the edge, in that polls are not polling new or unexpected voters. If new and unexpected voters turn their enthusiasm into voting, it’ll have a big impact. That remains to be seen. But it is significant to involve people in the process. People are now arguing politics, arguing leadership, fighting for who has the best plan to end the war in Iraq, who has the best plan indeed to deal with urban policy, the best plan to restore healthcare. And I would hope that this involvement will carry over into turnout in the campaign and into ’08 November.
AMY GOODMAN: Does any of their plans satisfy you in getting out of Iraq?
REV. JESSE JACKSON: Yes, but we started late. But I think there’s now almost a consensus that this war was an error, that we were lied to — no weapons of mass destruction, no al-Qaeda connection, no eminent threat. And we’ve built a house on sand; now we’ve lost lives, money and honor. So there’s a kind of consensus now that we should get out of Iraq as quickly as we can with some process of bringing some [inaudible], because we got in by ourselves, basically; we can’t get out by ourselves.
AMY GOODMAN: Are you endorsing a candidate?
REV. JESSE JACKSON: Well, I’m supporting Barack as a candidate, but I’m not campaigning for anyone, because I’ve tried to be focused on putting forth the issues that matter to all of them. I maintain open lines of communication with Hillary, with Barack, with Kucinich, with all of them, because right now I think what’s missing, Amy, is real focus on how to bail us out of this calamity of the subprime crisis, which is so big; the need for an urban policy, when bridges are collapsing and levees are breaking, schools are falling down; and thirdly, the need to focus on the emergency state of black America. You know, two million Americans are in jail; a million are black. In New Jersey, 60% of blacks are expelled more often than whites. I mean, the impact of the abandoned urban policy and isolating of black Americans is a big deal.
Let me say this to you quickly: this whole economic subprime crisis comes because we ignored the civil rights of the black, the brown and the poor. The water came in at the bottom of the ship, and now it’s up around the deck and up around the captain’s table. So we’re paying a big price for not civil rights protection of all Americans.
AMY GOODMAN: This latest news: City of Chicago agreeing to pay nearly $20 million to four former death row prisoners who gave false confessions after being tortured by Chicago police led by the police commander Jon Burge.
REV. JESSE JACKSON: It’s our own Abu Ghraib. And there has been too little commitment to in fact deal with it. My son, Jonathan Jackson, has focused on this issue for months on end now, because there are more torture victims still on death row. The sticky wicked of it is that Mayor Daley was the state’s attorney when Jon Burge did these tortured confessions, and if it really unravels, it’s going to involve a lot of Chicagoans. This is an ugly set of international crimes that must not be ignored any longer.
AMY GOODMAN: Finally, this latest news that’s just come out: the leadership of the Democratic and Republican Party in the House and Senate — Nancy Pelosi, Jay Rockefeller and others — were in on, were briefed early on, about torture. And according to the Washington Post, they not only didn’t stop it, they condoned it, in top-level, you know, secret intelligence briefings.
REV. JESSE JACKSON: I’m disappointed. And that may be why, when the issue of torture came up with the new attorney general, they were so mum, because in some sense they were complicit, complicit in the process. We must have an ethical standard that we espouse and that we also live by. We cannot compromise our ethical standards and our dignity for short-term politics. We deserve better than that.
AMY GOODMAN: So, you’re going to be out on Wall Street today.
REV. JESSE JACKSON: Today, Exchange and Broad at high noon on Wall Street in New York; LaSalle Street in Chicago; and Peachtree Street in Atlanta, Georgia, around — we’re going to start marching and not stop until we in fact stop evictions, stop foreclosure, and choose long-term restructuring of loans over repossession of people’s homes en masse. We cannot afford it, and it’s not right morally.
AMY GOODMAN: Reverend Jackson, thanks for joining us.
REV. JESSE JACKSON: Thank you.