If you’re confused about the wave of protests sweeping the country, don’t be alarmed. It is confusing. Who are the protesters? What and who are they protesting? And what do they want?
It turns out that there are two different but overlapping movements taking to the streets. Both are angry at the richest 1 percent of Americans, who have made out like bandits while most of the rest of us have seen our wealth, income and standard of living decline. Both blame Wall Street for causing an economic crisis that has led to massive layoffs, foreclosures and cuts in government services. And both oppose tax breaks for the superrich and bailouts for banks.
The one getting the most media attention this fall calls itself Occupy Wall Street, although it has recently spread from New York’s financial center to Boston, San Francisco, Los Angeles, Chicago and other cities [see “Occupy America,” above].
Rose Gudiel is part of the other wing of the protest movement. Gudiel, who juggles two jobs and lives with her parents and brother in a working-class suburb of Los Angeles, has become the public face of a burgeoning crusade to defend homeowners from unfair evictions. She, her family, neighbors and other supporters have pledged to risk arrest when the LA County sheriff tries to evict them from her home now that Fannie Mae and OneWest Bank have issued a foreclosure notice.
Gudiel belongs to the Alliance of Californians for Community Empowerment and the Service Employees International Union, organizations that have led the fight for bank reform in California. Their protests are rooted in the specific grievances of their mostly low-income and working-class members, who have been laid off, ripped off and evicted by banks engaged in predatory lending.
The ACCE, SEIU and other California unions and community groups have been mobilizing homeowners since the beginning of the economic crisis. They’ve organized meetings with bank officials to try to get them to modify loans rather than foreclose on homeowners. When negotiations break down, the activists have resorted to protests and civil disobedience to draw attention to abusive practices and the banks’ failure to deal with homeowners in good faith.
The goal is not simply to help a handful of homeowners stay in their houses but to create a mounting sense of urgency, so that banks change their practices and politicians change government policy. This year SEIU persuaded the San Francisco Board of Supervisors to renegotiate its “interest rate swap” with JPMorgan Chase, allowing the city to repay its loans at the current lower rates, thus saving San Francisco $40 million. Similar campaigns are under way in other cities. The coalition has pushed for local laws that will fine banks up to $1,000 a day if they don’t maintain empty foreclosed homes to avoid neighborhood blight. Earlier this year the coalition urged the California legislature to make banks pay a $10,000–$20,000 fee per foreclosure to help cities address the damage they cause. According to conservative estimates, foreclosures have reduced property values in California by $650 billion, resulting in a loss of up to $4 billion in property taxes.
The activist groups are now putting the heat on banks to reduce mortgage principal for struggling homeowners. Many economists say this is an effective way to revitalize the housing sector and bring about a recovery. Californians with underwater mortgages overpay banks $20 billion a year—money that could instead be pumped into the state’s economy. The activists also want the legislature to establish a mandatory foreclosure mediation program to ensure that homeowners receive due process and a fair chance at negotiating loan modifications.