Livinglies's Weblog

Statistics, Index, and the Power of Information

livinglies — Sat, 17 May 2008 16:56:22 +0000

CONVERSION FROM INDEX TO REALITY

Obama’s call for “TRUTH” is a simplified statement that calls into question the manner in which information is collected, the way it is presented and the manner in which it is disseminated to the public.

Underlying this simple call for integrity is his assessment that information flow is fundamentally flawed and that a much needed correction will result in smarter policies that people will give credence to and lend their active support; and that the self-fulfilling negative prophecy we are all living can be turned into a positive climb in quality of life. If you already believe this and understand it, there is no need for you to read this article. If you think his statement is mere lofty rhetoric, you might want to consider my presentation here. For those who want further information, look for books by Von MIses and Rothbard.

The tools of power are all based in information. If the information seems reliable, then the policies foisted on us seem reasonable and even “right.” The basic tool in use today is the statistical index. There is something about an index that when published gains the credulity of the public and even those who know better. It is like a self-fulfilling prophecy.

American political and economic history can be viewed from many perspectives and themes. One of them is the ebb and flow of our collective perception of people, regarded sometimes as labor, sometimes as capital and sometimes not at all.

The current business, economic and political environment has failed to advance or evolve very much for most of the people of the United States, even though women received the right to vote some 80 years ago, and blacks received the right to vote some 40 years ago.

The tendency of certain people to accumulate great wealth and power in any society of any nature inevitably produces an inequality not only of results, but of opportunity. American voters, deprived of the education and information they need to know to make informed decisions, are easily manipulated into voting against their own interests. An educated voter is a nightmare to any power broker, economic cartel, or political cartel.

When adults cannot find states, cities or even continents on a map displaying all the information with proper labeling, it is not hard to see how such people can be easily deceived. And those with power and wealth are eager to deceive them, gaming the electoral process into a utility to maintain and expand their wealth and their power.

The tools of power are all based in information. If the information seems reliable, then the policies foisted on us seem reasonable and even “right.” The basic tool in use today is the statistical index. There is something about an index that when published gains the credulity of the public and even those who know better. It is like a self-fulfilling prophecy.

Whether it is Libor, the inter-bank lending rate index, the CPI, which supposedly measures inflation for consumers, or the indexes used to measure market dominance, we have drawn artificial lines in the sand which allow those in power to continue on their merry way while the rest of us wonder what hit us.

The reality is that Libor, bond ratings, measurements of consumer prices, measurements of those employed, measurements of those unemployed, measurements of those underemployed, productivity, and unfair trade practices are all at substantial variance with reality. Thus the mortgage meltdown, the recession, and another opening of Walmart that kills thousands of jobs, hundreds of companies, thousands of opportunities for innovation, and diminishes our choices to dangerous or inferior products with virtually no service inside the store and no assurances of fair treatment once a sale has been completed.

Walmart is able to achieve this feat and become one of the largest companies in the world by converting labor back into capital despite the 13th Amendment. As with all companies of great wealth they were able to purchase the rights to make their activities legal. In reality, those of us who live in the world created by this cash carry government policy making, we see that there is complete 100% market dominance by Walmart in each town it hits.

But statisticians for Walmart just like the statisticians for the drug companies, look for a sampling that gives them the arguable position that what we see right in front of us, just isn’t there. We are deceived, or so they say. We are not looking at the “big picture.” True, nor should we look at THEIR big picture if we want OUR lives improved. There should be a healthy competition between accumulation of wealth and quality of life. In truth, we are at the bottom of the barrel on the level of that all-important competitive “index.”

By expanding and contracting the area “affected” by a Walmart store one can present a plausible argument that there is no significant effect on competition. We know different but there it is right there in black and white, by the numbers.

By contracting the sampling on a drug study to a specific period of time where nothing adverse happened to patients taking the experimental drug, the drug is pronounced safe and then tens of thousands of people die because it wasn’t safe, as the REST of the data clearly showed. Management of disinformation is the way we are manipulated into voting against ourselves. Political slogans emanate from false statements from apparently reliable sources. And we are all deceived.

By hiring all graduates of regulatory agencies when they retire, a retailer or drug or oil company guarantees that the regulators will not look too deeply into the manner in which such an index is presented. Plausible deniability is the name of the game. The result is you and I get screwed. That is the story of antitrust, the FDA, and dozens of other agencies serving the business sector to the nearly complete exclusion of the safety and welfare of the taxpayers in whose name they operate. It is the equivalent of a hostile takeover of government where the cash and carry system of legislation perpetuates not merely inequality but threats to the safety and welfare of our citizens.

“Inequality” (regardless of how you define the word “equal”) does and will exist in the most despotic regimes following ideology from Marx to Plato’s progeny producing the likes of John Locke and the scholars of the American Revolution. No regime can provide or assure a specific outcome for the life of one or any of its citizens. This article takes no issue with the inevitability of inequality.

Yet we have an innate sense of right and wrong even when we do wrong. We know that “all men are created equal” has a meaning even if we can’t all agree precisely what that means. We know that the U.S. Constitution was written to provide a framework for liberty and freedom but not for women, native Americans and slaves. Women and native Americans counted as zero and black slaves pulled slightly ahead of women at 3/5 of a person, as stated in our constitution.

When the American Slaves were freed about 160 years ago it was, in an economic sense, a conversion of capital into labor.

Slaves had been purchased and traded like bales of cotton or rice or tobacco; they were property, they were allowed no education, no free will, and of course no bargaining power. How would anyone go about “educating” a bale of cotton? It makes no sense. While mystics ascribe a soul to everything, whether we think it is alive or not not, most of us are quite tolerant at denying rights to a bale of cotton, even if it is burned, torn apart are thrown under a bus. In a word, if the cotton “feels” anything, we don’t care and it isn’t likely that we will care anytime soon or that we should. Something in most of us “knows” that the cotton is not worthy of our sympathy, nor do we sense any obligation to it.

The system made perfect economic sense: the cost of production was reduced to the absolute minimum, repairs of equipment and “other capital” (like slaves) were repaired until they were of no further use at which point they were discarded. And unlike other forms of capital, slaves reproduced, thus continually expanding the potential for production without further capital expenditures.

Society organized around this system in such a way that no actual person worked, without being regarded as disgraced. Plantations were worked by slaves, managed by slaves and the wealth generated went exclusively to the Plantation owner. The threat of removing this system, depriving the owners of their possession of slave capital was a threat to the entire way of life that had evolved over 200 years.

It makes sense only if you look at some data and not look at other information. The slave capital system was missing a key ingredient — a prospering rising middle class. The non-slave states had it and they did far better in the long run than any of the slave states many of which are still, 160 years alter, at the bottom of the barrel economically and in quality of life. Their resistance to allowing education to a significant population of former slaves was the equivalent of shooting themselves in the head. It was an all or nothing mentality. Either the slaves would provide free production or we won’t help them do anything.

The “information” Southerners were working with was that blacks were less than human. They thus deprived themselves of the single greatest resource they had to compete in a national economy and eventually internationally. Politicians looking for power found it easy pickings to tease voters into anger and resentment about the Civil War, about slavery, and about Jim Crow segregation. The politicians objectives were simple: maintain power. The rest of the people be damned. (which at the risk of political incorrectness, makes the Reverend Wright’s comment plausible, even if ill-constructed. He wasn’t wrong in what he said. Yet he missed an important point: 40-160 years ago he would have been tortured and hung for making a statement that passed only as a news story now).

The importing of tens of millions of Mexican laborers who had “illegal” status is an inevitable result of big business’ realization that the lock on the poor white and poor black populations was loosening. The grip of fear of discovery gave the leverage needed to convert these workers from labor to something as close to slave capital as would be tolerated in our society.

The mortgaging of America’s future, with all the inevitable taxes that implies, the culture of debt rather than savings, and the withholding and diminishment of education through all walks of life in America is the policy behind the tools of our re-enslavement. The risk now is higher and more widespread than in the 1790’s when women, slaves and native Americans were already discounted capital. Now the government and the business sector have us all targeted as potential “capital” instead of unhappy black men caught like animals and transported like capital with acceptable losses at 1/3 of the cargo.

And the only thing that can stop them is a reversal of the institutionalization of ignorance. We have accepted too long the notion that we don’t know anything but that’s OK nobody else does either. We should all know more than we do, We should all treat life as an opportunity to educate, train and better ourselves. If we do, then everyone wins, including the business sector which needs the rising prosperous middle class to do business, whether it is here or abroad. Why don’t they know that? Because like you, they are just people trying to get the most they can right now. That’s human nature. That is the American way.

Treat every index with suspicion. Test all information against your own anecdotal experience. And don’t let anyone tell you they know more about your life than you do.

Foreclosure Defense and Offense: Right of Rescission Reg Z

livinglies — Fri, 16 May 2008 16:14:34 +0000

§ 226.15 Right of rescission.

[Codified to C.F.R. § 226.15]

[Section 226.15 amended at 54 Fed. Reg. 24688, June 9, 1989, effective June 7, 1989, but compliance is optional until November 7, 1989; 58 Fed. Reg. 40583, July 29, 1993; 59 Fed. Reg. 40204, August 5, 1994, effective July 29, 1994; 59 Fed. Reg. 63715, December 9, 1994, effective December 8, 1994; 66 Fed. Reg. 17338, March 30, 2001, effective March 30, 2001; 72 Fed. Reg. 63474, November 9, 2007, effective December 10, 2007, the mandatory compliance date is October 1, 2008]

Foreclosure Defense and Mortgage Meltdown: SCAMS !!!

livinglies — Fri, 16 May 2008 15:40:00 +0000

BEWARE OF SCAMS

As though it isn’t bad enough, we are receiving increasing numbers of reports of scams, mistakes and just plain stupidity on the part of lenders, investors who own mortgage-backed securities etc.

Like the woman who just told she is in foreclosure by Wells Fargo on a house she never closed title on. Or the “mortgage workout” specialists who specialize in taking your money and running. Like the lawyers who tell clients they know all about the Truth in Lending Act, RESPA, RICO etc., and in fact either know nothing, or worse, know just enough to really screw the client from whom they squeezed a retainer out of.

And then you have stories like this in the Cincinnati area:

BY KIMBALL PERRY | KPERRY@ENQUIRER.COM

Warren County and state officials want to know how a Deerfield Township man sold a multimillion-dollar Homearama house he apparently never owned.

“It is being investigated by my office and the (Ohio Attorney General) for possible fraud,” Warren County Prosecutor Rachel Hutzel said Thursday.

Francisca Webster, a Westwood resident who makes $49,000 annually, said she was tricked by a friend, Eric Duke, into putting three Warren County homes - worth millions - in her name so he could later resell them at a profit. He promised her $70,000.

• See details of the deal in the settlement statement
• See the home’s listing in Warren County property records
• See previous story: “Homeowner in over her head”

She has sued him in Hamilton County.

Now, documents reveal Duke “sold” one of those houses - 8662 Hampton Bay Place - to Patricia Stevenson for $2.5 million in a March 15 transaction.

The sale was done even though Duke doesn’t own that property. It remains in Webster’s name.

“People just don’t get how devious and conniving he is,” Webster said. “I’m really stunned.”

Duke’s attorney, Steve Wenke, refused Thursday to make his client available for questions and refused to pass messages to him. “I don’t want him to talk to anybody,” he said. Duke’s phone number isn’t published.

In a March 15 transaction, Stevenson paid Rivendale Property Management Group $271,500 in cash to buy the house for $2.5 million. Rivendale is Duke’s company and lists its address at the Hampton Bay Place house where Duke lives, which is down the street from the house sold to Stevenson.

Webster wants to know how Duke can sell a house she legally owns - but never wanted and desperately wants out of her name.

“I don’t know where we go from here,” an exasperated Webster said Thursday.

ReMax Realtor Simon Moksin said he saw nothing crooked about the deal.

“We got an attorney who represented the title company,” said Moksin, who pocketed a $60,000 commission on the deal.

Not so, said John Brandt, owner of River Valley Title Agency.

Brandt was paid $150 to sign some of the financial documents involved in the deal and act as a signatory witness, not as a representative of his title insurance company. The deal was consummated in Brandt’s Sharonville office.

Even though the documents list Patricia Stevenson as the buyer, Brandt said her husband, Mitch Stevenson, was doing the transacting.

“(Stevenson) never requested a title examination. Duke told him I did (a title search). I did not,” Brandt said Thursday.

Brandt said Mitch Stevenson called him this week to complain Duke cheated him in the deal.

“Apparently, (Mitch Stevenson) took Mr. Duke at his word,” Brandt said. “I really feel sorry for Mr. Stevenson.”

The sale involved a land contract. That is a sale where the buyer pays a monthly mortgage directly to the seller but the seller keeps the deed until all of the payments are made. If they aren’t made, the seller keeps the property and the money already paid.

That’s why there was no loan involved in the deal as is usual in home sales and that’s why there was no change in ownership in county auditor records.

“It was what we commonly call in the industry a cash closing,” Brandt said.

The Stevensons shouldn’t have to travel far to complain to Duke - he lives a house or two away.

Both of the houses were featured in Homearama, the new construction showcase, in 2005.

Efforts to reach the Stevensons were unsuccessful Thursday.

Moksin, the Realtor, would only say that Mitch Stevenson was “a businessman” when asked about his occupation.

• More Mason news. Join the discussion.

Mortgage Meltdown: Central Bankers Prepare for Collapse of Dollar

livinglies — Fri, 16 May 2008 15:30:24 +0000

That confidence in the U.S. dollar is at an all-time low is no surprise. But when countries start propping up currencies that are barely on the radar, you know that central bankers are thinking that the U.S. government is not doing enough to shore up the fundamentals of its economy. This translates to a lack of confidence that the dollar will recover. Like the price of oil headed inexorably toward $200 per barrel, the dollar is seen headed inexorably downward. This kind of thinking leads to self-fulfilling prophecy, so it needs to be taken seriously.

The plain fact is that we have $500 trillion in derivative securities that are treated, for the most part, as cash equivalents. In the face of a half-gig behemoth of private sector money supply, central bankers understand that their impact on monetary policy, money supply, credit, and economic growth is virtually out of reach. Like it or not, economic policy is in the hands of the private sector now.

More pretense of regulation from a corrupt government will produce less rather than more instability in the financial sector. Government is providing cover for wrongdoers rather than relief for everyone.

The dangers are obvious. The inevitable conclusion of this paradigm shift can already be seen: a massive shift in the distribution of wealth, with its attendant death grip on government policy and action.

The role of government — to be the referee in assuring a fair playing field — has been subverted beyond recognition.

The tangible results are that millions of homes are being foreclosed, tens of millions of people are being hit with economic losses, and despite even the calls of the conservative Economist magazine for a U.S. “Federal effort to streamline the states’ convoluted foreclosure laws” nothing has emerged thus far.

We are aware and I have assisted in the writing of emergency rules of civil procedure for foreclosures from initiation of proceedings through mediation and judgment. These rules have been submitted to Nevada, Florida and Arizona thus far. The Courts are warming to the idea, but it is likely that a uniform approach will not be adopted, leaving the country in a morass of hoops to jump through before borrowers and lenders and investors can be brought to the table to put a stop to the downward slide.

Under normal conditions, we would be the first to scream for better regulation, more enforcement and criminal prosecution arising from the massive fraud that killed the residential housing market, and severely damaged the rest of the credit markets worldwide. But we are of the opinion that this is an emergency that transcends normal government response. It is akin to the emergency of war where we are fighting for our very survival. Amnesty for every participant on the investor-lender side and on the borrower loan origination side is essential even if it gives a break to “speculators” and criminal minds that irresponsibly launched this plan to nowhere.

Only then will we demonstrate to central bankers around the world that we are serious about this crisis. Only then will they lose momentum is distancing themselves from the dollar.

Overseas banks save a currency

Commentary: A useful game plan if the dollar really hits the skids

By MarketWatch

Last update: 10:08 a.m. EDT May 16, 2008

LONDON (MarketWatch) - It’s official — overseas central banks stepped in Friday to prop up a beleaguered currency that’s been weighed down by an out-of-control financial sector and an economy on the rocks.

Sounds like the U.S. dollar, but actually, it’s the Iceland krona. See related story.

The central banks of Norway, Sweden and Denmark will each provide up to 500 million euros that the Central Bank of Iceland can swap for krona.

Of course, any central bank intervention to prop up the dollar would have to be done on a far larger scale than chucking in a bit more than $2 billion.

So understandably, the Bank of Japan and the European Central Bank reportedly have kept their ammunition so far to words and arm twisting. See related story.

And U.S. interest rates are just a touch lower than what’s on offer in Iceland — 2.25% compared to 15.5%.

But it’s worth noting that the intervention has worked, on the day at least - the currency is up over 4% against the euro.

If nothing else, the move by the Scandinavian central banks is a game plan that can be dusted off if the dollar really goes into meltdown mode.

– Steve Goldstein

Mortgage Meltdown Revealed in Harvard Study

livinglies — Thu, 15 May 2008 15:35:48 +0000

In this study, the authors provide an exhaustive and invaluable aid, with plenty of charts and explanations of the mortgage meltdown, sub-prime and general credit crisis. This is MUST reading for anyone who is filing securities actions and foreclosure defense. With this paper, you can understand who the players are and what they were doing. This paper is thus far more inclusive than what we have written here which is designed to give you the information in bite-sized pieces.

harvard-paper-diagrams

Foreclosure Defense: Countrywide Ruling Can be Cited as Persuasive Support for Bad Lending Practices

livinglies — Thu, 15 May 2008 14:38:24 +0000

COUNTRYWIDE SUED FOR IMPROPER LENDING PRACTICES BY ITS SHAREHOLDERS: GOOD MATERIAL HERE FOR BORROWERS TO ALLEGE IN THEIR LAWSUITS AND DEFENSIVE ACTIONS

In these posts I am trying to keep pace with the events unfolding on the investor side of the Mortgage Meltdown. That is because these lawsuits are more sophisticated than the usual fair you find with lawyers representing individual borrowers in foreclosure defense, bankruptcy or non-judicial sales.

Our theme is simply this: lender practices went astray because of lack of supervision, failure of regulation, improper oversight by stockholders and congress, and direct collusion with the even more sophisticated Wall Street firms offering “securitization” of risk products that removed the risk element from the loan underwriting process. The result was predictable — lending standards not only fell, they were smashed under a cloud of plausiable deniability.

countrywide_class_action_defense_stay_ord

Note the article below and in particular, the bold sections which this editor has added.

May 15, 2008

Judge Says Countrywide Officers Must Face Suit by Shareholders

By GRETCHEN MORGENSON

Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled.

Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”

Plaintiffs also identified “numerous red flags” that would have warned directors of increasingly risky loans made by Countrywide, according to the judge, who rejected a motion to dismiss the suit. “It defies reason, given the entirety of the allegations,” Judge Pfaelzer wrote, “that these committee members could be blind to widespread deviations from the underwriting policies and standards being committed by employees at all levels. At the same time, it does not appear that the committees took corrective action.”

Hundreds of mortgage companies have failed in the last year or so, but few executives or directors have taken responsibility. That makes the ruling significant, said Blair A. Nicholas, one of two lawyers at Bernstein Litowitz Berger & Grossmann representing the plaintiffs.

“It is a critical step enabling Countrywide and its shareholders to hold accountable the officers and directors who looted the company and were responsible for its devastating collapse,” Mr. Nicholas said.

Countrywide shareholders have lost billions of dollars since 2007 when its shares hit a high of $45.03. They closed on Wednesday at $4.85.

“As institutional investors, it is our duty to seek recourse when a company’s directors engage in practices that are not in the best interests of shareholders,” said Christa S. Clark, chief legal counsel of the Arkansas Teacher Retirement System, the lead plaintiff in the case. “We are pleased with the court’s ruling as it enables the shareholders to move forward with our case and remedy this wrong.”

A Countrywide spokesman declined to comment on the ruling.

The plaintiffs in the case said they hoped to recover money for shareholders from Countrywide officials named in the case who sold $850 million in stock from 2004 to 2007. The plaintiffs contend that the directors and officers dumped shares even as the company spent $2.4 billion to repurchase its own stock in late 2006 and early 2007.

The chief executive of Countrywide, Angelo R. Mozilo, has argued that his $474 million in stock sales during the three-year period complied with securities laws under a planned selling program. But he revised the program, known as a 10b5-1 plan, several times, each time increasing the shares to be sold.

As a result, the judge wrote: “Mozilo’s actions appear to defeat the very purpose of 10b5-1 plans,” created to allow corporate insiders to sell stock regularly and without direct involvement.

Gerald H. Silk, who also represents the plaintiffs, said: “Corporate fiduciaries cannot expect to evade liability by blaming a general market downturn when there is specific and systematic misconduct taking place right beneath their noses.”

The suit names 14 current and former directors and officials as defendants; it is known as a derivative action because shareholders of Countrywide are suing its officers and directors on behalf of the company.

Lawyers for the plaintiffs said that they would ask the judge to expedite discovery so that they can get testimony before the proposed purchase of Countrywide by Bank of America takes place. The deal is expected to close in the third quarter.

Senator Charles E. Schumer, Democrat of New York, asked the Federal Trade Commission on Wednesday to investigate whether Countrywide took advantage of borrowers who filed for bankruptcy protection to try to keep their homes.

In the letter to William E. Kovacic, the F.T.C. chairman, Mr. Schumer said, “An investigation by the Federal Trade Commission would help pull the curtain back on a hidden corner of the existing foreclosure crisis, and could help stem the tide of homeowners who are now unnecessarily being forced into bankruptcy and foreclosure.”

Foreclosure Defense: Lost Note Shananigans

livinglies — Thu, 15 May 2008 00:20:50 +0000

Jose wrote:

Thanks for the input K, I filed for BK today pro se I was totally unable to find and attorney with the enough guts in Virginia to take on these crooked lenders. There also another issue in our wonderful state, there is a statute that allows for the lenders to provide a lost note affidavit, most of these affidavits are fraudulent, these lenders and servicers never saw or even received this documents, they are being signed and notarized in back room offices, and using them to foreclose on all these families that were lied and cheated of all their life savings. I poured more than $500,000 of my savings into our home, for these lenders to take me to the cleaners. What can realistically be done about these lost note affidavits, contest their validity?. I did my mortgage audit and that is the best tool I have found, most attorneys unfortunately are intimidated by the Rocket Docket here in Virginia.

EDITOR’S NOTE: The answer is that you don’t just ask for it you demand it. And if they don’t give it to you you sue them in your State Court and saying there are numerous misrepresentations that were made to you and then you issue a Request to Produce, along with interrogatories that demand identification of the person who signed the lost note affidavit and when they were hired and where the note was placed and the entire chain of custody.

You are right, most of those affidavit are bogus, signed by people who knew nothing about the closing. Don’t give up on finding a decent attorney. Keep looking. Whether young or old, you want someone who wants to take on the system and draw blood.

Good for you for getting the audit done. You took the right steps!!!

Mortgage Meltdown: The High Cost of Racism

livinglies — Wed, 14 May 2008 19:46:25 +0000

There are lots of things we do as human beings that are counterproductive in the sense of preventing ourselves from getting what we want. One of them is racism. Whether you harbor some small or large negative feeling toward one race or another consider this:

Negative red lining: In order to carry off the largest economic scam in history, bankers and Wall Street had to find a population that was deprived of sufficient education to know about the world, to know how to conduct their affairs legally, and to be able to reason things so they could make an informed decision.

It was obvious where they were going to find this demographic: (1) people who spoke no English and (2) black people, especially from the deep South. They were perfect targets and it all went “swimmingly” with everybody touting their new equity in their modest homes as though they were watching the ticker on the New York Stock Exchange.

People refinanced to take more money out of their house like an ATM machine, and they spent the money. But the value wasn’t really there, and neither is the income for original targets and then the secondary “refi” targets who got caught up in the whole frenzy. And now millions of lives are being uprooted, millions of jobs are being lost, and millions of people are stuck in retirement with insufficient income because of failed investments by their pension funds, their mutual funds et al..

You see, it is the poor in our country who are exposed, who are vulnerable. They are the ones that predators attack with tactics they could never get away with elsewhere. But the effects, if the predators succeed on a large scale, are felt by everyone. And they are felt deeply.

And the income isn’t there either for all the individuals, institutions, banks, government entities, corporations and other invetors who bought mortgage backed securities that were, for the most part, not worth the paper they were written on.

And the income isn’t there for people who earn a living wage but now find that it isn’t a living anymore because the value of the dollars they earn is also not worth the paper it is written on.

And so when these poor people protest that they were treated unfairly, the racist in us tends to turn a less sympathetic ear to them than to someone “like us.” That is where racism costs us.

By waiting for the shoe to drop on us instead of protecting those who could not protect themselves, by depriving people of the education they need to be able to avoid these predators, we have now created the worst possible outcome: nobody in the entire world trusts the United States policy on money and finance. And we lost our moral high ground to influence the policies of other nations.

And the benefits that we have long expected from our dominance of world finance is fast vanishing as the dollars we issued have turned into vast sweeping IOU’s to countries we could not imagine would have such power over us — China, S. Korea etc.

That Obama has come this far is amazing, even astonishing. Especially in view of the secrets we harbor, the driftwood of hundreds of years of shameful history and rationalization of that history. Notwithstanding all we have learned there are many among us who do not understand that we are wasting precious time and human resources when we withhold empathy, when we withhold funding for education, when we flee from those who are different.

How much money has been lost in home equity due to white flight? It was whites that lost the equity!

How much time and productivity did the South lose because they refused to allow blacks to participate in their economy or in education — even right after the civil war when it was ONLY the blacks that knew how to run the farms and plantations.

How much innovation did we lose by red lining employment opportunities in the North?

How many Einsteins have we completely missed amongst the black and Latin populations?

Racist Incidents Give Some Obama Campaigners Pause
By Kevin Merida
Washington Post Staff Writer
Tuesday, May 13, 2008; A01

Danielle Ross was alone in an empty room at the Obama campaign headquarters in Kokomo, Ind., a cellphone in one hand, a voter call list in the other. She was stretched out on the carpeted floor wearing laceless sky-blue Converses, stories from the trail on her mind. It was the day before Indiana’s primary, and she had just been chased by dogs while canvassing in a Kokomo suburb. But that was not the worst thing to occur since she postponed her sophomore year atMiddle Tennessee State University, in part to hopscotch America stumping for Barack Obama.

Here’s the worst: In Muncie, a factory town in the east-central part of Indiana, Ross and her cohorts were soliciting support for Obama at malls, on street corners and in a Wal-Mart parking lot, and they ran into “a horrible response,” as Ross put it, a level of anti-black sentiment that none of them had anticipated.

“The first person I encountered was like, ‘I’ll never vote for a black person,’ ” recalled Ross, who is white and just turned 20. “People just weren’t receptive.”

For all the hope and excitement Obama’s candidacy is generating, some of his field workers, phone-bank volunteers and campaign surrogates are encountering a raw racism and hostility that have gone largely unnoticed — and unreported — this election season. Doors have been slammed in their faces. They’ve been called racially derogatory names (including the white volunteers). And they’ve endured malicious rants and ugly stereotyping from people who can’t fathom that the senator from Illinois could become the first African American president.

The contrast between the large, adoring crowds Obama draws at public events and the gritty street-level work to win votes is stark. The candidate is largely insulated from the mean-spiritedness that some of his foot soldiers deal with away from the media spotlight.

Victoria Switzer, a retired social studies teacher, was on phone-bank duty one night during the Pennsylvania primary campaign. One night was all she could take: “It wasn’t pretty.” She made 60 calls to prospective voters in Susquehanna County, her home county, which is 98 percent white. The responses were dispiriting. One caller, Switzer remembers, said he couldn’t possibly vote for Obama and concluded: “Hang that darky from a tree!”

Documentary filmmaker Rory Kennedy, the daughter of the late Robert F. Kennedy, said she, too, came across “a lot of racism” when campaigning for Obama in Pennsylvania. One Pittsburgh union organizer told her he would not vote for Obama because he is black, and a white voter, she said, offered this frank reason for not backing Obama: “White people look out for white people, and black people look out for black people.”

Obama campaign officials say such incidents are isolated, that the experience of most volunteers and staffers has been overwhelmingly positive.

The campaign released this statement in response to questions about encounters with racism: “After campaigning for 15 months in nearly all 50 states, Barack Obama and our entire campaign have been nothing but impressed and encouraged by the core decency, kindness, and generosity of Americans from all walks of life. The last year has only reinforced Senator Obama’s view that this country is not as divided as our politics suggest.”

Campaign field work can be an exercise in confronting the fears, anxieties and prejudices of voters. Veterans of the civil rights movement know what this feels like, as do those who have been involved in battles over busing, immigration or abortion. But through the Obama campaign, some young people are having their first experience joining a cause and meeting cruel reaction.

On Election Day in Kokomo, a group of black high school students were holding up Obama signs along U.S. 31, a major thoroughfare. As drivers cruised by, a number of them rolled down their windows and yelled out a common racial slur for African Americans, according to Obama campaign staffers.

Frederick Murrell, a black Kokomo High School senior, was not there but heard what happened. He was more disappointed than surprised. During his own canvassing for Obama, Murrell said, he had “a lot of doors slammed” in his face. But taunting teenagers on a busy commercial strip in broad daylight? “I was very shocked at first,” Murrell said. “Then again, I wasn’t, because we have a lot of racism here.”

The bigotry has gone beyond words. In Vincennes, the Obama campaign office was vandalized at 2 a.m. on the eve of the primary, according to police. A large plate-glass window was smashed, an American flag stolen. Other windows were spray-painted with references to Obama’s controversial former pastor, the Rev. Jeremiah Wright, and other political messages: “Hamas votes BHO” and “We don’t cling to guns or religion. Goddamn Wright.”

Ray McCormick was notified of the incident at about 2:45 a.m. A farmer and conservationist, McCormick had erected a giant billboard on a major highway on behalf of Farmers for Obama. He also was housing the Obama campaign worker manning the office. When McCormick arrived at the office, about two hours before he was due out of bed to plant corn, he grabbed his camera and wanted to alert the media. “I thought, this is a big deal.” But he was told Obama campaign officials didn’t want to make a big deal of the incident. McCormick took photos anyway and distributed some.

“The pictures represent what we are breaking through and overcoming,” he said. As McCormick, who is white, sees it, Obama is succeeding despite these incidents. Later, there would be bomb threats to three Obama campaign offices in Indiana, including the one in Vincennes, according to campaign sources.

Obama has not spoken much about racism during this campaign. He has sought to emphasize connections among Americans rather than divisions. He shrugged off safety concerns that led to early Secret Service protection and has told black senior citizens who worry that racists will do him harm: Don’t fret. Earlier in the campaign, a 68-year-old woman in Carson City, Nev., voiced concern that the country was not ready to elect an African American president.

“Will there be some folks who probably won’t vote for me because I am black? Of course,” Obama said, “just like there may be somebody who won’t vote for Hillary because she’s a woman or wouldn’t vote for John Edwards because they don’t like his accent. But the question is, ‘Can we get a majority of the American people to give us a fair hearing?’ “

Obama has won 30 of 50 Democratic contests so far, the kind of nationwide electoral triumph no black candidate has ever realized. That he is on the brink of capturing the Democratic nomination, some say, is a testament to how far the country has progressed in overcoming racism and evidence of Obama’s skill at bridging divides.

Obama has won five of 12 primaries in which black voters made up less than 10 percent of the electorate, and caucuses in states such as Idaho and Wyoming that are overwhelmingly white. But exit polls show he has struggled to attract white voters who didn’t attend college and earn less than $50,000 a year. Today, he and Hillary Clinton square off in West Virginia, a state where she is favored and where the votes of working-class whites will again be closely watched.

For the most part, Obama campaign workers say, the 2008 election cycle has been exhilarating. On the ground, the Obama campaign is being driven by youngsters, many of whom are imbued with an optimism undeterred by racial intolerance. “We’ve grown up in a different world,” says Danielle Ross. Field offices are staffed by 20-somethings who hold positions — state director, regional field director, field organizer — that are typically off limits to newcomers to presidential politics.

Gillian Bergeron, 23, was in charge of a five-county regional operation in northeastern Pennsylvania. The oldest member of her team was 27. At Scranton’s annual Saint Patrick’s Day parade, some of the green Obama signs distributed by staffers were burned along the parade route. That was the first signal that this wasn’t exactly Obama country. There would be others.

In a letter to the editor published in a local paper, Tunkhannock Borough Mayor Norm Ball explained his support of Hillary Clinton this way: “Barack Hussein Obama and all of his talk will do nothing for our country. There is so much that people don’t know about his upbringing in the Muslim world. His stepfather was a radical Muslim and the ranting of his minister against the white America, you can’t convince me that some of that didn’t rub off on him.

“No, I want a president that will salute our flag, and put their hand on the Bible when they take the oath of office.”

Obama’s campaign workers have grown wearily accustomed to the lies about the candidate’s supposed radical Muslim ties and lack of patriotism. But they are sometimes astonished when public officials such as Ball or others representing the campaign of their opponent traffic in these falsehoods.

Karen Seifert, a volunteer from New York, was outside of the largest polling location in Lackawanna County, Pa., on primary day when she was pressed by a Clinton volunteer to explain her backing of Obama. “I trust him,” Seifert replied. According to Seifert, the woman pointed to Obama’s face on Seifert’s T-shirt and said: “He’s a half-breed and he’s a Muslim. How can you trust that?”

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Pollsters have found it difficult to accurately measure racial attitudes, as some voters are unwilling to acknowledge the role that race plays in their thinking. But some are not. Susan Dzimian, a Clinton supporter who owns residential properties, said outside a polling location in Kokomo that race was a factor in how she viewed Obama. “I think if it was somebody other than him, I’d accept it,” she said of a black candidate. “If Colin Powell had run, I would be willing to accept him.”

The previous evening, Dondra Ewing was driving the neighborhoods of Kokomo, looking to turn around voters like Dzimian. Ewing, 47, is a chain-smoking middle school guidance counselor, a black single mother of two and one of the most fiercely vigilant Obama volunteers in Kokomo, which was once a Ku Klux Klan stronghold. On July 4, 1923, Kokomo hosted the largest Klan gathering in history — an estimated 200,000 followers flocked to a local park. But these are not the 1920s, and Ewing believes she can persuade anybody to back Obama. Her mother, after all, was the first African American elected at-large to the school board in a community that is 10 percent black.

Kokomo, population 46,000, is another hard-hit Midwestern industrial town stung by layoffs. Longtimers wistfully remember the glory years of Continental Steel and speak mournfully about the jobs shipped overseas. Kokomo Sanitary Pottery, which made bathroom sinks and toilets, shut down a couple of months ago and took with it 150 jobs.

Aaron Roe, 23, was mowing lawns at a local cemetery recently, lamenting his $8-an-hour job with no benefits. He had earned a community college degree as an industrial electrician, but learned there was no electrical work to be found for someone with his experience, which is to say none. Politics wasn’t on his mind; frustration was. If he were to vote, it would not be for Obama, he said. “I just got a funny feeling about him,” Roe said, a feeling he couldn’t specify, except to say race wasn’t a part of it. “Race ain’t nothing,” said Roe, who is white. “It’s how they’re going to help the country.”

The Aaron Roes are exactly who Dondra Ewing was after: people with funny feelings.

At the Bradford Run Apartments, she found Robert Cox, a retiree who spent 30 years working for an electronics manufacturer making computer chips. He was in his suspenders, grilling shish kebab, which he had never eaten. “Something new,” Cox said, recommended by his son who was visiting from Colorado.

Ewing was selling him hard on Obama. “There are more than two families that can run the United States of America,” she said, “and their names aren’t Bush and Clinton.”

“Yeah, I know, I know,” Cox said, remaining noncommittal.

He opened the grill and peeked at the kebabs. “It’s not his race, because I got real good friends and all that,” Cox continued. “If anything would keep him from getting elected, it would be his name. It might turn off some older people.”

Like him?

“No, older than me,” said Cox, 66.

Ewing kept talking, until finally Cox said, “Probably Obama,” when asked directly how he would vote.

As she walked away, Ewing said: “I think we got him.”

But truthfully, she wasn’t feeling so sure.

Staff writer Peter Slevin and polling analyst Jennifer Agiesta contributed to this report.