DA Cliff Newell Debates Prop 19 With Former Police Chief of San Jose

Nevada County District Attorney Cliff Newell yesterday — on Michael Krasny’s Bay Area-based KQED radio program, Forum debated former San Jose Police Chief Joseph McNamara on Proposition 19, the marijuana legalization initiative (the “Regulate, Control and Tax Cannabis Act of 2010”). McNamara favors and Newell opposes the proposition.

Judge for yourself who made the better argument:

Green Team Drafts Concept Proposal for Alpha Building

I spoke to two members of the Green Team this evening — Mali Dyck and Reinette Senum — and learned that a contingent of the team has drafted a “concept proposal” for the Alpha Building. They’re calling it The Alpha Building Marketplace and Community Collaborative.

According to Mali and Reinette, Gary Tintle, co-owner of the Alpha Building, is very interested in their proposal.

Here are some excerpts from the draft proposal:

“The Alpha Building Marketplace and Community Collaborative is envisioned as a people’s marketplace and community center serving local residents and travelers alike …

“We envision a vibrant community gathering place showcasing local and regional farmers, artisan producers, independently owned and operated local businesses and non-profit public benefit organizations. The Alpha Building Marketplace and Community Collaborative would:

* Feature local and regional foods and products and operate as a community gathering place for the celebration of local culture, food and services on the main or plaza level.

* Celebrate community collaboration through the non-profit collaborative, embracing the benefits of shared spaces and collective business services on the mezzanine level.

* Assemble the tools for our community’s current and future food security while contributing to our economic sustainability by offering a certified community kitchen, creamery, refrigeration and storage (as possible attributes) on the daylight basement level.

“The Alpha Building Marketplace and Community Collaborative would further serve as an incubator for artisan producers and community groups who are committed to supporting local, sustainable agriculture and to stewarding Nevada County’s economic, ecological and social/cultural well being …

The proposal includes specifications of space utilization for each of the three levels:

“THE MAIN LEVEL
As previously stated, the main level would serve as the heart of the marketplace. Of the 8,000 square feet, approximately 87% is usable space. We anticipate 4,000 square feet of rental space of up to 15 small business entities (in approximately 250-300 square foot kiosks). An additional 3,000 square feet would be utilized as rental space for community events, performances, temporary market space (i.e., an off-season indoor farmers market, etc.).

“THE MEZZANINE
The mezzanine would pilot a non-profit collaborative, where local, community-based organizations would house their offices while sharing common spaces (such as conference and meeting rooms) and innovating shared business services and equipment. These community organizations would be comprised of those whose mission is to promote the economic, ecological and social/cultural health and well being of our community. This level would also house the management office of the Alpha Building. 71% of the space is usable, leaving 3,000 square feet for offices and 1,085 square feet for common and shared spaces.

“LOWER LEVEL
The lower or daylight basement level would provide an important economic engine and incubator for agricultural producers wishing to develop value-added products and in making it possible for model community programs that rely upon certified kitchens to thrive (i.e., a school lunch program, etc.). The basement could house a certified community kitchen, a creamery, large walk-in refrigerators and freezers, storage space, as well as possible additional retail space. The development of this level of infrastructure is costly but we believe it is fundable, at least in large part, by USDA Rural Development programs. 78% of the space is usable with over 6500 square feet available for these proposed purposes …

“At an average of $1.10sf/month for all usable space, the average income equals $19,320 per month.

“Additionally, the annex would need to generate another $5000/month to ensure the economic viability of the Alpha Building Marketplace and Collaborative. There have been conversations with various entities, ranging from the community radio station, a local brewing company as well as in creating a healing arts studio and community clinic in this space whose square footage approximates 5,000 sf of usable space.”

As interesting and provocative as all this is, keep in mind that this is a draft proposal, a work in progress.

Much will depend on the response from the community, and the first step in measuring that response will the be the public meeting — the “Barn Raising,” they’re calling it — in the Alpha Building itself on Thursday, September 30th from 6 PM to 9 PM.

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Alpha Building Visioning Workshop – Sept 30th

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Gathering on Sept 23 to Oppose Big Oil’s Dirty Energy Proposition


Stop Big Oil’s Prop 23

Gathering at the Nevada City United Methodist Church

433 Broad Street in Nevada City

Sponsored by Earth Justice Ministries

September 23, 7-8:30 p.m.

Earth Justice Ministries is working with the Union of Concerned Scientists and people across the state to educate voters about climate change and advocate for the defeat of Proposition 23, the “dirty energy proposition.”  We invite you to come to a gathering of local people who want to limit climate change. Learn more about how Texas oil companies are trying to overturn California’s landmark clean energy standards with Proposition 23, and what we can do to stop them.

On September 23 at 7 p.m. we’ll premiere a new mini-documentary, which will shed light on our state’s cutting-edge global warming and clean energy policies and the oil companies’ efforts to derail them.  On that night, concerned Californians like you will gather at parties all over the state to view the documentary and team up with like-minded friends and allies to take action to defeat Prop 23.

The party agenda will include: registration, introductions, viewing the mini-documentary, a conference call for a real-time update on the campaign and how you can make a difference, discussion, a wrap-up and planning “No on 23” outreach.  We’ll end promptly at 8:30.

Let’s create a coalition that can take future actions. Together we can do far more than we can alone.

http://www.stopdirtyenergyprop.com/joinbox.php

Please feel free to forward this invitation to everyone you feel is concerned about or may be interested in doing something about climate change.

For more information, go to Earth Justice Ministries.

Note from Editor: See also this 30-second video message by Edward James Olmos:

Innovation, Sustainable Consumption, and ‘The Mesh’

By Joel Makower
Joel Makower is executive editor of GreenBiz.com, where this article originally appeared.
Reprinted with permission.

I’ve just glimpsed a world in which the elusive notion of “sustainable consumption” is both possible and profitable. It’s a world where products are built to last, shared among both friends and strangers, made more affordable to all, support local communities, and are recycled back into more useful stuff. Best of all, it’s a world that’s already here, and is growing and thriving.

You may be wondering what I’ve been smoking. The better question is what I’ve been reading.

The answer: an engaging and inspiring new book called The Mesh: Why the Future of Business Is Sharing.

The book, published this month, is by my friend and mentor Lisa Gansky, a self-described “marketect” who’s a master at spotting and capitalizing on consumer trends. Gansky is behind a succession of breakout companies, starting in the 1990s with GNN, the first commercial website, which sold to AOL, and more recently Ofoto, the photo-sharing company, sold to Kodak. In between, Gansky has worked with the founders of Yahoo!, AOL, Google, PayPal, and Mozilla, among others. (I last wrote about Gansky four years ago, about the ecotourism nonprofit she co-founded that is transforming lives in Chile.)

Her new book zeroes in on an emerging market transformation, a revolution taking place that even its participants don’t yet see. Mesh businesses, says Gansky, are those that offer something that can be shared within a community, market, or value chain, including products, services, and raw materials. They harness advanced Web and mobile data networks to track goods and aggregate usage, customer, and product information. Because they focus on shareable physical goods, including the materials used, they make local delivery of services and products — and their recovery — valuable and relevant. And their offers, news, and recommendations are transmitted largely through word of mouth, augmented by social network services.

Why call this new wave of businesses “The Mesh”? In her book, Gansky explains:

A Mesh describes a type of network that allows any node to link in any direction with any other nodes in the system. Every part is connected to every other part, and they move in tandem. … Mesh businesses are knotted to each other, and to the world, in myriad ways. Some connections are formed directly, such as an agreement among companies to identify a market and make coordinated offers. … Other connections are formed indirectly through third parties, such as aggregated consumer data or via customers’ social networks.

Mesh businesses exist thanks to hundreds of billions of dollars in available information infrastructure — telecommunications, mobile technology, enhanced data collection, large and growing social networks, mobile SMS aggregators, and of course the Web itself. They efficiently employ horizontal B-to-B services, such as FedEx, UPS, Amazon Web Services, PayPal, and an ever-increasing number of cloud computing services.

Zipcar and other car-sharing services are the prototypical Mesh businesses. As Gansky points out, they don’t make, sell, or repair cars; they share them. That turns a pricey asset, a vehicle, that might otherwise sit idle 95 percent of the day, into a highly leveraged service delivery system, made possible by members connected through smart phones and websites to an ever-growing network of vehicles. In some respects, it’s not unlike the “load management” airlines use to keep their flights full and profitable.

“It takes the friction, the pain, and the annoyance out of needing to do a carshare or a ride share or find some product or service that I’m in need of as I stand at some street corner in some city,” Gansky explained to me recently. One result: people abandon their second — and sometimes their first — cars in favor of car sharing.

But it’s not just cars. Mesh businesses are sprouting across a wide range of sectors: homes, fashion, energy cooperatives, office space, music studios, tool libraries, food and wine coops, and many more. Gansky has cataloged hundreds of Mesh organizations — both for-profit and nonprofit — on her website, from tiny cooperatives to Netflix, a billion-dollar share platform that transformed the video and film distribution industry.

A sampling: A Box Life (keeps shippable cardboard boxes in use longer); GoLoco (ride-sharing system that notifies users when their friends or interest groups are going places they want to go); Instant Offices (matches businesses with available office space); Kopernik (connects tools and people where they are most needed); Local Dirt (helps consumers buy, sell, and find local food); Sourcemap (helps consumers find and share stories about where products come from and what they are made of); YouNoodle(users discover and support early-stage companies); and Zopa (helps people lend and borrow money with each other while sidestepping banks).

As you’ll see, some of these are pretty homegrown, a few are slick — but all seem to be garnering engaged and enthusiastic audiences.

“Some of this is driven by the recession and an increasing concern for waste,” Gansky told me. “From a business perspective, waste is starting to show up on balance sheets in a way that it hasn’t before. What we’ve normally considered to be waste can have a lot of hidden value. And if we squeeze on what we used to call waste, there’s a lot of goodies that will come out, which will make the actual cost of waste much less.”

That’s fundamental to The Mesh, she says, and entire institutions will need to change along with the shifting business models. For example, secondary services — mortgages and insurance and such — have been organized to support owning homes and cars and other items. But a recent piece of legislation passed in California supports insurance covering car-sharing services.

One of the things I find fascinating about Mesh companies is that few are marketed as environmental or sustainable companies, yet that’s exactly what they are. They dematerialize commerce by turning products into services, value access over ownership, optimize resource use, and generally improve efficiencies. Much like iTunes and the myriad other services that have transformed the book, music, and movie industries, Mesh businesses catch on not because they’re greener, but because they’re better — a point I’ve been making for some time.

But the Mesh is a sustainability play in several ways. One, as I said, is the fundamental notion of getting more value out of existing resources and assets. Second is that there’s a premium on the social connectivity that typically takes place within Mesh businesses, “getting us out of our chairs and into the streets to interact with one another in a way that many people haven’t in their own communities for a long time,” as Gansky puts it.

Third, Mesh companies tend to take a systems approach to managing “stuff,” something traditional companies and value chains haven’t done, or done well. That drives companies to look beyond their products to the larger system within which they operate, including where things come from and where they go when no longer needed. Inevitably, they look for ways to optimize that value chain, cutting out waste and inefficiency.

All of which affects product design — material choices, of course, but also how products are made: more durable, flexible, reparable, and sustainable. A shared bicycle not only needs to last longer to get higher utilization, but must accommodate a broad range of customers, from tall skinny people to short portly ones, not to mention a variety of terrains and climate. “If you’re interacting with your car on a regular basis the way you interact with, say, iTunes, it’s an entirely different relationship,” says Gansky. “That informs design, that informs waste, that informs sustainability.”

“Earth,” she likes to say, “is the ultimate share platform.”

The potential here goes well beyond simply reinventing existing systems of commerce. Gansky envisions developing economies leapfrogging directly to Mesh models of sharing, without first experiencing the ownership society, much the way they have gone directly to mobile phones without ever building landlines.

There’s a lot more to the Mesh, and I strongly encourage you to read the book, as I think there is something extraordinary going on here for both startup and incumbent players. The Mesh represents a brave new marketplace where consumers rule and business models are turned topsy-turvy. Where innovation and inspiration collide to create greener, cooler products and services that are high in value and values. And where disparate communities form, if only for an instant, to ignite companies and markets.

Learn more about innovative products, services, and business models at the upcoming GreenBiz Innovation Forum.

Joel Makower is chairman and executive editor of Greener World Media, producer of GreenBiz.com and other websites, events, and business information services. He is author of more than a dozen books, including Strategies for the Green Economy.

 

“The Invisible Hand Is Just Waving Goodbye”

This is an excellent interview with Tom Ferguson, political science professor at the University of Massachusetts Boston, worth the trouble to post for the witty but grim headline, “The Invisible Hand Is Just Waving Goodbye.”

What does that headline mean? In the present circumstance, it means that so long as the deficit hawks prevail, we are likely to be stuck in a semi-permanent high-unemployment cul-de-sac (“unemployment equilibrium,” Ferguson calls it).

He says that we have a “super-cyclical” crisis, a cyclical crisis with a financial sector (banking) crisis superimposed on top of it.

Speaking of the looming bankruptcy of many cities and states, he says that so long as “national income” is too low, “there’s nothing they can do.”

“Without a national policy to get back to full employment pretty fast … they’re caught between a rock and a hard place.”

Ferguson lays out a compelling — I’m tempted to say “no brainer” — case for the classical Keynesian remedy for what ails us, a stimulus massively greater than any we have had so far.

“There is just one panacea for all the woes of the economy … full employment.” At full employment, all the other problems go away.

Although claiming reluctance to “get directly into partisan politics,” he says we should “ask the Democrats why didn’t they act like Democrats and do something to rescue ordinary people … why did they just rescue the banks?”

“Who would ask a Republican,” he says, laughing a robust guffaw for the only time in the interview, “why they rescued the banks and not the ordinary population?”

Clint Curtis Should Remove This Ad

I’m no admirer of Tom McClintock, and I’m looking forward to an opportunity to vote for a different, more progressive candidate with integrity, someone who will run against him for California’s 4th Congressional district.

I’ve been favorably impressed — up until now — by both Clint Curtis and Ben Emery. In fact, I’ve been something of a fan of Clint Curtis ever since his whistleblowing days in Florida when he revealed that Speaker of the Florida House of Representatives Tom Feeney tried to get him to write election-tampering software.

But I was surprised and disappointed to see the following Clint Curtis political advertisement during a commercial break while watching MSNBC on our local Comcast network last night.

I was surprised mostly by the style of the ad, which criticizes personal attacks in political ads, but does so by mentioning several untrue hypothetical personal smears against McClintock, Curtis’ opponent, ostensibly in order to condemn them. But the effect, not subtle at all, is to get those negative images out there in what comes across — hopefully unintentionally — as a sleazy device.

(Note: I captured the video of this weird ad to my computer, uploaded it to YouTube and intended to embed it here for you to see, but in the end I was so troubled by it that I didn’t want to reproduce it here or anywhere … I’ve now deleted it from YouTube. Instead, I created a complete transcript of the 30-second ad, below, with a couple of still frames).

The video begins by showing the following mockup newspaper headline , accompanied by this voice-over narration: “Breaking News! McClintock Accused of Sexual Affair!”

Then Curtis himself appears, and speaks the words below:

“That’s not true!” (referring to the untrue allegations)

“Aren’t we tired of all these negative campaigns or outright lies.”

“The Clint Curtis campaign will focus on the issues. This will not be about who he is spleeping with, how he spends his spare time, or whether he lives in the district.”

“With your help, we will focus on the issues that affect our lives, and get rid of all this negative campaigning.”

“I am Clint Curtis and I approve this message.”

I like Clint Curtis and I hope he reconsiders this ad, which unfortunately reflects more poorly on him that it does on his opponent.

UPDATE 1: I sent the following email to Clint Curtis this morning:

Dear Clint Curtis:

I posted a short review of your political ad decrying negative
campaigning to my online journal here:

“Clint Curtis Should Remove this Ad”
http://sierravoices.com/2010/09/clint-curtis-should-remove-this-ad/

I really like your campaign overall and wish to support it, so I hope
you’ll take a second look at that ad, which — in my opinion – doesn’t
reflect well on you.

Sincerely,

Don Pelton
Editor, “Sierra Voices”

UPDATE 2: I received this reply from Clint Curtis a little after noon today:

Actually the negative from the beginning comes from various Republican
campaigns in the last 5 years and they do not follow explaining that
they are simply based on half-truths or complete lies. (Do not think
that the Dems haven’t had their fair share of attack ads and
disinformation too.)

Try listening to the ad without the negative intro and imagine how much
people will actually pay attention to the message. The ad only works
with the samples of the type of ads that are placed on the public
airwaves everyday. In the Senatorial Debate Barbra Boxer was accused bu
her opponent of helping terrorists.

This one is fairly mild compared to the ads presently playing by several
tea party candidates around the country today. We actually have much
worse intros (based solely on existing Republican Ads) that we have held
back until later.

The key is to focus the discussion on such foolishness and then offer
the solution. I am a proponent of regulation that would make politicians
and operatives that disseminate disinformation legally liable for the
costs associated with corrected the mis-information. This would, of
course, put Fox News out of business but would also stop the nameless
internet campaigns that have convinced 35% of the registered Republicans
that Obama is Muslim (and the whole religion has been defined by the
same group as terrorists) even when fact show he is not.

Let us cure the problem by entering the fight full force. We will not
accomplish the goal by simply whining about it. Democrats need to be
willing to punch it out with the republicans while still preserving our
values.

Clint

Could 62 Million Homes Be Foreclosure-Proof?

Published by Yes! Magazine August 18, 2010

The financial juggling that helped cause the 2008 crisis may be coming back to haunt banks — and help homeowners.

by Ellen Brown

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles — and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

—————————————————————————

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

California Precedent
The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see herehere and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Postarticle titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

By Their Own Sword: MERS’ Role in the Financial Crisis

MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”

MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept….

After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible …. The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

Axing the Bankers’ Money Tree

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . .

Nationalization of these giant banks might be the next logical step—a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.

With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

This article is licensed under a Creative Commons License

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and “the money trust” have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

Tea Party May Be Leading GOP Into Decades of Oblivion

GOP Ethics

Things are looking pretty good for the GOP in the midterm election this year. Their strategy of being the “Party of No,” staking out positions contrary to everything Obama supports, doing their best to make sure he fails no matter what the cost to the nation, may be a happy path back to power.

Polling suggests the definite possibility of the GOP recapturing the House.

But this may be the short view.

So says Dylan Loewe, author of the new book, Permanently Blue.

In Loewe’s recent Huffington Post article, he lays out a very plausible scenario for the long-term prospects of the Democratic Party “and the progressive ideals it represents,” based on the demographics of the Hispanic and the “Young Millennials” (Generation-Y) voting populations:

“The Republican Party has been making decisions these last few years that will haunt them long past November. Their adherence to “tea party values” — their full-tilt ideological purification — has left the party in a position where it can no longer moderate. That’s okay during an off-year election in the middle of a sputtering recovery, but in presidential years — like 2012 — the voting population expands. Young voters and minorities show up to the polls in much higher numbers. When that happens, Republicans will find themselves in an incredibly tough spot.”

“They have, for example, doubled-down on their anti-immigrant, anti-Hispanic rhetoric. Not only has the party roundly endorsed the Arizona immigration law, it’s also begun calling for the end of birthright citizenship through the repeal of the Fourteenth Amendment. Not the best formula for winning the Hispanic vote.”

“Why should the Republicans care about the Hispanic vote? Because Hispanics are, by far, the fastest growing population in the country. By 2020, the Hispanic population is projected to grow another 40 percent while the white population grows just 5 percent. In 2008, President Obama won 67 percent of the Hispanic vote, which drove his victories in Colorado, New Mexico, Nevada, and Florida. If he can maintain that level of support among Hispanics in 2012, it will be extraordinarily difficult for the Republican nominee to find a path to 270 votes.”

Loewe says that 2010 will be a great year for Republicans, but looking further down the road he sees a much  “uglier picture.”

He describes his generation, the “Young Millennials,” the group that gave Barack Obama two-thirds of its support in 2008, as “the most socially liberal generation in American history.”

“Why should that worry Republicans? Because every year between now and 2018, 4 million new Millennials will become eligible voters. That means that 16 million more will be able to vote in 2012 than in 2008, and 32 million more in 2016. Even if they turn out in characteristically low numbers, they will still add millions of new votes into the Democratic column. By 2018, when the entire Millennial generation can vote, they will make up 40 percent of the voting population and be 90 million strong. That’s 14 million more Millennials than Baby Boomers, making the youngest generation the largest in U.S. history.”

“How can the Republican Party possibly court a generation this progressive, and this substantial, without losing its tea party base? And how can they survive on the national stage if they don’t?”

If Loewe is right — and it won’t take too long to find out — this may be the revenge of the Jon Stewart generation, the Millennial generation which is growing-up and moving on to the center stage of history.

The Tea Party Movement is Nothing New

There’s been much contradictory speculation about the tea party movement over the last year or so. Dick Armey’s Freedomworks is generally credited with giving birth to the movement, and continuing to guide it. Most tea partiers, however, passionately insist that the movement is essentially grass-roots, born of itself.

Jane Mayer’s recent New Yorker article about the Koch brothers gives many compelling details of the corporate influence behind the tea party movement. And Frank Rich’s recent article focuses on its dangers to the GOP and to the nation.

But the best analysis of the tea party movement I’ve read so far is Kevin Drum’s article, “Recycled,” in the October 2010 issue of Mother Jones (not yet online). Drum’s piece is one of those seminal articles that will probably soon evolve into a book-length treatment.

Drum shows that the tea party movement has antecedents in earlier movements which have consistently arisen “whenever a Democrat takes over the White House:”

The Liberty League after FDR was elected … the John Birch Society after JFK ((Funded in part by Fred Koch, father to David and Charles Koch)) … the Arkansas Project after Clinton, and today — after Barak Obama’s election — “it’s the tea party’s turn.”

Similarities among the movements?

“A shared preoccupation with the Constitution … other shared tropes include a fear of ‘losing the country we grew up in’ … an obsession with ‘parasites’ who are leeching off hardworking Americans and … a myth that the movement is composed entirely of fed-up grassroots amateurs.”

So, does Drum agree that the tea party movement is “fundamentally remaking our two-party system,” as pollster Scott Rasmussen touts in the title of his soon-to-be-released book? (Thanks to Jeff Pelline for calling attention to this book).

Hardly.

Drum concludes:

“The tea party movement is likely to provide plenty of drama this November, but if the historical record is anything to go by, it won’t last long after that.”

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