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Can These College Football Players Actually Unionize?

by DaneLabynm Posted on February 21, 2014

Mother Jones

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Last month, football players at Northwestern University took formal steps to organize a labor union and bargain for benefits like guaranteed multiyear scholarships and medical coverage for concussions and other long-term health issues. The first of what will likely be many battles for the unionization effort came this week, with an hearing before the Chicago regional National Labor Relations Board.

The proceeding, which will continue at least through the end of the week, has pitted the proposed College Athletes Players Association and former Northwestern quarterback (and NFL hopeful) Kain Colter against Northwestern. While the university reacted much less strongly than the NCAA when the unionization efforts were unveiled—the official university statement made sure to say that Northwestern is “proud” of its students for being “leaders and independent thinkers”—it is still the theoretical employer of Colter and the other players and thus must face off against them before the labor board. (Head coach Pat Fitzgerald is expected to testify Friday.) Here’s what you need to know about the hearings and what they mean for college football:

What does the union need to prove to win? The College Athletes Players Association, with the help of star witness Colter, is arguing that football players are employees of the university. The group has some strong arguments in its favor, according to University of Illinois law professor and sports labor expert Michael LeRoy. For one, the players work long hours equivalent to a full-time job. Colter testified that football-related activities take up 40 to 50 hours a week during the season and 50 to 60 hours a week during training camp in the summer. The players’ efforts also benefit the university—an economics professor who testified on the union’s behalf said that Northwestern’s football revenue totaled $235 million between 2003 and 2012, while its expenses added up to just $159 million during that time. “It’s a financial benefit, and that’s putting it mildly,” LeRoy said.

What does Northwestern need to prove? The university’s argument is that the players are student-athletes and nothing more. The players receive scholarships worth about $60,000 a year, a university athletics official testified, and a lawyer for the school noted that players also get “a world-class education, free tutoring services, core academic advice, and personal and career development opportunity.” While some of Northwestern’s other counterpoints lacked substance—school lawyers grilled Colter on whether leadership and other skills learned from the football team helped him get a prior internship at Goldman Sachs, a line of thinking LeRoy called “fairly irrelevant” to whether or not college football counts as labor—perhaps its strongest point is that players signed a scholarship contract, agreeing to their amateur status and therefore waiving their collective bargaining power.

What happens now? No matter which side the Chicago labor board takes, the loser will probably appeal that decision to the national board in Washington, DC. That ruling will likely head to a federal appeals court. The entire process could take years, LeRoy said, which presents a unique challenge for union organizers: There’s a chance all the players who signed union cards will have graduated and moved on by the time a final decision comes down. One big question is how other schools and teams will react—while teams at private schools like Northwestern can try to unionize, teams at public schools must adhere to their states’ collective bargaining laws. If players at some schools are able to negotiate benefits that players at other schools are not, LeRoy said, it could fundamentally change recruiting, realign conferences, and lead to swaths of state legislation addressing the matter. “It’s a huge can of worms,” he said. “It’s a showstopper.”

Who’s going to win? LeRoy said he thinks the regional and national labor boards will rule in favor of the players due to the boards’ liberal slant, but that the courts will rule against Colter & Co. That won’t mean the movement was pointless, though—LeRoy expects the NCAA to compromise on many of the union’s core issues by that point. Vitally, the Northwestern players aren’t asking for pay for play, meaning the university and the NCAA could provide them with the scholarship and medical benefits they’re calling for and still maintain its structure and concept of amateurism. Even a formal union doesn’t hold up legally, LeRoy said, we may see a “union substitute” in which the threat is credible enough that the NCAA provides players with more voice and benefits. “I don’t think we’re going to have collective bargaining,” he said. “But I think this is a necessary step.”

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Can These College Football Players Actually Unionize?

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Surprise: Liberals Are Just as Morally Righteous as Conservatives

by FranciscaDGY Posted on February 19, 2014

Mother Jones

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From the Moral Majority to the Tea Party, we tend to think of those on the political right as driven by deep moral convictions. Much of the reason involves the right’s strong connection with fundamentalist religiosity, and the accompanying rhetoric about “moral values.” Indeed, conservatives have made a habit of accusing liberals of being “moral relativists,” even as psychological research paints liberals as more tolerant of uncertainty and nuance than conservatives, and more open to new experiences and ideas. That certainly doesn’t sound like the psych profile of a moral crusader.

Maybe, though, the moral motivations of liberals have been underestimated. That’s the upshot of a new political psychology study by Linda Skitka of the University of Illinois-Chicago and two colleagues. The researchers conducted a meta-analysis of 21 separate studies examining the differing moral investments of the left and the right. And they found that overall, liberals showed just as much moral conviction as conservatives—albeit on very different political issues.

The 21 studies in question had much in common: All of them asked participants how much their stances on a wide variety of political issues were “based on moral principle,” “deeply connected to their beliefs about fundamental right and wrong,” “a moral stance,” and other related questions. All the studies also asked participants about their political ideology.

Crunching together this large body of similar research, Skitka and colleagues didn’t find much convincing evidence that conservatives feel more morally righteous than liberals do. For instance, in total the 21 studies examined the moral commitments of liberals and conservatives on 41 separate political issues, from drug policy to the Israel-Palestine conflict. But on the large majority of those issues—28 of them in all—liberals and conservatives showed about the same level of moral conviction. Of the remainder, conservatives felt more strongly about 7 issues (immigration, abortion, states’ rights, gun control, physician-assisted suicide, the deficit, and the federal budget) and liberals felt more strongly about 6 issues (climate change, the environment, gender equality, income inequality, healthcare reform, and education).

Different levels of moral conviction from left to right might tell us a lot about how particular issues play out, then (think abortion). But there’s wasn’t a very big difference in moral conviction overall.

When Skitka and her colleagues examined a subset of the studies that involved political engagement (activism, voting, and so on), meanwhile, they also failed to find a major left-right difference. In other words, liberals and conservatives were equally likely to be driven, by their moral convictions, into overt political actions such as activism or voting.

None of which is to suggest that when it comes to moral politics, liberals and conservatives are just two sides of a coin. Prior research, for instance, suggests that conservatives are more likely to believe in moral absolutes than liberals are. And as already noted, the two sides are not always equally fired up about a given issue: Thus, the zeal with which the right attacks, say, government spending is not matched with equal zeal on the left aimed at defending it.

Finally, much research has suggested that the basic moral systems of the left and the right are very different. If you follow George Lakoff, liberals have a “nurturant parent” morality, centered on caring and empathy, as opposed to conservatives’ “strict father” morality, centered on rules and obedience. If you follow Jonathan Haidt, meanwhile, then liberals feel strong moral convictions about issues involving harm and fairness, whereas conservatives root their morality in authority, tribalism, and even emotions of disgust.

There’s no reason to doubt that these differences are real. But the new study suggests that in spite of them, both the left and the right can get very fired up about politics. And when they let their deep-seated moral emotions drive their political views, they may do so with equal zeal.

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Surprise: Liberals Are Just as Morally Righteous as Conservatives

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Living in a Violent Neighborhood Is as Likely to Give You PTSD as Going to War

by daniel13stoko Posted on February 4, 2014

Mother Jones

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This story originally appeared on ProPublica.

Chicago’s Cook County Hospital has one of the busiest trauma centers in the nation, treating about 2,000 patients a year for gunshots, stabbings and other violent injuries.

So when researchers started screening patients there for post-traumatic stress disorder in 2011, they assumed they would find cases.

Is PTSD Contagious?
Read Mac McClelland’s feature story on the epidemic in military families.

They just didn’t know how many: Fully 43 percent of the patients they examined–and more than half of gunshot-wound victims–had signs of PTSD.

“We knew these people were going to have PTSD symptoms,” said Kimberly Joseph, a trauma surgeon at the hospital. “We didn’t know it was going to be as extensive.”

What the work showed, Joseph said, is, “This is a much more urgent problem than you think.”

Joseph proposed spending about $200,000 a year to add staffers to screen all at-risk patients for PTSD and connect them with treatment. The taxpayer-subsidized hospital has an annual budget of roughly $450 million. But Joseph said hospital administrators turned her down and suggested she look for outside funding.

“Right now, we don’t have institutional support,” said Joseph, who is now applying for outside grants.

A hospital spokeswoman would not comment on why the hospital decided not to pay for regular screening. The hospital is part of a pilot program with other area hospitals to help “pediatrics patients identified with PTSD,” said the spokeswoman, Marisa Kollias.”The Cook County Health and Hospitals System is committed to treating all patients with high quality care.”

Right now, social workers try to identify patients with the most severe PTSD symptoms, said Carol Reese, the trauma center’s violence prevention coordinator and an Episcopal priest.

“I’m not going to tell you we have everything we need in place right now, because we don’t,” Reese said. “We have a chaplain and a social worker and a couple of social work interns trying to see 5,000 people. We’re not staffed to do it.”

A growing body of research shows that Americans with traumatic injuries develop PTSD at rates comparable to veterans of war. Just like veterans, civilians can suffer flashbacks, nightmares, paranoia, and social withdrawal. While the United States has been slow to provide adequate treatment to troops affected by post-traumatic stress, the military has made substantial progress in recent years. It now regularly screens for PTSD, works to fight the stigma associated with mental health treatment and educates military families about potential symptoms.

Few similar efforts exist for civilian trauma victims. Americans wounded in their own neighborhoods are not getting treatment for PTSD. They’re not even getting diagnosed.

Studies show that, overall, about 8 percent of Americans suffer from PTSD at some point in their lives. But the rates appear to be much higher in communities–such as poor, largely African-American pockets of Detroit, Atlanta, Chicago and Philadelphia–where high rates of violent crime have persisted despite a national decline.

Researchers in Atlanta interviewed more than 8,000 inner-city residents and found that about two-thirds said they had been violently attacked and that half knew someone who had been murdered. At least 1 in 3 of those interviewed experienced symptoms consistent with PTSD at some point in their lives–and that’s a “conservative estimate,” said Dr. Kerry Ressler, the lead investigator on the project.

“The rates of PTSD we see are as high or higher than Iraq, Afghanistan or Vietnam veterans,” Ressler said. “We have a whole population who is traumatized.”

Post-traumatic stress can be a serious burden: It can take a toll on relationships and parenting, lead to family conflict and interfere with jobs. A national study of patients with traumatic injuries found that those who developed post-traumatic stress were less likely to have returned to work a year after their injuries.

It may also have a broader social cost. “Neglect of civilian PTSD as a public health concern may be compromising public safety,” Ressler and his co-authors concluded in a 2012 paper.

For most people, untreated PTSD will not lead to violence. But “there’s a subgroup of people who are at risk, in the wrong place, at the wrong time, of reacting in a violent way or an aggressive way, that they might not have if they had had their PTSD treated,” Ressler said.

Research on military veterans has found that the symptom of “chronic hyperarousal”–the distorted sense of always being under extreme threat–can lead to increased aggression and violent behavior.

“Very minor threats can be experienced, by what the signals in your body tell you, as, ‘You’re in acute danger,'” said Sandra Bloom, a psychiatrist and former president of the International Society for Traumatic Stress Studies.

Another issue, wrote researchers at Drexel University, is that people with symptoms of PTSD may be more likely to carry a weapon in order to “restore feelings of safety.”

Hospital trauma centers, which work on the front lines of neighborhood violence, could help address the lack of treatment. Indeed, the American College of Surgeons, which sets standards for the care of patients with traumatic injuries, is set to recommend that trauma centers”evaluate, support and treat” patients for post-traumatic stress.

But it’s not a requirement, and few hospitals appear to be doing it.

ProPublica surveyed a top-level trauma center in each of the 22 cities with the nation’s highest homicide rates. Just one, the Spirit of Charity Trauma Center in New Orleans, currently screens all seriously injured patients for PTSD. At another, Detroit Receiving Hospital, psychologists talk with injured crime victims about PTSD.

Other hospitals have a patchwork of resources or none at all. At two hospitals, in Birmingham, Alabama and St. Louis, Missouri, trauma center staff said they hope to institute routine PTSD screening by the end of the year.

Doctors in Baltimore, Newark, Memphis, and Jackson, Miss., said they wanted to do more to address PTSD, but they do not have the money.

They said adding even small amounts to hospital budgets is a hard sell in a tough economic climate. That’s especially true at often-cash-strapped public hospitals.

In order to add a staff member to screen and follow up on PTSD, “Do I lay someone else off in another area?” asked Carnell Cooper, a trauma surgeon at Maryland Shock Trauma in Baltimore.

Many public hospitals rely on state Medicaid programs to cover treatment of low-income patients. But several surgeons across the country said they did not know of any way they could bill Medicaid for screenings.

The federal government often provides guidance to state Medicaid programs on best practices for patient care and how to fund them. But a spokeswoman for the Centers for Medicare and Medicaid Services said the agency has given states no guidance on whether or how hospitals could be reimbursed for PTSD screenings.

Hospitals are often unwilling to foot the bill themselves.

Trauma surgeons and their staffs expressed frustration that they know PTSD is having a serious impact on their patients, but they can’t find a way to pay for the help they need.

“We don’t recognize that people have PTSD. We don’t recognize that they’re not doing their job as well, that they’re not doing as well in school, that they’re getting irritable at home with their families,” said John Porter, a trauma surgeon in Jackson, Miss., which has a per-capita homicide rate higher than Chicago’s.

“When you think about it, if someone gets shot, and I save their life, and they can’t go out and function, did I technically save their life? Probably not.”

When RAND Corp. researchers began interviewing violently injured young men in Los Angeles in the late 1990s, they faced some skepticism that the men, often connected to gangs, would be susceptible to PTSD.

“We had people tell us that we’d see a lot of people who were gang-bangers, and they wouldn’t develop PTSD, because they were already hardened to that kind of life,” said Grant Marshall, a behavioral scientist who studied patients at a Los Angeles trauma center. “We didn’t find that to be the case at all. People in gangs were just as likely as anyone else to develop PTSD.”

In fact, trauma appears to have a cumulative effect. Young men with violent injuries may be more likely to develop symptoms if they have been attacked before.

The Los Angeles study found that 27 percent of the men interviewed three months after they were injured had symptoms consistent with PTSD.

“Most people still think that all the people who get shot were doing something they didn’t need to be doing,” said Porter, the trauma surgeon from Jackson, Miss. “I’m not saying it’s the racist thing, but everybody thinks it’s a young black men’s disease: They get shot, they’re out selling drugs. We’re not going to spend more time on them.”

While post-traumatic stress often does not show up until several months after an injury, experts say many trauma centers are missing the chance to evaluate patients early for risk of PTSD and to use clinical follow-ups–when patients come back to have their physical wounds examined–to check if patients are developing symptoms.

Doctors say hospitals are unlikely to make significant progress until the American College of Surgeons makes systematic PTSD screening a requirement for all top-level trauma centers.

An ACS requirement would be “a much better hammer to show the administration,” said Michael Foreman, chief of trauma surgery at Baylor University Medical Center in Dallas. Baylor, one of the few trauma centers to have a full-time psychologist on staff, surveyed 200 patients and found that roughly a quarter experienced post-traumatic stress. But Foreman said the center would not systematically screen all its patients until the ACS mandates it.

It’s not clear when that will happen. The organization’s recognition of PTSD screening as a recommended practice is a first step. Those new guidelines will be released in March 2014, according to Chris Cribari, who chairs the subcommittee that evaluates whether hospitals are meeting ACS standards. Cribari declined to say when PTSD screening might become a requirement. He said the timing will depend on what hurdles hospitals encounter–such as patient privacy–when some of them start screenings.

Cribari acknowledged that at some hospitals, “unless it’s a regulation, they’re not going to spend the money on it.”

At minimum, experts say, hospitals should provide all trauma patients with basic education about post-traumatic stress.

“The number one thing we do,” is simply “tell everybody in the trauma center about PTSD,” said John Nanney, a Department of Veterans Affairs researcher who developed a program for violently injured patients at the Spirit of Charity in New Orleans.

Without education about symptoms, patients who have flashbacks or constant nightmares may have “these catastrophic beliefs” about what is happening to them, Nanney said. “Just say, ‘This is something you might notice. If you do notice it, it doesn’t mean you’re going crazy. It doesn’t mean you’re weak. This is something that happens—don’t freak out.'”

The city of Philadelphia has begun to focus on trauma as a major public health issue. Philadelphia is working with local mental health providers to screen for PTSD more systematically–and to focus on post-traumatic stress as part of drug and alcohol treatment. The city has also paid to train local therapists in prolonged exposure, a proven treatment for PTSD– the same kind of training the US Department of Veterans Affairs has paid for its therapists to receive.

For violently injured Philadelphia residents, there’s also Drexel University’s Healing Hurt People, a program that’s become a national model for addressing trauma and PTSD.

Healing Hurt People reaches out to violently injured adults and children at two local hospitals and offers them intensive services. The program accepts a broad range of patients — from high-schoolers to siblings of young men who have been shot to former drug dealers. (One of Healing Hurt People’s clients talked about his post-traumatic stress in 2013 on This American Life.)

The program’s social workers screen all clients for PTSD symptoms and host discussions in which clients can share their experiences with one another. It’s a way of fighting stigma around mental-health symptoms. Instead of thinking that they’re going crazy, the conversations help them realize, “OK, this is normal,” as one client put it.

One of the program’s central goals is to discourage victims of crimes from retaliating against their attackers and to help them focus on staying safe and rebuilding their own lives.

The program’s therapists and social workers remind clients that the aftereffects of trauma may make them overreact and help them plan how to identify and avoid events that might trigger them. In one discussion last fall, a therapist sketched a cliff on a whiteboard, with a stick man on the top, close to the edge. The question: How do you recognize when you’re getting close to the cliff edge—and learn to walk away?

“Our thing is education,” social worker Tony Thompson said. The more clients “understand what’s going on in their body and their mind, the more prepared they are to deal with it.”

Intensive casework like this has shown good results, but it’s not cheap. Healing Hurt People is relatively small: Its programs served 129 new clients in 2013 and offered briefer education or assistance to a few hundred more. Its annual budget in 2013 was roughly $300,000, not including the cost of the office space that Drexel donates to the program.

Other researchers have been working to develop quicker, more modest interventions for PTSD, including some that use laptops and smartphones—programs that could easily be extended to more patients and still have some positive effect.

Whatever the approach, there “is untapped potential,” said Joseph, the surgeon at Chicago’s Cook County Hospital. Healing Hurt People is a model for what she wants to create. “These are kids, for the most part. When a 17-year-old kid crashes their parents’ car, and they were drinking, we don’t say, ‘Oh, that kid’s hopeless, let’s just give up on them.'”

“We’ve certainly had decades of trying to apply political solutions and social solutions to our inner cities’ financial problems and violence problem, and they haven’t been successful,” said Ressler, the Atlanta researcher. “If we could do a better job of identification, intervention and treatment, I think there would be less violence, and people would have an easier time doing well in school, getting a job.”

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Living in a Violent Neighborhood Is as Likely to Give You PTSD as Going to War

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How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme—Again

by LenJoywotte Posted on November 29, 2013

Mother Jones

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This story first appeared on the TomDispatch website.

You can hardly turn on the television or open a newspaper without hearing about the nation’s impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.

Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.

Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up—again.

Since the buying frenzy began, no company has picked up more houses than the Blackstone Group, the largest private equity firm in the world. Using a subsidiary company, Invitation Homes, Blackstone has grabbed houses at foreclosure auctions, through local brokers, and in bulk purchases directly from banks the same way a regular person might stock up on toilet paper from Costco.

In one move, it bought 1,400 houses in Atlanta in a single day. As of November, Blackstone had spent $7.5 billion to buy 40,000 mostly foreclosed houses across the country. That’s a spending rate of $100 million a week since October 2012. It recently announced plans to take the business international, beginning in foreclosure-ravaged Spain.

Few outside the finance industry have heard of Blackstone. Yet today, it’s the largest owner of single-family rental homes in the nation—and of a whole lot of other things, too. It owns part or all of the Hilton Hotel chain, Southern Cross Healthcare, Houghton Mifflin publishing house, the Weather Channel, Sea World, the arts and crafts chain Michael’s, Orangina, and dozens of other companies.

Blackstone manages more than $210 billion in assets, according to its 2012 Securities and Exchange Commission annual filing. It’s also a public company with a list of institutional owners that reads like a who’s who of companies recently implicated in lawsuits over the mortgage crisis, including Morgan Stanley, Citigroup, Deutsche Bank, UBS, Bank of America, Goldman Sachs, and of course JP Morgan Chase, which just settled a lawsuit with the Department of Justice over its risky and often illegal mortgage practices, agreeing to pay an unprecedented $13 billion fine.

In other words, if Blackstone makes money by capitalizing on the housing crisis, all these other Wall Street banks—generally regarded as the main culprits in creating the conditions that led to the foreclosure crisis in the first place—make money too.

An All-Cash Goliath

In neighborhoods across the country, many residents didn’t have to know what Blackstone was to realize that things were going seriously wrong.

Last year, Mark Alston, a real estate broker in Los Angeles, began noticing something strange happening. Home prices were rising. And they were rising fast—up 20% between October 2012 and the same month this year. In a normal market, rising home prices would mean increased demand from homebuyers. But here was the unnerving thing: the homeownership rate was dropping, the first sign for Alston that the market was somehow out of whack.

The second sign was the buyers themselves.

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About 5% of Blackstone’s properties, approximately 2,000 houses, are located in the Charlotte metro area. Of those, just under 1,000 (pictured above) are in Mecklenberg County, the city’s center. (Map by Anthony Giancatarino, research by Symone New.)

“I went two years without selling to a black family, and that wasn’t for lack of trying,” says Alston, whose business is concentrated in inner-city neighborhoods where the majority of residents are African American and Hispanic. Instead, all his buyers—every last one of them—were besuited businessmen. And weirder yet, they were all paying in cash.

Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53% of African American wealth and 66% of Hispanic wealth, figures that stagger the imagination. As a result, it’s safe to say that few blacks or Hispanics today are buying homes outright, in cash. Blackstone, on the other hand, doesn’t have a problem fronting the money, given its $3.6 billion credit line arranged by Deutsche Bank. This money has allowed it to outbid families who have to secure traditional financing. It’s also paved the way for the company to purchase a lot of homes very quickly, shocking local markets and driving prices up in a way that pushes even more families out of the game.

“You can’t compete with a company that’s betting on speculative future value when they’re playing with cash,” says Alston. “It’s almost like they planned this.”

In hindsight, it’s clear that the Great Recession fueled a terrific wealth and asset transfer away from ordinary Americans and to financial institutions. During that crisis, Americans lost trillions of dollars of household wealth when housing prices crashed, while banks seized about five million homes. But what’s just beginning to emerge is how, as in the recession years, the recovery itself continues to drive the process of transferring wealth and power from the bottom to the top.

From 2009-2012, the top 1% of Americans captured 95% of income gains. Now, as the housing market rebounds, billions of dollars in recovered housing wealth are flowing straight to Wall Street instead of to families and communities. Since spring 2012, just at the time when Blackstone began buying foreclosed homes in bulk, an estimated $88 billion of housing wealth accumulation has gone straight to banks or institutional investors as a result of their residential property holdings, according to an analysis by TomDispatch. And it’s a number that’s likely to just keep growing.

“Institutional investors are siphoning the wealth and the ability for wealth accumulation out of underserved communities,” says Henry Wade, founder of the Arizona Association of Real Estate Brokers.

But buying homes cheap and then waiting for them to appreciate in value isn’t the only way Blackstone is making money on this deal. It wants your rental payment, too.

Securitizing Rentals

Wall Street’s rental empire is entirely new. The single-family rental industry used to be the bailiwick of small-time mom-and-pop operations. But what makes this moment unprecedented is the financial alchemy that Blackstone added. In November, after many months of hype, Blackstone released history’s first rated bond backed by securitized rental payments. And once investors tripped over themselves in a rush to get it, Blackstone’s competitors announced that they, too, would develop similar securities as soon as possible.

Depending on whom you ask, the idea of bundling rental payments and selling them off to investors is either a natural evolution of the finance industry or a fire-breathing chimera.

“This is a new frontier,” comments Ted Weinstein, a consultant in the real-estate-owned homes industry for 30 years. “It’s something I never really would have dreamt of.”

However, to anyone who went through the 2008 mortgage-backed-security crisis, this new territory will sound strangely familiar.

“It’s just like a residential mortgage-backed security,” said one hedge-fund investor whose company does business with Blackstone. When asked why the public should expect these securities to be safe, given the fact that risky mortgage-backed securities caused the 2008 collapse, he responded, “Trust me.”

For Blackstone, at least, the logic is simple. The company wants money upfront to purchase more cheap, foreclosed homes before prices rise. So it’s joined forces with JP Morgan, Credit Suisse, and Deutsche Bank to bundle the rental payments of 3,207 single-family houses and sell this bond to investors with mortgages on the underlying houses offered as collateral. This is, of course, just a test case for what could become a whole new industry of rental-backed securities.

Many major Wall Street banks are involved in the deal, according to a copy of the private pitch documents Blackstone sent to potential investors on October 31st, which was reviewed by TomDispatch. Deutsche Bank, JP Morgan, and Credit Suisse are helping market the bond. Wells Fargo is the certificate administrator. Midland Loan Services, a subsidiary of PNC Bank, is the loan servicer. (By the way, Deutsche Bank, JP Morgan Chase, Wells Fargo, and PNC Bank are all members of another clique: the list of banks foreclosing on the most families in 2013.)

According to interviews with economists, industry insiders, and housing activists, people are more or less holding their collective breath, hoping that what looks like a duck, swims like a duck, and quacks like a duck won’t crash the economy the same way the last flock of ducks did.

“You kind of just hope they know what they’re doing,” says Dean Baker, an economist with the Center for Economic and Policy Research. “That they have provisions for turnover and vacancies. But have they done that? Have they taken the appropriate care? I certainly wouldn’t count on it.” The cash flow analysis in the documents sent to investors assumes that 95% of these homes will be rented at all times, at an average monthly rent of $1,312. It’s an occupancy rate that real estate professionals describe as ambitious.

There’s one significant way, however, in which this kind of security differs from its mortgage-backed counterpart. When banks repossess mortgaged homes as collateral, there is at least the assumption (often incorrect due to botched or falsified paperwork from the banks) that the homeowner has, indeed, defaulted on her mortgage. In this case, however, if a single home-rental bond blows up, thousands of families could be evicted, whether or not they ever missed a single rental payment.

“We could well end up in that situation where you get a lot of people getting evicted… not because the tenants have fallen behind but because the landlords have fallen behind,” says Baker.

Bugs in Blackstone’s Housing Dreams

Whether these new securities are safe may boil down to the simple question of whether Blackstone proves to be a good property manager. Decent management practices will ensure high occupancy rates, predictable turnover, and increased investor confidence. Bad management will create complaints, investigations, and vacancies, all of which will increase the likelihood that Blackstone won’t have the cash flow to pay investors back.

If you ask CaDonna Porter, a tenant in one of Blackstone’s Invitation Homes properties in a suburb outside Atlanta, property management is exactly the skill that Blackstone lacks. “If I could shorten my lease—I signed a two-year lease—I definitely would,” says Porter.

The cockroaches and fat water bugs were the first problem in the Invitation Homes rental that she and her children moved into in September. Porter repeatedly filed online maintenance requests that were canceled without anyone coming to investigate the infestation. She called the company’s repairs hotline. No one answered.

The second problem arrived in an email with the subject line marked “URGENT.” Invitation Homes had failed to withdraw part of Porter’s November payment from her bank account, prompting the company to demand that she deliver the remaining payment in person, via certified funds, by five p.m. the following day or incur “the additional legal fee of $200 and dispossessory,” according to email correspondences reviewed by TomDispatch.

Porter took off from work to deliver the money order in person, only to receive an email saying that the payment had been rejected because it didn’t include the $200 late fee and an additional $75 insufficient funds fee. What followed were a maddening string of emails that recall the fraught and often fraudulent interactions between homeowners and mortgage-servicing companies. Invitation Homes repeatedly threatened to file for eviction unless Porter paid various penalty fees. She repeatedly asked the company to simply accept her month’s payment and leave her alone.

“I felt really harassed. I felt it was very unjust,” says Porter. She ultimately wrote that she would seek legal counsel, which caused Invitation Homes to immediately agree to accept the payment as “a one-time courtesy.”

Porter is still frustrated by the experience—and by the continued presence of the cockroaches. (“I put in another request today about the bugs, which will probably be canceled again.”)

A recent Huffington Post investigation and dozens of online reviews written by Invitation Homes tenants echo Porter’s frustrations. Many said maintenance requests went unanswered, while others complained that their spiffed-up houses actually had underlying structural issues.

There’s also at least one documented case of Blackstone moving into murkier legal territory. This fall, the Orlando, Florida, branch of Invitation Homes appeared to mail forged eviction notices to a homeowner named Francisco Molina, according to the Orlando Sentinel. Delivered in letter-sized manila envelopes, the fake notices claimed that an eviction had been filed against Molina in court, although the city confirmed otherwise. The kicker is that Invitation Homes didn’t even have the right to evict Molina, legally or otherwise. Blackstone’s purchase of the house had been reversed months earlier, but the company had lost track of that information.

The Great Recession of 2016?

These anecdotal stories about Invitation Homes being quick to evict tenants may prove to be the trend rather than the exception, given Blackstone’s underlying business model. Securitizing rental payments creates an intense pressure on the company to ensure that the monthly checks keep flowing. For renters, that may mean you either pay on the first of the month every month, or you’re out.

Although Blackstone has issued only one rental-payment security so far, it already seems to be putting this strict protocol into place. In Charlotte, North Carolina, for example, the company has filed eviction proceedings against a full 10% of its renters, according to a report by the Charlotte Observer.

Click here to see a larger version

About 9% of Blackstone’s properties, approximately 3,600 houses, are located in the Phoenix metro area. Most are in low- to middle-income neighborhoods. (Map by Anthony Giancatarino, research by Jose Taveras.)

Forty thousand homes add up to only a small percentage of the total national housing stock. Yet in the cities Blackstone has targeted most aggressively, the concentration of its properties is staggering. In Phoenix, Arizona, some neighborhoods have at least one, if not two or three, Blackstone-owned homes on just about every block.

This inundation has some concerned that the private equity giant, perhaps in conjunction with other institutional investors, will exercise undue influence over regional markets, pushing up rental prices because of a lack of competition. The biggest concern among many ordinary Americans, however, should be that, not too many years from now, this whole rental empire and its hot new class of securities might fail, sending the economy into an all-too-familiar tailspin.

“You’re allowing Wall Street to control a significant sector of single-family housing,” said Michael Donley, a resident of Chicago who has been investigating Blackstone’s rapidly expanding presence in his neighborhood. “But is it sustainable?” he wondered. “It could all collapse in 2016, and you’ll be worse off than in 2008.”

Laura Gottesdiener is a journalist and the author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home, published in August by Zuccotti Park Press. She is an editor for Waging Nonviolence and has written for Rolling Stone, Ms., Playboy, the Huffington Post, and other publications. She lived and worked in the People’s Kitchen during the occupation of Zuccotti Park. This is her second TomDispatch piece.

Note: Special thanks to Symone New and Jose Taveras for conducting the difficult research to locate Blackstone-owned properties. Special thanks also to Anthony Giancatarino for turning this data into beautiful maps.

Follow TomDispatch on Twitter and join us on Facebook or Tumblr. Check out the newest Dispatch Book, Ann Jones’s They Were Soldiers: How the Wounded Return From America’s Wars—The Untold Story.To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here.

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How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme—Again

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These Beautiful "Place-Hacking" Photos Will Give You an Adrenaline Rush

by surfikdon Posted on November 15, 2013

Mother Jones

<!DOCTYPE html PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN” “http://www.w3.org/TR/REC-html40/loose.dtd”>

They call themselves “place hackers”—urban adventurers who get a thrill (and bragging rights) from exploring forbidden spaces: old military bases, sewer systems, decommissioned hospitals, power stations—even the odd skyscraper under construction. Just like backpackers, they have an ethical code: no vandalism or theft, take only photographs, leave only footprints. “The idea behind urban exploration is revealing what’s hidden,” explains Bradley Garrett, author of the recent book Explore Everything: Place Hacking the City. “It’s about going into places that are essentially off limits and, because they are off limits, have been relatively forgotten.” The goal is not just to explore, he adds, but to document and share as well. To wit: Check out these 12 amazing photos from Garrett’s book.

Effra Sewer, South London

Saint Sulpice Church, Paris

King’s Reach Tower, London

New Court Building, London

Ritz-Carlton Residences, Chicago

Legacy Tower, Chicago

Temple Court Building, London

Legacy Tower, Chicago

Lost Kingdom Water Park, Riverside, California

GLC Pipe Subways, London

Skyscraper Crane, Aldgate East, London

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These Beautiful "Place-Hacking" Photos Will Give You an Adrenaline Rush

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The Art of Loving – Erich Fromm

by Myrna Posted on July 19, 2013

READ GREEN WITH E-BOOKS

The Art of Loving

Erich Fromm

Genre: Psychology

Price: $3.99

Publish Date: February 26, 2013

Publisher: Open Road

Seller: OpenRoad Integrated Media, LLC


The international bestseller that launched a movement with its powerful insight: “Love is the only sane and satisfactory answer to the problem of human existence.” The Art of Loving is a rich and detailed guide to love—an achievement reached through maturity, practice, concentration, and courage. In the decades since the book’s release, its words and lessons continue to resonate. Erich Fromm, a celebrated psychoanalyst and social psychologist, clearly and sincerely encourages the development of our capacity for and understanding of love in all of its facets. He discusses the familiar yet misunderstood romantic love, the all-encompassing brotherly love, spiritual love, and many more. A challenge to traditional Western notions of love, The Art of Loving is a modern classic about taking care of ourselves through relationships with others. This ebook features an illustrated biography of Erich Fromm including rare images and never-before-seen documents from the author’s estate. “Erich Fromm is both a psychologist of penetration and a writer of ability. His book is one of dignity and candor, of practicality and precision.” — Chicago Tribune “Every line is packed with common sense, compassion, and realism.” — Fortune Erich Fromm (1900–1980) was a bestselling psychoanalyst and social philosopher whose views about alienation, love, and sanity in society—discussed in his books such as Escape from Freedom , The Art of Loving , The Sane Society ,and To Have or To Be? —helped shape the landscape of psychology in the mid-twentieth century. Fromm was born in Frankfurt, Germany, to Jewish parents, and studied at the universities of Frankfurt, Heidelberg (where in 1922 he earned his doctorate in sociology), and Munich. In the 1930s he was one of the most influential figures at the Frankfurt Institute of Social Research. In 1934, as the Nazis rose to power, he moved to the United States. He practiced psychoanalysis in both New York and Mexico City before moving to Switzerland in 1974, where he continued his work until his death.

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The Art of Loving – Erich Fromm

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FDA moves to keep arsenic out of your apple juice

by bvds34dfsg Posted on July 15, 2013

FDA moves to keep arsenic out of your apple juice

By John Upton

Shutterstock

Finally, more apples in our arsenic juice.

Apple juice may soon be as safe to drink as tap water. (Well, except for all that sugar.)

Nearly two years after consumer groups raised alarms about elevated levels of arsenic in some brands of apple juice, the U.S. Food and Drug Administration on Friday proposed new limits on permissible levels of the chemical, which can cause cancer and other maladies.

The FDA’s proposed “action level” for inorganic arsenic in apple juice matches the EPA’s existing rules for tap water — 10 parts per billion.

From The Christian Science Monitor:

The FDA has tested arsenic in apple juice for at least 20 years and has long said the levels are not dangerous to consumers, in particular the small children who favor the fruit juice (second only to orange juice in popularity, according to industry groups).

But the agency issued a tougher stance with its announcement Friday. Under the new regulation, apple juice containing more than 10 parts per billion could be removed from the market and companies could face legal action.

The proposal follows testing by The Dr. Oz Show and Consumer Reports [PDF] that revealed that some apple juices contained more arsenic than was allowed in tap water.

WTF is arsenic doing in apple juice anyway? The Chicago Tribune explains:

Inorganic arsenic in food can come from pesticides or from soil and groundwater pollution, though some occurs naturally in the environment. Organic arsenic is viewed as relatively safe, but emerging research suggests that two types of organic arsenic may be toxic. The FDA says these occur rarely or in negligible quantities in apple juice.

It probably doesn’t help that a lot of the apple juice sold in the U.S. comes from concentrate imported from China, a country that does not have an exemplary food-safety record.

John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com.

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Obama says a climate plan is coming next month, so climate hawks delay lawsuit

by DorothyUn Posted on June 18, 2013

Obama says a climate plan is coming next month, so climate hawks delay lawsuit

By John Upton

Shutterstock/

mistydawnphoto

“Sit tight, guys. Climate rules are coming soon, I swear.”

A cavalry of lawyers representing states and environmental groups was expected to launch a legal assault against the Obama administration this week over its slow movement on climate rules, but the charge was postponed at the 11th hour.

What changed? Obama has been telling donors that he plans to unveil new climate change regulations as part of a larger climate strategy next month.

Those regulations are expected to include a long-awaited rule on carbon dioxide emissions from new power plants, which would likely make it impossible to build new coal plants unless they have carbon-capture technology. The administration has been delaying release of that rule, reportedly working to improve it so it can better withstand the inevitable industry lawsuits. That delay in turn prompted states and environmental groups to threaten their own lawsuit.

From Reuters:

The attorney generals of New York and nine other states, along with three major green groups, had planned to sue the EPA this week because it missed a deadline in April to finalize emissions standards for new electric power plants.

Two months after notifying the agency they intended to sue, the consortium had expected to file as early as Monday, but backed off temporarily to allow the White House to disclose its climate plans.

“Due to public reports that the president will be announcing major action on climate change very soon, the Attorney General has decided to postpone a lawsuit on this matter for a short period,” said Melissa Grace, a spokeswoman for New York Attorney General Eric Schneiderman.

So the prospect of a new climate initiative is enough to mollify the would-be litigants — for now.

But climate activists are still restless and unhappy, particularly over Obama’s indecision on the Keystone XL pipeline. Just yesterday, 22 activists were arrested during a Keystone protest outside a State Department office in Chicago.

John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com.

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Obama says a climate plan is coming next month, so climate hawks delay lawsuit

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Which U.S. city has the best park system?

by pitery Posted on June 6, 2013

Which U.S. city has the best park system?

By Claire Thompson

Michael Hartford

Even the Minneapolis winter can’t keep kids out of its parks.

If you’re a lover of outdoor urban activity, might we suggest a move to Minneapolis? Not only does the burg have a bike culture to rival Portland’s, it boasts the best park system of any major U.S. city, according to rankings released Wednesday by the Trust for Public Land in its second-annual ParkScore Index.

Minneapolis didn’t appear on last year’s inaugural ParkScore list, which ranked only the 40 largest U.S. cities (Minneapolis comes in at No. 48). But this year, TPL looked at 50 cities, and Minneapolis took top honors, bumping San Francisco, last year’s winner, to third place. New York City moved up from third to second.

Here’s the top 10:

  1. Minneapolis
  1. New York City
  1. Sacramento & San Francisco & Boston (a three-way tie)
  1. Washington, D.C.
  1. Portland, Ore.
  1. Virginia Beach
  1. San Diego
  1. Seattle

Most of the cities in the Top 10 are either older Eastern towns shaped by Frederick Law Olmsted’s legacy of urban design (such as New York and Boston) or newer Western ones with urban wilderness and open space to spare (Portland, San Diego, Seattle).

In calculating the rankings, ParkScore gives equal weight to three main categories: acreage (median park size and park land as a percentage of overall city area), services and investment (park spending per capita and playgrounds per 10,000 residents), and access (how many people live within a 10-minute walk of a park). Fresno, Calif., brought up the rear for the second year in a row. In that city, park land constitutes only 2 percent of the city area — compared to 15 percent in Minneapolis — and roughly half of every income and age group lacks easy access to a park. But Fresno’s not even the worst city in terms of access — that honor goes to Charlotte, N.C., where less than 30 percent of the population lives within a 10-minute walk of a park.

New York is by far the biggest city in the top 10. L.A. sits all the way down at No. 34; Chicago came in No. 16. Virginia Beach is the only Southern city in the Top 10; Midwestern and Western cities are more evenly distributed. You can compare all the cities’ scores in each main category here; click on a city for a breakdown of its rankings.

In general, cities known for their car-loving culture (L.A., Atlanta, basically every city in Texas) don’t appear to give much love to parks.

ParkScore rankings aren’t meant just to celebrate or shame certain cities; TPL says its website should serve as “a roadmap to guide park improvement efforts.” The detailed analysis shows city leaders which aspects of their park system deserve the most focus. Let’s hope, for the sake of the people in Fresno, that they’re paying attention.

Claire Thompson is an editorial assistant at Grist.

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California, Illinois lawmakers welcome frackers

by cur07jqm Posted on June 3, 2013

California, Illinois lawmakers welcome frackers

By John Upton

Lawmakers rolled out red carpets for frackers last week in California and Illinois.

Shutterstock

California’s Assembly rejected, by a 37-24 vote, AB 1323, which would have imposed a moratorium on fracking until state regulators issue environmental and safety guidelines. Apparently the rush to cash in on oil and gas deposits just cannot wait for such trivial matters. “Let’s unleash this magnificent potential for jobs,” Assemblyman Jim Patterson (R) said, according to the AP.

A separate bill requiring scientific studies, water testing, and public notification of chemicals used by frackers — but imposing no moratorium — passed California’s Senate and will now move on to the Assembly for a vote.

Fracking for gas and oil is well underway beneath private land in California, though there are no requirements for energy companies to tell anybody what they’re up to, meaning it’s difficult to know how widespread the practice is. (Fracking for oil on federal lands in the state, meanwhile, is on hold pending an environmental review ordered by a federal judge.)

The practice of fracking is pitting farmers against energy companies in California. From The New York Times:

By all accounts, oilmen and farmers — often shortened to “oil and ag” here — have coexisted peacefully for decades in this conservative, business friendly part of California about 110 miles northwest of Los Angeles. But oil’s push into new areas and its increasing reliance on fracking, which uses vast amounts of water and chemicals that critics say could contaminate groundwater, are testing that relationship and complicating the continuing debate over how to regulate fracking in California.

“As farmers, we’re very aware of the first 1,000 feet beneath us and the groundwater that is our lifeblood,” said Tom Frantz, a fourth-generation farmer here and a retired high school math teacher who now cultivates almonds. “We look to the future, and we really do want to keep our land and soil and water in good condition.”

“This mixing of farming and oil, all in one place, is a new thing for us,” added Mr. Frantz, who is also an environmentalist and is pressing for a moratorium on fracking.

In Illinois, a bill that clears the way for fracking to get rolling in the state is headed for the desk of Gov. Pat Quinn (D), who says he’ll sign it. The Natural Resources Defense Council reported last week that some fracking has already been happening in the state, unbeknownst to most Illinoisans, but many companies have been waiting for the state to establish its regulatory framework before sinking their drills. This bill imposes “some of the toughest disclosure laws in the country” on frackers, the Chicago Tribune reports, but it’s not nearly as tough as green activists had wanted. From the Tribune:

Under new regulations which would take effect as soon as Quinn signs them into law, companies who wish to frack for oil or gas … must disclose a wealth of new information to the public, which has the opportunity to appeal permits and launch lawsuits against energy firms who attempt to skirt the law.

Environmental groups who helped hash out the bill say they would have preferred a moratorium on fracking.

So, yes, some safeguards are being put in place. But overall, lawmakers seem to hope the legislation will spur an oil boom in the state. The Chicago Tribune summed up the news this way: “Let the fracking begin.”

John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com.

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