The Occupy Oakland group is starting a new wave of occupations. They intend to occupy vacant properties.
The Occupy Oakland group announced on Twitter earlier this week that its general assembly “just passed a proposal to encourage the occupation of bank-owned/foreclosed and abandoned properties across #Oakland.”
On Wednesday, a group of Occupy Oakland members took a first step in this direction by entering a vacant building formerly used by the Traveler’s Aid Society.
The group “hoped to use the national spotlight on Oakland to encourage other occupations in colder, more northern climates to consider claiming spaces and moving indoors in order to resist the repressive force of the weather,” states a blog post on the Occupy Everything! Blog.
“None of this should be that surprising, in any case, as talk of such an action has percolated through the movement for months now, and the GA [General Assembly] recently voted to support such occupations materially and otherwise,” states the blog post. “In solidarity with the global occupation movement, we encourage the transformation of abandoned spaces into resource centers toward meeting urgent community needs that the current economic system cannot and will not provide.”
The people who could ultimately give Greece the coup de grace are not the kind to throw stones or Molotov cocktails, and they have yet to torch any cars. Instead, they are people like 60-year-old beverage distributor Angelos Belitsakos, people who might soon turn into a real problem for the economically unstable country. Feeling cornered, he and other private business owners want to go on the offensive. But instead fighting with weapons, they are using something much more dangerous. They are fighting with money.
Belitsakos is a short, slim and alert man who lives in the middle-class Athenian suburb of Holargos. He is also the physical and spiritual leader of a movement of businesspeople in Greece that is recruiting new members with growing speed. While Greece’s government is desperately trying to combat its ballooning budget deficit by raising taxes and imposing new fees, people like Belitsakos are putting their faith in passive resistance.
The group’s slogan is as simple as it is stoic: “We Won’t Pay.”
This business owners’ absolute refusal to pay any taxes resembles an uprising of the ownership class, rather than the working class, a rebellion of the self-employed business owners who have long been the backbone of Greek society. These are not the people who weaseled their way into Greece’s oversized civil service; these are people who put their money in the private sector, working 12-hour days, seven days a week. Or so Belitsakos says.
Standing in his small store, Belitsakos makes a sweeping gesture and says that the people in his movement no longer have a choice. “The state will kill us,” he says. “We’re acting in self-defense.” Then he starts to do the math. Over the last two years, his sales have massively shrunk as 60 of the tavernas and restaurants he used to make deliveries to have terminated their contracts with him. At the same time, the government has raised the value-added tax (VAT) twice while imposing a never-ending series of new fees. He mentions the €300 ($406) one-time fee for the self-employed, a two-percentage-point boost in the VAT, a €180 solidarity levy for the unemployed and a property tax that is “easily a few hundred euros every year.”
The taxes are part of Athens’ last ditch effort to avoid drifting into insolvency and to live up to the promises of austerity it delivered to the European Union. The country’s vast debt means it is already reliant on the steady drip of aid it receives from a €110 billion rescue package passed last year, with a second such package likely to be passed this fall. But each payment from the fund is dependent on progress being made on the effort to clean up the country’s finances.
That progress has been halting at best. In an effort to move the process forward, the government of Prime Minister Giorgios Papandreou has recently announced it intends to cut thousands of more civil servant jobs. And it introduced a controversial one-off property tax which has angered many. Several other taxes and fees have also been introduced.
Belitsakos calls them “charatzi,” a word from Ottoman times that can perhaps best be translated as “loot” or “compulsory levy.” The term is meant to indicate taxes levied arbitrarily and without justification, such as the tithe once paid to feudal lords. “But I can’t and won’t pony up. It’s wrong,” Belitsakos says. “Don’t you understand?”
The situation finally drove Belitsakos to write a letter to the head of the local tax authority in the name of his group. “We see ourselves facing a whole series of new taxes,” he wrote. “We are protesting and enraged.” He went on to charge that the only purpose behind the new fees was the “dispossession and impoverishment” of the Greeks and that he was now forced to resist. Briefly put, he wrote: “We won’t pay.”
Belitsakos says the tax official he handed the letter to was understanding and friendly. The fact that the civil servant put on a brave face might have something to do with all the TV cameras that were present. But, in a place like Greece, it is also entirely possible that the official was simply not all that surprised that someone would announce they were evading their taxes.
As well-known analyst Babis Papadimitriou puts it, the average Greek may well love his country, but he views the state apparatus as a power that one can and should plunder. Papadimitriou says that while the European average for VAT taxes that are evaded is 10 percent, the rate in Greece is roughly 30 percent. About a third of the entire economy happens off tax-authority radars.
These days, even communists, unionists and leftists are raising a public outcry against the new taxes. This week, Aleka Papariga, the general secretary of the Communist Party of Greece, said that the only way to stop the complete bankrupting of the people was for them to not pay the “charatzi.” In fact, financial resistance had now become the supreme civic duty, she said.
In an interview with SPIEGEL ONLINE, Greek Economy Minister Michalis Chrysochoidis said: “The question is how we can create a feeling of solidarity. One for all and all for one, that’s what it’s about now.” Still, Chrysochoidis would not answer his own question. For the moment, he said, it doesn’t look like the government can count on many of their fellow Greeks being willing to sacrifice themselves for the interest of the state. In fact, people are abandoning the government in droves.
Belitsakos, the beverage distributor, can’t and won’t play a role in rescuing his country no matter what. The reason has nothing to do with patriotism. Instead, it has to do with his mistrust of the government in Athens and “international financial capitalism” and the fact that, despite having once studied mathematics, he still can’t fathom the amount of money at stake here.
Belitsakos stresses that his plan is to refuse to pay any and all taxes and fees. If he has to, he says he will either go broke, to jail or both. He is convinced that there are thousands upon thousands who think just like he does and that, in the end, the Greeks will win this battle that they never chose.
The only question is what they really have to win.
Haves and Have-nots – a widening gap here too. FromReuters:
LONDON, Aug 9 (Reuters) – Just yards from the east London street where riots erupted on Monday stands a house for sale that sums up the depth of division in the area.
With five bedrooms, three bathrooms and its own coach house, the elegant property has been put up for sale with an asking price of 1.7 million pounds ($2.75 million). The main attraction, according to the advert, is the sought-after location.
Many residents of the diverse borough of Hackney said it was this ever widening and very visible gap between the rich and poor that has exacerbated tension in recent years, especially as government cuts to welfare payments have started to bite.
Britain, one of the world’s major economies, has a bigger gap between rich and poor than more than three-quarters of other Organisation for Economic Cooperation and Development (OECD) countries, according to a 2008 report. Charities in Britain say that inequality is most keenly felt in London.
“It’s us versus them, the police, the system,” said an unemployed man of Kurdish origin in his early 20s, sitting at the entrance to a Hackney housing estate with four Afro-Caribbean friends who nodded in agreement.
“They call it looting and criminality. It’s not that. There’s a real hatred against the system,” he added, listing what he saw as the police prejudice, discrimination and lack of opportunity that led him and his friends to loot shops, torch bins and hurl missiles at police on Monday.
“There’s two worlds in this borough. More and more middle classes are coming and we’re being pushed out. The shops are pricing stuff like it’s the West End, we can’t afford the rents. We’re the outcasts, we’re not wanted any more.
Four posts back was the article about principal reductions – below is the response from Irvine Renter, or click here to his blog:
To give the hopeless a reason not to strategically default, several banks have singled out a few deeply underwater loan owners for principal forgiveness. By spreading news of their magnanimous deeds, they hope the remainder will keep paying.
Banks have a problem, a riddle they must solve. Twenty-five percent of their borrowers are underwater, and when you factor in second mortgages and sales commissions, more than half can’t sell their homes without writing a check for the shortfall. And house prices are still going down. When homeowners have no equity, they are no longer homeowners, they are loan owners. If a loan owner’s payments are less than the cost of a comparable rental, they have an incentive to stay and pay, but when the payment exceeds a comparable rental — and the huge mortgage balances of the bubble make this common — loan owners have an incentive to keep their money and strategically default on their mortgage.
Underwater loan owners have their names on title, and if they keep making payments long enough, amortization may catch them up, and prices may come back, so they may have equity again someday. The more their payments exceed the cost of rental, the further a loan owner is underwater, and the longer they perceive they will have to wait to have equity again, the more likely they are to give up and strategically default. If a loan owner strategically defaults, the lender is forced to make a choice; foreclose on the property when the resale value is worth less than the loan, or allow the loan owner to squat in the property.
Neither choice is palatable to the lender.
Lenders have responded to these circumstances — conditions the lenders created through irresponsible lending which inflated the housing bubble — by using both a carrot and a stick to keep borrowers paying when it is in the best interest of the borrower to strategically default. The stick is the threat of foreclosure, debt collection, reduced access to credit in the future, and an appeal to morality. The specter of consequences to borrowers has been wildly exaggerated, and these circumstances are lessening by the day.
The appeal to morality has been steadily eroding, as borrowers are coming to realize they have a greater moral responsibility to their families, than they have to their lenders.
Lenders’ threats of foreclosure have been neutralized by reports of delinquent mortgage squatters obtaining years of free rent. In fact, instead of being a deterrent to strategic default, the long foreclosure timelines have actually become an inducement. Lenders combat this perception with the use of terrorist tactics. Each month, lenders will randomly select a small number of fresh delinquencies to push through the system as quickly as possible. If some of the herd are executed quickly while others are allowed to squat indefinitely, it creates uncertainty. This uncertainty keeps some paying rather than play Russian roulette.
The carrot lenders dangle in front of loan owners comes through rumors of principal reduction windfalls. Like the random executions of freshly delinquent borrowers, a very small number of principal reductions given to loan owners who are doing what lenders want — making all payments — provides the lottery-style false hope to motivate the masses. Today’s featured article is part of the public relations campaign lenders use to get the word out concerning the principal reduction lottery windfall ostensibly available to loan owners who dutifully make their payments.
If someone somewhere got a principal reduction, it could happen to anyone. I hope nobody is holding their breath.
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