Inner City Press: Investigative Reporting from the United Nations

“The Subprime Virus” Omits the Activist Cure, Mystification in CFPB Republic

By Matthew R. Lee

SOUTH BRONX NY, February 6 -- Given the role of predatory lending in the financial meltdown that still haunts the global economy, the February 10 publication by Oxford University Press of a book on the topic, “The Subprime Virus” by law professors Kathleen Engel and Patricia McCoy seemed likely to counter revisionism and re-focus on the decade long fight against loan sharks.

Alas, the book makes scant mention of community or even consumer activism, much less the Community Reinvestment Act protests to banks' applications which results in some of the Federal Reserve Board's few enforcement orders and fines.

For example, the authors write about HSBC's seminal and fated acquisition of Household International without mentioning all of the community based challenges to Household and to the deal, and to HSBC afterward.

The book is like writing about the civil rights laws without mentioning how and why they were passed. It is a form of mystification.

Instead of political and social explanation, we have yet another narrative of the economic stations of the cross leading to the seizing up of global markets. At this point, such re-telling is no longer what is needed: it is like another book about the moment to moment flight plans of the 9/11/01 hijackers, and views of airport safety experts. That said, this one is told in some detail.

In the book's lengthy index, the Community Reinvestment Act is not mentioned once. Meanwhile, the “Solutions” chapter of the book has a four paragraph section entitled “Ensuring Access to Affordable Credit,” the purpose of the CRA.

One of many protests at Citigroup - Subprime Virus not seen

Patricia McCoy has recently been appointed to the Consumer Financial Protection Bureau, from which CRA enforcement powers were stripped. If the book is an indication of awareness of, or respect for, the Community Reinvestment Act and the grassroots groups which use it, perhaps the stripping is a blessing in disguise.

The lack of focus not only on past activism that that needed in the future, including the near future, might be attributable to an inordinate faith in the Obama administration and the CFPB. But even with a President like Barack Obama, it is not law professors who are going to protect consumers and communities. Everything is politics: but “The Subprime Virus” seems to miss this.

By contrast, the 2009 book “Busted” by journalist Edmund Andrews does not purport to be an expert account. In fact, much of Edwards' story is about how he fell into foreclosure on a home he bought for his second wife and their blended family, and how that marriage fell apart. The story shoots lower, but ends of higher. We recommend it.

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As IMF Urges Pakistan to Raise Tax, Dodges Food Prices, Cote d'Ivoire & Bulgaria

By Matthew Russell Lee

UNITED NATIONS, February 3 -- With protests related to rising food prices and mis-government spreading worldwide, the IMF in Pakistan is reportedly urging the much-opposed government to raise taxes on agricultural income, and thereby food prices too.

At the IMF's fortnightly press briefing on Thursday, Inner City Press submitted four question, including about Pakistan, food prices and Cote d'Ivoire. IMF spokesperson Caroline Atkinson, calling three of the four questions “bilateral,” read out and answered only one:

“On Pakistan, can you confirm the IMF is accepting delay in the Reformed General Sales Tax, in exchange for the gov't raising other taxes, such as taxes on agricultural income? What impact could this have on food prices?”

To this, Ms. Atkinson said that what she would confirm was that the IMF had a team in Pakistan, working closely with the government “to get the program back on track” including “revenue raising measure so that they have the resources... especially after the floods." But what safeguards are there that this revenue raising won't further raise food prices?

Among the questions that Atkinson called “bilateral” was one directly on food prices:

“On Africa, what is the IMF's response to Botswana Central Bank governor Linah Mohohlo's statement that 'The IMF (International Monetary Fund) is also lagging behind. I am almost sure the problems of Africa will not reach the board of the IMF.' She added that higher food inflation in the continent squeezes the poor?”

One wonders how this is a “bilateral” question -- does that mean, not of general interest? Those in person at the IMF's briefing asked question after question about Egypt, even after Atkinson made it clear she would not answer, saying “we are not political experts.” She would not even answer if the IMF had been in contact this week with Egypt's finance minister.

Protest in Tunisia, IMF role not acknowledged, other Qs called bilateral

In response to a question from an Israeli newspaper, Ms. Atkinson acknowledged the obvious, that events in Egypt would have regional impact. But here is another question she called bilateral:

“On Cote d'Ivoire, what is the IMF's comment on the recent sovereign bond default? What does the IMF think the impacts would be of Cote d'Ivoire breaking from the CFA and establishing its own currency? What are the IMF's plans on Cote d'Ivoire?”

At the end of the IMF briefing, Spokesperson Atkinson concluded, "I should just say that we've received some bilateral questions on Botswana, Cote d'Ivoire and Romania that will be answered bilaterally." This was the question about protests against the IMF also not answered at the briefing nor by embargo deadline:

On Romania, what is the IMF's response to 1000s of people protesting in Romania after “the government cut public workers' salaries, increased the sales tax from 19 to 24 per cent and cut child benefits to meet demands by the IMF”?

Recently at the UN, a wire service reporter proposed that other reporters at briefings should only ask questions in which “everyone” is interested. Perhaps the IMF has adopted this approach. But it goes around world trumpeting its interest in Africa, for example. How then are questions about Cote d'Ivoire and Botswana “bilateral”? Watch this site.

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IMF Postpones Kosovo & Pakistan, Waiting for Stronger Governments, Dodges on Sudan But Answers on Tunisia

By Matthew Russell Lee

UNITED NATIONS, January 6, updated -- Questions of Pakistan and Kosovo and the International Monetary Fund's longing for strong governments arose at the IMF's fortnightly media briefing on Thursday. Inner City Press asked, and IMF spokesperson Caroline Atkinson read out with a cautionary note, the following on Pakistan:

“On Pakistan, what is the IMF's thinking after the assassination of Punjab's governor, as the government loses power -- [here Ms Atkinson added, “those are Matthew's words”] -- is it realistic to think the IMF's conditions will be met?”

In response, she said Pakistan has been given nine additional months. But what will be different then?

Later in the briefing, Ms. Aktinson read out the rare Balkan question, also from Inner City Press:

“On Kosovo, what are the IMF's views on Mr. Thaci's proposal to double public sector salaries, and on the Council of Europe's allegations this once and seeming future PM was involved in organ trafficking?”

How ever distasteful the organ reference may have been to Ms. Atkinson, she replied that “we have, as Matthew may know, an eighteen month” program with Kosovo, the December consideration of which has been postponed.

A link between these two may be that while the IMF does impose conditions on its loans, it prefers to say that governments, particularly legislatures, have approved or even chosen between the choices presented by the IMF. This legitimates the IMF, and also may help in collecting the money down the road.

Kosovo is in political turmoil, and Pakistan no longer even controls large swaths of its territory -- nor, apparently more importantly to the IMF, its political space.

Submitted but not acknowledge during the briefing by Ms. Atkinson was this question, about Tunisia:

“On Tunisia, given the IMF's role and statements, what can IMF say about the unrest that has followed the death of protester Mohamed Bouazizi and others?”

We will await the IMF's acknowledgement and answer of this question, and a more detailed response on Sudan and the IMF's role in the debt issues, on which the UN has said “the Bretton Woods institutions are taking the lead.” Watch this site.

Update of 1 pm - Two hours after deadline, the following arrived, with the notation that it should be attributed to an IMF spokesperson:

“We deeply regret the recent surge of violence in Tunisia. The IMF remains engaged with the Tunisian authorities and follows the developments closely. Unemployment in Tunisia has declined slightly in the last decade, but remains high, especially among the young. In this context, IMF staff continues to encourage the authorities to pursue structural reforms critical to achieve higher growth, enhance competitiveness and address the problem of persistent high unemployment. Such reforms include measures to increase productivity by improving the business environment, reforming labor market policy, increasing capital investment, and modernizing and strengthening the financial sector.”

We'll have more on this.

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund. Video Analysis here

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations