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Why Glenn Beck Is Shaking in His Boots About a Union Leader's Plan to Go After the Banks

Threatening a strategic default on mortgages could force banks to negotiate better interest rates on predatory loans.
 
 
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Last week, Glenn Beck obtained the audio recording of a speech by  Stephen Lerner, who directed SEIU's Justice for Janitors and Financial Reform campaigns, calling for a new campaign against the major banks through direct action, sit-ins, boycotts and strategic mortgage defaults. Lerner called for efforts that could lead to strategic mass default on mortgages against JPMorgan Chase, saying:

What does the other side fear most? They fear disruption, they fear uncertainty. Every article about Europe says a riot in Greece, the markets went down. The folks that control this country care about one thing: how the stock market does; how the bond market does; and what their bonus is. So I think we weed out a very simple strategy: how do we bring down the stock market, how do we bring down their bonuses, how do we interfere with their ability to be rich.

Beck has used these comments to label Stephen Lerner "an economic terrorist." Even worse, almost one third of the writing on Beck's website The Blaze and many of Beck's comments on his show draw attention to Lerner's Jewish roots. Beck keeps mentioning Lerner's connection to the Jewish community in order to set off dog whistles for anti-Semites who believe conspiracy theories about Jewish domination of the banking sector. They have drawn particular attention to annual Yom Kippur event hosted at Stephen Lerner's houses attended by " movers and shakers" of the labor movement. (Media Matters released a report on how Glenn Beck commonly uses such dog whistle tactics that some label as anti-semtic).

After Beck's report, right-wing hate sites came alive with description of Stephen Lerner as "a Jew agit/prop agent for the labor unions — long a favorite den of Jew Commie bastards."

Glenn Beck has launched a massive attack, dedicating two whole episodes to Lerner. This created a mass of controversy and even a call by Congressman Jason Chaffetz (R-Utah) for an investigation into Stephen Lerner and organized labor's financial reform campaigns. After seeing what similar investigations did to ACORN's campaign on financial reform, people in labor are weary of this.

So why are Glenn Beck and his congressional allies launching a massive attack against unions' financial reform campaigns? They are doing it because they want progressives and unions to take back off from campaigns that would could shake up financial elite and force real changes in the economy.

Unions have recently launched a high profile boycott of M&I Bank in Wisconsin (see my piece in the Nation here). M & I Bank was the second largest contributor to Governor Scott Walker's campaign. Unions hold over $1 billion of their funds in M & I Bank, have withdrawn several hundred thousand dollars already and are threatening to withdraw more if M & I gets involved in efforts to defend Republicans under recall elections. This forced the chairman of the board of directors of Royal Bank Montreal, which owns M&I Bank, to tell a stockholders meeting that he supports the right to collectively bargain (a rare statement from bankers).

As the financial crisis deepens, unions are beginning to realize the economic power they have through organizing how their members spend their money. With over $6 trillion of workers’ money in retirement plans, pension funds, profit-sharing and stock plans and union reserve funds, workers have the ability to reshape the economy and political priorities of the economic elite.

Lerner's plan calls for something much less common in organized labor— threatening a strategic default on mortgages in order to force banks to negotiate better interest rates on predatory loans. Banks and big corporations do this all the time. They threaten to just walk away from a mortgage and stop paying it all together unless the banks change their rates. Morgan Stanley simply walkedaway from five office buildings they owned in San Francisco in 2009.

However, workers realizing that they can do this collectively could change the practices of banks—and create a new power dynamic in this country. If the banks don't refinance their loans, they are likely to go out of business, Lerner argues. This is why Corporate America is so scared of what Lerner is proposing and why Glenn Beck has dedicated two whole episodes to portray Lerner as an economic terrorist.

 
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