Floor Waxing March 14-15

Good afternoon,

 

Brad from Jani-King will be cleaning and waxing the floors in the church.  Please be aware that some areas of the church will be off limits until the wax on the floors dry.  He will begin this Friday morning, March 14, and will not be finished until some time Saturday, March 15.  Please be careful and look for signs indicating newly waxed/wet floors.

 

Thanks,

 

Cathy

How Did the Rich Get Richer and the Middle Class Get Left Behind? Don Birt

From the Economic Justice Task Force:
How Did the Rich Get Richer and Middle Class Get Left Behind? (July 2013 CUCC Newsletter)
In a blog on June 17th, Stephen Strauss, an adjunct lecturer of public policy at the Harvard Kennedy School, asked, “Why Let a Bank Write U. S. Financial Reform Legislation?” Congress has opened the way for one of the big banks that was bailed-out despite its acts of fraud and mismanagement to draft new reform legislation. The only reason, Strauss posits, was because this big bank had “experience.” Here then is another case-in point of how politics and the financial sector have come together in “organized combat” that has resulted in an endangered middle-class. At the same time it has made the rich richer.
This “Thirty-year War” is the subject of an enlightening work: Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned its Back on the Middle-Class. Published in 2010 by Jacob Hacker and Paul Pierson, professors of Political Science at Yale and UCLA Berkeley respectively, we commend it to you for consideration. Their research covers the thirty-year period prior to the economic collapse in 2007-2008 and highlights the reasons for the widening gap between the rich/poor and the ‘have and havenots.’ They point to the sharp increase in wealth inequality in recent years. They note the current discussion about recovery which continues among economists who are divided between a more liberal, Keynesian notion of spending during downturns and more conservative economists who advocate tax cuts for the wealthy that would result in a trickle-down effect in bad times. However, the authors focus instead on the impact of the relationship of the political realm and Wall Street and the financial sector. We have become aware of the now-familiar 99% and the upper 1%. But how did that happen? Was it just better education or new technology? These latter elements may have contributed to the problem. But the major cause was that politicians in both parties rewrote the rules that created a winner-take-all economy that favors the 1%, granting tax cuts and fewer and looser regulations on financial markets. But in so doing, the middle-class (thought at one time to be the backbone of our economy) lost jobs, wages and salaries stagnated, mortgage defaults increased, and many lives were severely interrupted. Money became more important to political campaigns. Citizen’s United opened the floodgate of funds going to candidates.
And, as we started this note, at least one big bank and Congress are coming together to draft new financial reform legislation. (That’s a little bit akin to putting the fox in to guard the henhouse!) The authors note briefly, “The banks are organized; its customers are not.” They refer to this process as “engineered inequality” in which we now have a small number of financial elite and (perhaps) only a remnant of a middle-class. Their conclusion is that a broken political system got us into this position, but the political system will of necessity get us out. But that will not be overnight.
(For a discussion with the authors, see the Bill Moyers, Moyers and Company program, January 17, 2012.)
                                                                           Submitted by Don Birt (EJTF)

Poverty is the Flip Side of Militarism. June 2013. Cy King

From the Economic Justice Task Force.

Poverty is the Flip Side of Militarism (June 2013)
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.” These words from President Dwight D. Eisenhower are our text for today.
And the second reading comes from Martin Luther King, who said, “A nation that continues year after year to spend more money on military defense than on programs of social uplift is a nation approaching spiritual death.”
Poverty has many causes, but surely one of them is the excessive amount that our nation spends on defense, money that could be used to build roads, schools, hospitals, and to repair our crumbling infrastructure. Dollars spent on guns, planes, tanks, and battleships create jobs, but they do not multiply jobs. Dollars spent to strengthen our infrastructure do. We need to move our money from military spending to spending to meet human needs.
Unfortunately, our State is dependent on military spending. Bases, especially in eastern North Carolina, provide economic support for communities that have lost tobacco and furniture plants as a means of economic survival. Governors, congresspersons, and mayors struggle to keep military bases in their districts and to increase military spending when possible. Any talk of cutting military spending immediately mobilizes these leaders to make sure that cuts don’t happen in their districts. And when our nation is the lone super power with tremendous military strength, the tendency is to use that power and strength to solve problems by using force rather than diplomacy; hence, Afghanistan and Iraq.
When young folks are taught violent solutions, they tend to use violent solutions to solve personal problems; thus, increased domestic violence and personal violence against others. And so we have created a military culture when what we need is a culture of peace. And this military culture demands financial support. The money that could be used to create a peaceful society is diverted to sustain a military society. As stated earlier, spending on the military diverts money from spending for peaceful activities. Thus, “poverty truly is the flip side of militarism.”
                                                                               -Submitted by Cy King

Banks and Lending I. Wachovia. Edith Sylla

From the Economic Justice Task Force. October 2013. Edith Sylla

Banks and lending. The Case of Wachovia.
In March of 1995 in connection with its Claiming Our Second Century, Renovation for Renewal Campaign, CUCC obtained a secured loan of up to $175,000 from Wachovia Bank. More than a hundred individuals and families had pledged over $460,000 for the project, which included many improvements to the sanctuary, construction of the Bradow and Hoffmann rooms, and much else, but that money was to come in over five years and so we needed money up front to carry out the project before the pledges came in. We began by going to a “personal banker” as they were then called at the Hillsborough branch of Wachovia, and ultimately agreed to draw on the loan as needed, paying interest on the amount taken out at Wachovia’s prime rate plus one half percent, paying interest only during a two year construction period, and thereafter paying back the loan itself in monthly installments over a three year period. As it happened, the pledges came in on schedule and we were able to pay off the loan ahead of schedule in April 1998. This is an example of the sort of excellent financial service to the community that one fervently hopes banks will provide.
In the course of the recent “great recession,” Wachovia bank experienced heavy losses. Having been deemed by federal regulators as “too big to fail,” it was forced in 2008 to accept its acquisition by Wells Fargo, whose company name now appears in large letters on the Hillsborough branch bank where we initiated our church loan in 1995. But the Wachovia that ceased to exist in 2008 was not really the same company as the Wachovia which had begun in 1879 and which had been so helpful to our church. In 1997 Wachovia had acquired First United Bancorp and American Bankshares Inc. in Florida, in 1998 it had acquired Jefferson National Bank and Central Fidelity Bank, both based in Virginia, and in 2000 it had purchased Republic Security Bank. Then in 2001, after rejecting a hostile takeover from SunTrust, Wachovia had accepted a merger with First Union Corporation based in Charlotte, in which First Union was the larger partner and surviving entity, but adopted the good name Wachovia. In 2003 and 2004, this new Wachovia, in an attempt to become a comprehensive financial services company nationwide, acquired the Prudential Securities Division of Prudential Financial (creating a full service brokerage firm with client assets of $532 billion), Metropolitan West Securities (with a portfolio of $50 billion), and, in a transaction valued at $14.3 billion, SouthTrust Corporation. In 2006 Wachovia became a major auto finance lender by acquiring Westcorp, and, through purchase of Golden West Financial/World Savings Bank (with over $125 billion in assets), acquired a 285 branch network of savings banks in 10 states and a large portfolio of option adjustable rate mortgages (ARMs). Then in 2007 Wachovia purchased A.G. Edwards retail brokerage firm for $6.8 billion. And then? During the subprime mortgage crisis that followed soon thereafter, Wachovia experienced such heavy losses in its loan portfolios that, after many twists and turns between alternative government regulatory agencies and other potential purchasers, it had to accept its demise and takeover by Wells Fargo.

Banks and Lending II. Self Help Credit Union

From the Economic Justice Task Force. February 2014. Edith Sylla

Banks and Lending, Part II. The Self-Help Credit Union.
Part I of “Banks and Lending” described the loan that Wachovia Bank gave CUCC to carry out our “Renovation for Renewal” building project during the 1990s. The interest rate on Wachovia’s loan depended on market rates, and worked out to 8.75%, but we were able to recoup some of that interest, because the Wachovia money market account, in which we held the money between borrowing it and spending it paid us 4.7%. We were very satisfied with Wachovia’s service. At the same time, in order to pay off the mortgage on what is now the Pilgrim House, we borrowed $45,000 for two years from several congregation members at a rate of 6%, compounded annually, thus benefitting both the members doing the lending and the church. We had $40,000 in our “Parsonage Fund” to serve as collateral.
The “Parsonage Fund” remains among CUCC’s “reserve funds.” It was created at the time CUCC sold the church parsonage, the idea being that earnings on this fund would go towards the housing costs of future pastors, who would have more flexibility in choosing where to live. Over a period of years the Parsonage Fund was invested in U.S. Treasury bonds paying on average 12.5%, contributing $5000 in income to the annual budget. Today, alas, there are no safe fixed-income investments that pay anything close to 12.5% (the very high interest rates at that time were the result of Paul Volker’s actions as head of the Federal Reserve to bring down inflation – see You Tube video listed below*). In the proposed 2014 budget, passed at the last Congregational meeting, the income from the Parsonage Fund is expected to be a measly $550, because of today’s very low interest rates. The 2014 budget includes the budget line “’Parsonage’/Self Help,” indicating that the Parsonage Fund is deposited in the Self-Help Credit Union (SHCU) in Durham.
Why does the Economic Justice Task Force think this is relevant to economic justice? It is relevant because keeping church reserve funds that are not part of the annual budget at the Self-Help Credit Union rather than at Wells Fargo or some other big bank helps to promote economic justice. While the church’s money is just as safe at the Self-Help Credit Union and earns a rate of return about the same as we might earn at other banks or credit unions, the SHCU loans their money out in a way to create and protect economic opportunity for all. In their own words, it “creates and protects ownership and economic opportunity through loans for home ownership, small businesses, and community facilities; downtown revitalization and affordable housing development; and responsible consumer financial services.” See more about what they offer at <www.self-help.org>. The Center for Responsible Lending, affiliated with the SHCU, has led a repeated effort to rid North Carolina of what amount to pay-day loans. As reported on CNN, “Wells Fargo, U.S. Bank, Fifth Third and Regions announced last week that they would discontinue their so-called deposit advance products.... Banks have defended the loans, saying they help customers when they need an emergency line of credit but can’t qualify for a traditional loan. But consumer advocates, like the Center for Responsible Lending, call them ‘predatory’ and have called on federal regulators to ban the products.... A report from the Center for Responsible Lending found that advance loans issued by banks carried an average term of 10 days, with a fee of $10 per $100 borrowed – amounting to a 365% APR. Customers remained stuck in the loan cycle – meaning they owed money to the bank – for an average of 175 days per year.” Our deposit at SHCU not only earns a little interest, but also counts as part of CUCC’s mission to work for economic justice.
*On the Federal Reserve and interest rates, see “James Grant and Richard Sylla – The Great Fed Debate!” Wealth Track with Consuelo Mack, December 20, 2013. http://www.youtube.com/watch?v=gAscgrCnrHI

From the Economic Justice Task Force

Newsletter June 2013: Poverty is the Flip Side of Militarism. Cy King

Newsletter July 2013. How Did the Rich Get Richer and the Middle Class Get Left Behind?  Don Birt.

Newsletter October 2013. Banks and Lending. I. Wachovia.  Edith Sylla

Newsletter, February 2014. Banks and Lending II. Self Help Credit Union. Edith Sylla

Recommended by Edie Rasell, Justice and Witness Ministries, UCC:

Putting Our Faith into Action: Support Farm Workers in NC

Tuesday March 18, 2014, West Raleigh Presbyterian Church, 6:30 p.m.