The Hightower Report

FORECLOSING ON RENTERS

Ponzi schemes are illegal – unless they're being run by Wall Street bankers and delivering fat profits to some of the world's richest speculators. Then, such scams are legal, unregulated, and have respectable banker monikers like "subprime mortgage pools."

The ongoing collapse of the subprime loan scheme has been widely reported, including stories about millions of foreclosures, billions of dollars in losses, and even a couple of Wall Street CEOs getting the boot. Little attention, however, has been paid to one group of Americans who had no role in the scam – yet now find themselves homeless as a result of it: renters.

All across the country, landlords took out big loans with adjustable interest rates to build apartments – especially in low-income areas. When interest rates zoomed up, landlords began defaulting on these loans, and renters are suddenly getting eviction notices from faraway corporate strangers. Unbeknownst to tenants, the landlord's mortgage was sold by his local lender to some investment pool created by a Wall Street bank, which resold the loan to faceless investors.

When the landlord defaults, the new owners of the apartment complex are the investors, living in places like Hong Kong, Hollywood, and Go-to-Hell, Texas. These are not people who are going to deal with your plumbing problems, so the investment pool serves its profit interest by putting the property up for sale, abrogating leases, and tossing out the tenants – on the theory that vacant buildings are easier to sell.

When Ponzi schemes like this are on the rise, the money flows to the top. When they collapse, the trouble rushes to the bottom. Rep. Barney Frank plans to introduce federal legislation to help renters who are finding the subprime loan scam crashing down on them. For more information, call Frank's office: 202/225-5931.

THE OLYMPICS: LET THE SPYING BEGIN

It's another Olympic year – that biennial spectacular of athletic prowess, international goodwill, and government spying on all who attend.

The government this time around is the authoritarian regime of China. As in all host countries, the Chinese leaders are eager to put their best foot forward by building world-class sports facilities, removing poor people and beggars from sight, and generally putting polish on everything.

But – pssssst – look around. Isn't that a surveillance camera up there, over there, and back behind you, too? Indeed, the host city, Beijing, will have almost as many cameras as visitors – and there has been a gold rush of U.S. corporations vying to get the multimillion-dollar contracts to set up the high tech surveillance state before the summer games.

Honeywell is working with state police to install elaborate computer monitoring systems to analyze feeds from cameras throughout one of the main Olympic areas. General Electric has sold its powerful VisioWave system, which allows authorities to control thousands of video cameras simultaneously, automatically alerting them to "suspicious" behavior. IBM has provided a computer system to analyze and catalog people's movements.

Officials claim this surge in techno-spying is necessary to protect visitors from terrorists. But the system's targets seem more designed to protect the regime from democracy activists and dissidents – cameras are to be installed, for example, in Internet cafes, places of religious worship, and even in the Olympics media center. And when the games and visitors leave, the see-all spying apparatus will remain in place.

In the interest of quick profits, Honeywell, IBM, GE, and the rest are putting an American imprimatur on Chinese authoritarianism, providing the regime with the most advanced tools of repression. Not exactly the Olympic spirit, is it?