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Opinion: Weighing in on the logic of collective action
The UAW is one of the few unions to gain from the government bailout. The overwhelming majority of taxpayer dollars has propped up financial services, enabling them to shrink more slowly than manufacturing. U.S. unemployment figures released the first week in March showed that workers involved in financial activities had an annual unemployment rate of just 6.7 percent compared to 11.5 percent in manufacturing and a whopping 21.4 percent in construction, the hardest-hit sector.
While many pundits have predicted this downturn will ignite a great reset of the economy, so far, there has only been more of the same — a mere continuation and subsidization of the financialized economy. Why shouldn’t taxpayers, who are now shareholders in these financial institutions, demand fairer treatment by these companies in lending terms and interest rates on credit cards?
People don’t need a union to take collective action. According to Boston College sociologist William Gamson, successful collective action requires that a group share a common identity, such as a shared feeling of deprivation. Homeowners facing foreclosure certainly share that. The group also needs a shared feeling of injustice or moral indignation at the system or the turn of events. And they need a sense of agency, a belief that they can alter their condition by working together.
The more than 350 homeowners who showed up in front of hedge fund manager William Frey’s house last month aren’t part of any one labor union. They are members of the Neighborhood Assistance Corporation of America (NACA), a nonprofit organization that provides mortgages for low- and moderate-income borrowers.
In February the protestors disrupted the hush of Frey’s manicured Greenwich, Conn., neighborhood by chanting “Fix our loans, save our homes.” Frey, who is head of Greenwich Financial Services, was targeted because he filed a lawsuit against Countrywide (now part of Bank of America) on behalf of investors of mortgage-backed securities for allegedly violating contracts when Countrywide agreed to modify mortgages as part of an $8 billion legal settlement with attorneys general from several states. (The attorneys general had alleged that Countrywide charged minority borrowers higher interest rates than Caucasians and engaged in predatory lending practices.)
While Frey’s suit works its way through the legal system, NACA has posted Frey’s picture, with “predator” stamped in red over his face on its website. The site features photos of several other financial executives and includes pictures of their homes, salary information and email addresses.
Such personalized pressure often works. According to NACA leader Bruce Marks, 20 minutes after the group protested at the Rye, N.Y. home of Morgan Stanley leader John Mack, a representative from Morgan’s subsidiary, Saxon, which makes sub prime loans, called to ask NACA to help it renegotiate its mortgages.
Collective action is effective only when there is enough time to accomplish change. As the Obama plan to refinance mortgages gets underway, homeowners who encounter difficulty could band together to demand fairer inclusion in this financialized bailout. With nearly 3 million Americans out of work and one in five mortgages underwater, if Americans wait too long to find their collective voice they might also lose their last chance to save their homes. The details of the plan can be found here.
Susan E. Reed is an award-winning journalist whose writing has been featured in The New York Times, The Washington Post and The Boston Globe. She has also reported on business and international affairs for CBS News, The New Republic, The American Prospect and elsewhere.