After the bailout, the thieves return for a second round. Foreclosures are a good thing for the economy.

In 2006, the top 25 hedge fund managers made $15 billion between them. In 2007, one hedge fund manager, John Paulson, earned $4 billion betting that honest and hard working men and women, as well as small mom and pop businesses would be crushed by the moneylenders, default on their mortgages and be thrown out of their homes. In 2010, Paulson made another $5 billion, about $159 every second of the day. Forbes has Paulson at 15th on the US’s wealthiest Americans and 39th in the world.

For a while, these characters had to keep a low profile as much of the anger at the financial crisis was directed at them and other bankers and coupon clippers; an anger that was well placed as they are the cause of the crisis. Some sections of the capitalist class were also angry at their private equity and hedge fund brethren as they became so wealthy in such a short period of time through very secretive deals (outside of the exchanges). Their profits, like most of Paulson’s stolen wealth, was taxed by the federal government as long-term capital gains, a rate of 15 percent while most Americans paid an income tax rate up to 35 percent.

Where some of the wealth went

The lid has pretty much been kept on the anger that existed and public protests like the massive rallies in Madison Wisconsin were shut down and the remaining activists left gathering signatures for a recall election to replace Republicans with Democrats so they are feeling a bit more confident that unrest is not yet likely. This overconfidence in the passivity of the American working class will come back to haunt them.

But as profit taking became more lucrative, these wasters are back to rip off US workers and the middle class for the second time around. After throwing millions of people out of their shelter, which is what a home is, the coupon clippers recognize that many of these people will now need somewhere to stay. Rent or home mortgage is a huge percentage of family income so many of these folks have jobs but were just bled dry by the moneylenders. Being the resourceful scumbags that they are, these “capital” managers are moving in to the big landlord business. “Big Money gets in to The Landlord Game”, the Wall Street Journal reports today.

The Journal tells of Agustin Gutierrez a Vallejo (CA) construction worker who lost his job and then his home being forced to rent it back from his new landlords, McKinley Capital Partners of Oakland CA. Capital Partners is exactly what the name implies, a partnership of capitalists, owners of capital. It is not a workers’ club or Union. With all the unsold homes, hedge funds and private equity firms see opportunity. McKinley has bought 300 foreclosed homes and has “teamed up” with another “capital management” bunch from New York City to buy 500 more.

States like Arizona, Nevada and Florida have been “hard hit by the foreclosure crisis” says the WSJ so the number of families renting single-family homes has jumped 48% from 2005 to 2010. And with the very uplifting news that 3.5 million borrowers were at least 90 days delinquent or in foreclosure at the end of May, there is a real good situation opening up for making money without working. Capitalists are still pretty much on strike as buying Labor power, (hiring workers) in this economy is not profitable so landlordism is another option. Single-family rental properties are an “under owned asset class” says one hedge fund manager but they are “an intelligent investment for the institutional investors.” Renting this shelter out to workers and our families for ten years then selling them “could produce double-digit investment returns” he adds.

The way they phrase things, “hit by the foreclosure crisis” it’s as if the foreclosure crisis is some sort of natural phenomenon like an earthquake or tornado that just came along and whacked people out of their homes. It’s never a crisis of the market, an economic system of production or capitalism in this case. And what does it mean to “flip” a property that has human beings living in it depending on it for shelter? What will the new landlord be like? What will they demand of the tenant?

Some coupon clippers are concerned that the returns on their investment might not be large enough. The Carlyle Group, the private equity firm that the Bush family and I think maybe Cheney and a number of Saudi wasters are connected to (these firms are very private indeed) got out of the business for that reason. Plus, being a landlord of single-family homes can be a costly deal for large investors as its not like apartments where all the victims are under one roof. “Tenants can be troublesome” the Journal whines. One investor who bought properties in Nevada Arizona and California is very cautious, “You could have a bad tenant who doesn’t want to pay their rent or maintain the pool”, he says, adding, “A hedge fund manager doesn’t want to have to be their own plumber or electrician.” It's very simple in the investor's eyes, the tenant simply doesn't "want" to pay the rent.

Doug Brien is a former place kicker for the New York Jets who used that easy money to get in to the land pimping business too it seems. He is managing director of another Oakland CA real estate outfit, Waypoint Real Estate Group that has taken advantage of the misery of others purchasing 700 homes over the past two years. He is looking at some good prospects in the future, “At some point there will be a shortage of housing” he says, “Everyone is realizing that a single family home buy-and hold-is the way to go.”

There is a shortage of housing at the moment not because people have lost their homes, their homes never went anywhere, they were stolen from them and were never really theirs in the beginning as the moneylenders own them and the market determines the level and condition of shelter in the market economy. And when Brien is talking about “everyone” understanding that “buy-and-hold is the way to go” he is not talking about those that need shelter to live, but those who see shelter as an investment only; not a use value but an exchange value no less.

These wasters who are using their political clout and bribery to ensure their government cuts public spending jobs and anything that reeks of social services and “big government”, are likely to get some help from the Obama administration which is considering ways of selling them foreclosed homes if they agree to rent them out. The hated, socialistic Freddie Mac, Fannie Mae and the Federal Housing Administration owns over 50% of all unsold homes, but the opponents of government interference will welcome their assistance now. Local governments should “provide subsidies to investors who buy, rent out and are good landlords for foreclosed properties.” Says one academic.

It’s a bit like the S&L debacle where the government, the same people in Congress who created the conditions that allowed the S&L crisis to arise, created the Resolution Trust Corporation that had the taxpayer absorb all the losses then sold the best remaining S&L’s back to the crooks that caused the mess at bargain basement prices. In that case they nationalized the debt of the S&L’s. They always nationalize debt; shift it on to the shoulders of the workers and middle class just like they have done in this deficit deal.

The capitalist mass media constantly tells us that we need to be afraid of al Qaeda, the Iranians, communists, gay marriage, undocumented immigrants and sinister people of color with Muslim sounding names. Our prisons are full of young men and women, working class men and women who are victims not of any of these bugaboos but of capitalism and Wall Street and those who make up the Forbes list of wealthy people, just like the foreclosure victims are. The private equity lords and hedge fund characters are American in name just like most of us, us but we have nothing in common with them. The damage and havoc that terrorists wage in this country or the world cannot compare to the damage inflicted on the people’s of this country and the world by capitalism, the free market and its adherents.

We are told we should be united as a “nation”. The people and institutions described here are our bitter foes, not any force that we should unite with; undocumented workers are whom we should unite with, Bangladesh factory workers are people we should unite with. Why would we want to unite with hedge fund managers? Who would expend their life activity in such ventures? They are people who have become totally cut off from their humanness and live off the Labor of others; they do not even play a role in the productive process in the way the old factory owners did. They are victims in a sense that the system in which we live is the real culprit and we can’t change this situation without changing the system which is not to say we don’t participate in the day-to-day struggles to improve our immediate conditions. And by changing the system we can provide them with a job, a productive and fruitful life, something they deny the rest of us.  The wealth of a handful of hedge fund managers would solve the poverty and hunger in the entire continent of Africa.  That this obscene situation exists is proof enough that civilization is far from our midst.

The would-be landlords say that another problem is when they kick the occupants out of their homes they often damage the property before they leave. This is an act of defiance, it is not criminal; it is a natural reaction to a rapist and a thief. It temporarily satisfies the soul faced as we are with a seemingly powerful adversary that has the media, the courts and the police to enforce their will, and the prisons to put us in. But we have the numbers and the social power in that their system cannot function if we stop working. In order to avert such disaster they divide working class people along race, gender and religious lines; any way they can. Recognizing that racism, sexism and other attempts to turn worker against worker only strengthens our foes and ensures the demise of us all is an important step in the right direction.

"Brethren we conjure you...not to believe a word of what is being said about your interests and those of your employers being the same. Your interests and theirs are in a nature of things, hostile and irreconcilable. Then do not look to them for relief...Our salvation must, through the blessing of God, come from ourselves. It is useless to expect it from those whom our labors enrich." (1)

(1)1840's appeal from New England laborers to their fellows to abandon the idea that the capitalists would solve working people's problems. Philip Foner History of the Labor Movement Vol. 1 p192