Bad Swaps
By Labor Beat
May 21, 2013
Jackson Potter, Staff Coordinator for the Chicago Teachers Union, walks us through what Swaps are and how Chicago banks, including Bank of America, made a big killing when Chicago Public Schools swapped a fixed rate loan back in 2003 for a variable rate. Potter clearly explains graphically (which Labor Beat animates) what happened in 2008, when interest rates plummeted, and CPS lost millions to Chicago bankers.
Potter points out that since the banks got bailed out by all of us after they made some bad gambles, why shouldn't CPS get bailed out in return by the banks? However, CPS has no interest in raising this issue, as if they really sympathized more with local banks than with the public schools, for which they are supposed to be the stewards.
The seminar, led by Potter, then decides to walk across the street to a branch of Bank of America and deliver a letter (from Grassroots Collaborative). The letter is addressed to Tim Maloney, Illinois President of Bank of America, saying "It is time for your bank to repair the damage it has done to our school districts across the country by agreeing to renegotiate these toxic swap deals at no cost to taxpayers."
Length - 8:40
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One of the graphic animations showing how CPS's fixed interest rates, following
the 2008 crash, let the banks get away like bandits when interest rates plunged.
And then the banks got bailed out too.
Photo: Labor Beat
A spokesperson for the demonstration hands a letter to a Bank of America representative
to forward to BofA-Illinois President Tim Maloney. The letter calls for the swaps to be renegotiated
and money returned to the school children of Chicago. Photo: Labor Beat
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