One of the consequences of the financial meltdown of 2008, is the precipitous drop in the cost of borrowing for municipalities with good credit ratings. However many of these municipalities and public agencies have locked themselves into long term contracts with banks to pay high fixed rates of interest and in exchange get back the current (low) variable rates from the banks. These so called "interest rate swaps" might have made sense when rates were expected to rise; however by crashing the economy, the banks are making billions from these contracts and the municipalities are having to cut back services and lay off employees to service their debt. One of the demands of the Occupy Movement should be to insist that the banks renegotiate these swaps.
This scandal is finally getting some attention in the MSM; see the article in the New York Times by Gretchen Morgenson. (click here
I am a retired College Professor (Mathematics) having taught for over 40 years at Queens College, CUNY. I have been active with my union, the PSC, and with radical faculty on campus. We have engaged in Anti-Recruiting as well as showing films (more...)