Wednesday, November 16, 2011
Well?
We had a few elections last week that produced some interesting results.
First up was Ohio's rejection of Proposition 2 which would have limited collective bargaining rights. 61% of the voters rejected it so that's more than a simple majority.
In Mississippi, over 55 percent of voters rejected that a fertilized egg is a person in voting against the so called "Personhood" amendment.
And in Arizona, Russell Pearce, the man who wrote SB 1070, became the first ever Arizona legislator to be recalled by a vote of 53 to 45 percent.
Now, I've been told by several of my readers that elections send clear messages. What do these three elections mean?
First up was Ohio's rejection of Proposition 2 which would have limited collective bargaining rights. 61% of the voters rejected it so that's more than a simple majority.
In Mississippi, over 55 percent of voters rejected that a fertilized egg is a person in voting against the so called "Personhood" amendment.
And in Arizona, Russell Pearce, the man who wrote SB 1070, became the first ever Arizona legislator to be recalled by a vote of 53 to 45 percent.
Now, I've been told by several of my readers that elections send clear messages. What do these three elections mean?
Tuesday, November 15, 2011
A Bankrupt Bankruptcy System
Mitt Romney talks a lot about being a "job creator," but he's destroyed a lot of jobs in his career as a private equity capitalist. A recent article in the New York Times details his adventures with Dade International, a Florida medical company.
In 2005 the Republican Congress passed a new bankruptcy law making it much harder for consumers to declare bankruptcy. This was supposed to reduce interest rates because creditors would have fewer losses. That didn't pan out, but credit card company profits have soared. More money is flowing to fewer people.
On the one hand wealthy people like Romney and Bain are able to use the bankruptcy system to make big scores by forcing acquired companies to fail. On the other hand, when regular folks got into trouble, giant credit card companies snapped their fingers and George Bush and the Republican Congress did their bidding to make it harder for the little people to get out of financial hardship.
When corporations go bankrupt there are really no consequences for the guys who are at fault. The entire purpose of a corporation is to remove any kind of personal liability for their actions. Unless they commit actual crimes, they don't have to pay for their mistakes. None of their personal property is at risk, and all the cash they ripped off -- excuse me, their lavish salaries and profits from stock sold before the company nosedived -- is untouchable. If they use borrowed money, like Romney and Bain did with Dade, there are almost no financial consequences for them. But the people who loaned them the money, for example, pension funds or 401K funds, lose everything.
When regular folks go bankrupt they are completely hosed. They lose their house, car, life savings, child's college funds, stereo, TV. Everything that can be sold off for cash is lost. And one of the most common causes of bankruptcy is medical costs, which means these people are often sick and can't work, so it's impossible to get back on their feet and get medical insurance again.
In the worst case, takeover artists who've bankrupted a company like Dade themselves have to declare bankruptcy. But then they can incorporate under a new name, buy up another company, force production into foreign countries, trash the American subsidiary, then milk the company for all it's worth and bail, leaving another few thousand Americans out of work.
This double standard of rich vs. poor in the bankruptcy system is yet another example of class warfare being waged on the poor and middle class.
Bain Capital bought Dade International in 1994 with mostly borrowed money. They then bought two competitors, including a German company, and laid off more than 1700 American employees.
After mucking around with Dade for five years, closing plants, relocating workers to other plants and then closing those, eliminating the pension plan, and so on, Bain decided to cash out:
Bain settled on a common tactic in private equity: In April 1999, it pushed Dade to borrow hundreds of millions of dollars to buy half of Bain’s shares in the company — and half of those of its investment partners.
Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade.Romney and Bain essentially milked Dade for hundreds of millions of dollars, saddling Dade with billions in debt. Then interest rates rose, the euro's value slid, and Dade got into trouble.
Creditors, unsettled by deteriorating finances and high debts, began to pounce. More layoffs followed. And in August of 2002, Dade filed for bankruptcy protection.
The creditors threatened litigation against Bain and its investment partners, accusing them of “professional negligence” and “unjust enrichment,” according to bankruptcy documents.
Bain and the other investors argued that the claims were baseless, but agreed to forgo about $68 million owed to them by Dade. And seven years after buying the company, Bain forfeited its remaining ownership stake.
Dade emerged from bankruptcy two months later and the stock soon began trading publicly.Romney and Bain drove Dade into bankruptcy. They essentially stole money from Dade's creditors, laundering it through Dade and the bankruptcy court. (Romney had already ditched Bain to work on the Olympic Games when Dade went belly up, but he profited handsomely from the deal.)
Over the next four years, its revenues and share price surged, and in 2007, Siemens, the German conglomerate, paid $7 billion to buy Dade Behring. The Dade name disappeared, but the company survived.
In 2005 the Republican Congress passed a new bankruptcy law making it much harder for consumers to declare bankruptcy. This was supposed to reduce interest rates because creditors would have fewer losses. That didn't pan out, but credit card company profits have soared. More money is flowing to fewer people.
On the one hand wealthy people like Romney and Bain are able to use the bankruptcy system to make big scores by forcing acquired companies to fail. On the other hand, when regular folks got into trouble, giant credit card companies snapped their fingers and George Bush and the Republican Congress did their bidding to make it harder for the little people to get out of financial hardship.
When corporations go bankrupt there are really no consequences for the guys who are at fault. The entire purpose of a corporation is to remove any kind of personal liability for their actions. Unless they commit actual crimes, they don't have to pay for their mistakes. None of their personal property is at risk, and all the cash they ripped off -- excuse me, their lavish salaries and profits from stock sold before the company nosedived -- is untouchable. If they use borrowed money, like Romney and Bain did with Dade, there are almost no financial consequences for them. But the people who loaned them the money, for example, pension funds or 401K funds, lose everything.
When regular folks go bankrupt they are completely hosed. They lose their house, car, life savings, child's college funds, stereo, TV. Everything that can be sold off for cash is lost. And one of the most common causes of bankruptcy is medical costs, which means these people are often sick and can't work, so it's impossible to get back on their feet and get medical insurance again.
In the worst case, takeover artists who've bankrupted a company like Dade themselves have to declare bankruptcy. But then they can incorporate under a new name, buy up another company, force production into foreign countries, trash the American subsidiary, then milk the company for all it's worth and bail, leaving another few thousand Americans out of work.
This double standard of rich vs. poor in the bankruptcy system is yet another example of class warfare being waged on the poor and middle class.
Monday, November 14, 2011
They Really Said That?
If we re-elect Barack Obama, Iran will get a nuclear weapon. If we elect Mitt Romney, Iran will not.---------GOP Contender Mitt Romney.
The ‘Great Society’ has not worked and it’s put us into the modern welfare state. If you look at China, they don’t have food stamps. If you look at China, they’re in a very different situation. They save for their own retirement security…They don’t have the modern welfare state and China’s growing. And so what I would do is look at the programs that LBJ gave us with the Great Society and they’d be gone.-------GOP Contender Michele Bachmann
Regarding the first quote, I'm please to see that Mitt is not resorting to fear mongering.
Regarding the second quote, I...well...there's nothing else I could add to it really, right?
The ‘Great Society’ has not worked and it’s put us into the modern welfare state. If you look at China, they don’t have food stamps. If you look at China, they’re in a very different situation. They save for their own retirement security…They don’t have the modern welfare state and China’s growing. And so what I would do is look at the programs that LBJ gave us with the Great Society and they’d be gone.-------GOP Contender Michele Bachmann
Regarding the first quote, I'm please to see that Mitt is not resorting to fear mongering.
Regarding the second quote, I...well...there's nothing else I could add to it really, right?
Sunday, November 13, 2011
Humbled
Once in a while, I'll read something that humbles me to the point of bowing my head in shame. The recent piece in the Washington Post by Thomas Day, an Iraq War veteran, Penn State Graduate and product of the Second Mile Foundation (the organization started by accused child molester Jerry Sandusky) has done that at a level I didn't think possible.
His voice perfectly summarizes the last decade in this country and how all of us that are older have failed him. Sure, he points the finger at a few very specific people but it's really the elders as a whole that have destroyed his faith. Even though I don't know Thomas Day, as an educator of the next generation, I'm still responsible. His words are damning, as well they should be, and we must heed them.
His voice perfectly summarizes the last decade in this country and how all of us that are older have failed him. Sure, he points the finger at a few very specific people but it's really the elders as a whole that have destroyed his faith. Even though I don't know Thomas Day, as an educator of the next generation, I'm still responsible. His words are damning, as well they should be, and we must heed them.
Saturday, November 12, 2011
Why Can't More Americans Be Like These Folks?
All of the debate about the role of government would be null and void if more Americans were like this guy. And these folks.
Truly amazing stories and great examples of how the little guy does actually have some power if they dedicate some time and patience to this stuff. But this brings up a larger issue.
Certainly, the right wing media industrial complex would applaud these individuals for assuming responsibility for themselves and their circumstances and getting the job done. I'm wondering why they aren't that way with the Occupy Wall Street Movement? Up to this point, the right has largely painted the OWS folks as socialist hippies who want the government to run everything. Yet, this movement has essentially been saying the same thing as the Tea Party and, like Patrick Rodgers, Wayne Nyerges, and Maureen Collier have taken it upon themselves to work outside of the government and stick it to the banks.
In the past month, 650,000 people have transferred their money from the big banks that the OWS movement are protesting to smaller banks and credit unions. Part of this is due to the new fees that banks have been adding but the other part is due to the OWS movement. Early estimates indicate that the banks have taken a couple of billion dollar hit from this change. This isn't a large amount when you consider all their transactions but it's not chump change either.
So, I'm wondering...what's the problem? Pastor Ed and Doctor Sean were absolutely apoplectic about the OWS movement calling for people to transfer their money. "Our economy will collapse!!!" they both screamed at me last weekend at the gum. I don't get it. The government wasn't forcing anyone to do anything. This is simply a movement of people exercising free will and participating in a free market choice.
Why Can't More Americans Be Like These Folks?
Truly amazing stories and great examples of how the little guy does actually have some power if they dedicate some time and patience to this stuff. But this brings up a larger issue.
Certainly, the right wing media industrial complex would applaud these individuals for assuming responsibility for themselves and their circumstances and getting the job done. I'm wondering why they aren't that way with the Occupy Wall Street Movement? Up to this point, the right has largely painted the OWS folks as socialist hippies who want the government to run everything. Yet, this movement has essentially been saying the same thing as the Tea Party and, like Patrick Rodgers, Wayne Nyerges, and Maureen Collier have taken it upon themselves to work outside of the government and stick it to the banks.
In the past month, 650,000 people have transferred their money from the big banks that the OWS movement are protesting to smaller banks and credit unions. Part of this is due to the new fees that banks have been adding but the other part is due to the OWS movement. Early estimates indicate that the banks have taken a couple of billion dollar hit from this change. This isn't a large amount when you consider all their transactions but it's not chump change either.
So, I'm wondering...what's the problem? Pastor Ed and Doctor Sean were absolutely apoplectic about the OWS movement calling for people to transfer their money. "Our economy will collapse!!!" they both screamed at me last weekend at the gum. I don't get it. The government wasn't forcing anyone to do anything. This is simply a movement of people exercising free will and participating in a free market choice.
Why Can't More Americans Be Like These Folks?
Friday, November 11, 2011
Thursday, November 10, 2011
So Long, Joe
Yesteday Penn State fired Joe Paterno. Last night Penn State students rioted. They damaged public and private property and assaulted police.
The most common sentiment was that Joe "didn't do anything." On the contrary: he participated in a coverup of the rape of a child. This conspiracy of silence allowed the perpetrator to escape detection and go on to assault other children.
I can understand why some nobody, like the assistant who actually found Sandusky in flagrante delicto with the kid in the shower, would report the incident to higher-ups and let them deal with the police. But Paterno was Sandusky's boss and the symbol of the football program. He was the one with the moral authority -- he always claimed morality and ethics were an integral part of his program -- to make sure that Penn State football wasn't sullied by the actions of one scumbag. But he just kicked the report up the chain and buttoned his lip.
Joe Paterno doesn't deny any of the facts. He helped a felon escape justice. By his own moral and ethical compass, he knew he had to go. That's why he announced he would retire after this season. But the board knew that wasn't good enough and made Joe play by his own rules.
Had this incident occurred at some no-name Division III track program there would be absolutely no question that the parties involved would be fired, and that everyone would agree it was the right decision. But because this is football and Joe Paterno is the figurehead of an iconic institution, a lot of angry students think he should get a pass.
What the angry mob doesn't understand is that their idolizing of Parterno and Penn State football caused this. Putting people and institutions on pedestals fills them with hubris and lets them think that they are above the law. They come to think of themselves and their program as more important than the rights of individuals, and if some little people are hurt to preserve the image of the leader and the program it's justified because the leader and the program are so moral and ethical. Which, when you think of it that way, makes it seem even more corrupt and self-serving than it already does.
If you still think Paterno was wronged, try replacing "Joe Paterno" with "archbishop" and "Penn State" with "Catholic Church." I mean, some people do claim Penn State football as their religion but this is carrying a little too far.
The most common sentiment was that Joe "didn't do anything." On the contrary: he participated in a coverup of the rape of a child. This conspiracy of silence allowed the perpetrator to escape detection and go on to assault other children.
I can understand why some nobody, like the assistant who actually found Sandusky in flagrante delicto with the kid in the shower, would report the incident to higher-ups and let them deal with the police. But Paterno was Sandusky's boss and the symbol of the football program. He was the one with the moral authority -- he always claimed morality and ethics were an integral part of his program -- to make sure that Penn State football wasn't sullied by the actions of one scumbag. But he just kicked the report up the chain and buttoned his lip.
Joe Paterno doesn't deny any of the facts. He helped a felon escape justice. By his own moral and ethical compass, he knew he had to go. That's why he announced he would retire after this season. But the board knew that wasn't good enough and made Joe play by his own rules.
Had this incident occurred at some no-name Division III track program there would be absolutely no question that the parties involved would be fired, and that everyone would agree it was the right decision. But because this is football and Joe Paterno is the figurehead of an iconic institution, a lot of angry students think he should get a pass.
What the angry mob doesn't understand is that their idolizing of Parterno and Penn State football caused this. Putting people and institutions on pedestals fills them with hubris and lets them think that they are above the law. They come to think of themselves and their program as more important than the rights of individuals, and if some little people are hurt to preserve the image of the leader and the program it's justified because the leader and the program are so moral and ethical. Which, when you think of it that way, makes it seem even more corrupt and self-serving than it already does.
If you still think Paterno was wronged, try replacing "Joe Paterno" with "archbishop" and "Penn State" with "Catholic Church." I mean, some people do claim Penn State football as their religion but this is carrying a little too far.
Wednesday, November 09, 2011
Let Them Eat Cake
I've been talking for quite awhile on here about the one percent of this country and how they really seem to be tone deaf when it comes to the other 99 percent. Worse are the folks who scream about socialist revolutions and yet shit all over the people (the president, many Democrats in Congress) trying to prevent such an uprising.
But I never thought that the wealthy of this country would stoop to a level as low as this. Take a look at these photos.
These images are from a Halloween Party last year at the law firm of Steven J. Baum in New York. Party goers dressed up like people who have had their homes foreclosed amid a "tent city" that was set up in the office for people to go flap to flap and trick or treat. Baum represents banks and mortgage servicers in their foreclosure proceedings. It is the largest firm in New York and represents Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.
At first, I simply couldn't believe that people would be this heartless. Then I realized that this these modern day Marie Antoinettes are really that fucking awful. And clueless. Who the fuck do they think caused all of this to begin with? THEIR clients. If anything, they should be dressing up as bankers and financial sector "whizes" who busted our country out like the mafia.
I guess the capacity to blame the victim is infinite.
But I never thought that the wealthy of this country would stoop to a level as low as this. Take a look at these photos.
These images are from a Halloween Party last year at the law firm of Steven J. Baum in New York. Party goers dressed up like people who have had their homes foreclosed amid a "tent city" that was set up in the office for people to go flap to flap and trick or treat. Baum represents banks and mortgage servicers in their foreclosure proceedings. It is the largest firm in New York and represents Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.
At first, I simply couldn't believe that people would be this heartless. Then I realized that this these modern day Marie Antoinettes are really that fucking awful. And clueless. Who the fuck do they think caused all of this to begin with? THEIR clients. If anything, they should be dressing up as bankers and financial sector "whizes" who busted our country out like the mafia.
I guess the capacity to blame the victim is infinite.
Tuesday, November 08, 2011
Open Season on the Poor
Every time anyone talks about raising taxes on the rich, people like Rush Limbaugh and Ann Coulter start screaming "class warfare" at the top of their lungs. The thing is, the rich have been waging class warfare on the poor for years. Here's the latest example of the trend, which has the distinct possibility of blowing up like the housing bubble.
A recent story in the LA Times reports on a chain of used car dealerships called "Buy Here Pay Here." They specialize in selling junker cars to poor people at exorbitant interest rates. Until recently, responsible investors wouldn't touch these outfits with a ten-foot pole: a quarter of the loans go into default. But in May the private equity firm Altamount Capital Partners in Palo Alto bought the J. D. Byrider chain of used car dealerships for $50 million.
Private equity firms in California used to invest in computer companies, bio-tech firms, Internet startups and other high-tech ventures that would create completely new industries and more jobs. But they've moved on to greener pastures. From the LA Times article:
Now, that's a really high interest rate. You can generally get home mortgages -- if you can qualify -- for 2.5 to 4%. For comparison, if you get a certificate of deposit from a bank a typical return is currently 1% for one-year CD to 2.5% for a five-year CD. But Buy Here Pay Car Lots doesn't shrink from the fact that they're screwing you. They brag about it:
What these Buy Here Pay Here companies don't tell you is that if your credit rating is good enough to get the right kind of credit card, you can pay off your balance in two years or one year, or six months, or one month, with no penalty and even no interest. But they neglect to mention that their car loan contracts usually have prepayment penalties.
Their rationale for charging high interest rates is essentially: "The big banks are screwing you, so we're going to screw you too. We're just screwing you faster: instead of a long, leisurely weekend dalliance, we give you quickie in the backseat of your car."
You can just see how this will play out when this house of cards collapses and some big bank goes bust when these "AAA" securities fail. Limbaugh and Coulter will blame those worthless scumbags and leeches for taking out loans that they can't pay, and the rest of us have to suffer for it. But the real leeches are the loan sharks making loans to poor people that they fully expect will default on the loan?
In the olden days the local used car dealer or loan shark profited from your misery. Now that these BHPH dealerships are being bought up as by venture capitalists and their loans are being repackaged as Wall Street investment instruments, Citibank or some other giant out-of-state investment firm is getting your money. That raises another issue: out-of-state banks don't have to abide by state interest rate limits.
Many states used to have limits on interest rates (in Minnesota's case it was 12%). Marquette National Bank of Minneapolis sued First National of Omaha when FNO started offering cards in Minnesota at a higher interest rate. In 1978 the Supreme Court decided against Marquette, preventing states from imposing interest rate limits on national banks. Which is why so many banks moved their credit card operations to North Dakota, and interest rates have often been as high as 18 and 21%.
What about states' rights? Local control? Christians should be outraged by this: usury is condemned by the Bible as immoral. The First Council of Nicaea and subsequent ecumenical councils forbade usury and charging interest greater than 1% per month. If we want our state to abide by Christian precepts dating back to the founding of the Church, the big bad federal government steps in and stops us.
This is just one more example where more and more money is flowing into fewer and fewer hands, most notably the hands of Wall Street bankers. The people who can least afford it wind up paying more for everything: from cashing their paychecks, to buying groceries, to car loans, to furniture, the poor wind up paying more money for less value in every instance. They can't even put their money into a bank because of the fees.
This is why the poor can't pull themselves up by their bootstraps. The ways rich or middle-class people save money are unavailable to the poor. As the old saw goes, it takes money to make money. How much money can you save if your life consists of working three part-time minimum wage jobs 60 hours a week for $25K a year, driving a BHPH-financed junker that keeps breaking down, living in an overpriced and underheated roach-infested apartment, getting your kids' beds and the living room couch and the TV from the RentaCenter down the street for three times their actual value, buying the kids Fruit Loops at the the local convenience store for twice what the Publix in the suburbs charges, having to pay a couple hundred bucks out of pocket (because you've got no health insurance) every time your kids start puking their guts out or screaming bloody murder because of an ear infection?
If the poor were getting hammered by just one of these problems they might be able to find a way out. But every way they turn they're getting nickeled and dimed to death by people who make a lot more money than they do. What's worse, more and more middle class people are losing their jobs, and they're being pushed down the same hole that the working poor have been living in for decades. And the guys at the top keep raking more and more money in, concentrating it in fewer and fewer hands.
Nope, Limbaugh and Coulter are right when they say they aren't engaging in class warfare. Warfare implies some kind of roughly symmetrical conflict. The wealthy have simply declared open season the poor.
A recent story in the LA Times reports on a chain of used car dealerships called "Buy Here Pay Here." They specialize in selling junker cars to poor people at exorbitant interest rates. Until recently, responsible investors wouldn't touch these outfits with a ten-foot pole: a quarter of the loans go into default. But in May the private equity firm Altamount Capital Partners in Palo Alto bought the J. D. Byrider chain of used car dealerships for $50 million.
Private equity firms in California used to invest in computer companies, bio-tech firms, Internet startups and other high-tech ventures that would create completely new industries and more jobs. But they've moved on to greener pastures. From the LA Times article:
The dealerships make an average profit of 38% on each sale, according to the National Alliance of Buy Here Pay Here Dealers. That's more than double the profit margin of conventional retail car chains like AutoNation Inc.
"The amount of return from these loans you can't get on Wall Street. You can't get it anywhere," said Michael Diaz, national sales manager for Small Dealers Assistance Inc. in Atlanta, which buys loans originated by Buy Here Pay Here dealers. "It's the gift that keeps giving."
Although they're backed mainly by installment contracts signed by people who can't even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.Where have we heard this scam before?
That's because rating firms believe that with tens of thousands of loans lumped together, the securities are safe even if some of the loans prove worthless.
Buy Here Pay Here is also being boosted by one of the sophisticated financial strategies that drove the nation's recent housing boom and bust: securitization. Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.So, just like at the beginning of the housing bubble, we have big banks and investors figuring out a new way to take money away from people who don't have any and then passing the bad loans on to someone else. But this scam is even worse, because the interest rates on these loans can be just about anything. For example, one Buy Here Pay Here dealership charges 14.9% interest.
Now, that's a really high interest rate. You can generally get home mortgages -- if you can qualify -- for 2.5 to 4%. For comparison, if you get a certificate of deposit from a bank a typical return is currently 1% for one-year CD to 2.5% for a five-year CD. But Buy Here Pay Car Lots doesn't shrink from the fact that they're screwing you. They brag about it:
So, are interest rates high at buy here pay here car lots? Well, what do you call high? We charge 14.9%. That’s more than you’ll pay on your mortgage–if you can still get one. It’s very likely what you’ll pay on a credit card balance–with one huge difference. The card issuer would love to see you stretch out payments forever. Any buy here pay here dealer that I know wants you to pay off in a couple of years at most. What’s that mean? Well, compare the following two loans.
$5,000 credit card balance at 14.9% over 10 years.
Payment = $80.36 a month, but total interest paid over the life of the loan is $4,643.39.
$5,000 car loan at 14.9% over 2 years.
Payment = $242.20 a month, but total interest paid over the life of the loan is $812.70.
Seriously. Who is really milking the consumer here, you[r] local car dealer, or Citibank?Of course they can't stretch the loan out over 10 years. The junkers they sell don't last 10 years, so they have to pry the money out of your hands right now or they'll wind up repoing a useless heap when it breaks down and you stop repaying them.
What these Buy Here Pay Here companies don't tell you is that if your credit rating is good enough to get the right kind of credit card, you can pay off your balance in two years or one year, or six months, or one month, with no penalty and even no interest. But they neglect to mention that their car loan contracts usually have prepayment penalties.
Their rationale for charging high interest rates is essentially: "The big banks are screwing you, so we're going to screw you too. We're just screwing you faster: instead of a long, leisurely weekend dalliance, we give you quickie in the backseat of your car."
You can just see how this will play out when this house of cards collapses and some big bank goes bust when these "AAA" securities fail. Limbaugh and Coulter will blame those worthless scumbags and leeches for taking out loans that they can't pay, and the rest of us have to suffer for it. But the real leeches are the loan sharks making loans to poor people that they fully expect will default on the loan?
In the olden days the local used car dealer or loan shark profited from your misery. Now that these BHPH dealerships are being bought up as by venture capitalists and their loans are being repackaged as Wall Street investment instruments, Citibank or some other giant out-of-state investment firm is getting your money. That raises another issue: out-of-state banks don't have to abide by state interest rate limits.
Many states used to have limits on interest rates (in Minnesota's case it was 12%). Marquette National Bank of Minneapolis sued First National of Omaha when FNO started offering cards in Minnesota at a higher interest rate. In 1978 the Supreme Court decided against Marquette, preventing states from imposing interest rate limits on national banks. Which is why so many banks moved their credit card operations to North Dakota, and interest rates have often been as high as 18 and 21%.
What about states' rights? Local control? Christians should be outraged by this: usury is condemned by the Bible as immoral. The First Council of Nicaea and subsequent ecumenical councils forbade usury and charging interest greater than 1% per month. If we want our state to abide by Christian precepts dating back to the founding of the Church, the big bad federal government steps in and stops us.
This is just one more example where more and more money is flowing into fewer and fewer hands, most notably the hands of Wall Street bankers. The people who can least afford it wind up paying more for everything: from cashing their paychecks, to buying groceries, to car loans, to furniture, the poor wind up paying more money for less value in every instance. They can't even put their money into a bank because of the fees.
This is why the poor can't pull themselves up by their bootstraps. The ways rich or middle-class people save money are unavailable to the poor. As the old saw goes, it takes money to make money. How much money can you save if your life consists of working three part-time minimum wage jobs 60 hours a week for $25K a year, driving a BHPH-financed junker that keeps breaking down, living in an overpriced and underheated roach-infested apartment, getting your kids' beds and the living room couch and the TV from the RentaCenter down the street for three times their actual value, buying the kids Fruit Loops at the the local convenience store for twice what the Publix in the suburbs charges, having to pay a couple hundred bucks out of pocket (because you've got no health insurance) every time your kids start puking their guts out or screaming bloody murder because of an ear infection?
If the poor were getting hammered by just one of these problems they might be able to find a way out. But every way they turn they're getting nickeled and dimed to death by people who make a lot more money than they do. What's worse, more and more middle class people are losing their jobs, and they're being pushed down the same hole that the working poor have been living in for decades. And the guys at the top keep raking more and more money in, concentrating it in fewer and fewer hands.
Nope, Limbaugh and Coulter are right when they say they aren't engaging in class warfare. Warfare implies some kind of roughly symmetrical conflict. The wealthy have simply declared open season the poor.
Monday, November 07, 2011
Her Ignorance Is As Good As My Knowledge
The most horrifying part of this video is when she talks about brainwashing. Heaven help us...
Sunday, November 06, 2011
My Wife Shrugs
My wife just finished reading Atlas Shrugged by Ayn Rand. It was given to her by my brother-in-law who considers it "his Bible." I asked her what she thought about it and this was our conversation.
"Are there actually people out there that think these characters are real?" she asked me.
"Which characters"
"The ones that make up most of society in this book...Rand's users and the mooches who take advantage of all the creative innovators."
"Uh...yeah."
"You mean that's how people who post on your site view people who collect Social Security?"
"Yep."
"Good Lord..."
The expression on her face made me realize how truly deluded the perception is of far too many people in this country. They actually think that people who are participate in government programs are dragging down our society. It also helped me to understand why blue collar folks are conservative. They are all under the horribly mistaken impression that our government is driving away innovators when, in fact, the exact opposite is true.
Just ask Bill Gates, Steve Jobs, and Mark Zuckerberg.
"Are there actually people out there that think these characters are real?" she asked me.
"Which characters"
"The ones that make up most of society in this book...Rand's users and the mooches who take advantage of all the creative innovators."
"Uh...yeah."
"You mean that's how people who post on your site view people who collect Social Security?"
"Yep."
"Good Lord..."
The expression on her face made me realize how truly deluded the perception is of far too many people in this country. They actually think that people who are participate in government programs are dragging down our society. It also helped me to understand why blue collar folks are conservative. They are all under the horribly mistaken impression that our government is driving away innovators when, in fact, the exact opposite is true.
Just ask Bill Gates, Steve Jobs, and Mark Zuckerberg.
Saturday, November 05, 2011
Remember This?
A 500 percent tax? Oh, I see...yet another bullshit lie.
But I do love how the owner of the gun shop kept using the word "scared" over and over again. Ah, the free market at work:)
Any of you folks who rushed out to buy guns feel foolish right now? We're almost three years into Obama's presidency and he's allowed states to do what they want. In addition, he's actually increased gun owner's rights by signing the credit card protection bill which contained a clause in it to allow people to carry loaded guns into national parks and wildlife refuges. So, all that fret and worry was for absolutely nothing.
I wonder if some of the other things they froth at the mouth about will also amount to one gigantic nothing like this did. Hmmm....
They Don't Have Any
We saw some good economic news this week as GDP grew 2.5 percent in the third quarter of 2011 and around 100,000 jobs were added bringing the unemployment rate down to 9.0 percent. Certainly, neither number is thrilling. The reason?
Ideally, those trends could signal stronger growth, followed by more hiring. Yet until consumers consistently spend more, businesses are unlikely to hire enough to drive down unemployment.
What's that again, you say?
Many employers are hesitant to step up hiring until they see steady demand from consumers.
So it's not some phantom uncertainty that's being caused by President Obama's policies but the simple fact that consumer spending (70 percent of our economy) isn't where it should be for any real improvement. Why aren't they spending money?
They don't have any.
Ideally, those trends could signal stronger growth, followed by more hiring. Yet until consumers consistently spend more, businesses are unlikely to hire enough to drive down unemployment.
What's that again, you say?
Many employers are hesitant to step up hiring until they see steady demand from consumers.
So it's not some phantom uncertainty that's being caused by President Obama's policies but the simple fact that consumer spending (70 percent of our economy) isn't where it should be for any real improvement. Why aren't they spending money?
They don't have any.
Friday, November 04, 2011
The Empire Strikes Out
Bank of America has struck out with its controversial plan to charge debit card customers $5 a month just to use their money. When customers complained and started to cancel their BoA accounts, many in favor of local credit unions, Bank of America dropped the plan.
Bank of America had to do this, they insisted, because of a law Congress passed that limits "swipe fees," the fees the banks charge retailers when you use your debit card. The regulation limits the swipe fee to 21 cents; swipe fees had averaged 44 cents before the regulation went into effect last month. (The original proposal was a 12-cent swipe fee, but regulators were convinced that was too low.)
I can remember a time when banks actually paid me to keep my money there. These days interest rates are essentially zero and the banks have fees for every imaginable thing -- depositing money, withdrawing money, talking to a teller, using ATMs, having a checking account, and on and on. (Banks are charging more fees because they're not making money the way they used to, by making loans.) Most of these fees can be avoided by maintaining minimum balances that can range up to tens of thousands of dollars. But that means people who don't have a lot of money wind up spending a lot of money just to have access to a bank account.
People who can't afford a bank account often have to pay companies just to cash their paychecks. These outfits frequently charge a lot for the privilege, and often make shady pay-day loans at exorbitant interest rates. For all the bad things Wal-Mart has done, this is one area where they may well have helped people out: they charge just $3.00 for cashing payroll checks.
Fortunately, most local not-for-profit credit unions have some form of a free checking account. Credit unions are basically customer-owned banks. They're often formed for employees of big corporations, union members, or government employees, but many allow anyone to join.
Some critics of the Dodd-Frank bill, whose provisions resulted in the swipe fee regulation, are trumpeting BoA's backtracking on the debit card fee as a victory for the free market. It is, no doubt about it. But this free market win is a direct result of the swipe fee regulation -- without that law, the big banks would have continued to silently charge retailers more than twice as much as they're charging now. That's money that we wind up paying in higher prices at the grocery store, gas station and shopping mall. Money that goes not to the retailer, but to some big bank.
The free market can work very well, but only when customers are aware of what's really going on. When banks make their profits in ways that aren't apparent to their customers, their customers can't make informed decisions about which bank provides the best service for the lowest price. The high swipe fees were essentially an extortion racket that allowed the big banks to use their monopoly position to gouge local merchants for providing a convenience option to their customers. This caused invisible price hikes on everything you buy with your debit card. (People who pay cash get socked the worst, but that's a separate issue.)
BoA figured it was their right to maintain their current profit margin by charging their customers directly for something that they had been making money on through transactions hidden from their customers. Their customers disagreed.
In the short run we probably won't see any price cuts at the checkout counter. But in the long haul the cost of doing business will be lower for merchants and that will ultimately result in more money staying local, resulting in healthier local businesses and more local hiring. Which seems better than sending all that extra money off to the banks so that they can give their execs more outrageous bonuses.
Bank of America had to do this, they insisted, because of a law Congress passed that limits "swipe fees," the fees the banks charge retailers when you use your debit card. The regulation limits the swipe fee to 21 cents; swipe fees had averaged 44 cents before the regulation went into effect last month. (The original proposal was a 12-cent swipe fee, but regulators were convinced that was too low.)
I can remember a time when banks actually paid me to keep my money there. These days interest rates are essentially zero and the banks have fees for every imaginable thing -- depositing money, withdrawing money, talking to a teller, using ATMs, having a checking account, and on and on. (Banks are charging more fees because they're not making money the way they used to, by making loans.) Most of these fees can be avoided by maintaining minimum balances that can range up to tens of thousands of dollars. But that means people who don't have a lot of money wind up spending a lot of money just to have access to a bank account.
People who can't afford a bank account often have to pay companies just to cash their paychecks. These outfits frequently charge a lot for the privilege, and often make shady pay-day loans at exorbitant interest rates. For all the bad things Wal-Mart has done, this is one area where they may well have helped people out: they charge just $3.00 for cashing payroll checks.
Fortunately, most local not-for-profit credit unions have some form of a free checking account. Credit unions are basically customer-owned banks. They're often formed for employees of big corporations, union members, or government employees, but many allow anyone to join.
Some critics of the Dodd-Frank bill, whose provisions resulted in the swipe fee regulation, are trumpeting BoA's backtracking on the debit card fee as a victory for the free market. It is, no doubt about it. But this free market win is a direct result of the swipe fee regulation -- without that law, the big banks would have continued to silently charge retailers more than twice as much as they're charging now. That's money that we wind up paying in higher prices at the grocery store, gas station and shopping mall. Money that goes not to the retailer, but to some big bank.
The free market can work very well, but only when customers are aware of what's really going on. When banks make their profits in ways that aren't apparent to their customers, their customers can't make informed decisions about which bank provides the best service for the lowest price. The high swipe fees were essentially an extortion racket that allowed the big banks to use their monopoly position to gouge local merchants for providing a convenience option to their customers. This caused invisible price hikes on everything you buy with your debit card. (People who pay cash get socked the worst, but that's a separate issue.)
BoA figured it was their right to maintain their current profit margin by charging their customers directly for something that they had been making money on through transactions hidden from their customers. Their customers disagreed.
In the short run we probably won't see any price cuts at the checkout counter. But in the long haul the cost of doing business will be lower for merchants and that will ultimately result in more money staying local, resulting in healthier local businesses and more local hiring. Which seems better than sending all that extra money off to the banks so that they can give their execs more outrageous bonuses.
Thursday, November 03, 2011
The Turning Tide
I saw this recently and just about fell out of my chair.
A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.
Holy Shee-aht! My initial shock was that it was even published at all in the Wall Street Journal. After that wore off, I was pleasantly surprised to see that two thirds of the wealthy now think that raising taxes is a good thing. But why do they support this?
Explains George Walper of Spectrem: “What this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’ ”
Yep.
Here are some of the comments from the supporters of this increase.
“When you have someone who made four and a half billion pay fifteen percent, and because it’s a hedge fund, I have a problem with that.”
“Quite frankly if Warren Buffett gets taxed an extra fifty thousand dollars or your typical investor of two hundred and fifty [thousand] or larger has to pay an extra thousand dollars in tax; It’s not gonna change his lifestyle. Whatever he or she was gonna buy, he or she is gonna buy.”
I have to say that I am fairly elated that wealthy people in this country are saying things like this. The tide is turning, folks, and it honestly can't happen too soon.
A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.
Holy Shee-aht! My initial shock was that it was even published at all in the Wall Street Journal. After that wore off, I was pleasantly surprised to see that two thirds of the wealthy now think that raising taxes is a good thing. But why do they support this?
Explains George Walper of Spectrem: “What this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’ ”
Yep.
Here are some of the comments from the supporters of this increase.
“When you have someone who made four and a half billion pay fifteen percent, and because it’s a hedge fund, I have a problem with that.”
“Quite frankly if Warren Buffett gets taxed an extra fifty thousand dollars or your typical investor of two hundred and fifty [thousand] or larger has to pay an extra thousand dollars in tax; It’s not gonna change his lifestyle. Whatever he or she was gonna buy, he or she is gonna buy.”
I have to say that I am fairly elated that wealthy people in this country are saying things like this. The tide is turning, folks, and it honestly can't happen too soon.
Wednesday, November 02, 2011
Who Cares??!!!???
With all the problems we have in this country currently, does anyone really care what Herman Cain said to two women 20 years ago? I know I don't. A sex scandal? Really??!!? I'm more interested in debating his 9-9-9 plan than hearing about "harassment." I put that last word in quotes because I tend to take a decidedly anti-PC stance when it comes to this phenomenon.
I'm sure that there are people out there who are seriously harassed in one way or another but with all the new company rules and policies in place these days, most people don't get out of line. Thus, the cases we do see (and especially the ones from 20 years ago) largely originate from people who need to take a fucking chill pill. If you are that weak kneed about stuff like this, how on earth are you going to get anywhere in this world?
I'm hoping that this ends soon but the media has sadly begun their frenzy and fascination with a bright shiny object. Imagine where we would be if they put this much energy into education.
I'm sure that there are people out there who are seriously harassed in one way or another but with all the new company rules and policies in place these days, most people don't get out of line. Thus, the cases we do see (and especially the ones from 20 years ago) largely originate from people who need to take a fucking chill pill. If you are that weak kneed about stuff like this, how on earth are you going to get anywhere in this world?
I'm hoping that this ends soon but the media has sadly begun their frenzy and fascination with a bright shiny object. Imagine where we would be if they put this much energy into education.
Tuesday, November 01, 2011
Get To Work
"Men with guns will come to your house and take you to jail."
Between Pastor Ed and Doctor Sean at the gym as well as several of my regular commenters, this line has been beaten to death of late so I decided to dedicate a post to it and clear up some very serious misconceptions and (surprise surprise) childish dishonesty.
The whole thing really started with these verses from the Bible (2 Corinthians 9, 6-12).
Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work. As it is written: "They have freely scattered their gifts to the poor; their righteousness endures forever."
Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.
This service that you perform is not only supplying the needs of the Lord’s people but is also overflowing in many expressions of thanks to God.
These verses are pretty plain to me: share your wealth and God will reward you. It's basically up to all of us to engage in one, gigantic wealth redistribution system. This simple instruction flies directly in the face of Ayn Rand's enlightened self interest bull shit so I say that any of you who embrace Rand and Jesus have a serious ideological dichotomy to overcome.
The part of this verse that seems to cause all the frothing at the mouth is this one:
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.
Clearly, this means under compulsion from God, not the government. This jibes with everything else JC because it's all about coming to the Lord under your own free will, not being forced. But, as they often do, the right has made this there Biblical evidence for having very little or no taxes. This is especially true of (gasp!, horror of horrors) Social Security and Medicare taxes which help people every day.
Let's assume that Paul, who wrote 2 Corinthians, was also talking about the government. He wasn't but I'm going to say that he was for the sake of this discussion. At first glance, it does indeed seem like we have no choice. Those taxes come out without our permission and we are not cheerful givers. We are being forced to pay them and men with guns will come to our use and take us away if we don't. As is usually the case with right, they don't look beyond that first glance, tap into their inner rage, and create a fantasy world in which Mom and Dad (the government) won't let them stay out past midnight...give them the keys to the car...do what they want to do...blah blah blah...
Because when you start to look honestly at how taxes and social programs started, the majority of this country are, in fact, cheerful givers. The 16th Amendment was ratified by the requisite number of states. Social Security and Medicare were passed by our elected representatives (see: TAXATION WITH REPRESENTATION) and enjoy the support of the majority of Americans today. In fact, 57 percent of Americans think their taxes are fair while 43 percent and 4 percent consider the amount right or too low. Interestingly, 50 percent think their taxes are too high but many of these still think their taxes are fair and nearly two thirds want taxes raised to cover Social Security and Medicare which clearly illustrates the overwhelming support for both of those programs.
At worst, all of this shows that half of the country has no problem with taxes being taken out of their check. At best, closer to two thirds support this type of taxation. They continue to support elected representatives that would continue to collect all of these taxes. When they cast their vote, it means that they are all now cheerful givers. That includes myself. When I vote for Democrats, I am essentially saying that I want money removed from my check for federal taxes and social programs.
This still leaves a good chunk of people that do not support this type of taxation and bitch about it constantly. Adding insult to injury, they lost (and continue to lose) this debate (see: the worst ever, man!) hence the reason why they froth at the mouth about men with guns forcing them to do things and whine about their freedom being inhibited. My message to you is the same one I give to lazy teenagers:
Get off your ass and do something about it.
Your vote and, more importantly, the time you invest in support of a candidate with your views and getting like minded individuals to vote with you, means that you can change the situation so that no one is forcing you to do anything. By sitting on your ass, the majority ruled and you lost so I guess you'll have to lump it. The history of this country is filled with examples of people that worked hard to change the way things were done if they didn't like the status quo. They pulled themselves up by the bootstraps (hee hee:)) and put people in office that would govern differently.
This is what we have seen in the last couple of years with the Tea Party. I'm certain that anyone who complains about taxes can work with these groups locally to change how the system works. You may end up not getting enough support but, hey, that's how our country works. If you're not happy with it, you are always welcome to leave. Or redouble your efforts.
Rather than wasting your time arguing with me on this site, devote time to ending men with guns coming to your house and forcing you to fork over the fruits of your labors. Democrats have done it throughout history. They passed Social Security, Medicare, and the Civil Rights Act. It wasn't easy but they used their power of voting to elect people who would pass these laws. Don't be a lazy teenager who gripes about the rules from the comfort of your parent's basement. In short,
GET TO WORK.
Between Pastor Ed and Doctor Sean at the gym as well as several of my regular commenters, this line has been beaten to death of late so I decided to dedicate a post to it and clear up some very serious misconceptions and (surprise surprise) childish dishonesty.
The whole thing really started with these verses from the Bible (2 Corinthians 9, 6-12).
Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work. As it is written: "They have freely scattered their gifts to the poor; their righteousness endures forever."
Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.
This service that you perform is not only supplying the needs of the Lord’s people but is also overflowing in many expressions of thanks to God.
These verses are pretty plain to me: share your wealth and God will reward you. It's basically up to all of us to engage in one, gigantic wealth redistribution system. This simple instruction flies directly in the face of Ayn Rand's enlightened self interest bull shit so I say that any of you who embrace Rand and Jesus have a serious ideological dichotomy to overcome.
The part of this verse that seems to cause all the frothing at the mouth is this one:
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.
Clearly, this means under compulsion from God, not the government. This jibes with everything else JC because it's all about coming to the Lord under your own free will, not being forced. But, as they often do, the right has made this there Biblical evidence for having very little or no taxes. This is especially true of (gasp!, horror of horrors) Social Security and Medicare taxes which help people every day.
Let's assume that Paul, who wrote 2 Corinthians, was also talking about the government. He wasn't but I'm going to say that he was for the sake of this discussion. At first glance, it does indeed seem like we have no choice. Those taxes come out without our permission and we are not cheerful givers. We are being forced to pay them and men with guns will come to our use and take us away if we don't. As is usually the case with right, they don't look beyond that first glance, tap into their inner rage, and create a fantasy world in which Mom and Dad (the government) won't let them stay out past midnight...give them the keys to the car...do what they want to do...blah blah blah...
Because when you start to look honestly at how taxes and social programs started, the majority of this country are, in fact, cheerful givers. The 16th Amendment was ratified by the requisite number of states. Social Security and Medicare were passed by our elected representatives (see: TAXATION WITH REPRESENTATION) and enjoy the support of the majority of Americans today. In fact, 57 percent of Americans think their taxes are fair while 43 percent and 4 percent consider the amount right or too low. Interestingly, 50 percent think their taxes are too high but many of these still think their taxes are fair and nearly two thirds want taxes raised to cover Social Security and Medicare which clearly illustrates the overwhelming support for both of those programs.
At worst, all of this shows that half of the country has no problem with taxes being taken out of their check. At best, closer to two thirds support this type of taxation. They continue to support elected representatives that would continue to collect all of these taxes. When they cast their vote, it means that they are all now cheerful givers. That includes myself. When I vote for Democrats, I am essentially saying that I want money removed from my check for federal taxes and social programs.
This still leaves a good chunk of people that do not support this type of taxation and bitch about it constantly. Adding insult to injury, they lost (and continue to lose) this debate (see: the worst ever, man!) hence the reason why they froth at the mouth about men with guns forcing them to do things and whine about their freedom being inhibited. My message to you is the same one I give to lazy teenagers:
Get off your ass and do something about it.
Your vote and, more importantly, the time you invest in support of a candidate with your views and getting like minded individuals to vote with you, means that you can change the situation so that no one is forcing you to do anything. By sitting on your ass, the majority ruled and you lost so I guess you'll have to lump it. The history of this country is filled with examples of people that worked hard to change the way things were done if they didn't like the status quo. They pulled themselves up by the bootstraps (hee hee:)) and put people in office that would govern differently.
This is what we have seen in the last couple of years with the Tea Party. I'm certain that anyone who complains about taxes can work with these groups locally to change how the system works. You may end up not getting enough support but, hey, that's how our country works. If you're not happy with it, you are always welcome to leave. Or redouble your efforts.
Rather than wasting your time arguing with me on this site, devote time to ending men with guns coming to your house and forcing you to fork over the fruits of your labors. Democrats have done it throughout history. They passed Social Security, Medicare, and the Civil Rights Act. It wasn't easy but they used their power of voting to elect people who would pass these laws. Don't be a lazy teenager who gripes about the rules from the comfort of your parent's basement. In short,
GET TO WORK.
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