Credit Card Company Scams

Digby writes about a scam by Bank of America, where they switched the envelope to look like junk mail, so people threw it away, and they collect million upon millions in late fees. Credit Card Companies Are Using Dirty Tricks to Force Us to Pay Late Fees: Why Won’t Congress Do Something?

It was clearly a sneaky trick. Yes, it’s my responsibility to know when my bills are due, but I had been in the habit of putting the bill into the “to pay” file and paying it on the following Monday. It didn’t occur to me that the bill would suddenly come in an envelope with no return address or label on it that didn’t look like a bill and so I tossed it into a junk pile and didn’t look at it right away.
And that’s what people are dealing with all the time as consumers, with their health insurance, their credit cards, their mortgages, their pensions — overwhelming complexity designed to trip them up and cost them money or deny them benefits to which they believed in good faith they were entitled. And its all perfectly legal — or at least there’s no visible accountability for it.

Chase ran a scam on me. I didn’t realize it was a scam until I was talking with someone else and found out exactly the same thing happened to her. I had automatic payments set up. They stopped the automatic payments, and charged me late fees. And when I got them to reverse the late fee, they applied a fee reversal fee!
Here’s the thing. Nothing is getting done about any of this big-corporate corruption! Democrats have a huge opportunity to demonstrate that they are on the side of regular people — but just enough corrupt Democrats in the Senate are joining with the totally-corrupt Republicans to keep anything from getting done.
Digby writes,

I just don’t get this. This is a populist moment and with the exception of a few liberal economists and professors and a couple of Democratic congressmen, the whole field is being left to the teabaggers. This populist fever doesn’t just affect the rural working folks, it affects people in the big urban centers and the suburbs just as much. Everybody’s getting screwed. Somebody needs to address that or the wrong people are going to be blamed.

Today’s Housing Bubble Post – It Ain’t Over

Have you noticed signs of “bubble mentality” in the housing market in your area? In my area the bubble is reignited by cheap credit and government subsidies. Just this week a relative told me that “housing prices will come back” because “housing always goes up.” People are talking again about “snapping it up” and doing it “before you get priced out of the market.” Low-end houses are getting dozens of offers above the asking price.
People have been trained to think that the way to get ahead is to buy real estate. You buy a house, after a while you use the equity you build up in that house to buy another. Either “trade up” or buy investment property. In my area most of the home sales are at the low end, are bought with cash, and are bought by investors who plan to rent the house out. (Even though rents are falling.)
People still don’t get it that we were in a bubble. People don’t get it that prices have not yet reverted to the mean.
Here is the hard news: The tulips will never be worth more than gold again. The “path to wealth” isn’t real estate anymore.
And it isn’t working. The Wall Street Journal this morning:

Even recent bargain hunters have been hit: 11% of borrowers who took out mortgages in 2009 already owe more than their home’s value.

The bubble won’t end until the bubble mentality ends. Until then a lot of people will only get hurt.
A house is a home, not an investment.

NYTimes Get Debt Interest Very Wrong

From Payback Time – Wave of Debt Payments Facing U.S. Government – Series – NYTimes.com

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

Just wrong.
According to the US Treasury, the interest on the debt was $451 billion in 2008. I’m not clear on the 2009 number yet, but it may actually be lower due to lower interest rates.
This changes the character of the entire NYTimes story, which claims interest could soar to over $700 billion “up from $202 billion.” A climb from approx. $450-500 billion just doesn’t sound as scary. The conclusions I guess we are supposed to draw are stop helping the unemployed, don’t reform health care. (But of course ignore the $1 trillion military budget, more than the rest of the world combined spends.)
And by the way, this is the Reagan/Bush debt they are writing about. Obama has added very little to that.

My Op-Ed In SJ Merc News — Tax The Rich

I have an op-ed in today’s San Jose Mercury News: Opinion: Why America needs to go back to taxing the wealthy. Here is a bit of it:

While America has always been a place where a person could get rich, it used to be that you got rich a bit more slowly, and everyone benefited in the process. This is because we used to have very high tax rates at the top.
A person could do very well, but income that came in above a certain level was highly taxed and used to pay for the teachers, police, courts and roads that enabled businesses to thrive. Just how high were taxes? During America’s “golden years” of 1951-1963, tax rates were over 90 percent on income over $400,000. Then through the 1960s and 70s, they were 70 percent on income above $200,000.
. . . Back when it took time to make a fortune, business people had to rely on the health of the greater community to nurture their own enterprises. They had to think and act long-term. They had to carefully build solid businesses that satisfied their customers. They had to hold on to workers because their experience was valuable.

The whole thing is on their site. Please go read it.

My Landline

The Johnsons have two cell phones and a landline. Pretty much the only calls we get on the landline are telemarketing calls, but for some reason we keep it around.
It would be nice if the government kept a database of people who do not want to be called at home by telemarketers. Maybe they could call it a “Do Not Call List.” People could get on this list, and the telemarketers would check the list before calling people, and not call the people who don’t want to be called.
That would be so nice of something like that existed, because we get three or four telemarketing calls a day here.
Or, if it actually did exist (it does), it would be a fucking miracle if the government would fucking just enforce the law. It that too much to ask?

The Problem With A Jobs Bill – And With Everything Else

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
The country needs a jobs program and needs it right now. Cash for Caulkers would be a good start. A new Civilian Conservation Corps would be another. But let’s not allow a jobs program to cover over the need for real changes in the structure and core principles of our economy.
Yes, an effective jobs program can help people hold out a while longer – until necessary changes are made. It can make the unemployment rate will look better, for a while, and maybe the GDP will climb a little bit. But our low-wage, everything-to-the-top economy is not sustainable and needs to be redesigned and reregulated. The economy has to be changed so that it works for all of us, instead of just a few.
What if the government passes a jobs bill, and these new jobs follow the current American job model of paying too little with no benefits? What if the government uses contractors, as they now do for so many government functions, and the contractors “reduce costs” by paying very low wages and no benefits, sending the rest of the cash to a few at the top? Does it really help the economy and the country to provide a bunch of low-paying jobs with no benefits, and make a few wealthy executives even wealthier? Or suppose the government starts a massive infrastructure modernization project? Does it help the economy if they hire construction firms that pay as little as possible or use Chinese steel?
Even if a government jobs effort provides good-paying jobs with good benefits, this still won’t change the need to restructure the rest of our economy so that it, too, provides good pay and benefits to all of us instead of concentrating all wealth and income at the top.
As long as our economy is structured to pass everything up to a few at the top, stimulus can’t work well, jobs bills can’t work well. Either can anything else. In the end things will just revert to the old ways and we’ll need more bailouts, stimulus and jobs programs.
The problem is that there are two economies now. There is an economy for the top few and an economy for the rest of us. And this problem is global. The world’s economy is structured to send almost everything to a global top few.
Everything just goes to the top now. Companies are structured that way, jobs are structured that way, taxes are structured that way and now even our government is structured that way. Our economy has been turned into a machine that sends every dollar to an already-wealthy few. So efforts to stimulate economic recovery using traditional methods cannot work. It will just make a few at the top even richer.
We need a jobs bill because the economic system has broken down. We needed a stimulus package because the economic system has broken down. All the bailouts and jobs bills and stimulus are just one more stopgap effort to keep a broken system going, for the continued benfit of the few at the top. Changes must be made.
One barrier to fixing our broken economy problem is the structural corruption of our Congress. Every effort to help the people seems to get hijacked – and never mind working on the needed reregulating and restructuring. The recent extension of unemployment insurance, for example, included only $2.4 billion for the unemployed, but had more than $20 billion tacked on, going directly or indirectly to (owners of) big homebuilding companies. Another example, the health care reform bill is turning into a law ordering people to buy insurance from the big insurance companies. This year’s big stimulus package was watered down with even more tax cuts for the few, like getting rid of the Alternative Minimum Tax.
The biggest example, of course, was last year’s financial sector bailout. Taxpayer dollars saved the asses of the companies that caused the collapse and are now serving up $140 billion for financial-sector bonuses but 10% unemployment for the rest of us!
If we want to get out of this mess we have to restructure and reregulate the whole system. We have to change the structure of our economy so that regular people receive the benefits. It is time. There is no more getting around it.
Next post: some of the structural problems that must be changed.

COBRA Subsidy Expiring – Hundred Of Thousands Will Lose Insurance

In two weeks the first wave of unemployed who qualified for COBRA health insurance subsidies under the “stimulus plan” will start losing their health insurance, and Congress has not acted.

Hundreds of thousands of Americans will start losing their health insurance each month as their COBRA subsidies expire.

Of course, these unemployed people can keep their insurance – if they can afford to pay the hundreds of dollars it will cost after the subsidy expires. In many cases the cost of COBRA insurance exceeds the amount a standard 2-week unemployment check.
Congress has an opportunity to give regular people a small, small bit of help here. Of course, they may be more interested in shoveling out more checks to the wealthy. Last week Congress extended unemployment benefits. The $2.4 billion cost was dwarfed by the $20 billion in checks going directly or indirectly to big corporations that was included in the bill – including a flat-out “gift” to big home building corporations.

Washington Times Against Protectionism Before They Were For It

m4s0n501

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
President Obama is visiting Asia, and is blasted over and over about America’s supposedly “protectionist” policies.

“China on Monday accused the United States of increasing protectionism…”

Think about it, the country with the massive trade surplus accuses the country with the massive trade deficit of being “protectionist.” Call it The Audacity Of Projection.
Our trade opponents have learned that all they have to do is shout the word “protectionist” and their American enablers will quickly run from doing anything that might help American companies and workers. But what happens later, when the consequences start hitting home? Do the “free trade” shouting, foreign-competition enablers take the blame and accept responsibility when Amercan dollars are spent overseas and American workers lose jobs and American factories close? Who could have known that they would point the finger at the President instead of themselves?
Here is what I am talking about:
On February 8, 2009, during the debate over the stimulus package, the conservative Washington Times joined the “free trade” chorus, denouncing the package’s proposed “Buy American” requirements as the same kind of “protectionism” that conservative mythology says caused the Great Depression: EDITORIAL: How to cause a depression,

…Tucked within the economic stimulus bill the House passed last week was a clause requiring state and local public works agencies to buy American iron and steel for their reconstruction projects, and the Senate expanded it to all manufactured goods.
[. . .] The stimulus bill has a way to go before it reaches Mr. Obama’s desk, but if strong “buy American” mandates are present at that time, he will have no choice but to veto the bill. Otherwise, he will be forever known as Barack H. (Hoover or Hawley) Obama.

Conservative free-traders got what they demanded. In response to these and other cries of “protectionism!” the Senate backed away from the Buy American clause, changing it to vague language requiring that the money be spent in ways consistent with existing treaties.
Since this wording gives the President some discretion in how the money is spent conservatives started demanding the President spend it … outside of the country. For example, a Washington Times editorial on March 24, EDITORIAL: The Mexican-American War of 2009, ended by blasting President Obama for wanting American stimulus dollars to stimulate America’s economy:

“Wasn’t Mr. Obama going to be the “international” president who was going to get the rest of the world to love us? The path to improving relations does not involve destroying jobs in other countries as well as in our own.”

So now it turns out that many stimulus dollars are being spent according to the wishes of the “free trade” conservatives, with money to purchase wind turbines creating jobs in Europe and China, and who could have known, the very same free-trade conservatives are JUST OUTRAGED that President Obama is sending American stimulus dollars out of the country! For example, a Washington Times editorial on November 13, EDITORIAL: Stimulus creates jobs in China, begins,

Of the $1 billion in clean-energy stimulus money spent since the beginning of September, $850 million has gone to foreign wind companies. It doesn’t take a bunch of experts at a hastily planned “jobs summit” to discover this isn’t the way to bolster employment in America.
Indeed, the 11 U.S. wind farms that received stimulus money from the Treasury have imported 695 of the 982 wind turbines to be installed, creating 4,500 jobs overseas. That’s far more overseas work than the stimulus money has created in the United States.

Yes, how DARE they not require that American stimulus dollars be spent in America! This from the very same Washington Times editors who earlier in the year demanded exactly that.
Who could have known that conservatives would attack President Obama for the consequences of giving in to conservative demands??!! The Washington Times was against protectionism before they were for it. Call it The Audacity Of Hypocrisy.
The lesson to be learned here is to stop listening to these conservative, “free trade” clowns. They are only interested in making the rich richer at the expense of the rest of us and will say whatever advances that goal. We should start just doing what is right for the country, our workers, our factories, our companies and our jobs.

Record Deficit Was Bush’s Last Budget

Everyone thinks this huge deficit is Obama’s doing. For example, a letter in today’s San Jose Mercury News,

Deficit story should have been Page 1
The brief Associated Press story “October federal deficit is a record” (Page 9A, Nov. 13) should have been front-page news. And the headline should have read, “2009 federal deficit triples!” I used my calculator to figure that Obama’s $1.42 trillion annual deficit is three times Bush’s $462 billion. The fact that the deficit for just the month of October 2009 is a record $176.4 billion is a clear signal that Obama’s strategy is not working. We need to stop the insane spending and start to prime the pump of small business if we are to create jobs.

This was Bush’s last budget. A spending year that ends before January 21 can’t be the responsibility of a President who was only in office 9 months when the budget year wrapped up.
Obama’s only contribution to this deficit was that some, and only some, of the stimulus package had started to kick in.
A lengthy analysis showed that Obama’s policies contributed at most 7% to this deficit.

How The Rich Get Richer

Paul Rosenberg nails it: Open Left:: The "Entitlement Problem": Racing ourselves to the bottom

But to a very large extent, the culture wars are a war of constructed tribal identity, fronting for elite corporate interests, and their primary historical achievement has been to transform an economy of broadly-shared growth into one of stagnation and diminished prospects for the many. The various issues that are involved are far less significant in the long run than this overarching effect in terms of the upward redistribution of wealth, power, opportunity and possibility.

Please go read it.