Archive for September, 2008

24
Sep

U.S. Credit Card Law Ignores Consumer Responsibility

By Cynapse 2 Comments
Categories: Business

In the shadow of the US Government’s massive subprime lending bailout, the House of Representatives passed legislation HR 5244, better known as the Credit Cardholders’ Bill of Rights Act of 2008. Designed to curb the growing torrent of credit card consolidation and bankruptcy filings, the bill bans or limits several lending practices, including:

  • Increasing the annual percentage interest rate (APR) on the outstanding balance without the customer acting delinquently on the account in question.
    Example: John’s FICO credit score drops by 70 points over several months. Although he has never missed a payment on his credit card, the lender sees him as a default risk and raises his APR from 19% to 34%
  • Using APR increases as penalties without a 45-day written notice
    Example: Suzy has missed several payments over the past year. On September 3, the bank decides to raise the APR on her card. The increase effects all purchases starting September 10. Suzy does not become aware of these changes until she receives her bill later in the month
  • Double Cycle Billing – using the previous month’s balance to calculate interest due on an outstanding balance
    Example: Jim owes $1000, payable by September 30. He pays $550, ensuring he is not delinquent but leaving $450 due. Most lenders calculate interest due based on the average daily balance and interest for the billing cycle (e.g. $1000* 19.5% * 25 / 365 = $13.36 interest) , but lenders who use double cycle billing take the average of the current month’s balance and the previous month’s balance. Thus, if Jim spent $2000 the previous month, the interest would be calculated on $1500 rather than $1000 (interest = $20.03).

This consumer-friendly legislation subscribes to the widely-held belief that those who use credit should be absolutely protected against unscrupulous lenders and their willingness to prey on so-called high risk customers. These customers are often considered by lenders to be profitable due to their tendency to revolve (retain a partial balance after the payment due date and pay interest fees as a result). This practice of targeting economically vulnerable customers has been examined at length by several industry observers and authors like James Scurlock, creator of the book and film “Maxed Out”:

“I think that most people think banks are still rationing out credit to people who’ve “earned” it or people who “deserve” it. That’s certainly what they want us to believe. But the truth is that banks are pushing credit onto people who will pay them the highest fees and the highest interest rates. That’s the real definition of “valued customer.”
-The Filmlot. Interview with James D. Scurlock

There is little doubt about the existence of predatory lenders and their practices; however, North American consumers must remember that we live in a free market society and the customer is not FORCED to use any of these products. Perhaps congress should have also passed a Credit Cardholders’ Bill of Responsibilities. Based on various self-help guides (all of which promise to solve your financial problems for the low, low price of $19.95) and my own observations, such a bill should contain at least the following clauses:

  1. Read the entire credit agreement before using a card.
  2. Avoid withdrawing cash on the credit card.
  3. Avoid using credit cards to pay off other credit products (especially mortgages)
  4. Do not spend over the basic credit limit, even if doing so is permitted
  5. Avoid using credit cards for the purchase or down payment of rapidly depreciating goods, like automobiles

Unlike the rights bill, the responsibilities bill could not be actively enforced; however, a customer that repeatedly violates its guidelines should have no expectation that the government is going to bail him/her out in the event of delinquency. Many of the practices banned by the Cardholders’ Bill of Rights are used for risk management strategies designed to punish unreliable clients. Some lenders may respond these new restrictions with more drastic risk management tactics:

  • Severely limiting who qualifies for and retains credit cards (students, small business owners and low income residents would almost certainly be affected)
  • Passing the delinquency costs onto the entire portfolio via extra fees and increased interest rates.

Without at least the spirit of consumer responsibility, the legislative measures designed to protect society’s most vulnerable consumers may in fact cause them more grief in the long run.

19
Sep

Fools and their Tools

By Cynapse 2 Comments
Categories: Society

Sometimes the biggest tragedy about tragic accidents is that they provide rather obvious lessons:

EWETT CITY, Conn. — Court documents show that moments before a Jewett City toddler fatally shot himself, his mother warned him not to touch his father’s gun because of the “bad boo boos” it could cause.

An arrest affidavit details how 2-year-old Wyatt Matteau grabbed the gun from a nightstand and shot himself in the eye while his mother was in the bathroom.

On the morning of Aug. 28, Rebecca Matteau was watching TV with her son and her 3-month-old daughter, just minutes before the shooting. The children’s father was sleeping in the bedroom.

Minutes later the boy shot himself, and he died less than two hours later.

Hmm, seen this somewhere before…

At the risk of offending some, this is why we need gun control. It’s not the guns – as the NRA loves to state, “People kill People”. Unfortunately, a lot of people aren’t that bright and an unwise person with a gun is more dangerous than an unwise person with a bat. You may trust yourself with a gun but ask yourself: do you trust EVERYONE you know with a gun? Probably not.

Of course the argument goes both ways: Toronto mayor David Miller’s call to ban ALL handguns will do little to stop gun crime between the hot-headed, immature youths that plague Toronto’s streets. Criminals generally don’t carry gun permits and seem undeterred by the fact that murder is already illegal. Conversely, responsible gun owners in cottage country will be penalized. Does this make any sense? Hardly.

05
Sep

Uppity: Someone Finally Labels Obama Directly

By Cynapse 1 Comment
Categories: American Politics and Politics

After months of beating around the bush with terms like “Messiah” and “His Holiness”, a member of the right-wing crowd has finally stated in plain language the general feeling of conservatives towards Barrack Obama and his wife Michelle:

Rep. Lynn Westmoreland, a conservative Republican from Georgia, let slip today what critics have been saying is the subtext of many of the attacks on Barack Obama: He’s “uppity.”
According to The Hill, a Capitol Hill newspaper, Westmoreland was discussing Alaska Gov. Sarah Palin’s acceptance speech outside the House chamber today when he veered into his thoughts on Michelle and Barack Obama.
“Just from what little I’ve seen of her and Mister Obama, Senator Obama, they’re a member of an elitist class individual that thinks that they’re uppity,” Westmoreland said.
When a reporter sought clarification on the racially loaded word, Westmoreland replied, “Uppity, yeah.”
-Washington Post: “Georgia GOP Congressman Calls Obama ‘Uppity’“

While the term uppity literally means putting on or marked by airs of superiority, the social usage towards blacks originated in the deep south and denotes a black person who does not know their place in society (which is presumably at the bottom). It is particularly used against highly educated and upwardly mobile blacks who refuse to be intimidated. Having been called it a few times, I’ve always seen the term uppity (or the many close approximations being used in this campaign) as a last attempt by the mediocre to maintain their social advantage over a class that they still believe -at least subconsciously- should be working the fields.

The term tends to be used more by uneducated whites and by people with a strong racial animus. Legendary baseball player and southern hothead Ty Cobb once stabbed a black elevator operator for being what he called “uppity”. Several lynchings in the deep south have been said to originate from uppity behaviour rather than criminal behaviour.

The worst race riots in recent US history, Oklahoma and Rosewood, took place in well-to-do black areas rather than the slums. Similarly, most of the recent threats by white supremacists against black institutions have been phoned into universities and churches rather than gang headquarters or other places that produce the often-cited black crime wave. Canada’s worst assault was on the self-contained and socially conservative Africville, located just outside Halifax. Indeed, the animus against successful blacks has always been the strongest in North America.

Why bring this up? Because I’ve been reading the same message ad infnitum and initially from Democrats who recoiled in horror that his “boy” would dare interfere with Hillary Clinton’s apparently God-sanctioned right to become president (a phenomenon that many black liberals -addicted to their handouts and kind words- still deny to this day). Once Obama proved this notion false, Republican operatives stoked the racist streak of small-town America but made sure that no direct racial terms were used. Instead, Obama is called “arrogant”, where a white great orator like Bill Clinton is called … a great orator. He is sarcastically referred to as “the messiah” while Ron Paul, a Republican candidate with notable ground-level support, was merely called populist. Barrack and Michelle are called elitist for their upper class status while John McCain retains his all-American status despite having lost count of his houses.

It might surprise you to know I don’t support Obama’s campaign as it is written on paper – he is not the right man for the job in 2008 unless he is willing to throw many of his supporters under the bus via ignoring all that social reform promised. America does not have enough money for universal health care, etc nor can it afford to turn protectionist just to save a few mid-town jobs. Obama is also going to run into resistance from international leaders if he tries to pull out of Iraq too fast – doing such would leave a security hole that cannot be filled by the poorly-trained Iraqi and and Afghan armies. However, the persistent ugliness from the right and from elements of the left is evoking sympathy for the skinny kid from Chicago that has carried a long-shot campaign just steps from the White House. In the long run, I believe other people will feel the same sympathy as they realize that these uppity/messiah/etc attacks are not merely character assessments or even partisan politics.

There are many legitimate reasons to attack Barrack Obama’s spendthrift platform and his unwillingness to dive into mechanics behind it. That “uppity” and other loaded terms are the predominant attack says more about the nature of Obama’s opponents and what they really fear.

03
Sep

US Election about Identity Politics and Drama

By Cynapse 5 Comments
Categories: American Politics and Politics

As the first (half) black presidential candidate, Senator Barack Obama has made history and furrowed eyebrows. Conservative opponents have accused Obama of playing the race card in lieu of experience or solid policy and using his novelty to gain support. Republican presidential candidate John McCain made the accusation himself, in response to Obama’s assertion that Republicans will try to scare voters because he “doesn’t look like all those other presidents on the dollar bills”:

“I’m disappointed that Senator Obama would say the things he’s saying … Barack Obama has played the race card, and he played it from the bottom of the deck. It’s divisive, negative, shameful and wrong.”
-John McCain (August 2008)

It’s difficult to judge the validity of Obama’s changes when he happens to be running for “the other party”. America’s political environment is cut-throat, after all, and Barack Obama’s supporters have been openly critical of McCain’s age – another demographic trait over which man has no control. Moreover, Democrats have actively targeted socially oppressed groups since the civil rights era, effectively obligating them to pitch their own advances as synonymous with those of blacks, women and gays – particularly if their candidate falls into one of those demographic groups.

Despite overwhelming black support for the Democrats, there has been a recent movement claiming Martin Luther King was in fact a conservative Republican – at least by virtue of his apparent commitment to individualism (e.g. judging someone by the content of their character). Perhaps in anticipation of Obama’s historic appeal, The National Black Republican Association published an essay in praise of MLK and assailing the Democrats’ historically negative history with civil rights:

“During the civil rights era of the 1960’s, Dr. King was fighting the Democrats who stood in the school house doors, turned skin-burning fire hoses on blacks and let loose vicious dogs. It was Republican President Dwight Eisenhower who pushed to pass the Civil Rights Act of 1957 and sent troops to Arkansas to desegregate schools. President Eisenhower also appointed Chief Justice Earl Warren to the U.S. Supreme Court which resulted in the 1954 Brown vs. Board of Education decision ending school segregation.”
-Frances Rice: “Why Martin Luther King, Jr. was a Republican”

The NBRA and like-minded conservatives must have been profoundly disappointed during the opening night of the Republican convention, where the party faithful reacted in earnest to a collage of American icons:

“Much of the early evening was taken up with prepackaged videos. “Country First,” a filmed roll call of American icons narrated by Robert Duvall, kicked things off, and was marred only by the response of the delegates, who cheered wildly when images of Nancy Reagan and George W. Bush appeared but were silent for Rosa Parks and Martin Luther King Jr.”
-New York Magazine: “RNC Speakers Rally Troops to the Best of Their Abilities” (September 2008)

New York Magazine’s perspective was corroborated by RNC featured blogger Shay, an African-American libertarian and owner of Booker Rising (a news site for black moderates and black conservatives):

“Relatively early into the schedule, they showed a convention video featuring both high-profile people and regular folks who’ve done extraordinary things by placing America first. There was a very arousing applause when President Ronald Reagan was shown. Same for President H.W. Bush, and who I believe was John Wayne. However, the hall was significantly quieter than it should have been when Dr. Martin Luther King, Jr. was shown. However, there were no boos.”
-Booker Rising: “Republican National Convention – Last Night’s Speeches”

Despite their lingering disdain for racial civil rights, the Republican rank and file are now quite sensitive to gender discrimination, as evidenced by the strong objection to media criticism of Vice-Presidential candidate Sarah Palin:

“At a press conference here at the GOP convention, female supporters of McCain gave the media a scolding for what they perceive as unfair and sexist treatment of Palin since she was unveiled as McCain’s running mate five days ago.
“We’re not going to have this foolishness,” said Renee Amore, Pennsylvania Republican Party Deputy Chairman. ‘You can do what you want to do, but we’re going to keep coming back at you,’ she added in a chastising tone.
Amore was joined by several other female McCain supporters, who decried rumors circulating on the Internet, which include accusations that Palin faked a pregnancy and that she has belonged to a fringe political group of which some members support Alaska’s secession from the United States. (Palin might not have belonged to the group, but her husband did.) ”
-MSNBC: “GOP Continues to Charge Sexism”

By the same token, few of the vocal female Hillary Clinton supporters have publicly spoken in defense of who may be turn out to be America’s first female Vice President – a woman who has accomplished the feminist ideal of managing both a family and a successful career.

One must wonder what this election is really about, as both parties flaunt and compare their ambiguously-qualified but historically significant candidates while attacking the minimal qualifications of the opposing icon. Obama and Palin have been frequently compared directly -to the complete exclusion of their white male partners- despite the fact that they not even running for the same position.

This situation is indicative of what American politics has become – a reality TV drama with political overtones. Even on Canadian blogs there is more chatter about Obama’s opus and Palin’s persecution than there is about our own recently announced election (irony noted!). Talk of carbon taxes in Canada and soaring deficits in the USA seem to be no match for Bristol Palin’s unwed pregnancy and whether Michelle Obama’s writings on discrimination imply a lack of patriotism. Candidate speeches on energy policy and taxation are treated as an afterthought by the media, more interested in pitting the two tokenized candidates (and their families) against one another. The 2008 US election belies the fact that either of the presidential teams are likely to govern from the center, regardless of whose fears and aspirations are stoked in exchange for votes. The economy cares little for well-coiffed mascots.

03
Sep

Anti-war, anti-wise

By Cynapse 0 Comments
Categories: Life and Times

The antiwar protest is perhaps the greatest expression of free speech in the Western world. To be involved in antiwar movements can mean literally lead to state-sanctioned death in many countries around the world. Conversely, spreading alternative views and news about national war efforts rarely leads more to a lot of shouting matches south of the border. The same can be said for the pro-choice movement, which also faces an uphill battle in the conservative United States.

That still doesn’t excuse this (courtesy of the protests in near the 2008 RNC):

alternative antiwar news ... too bad it\'s followed up by nonsense

Lesson #1: Know your message before proudly stating it

Further Research


RSSQuick Shots




Categories


Archives