Banking @ MindSay 
The United States Congress has okayed a $787 billion stimulus package in an attempt to stop the economic slide and, hopefully, put the economy back on track. This package was approved along party lines, after much in-fighting, for the incumbent democratic administration. As in the past, there has been talk about bipartisanship, but evidence is definitely lacking. Less than 5 months ago, a similar package was approved, with similar intent, for the republican administration; to date, there has been no change in the economy. Are we headed there again?
The monies that were doled out had no effect on the economy. A lot of bad banks got money which was spent buying up the worst banks to make the bad banks worse. The mortgage crisis that everybody claimed, and still claims, is responsible for the economic collapse is no better off; if anything, it is worse off.
With the first stimulus/bailout monies, there were no dictates as to how the monies would be used, and today, billions of dollars are owed the government by the tax payers but the government claims that it does not know how the money was spent. Yet, it is common knowledge about how much the banks got and how much the automobile manufacturers in Detroit got. In both cases, it would appear that the government got it wrong. Why put the money in the hands of the very institutions that clearly demonstrated that they have no ability to manage money, structure or re-structure a business so it would operate in a profitable manner? The banks spent their money to benefit them and to do nothing for the economy. They are still in the same state as before getting the money. The Detroit boys wanted, and got, money to continue building cars that the consumer could not buy, because of the state of the economy. Both institutions are now asking for more money as they continue to lay off employees. What happened to the job creation?
With the present stimulus package, the current administration claims that the economy would benefit from the creation of jobs, by handing out money to be spent on projects like upgrading the nation’s infrastructure, energy, healthcare, education, etc. There is suppose to be a tax credit of $400.00 /yr or $13.00/wk for qualified individuals (twice that for qualified couples). There are other tax credits, like no alternative minimum tax (a break for the “wealthy”). President Obama is also expected to tackle the housing crisis by having mortgage holders decrease interest rates and possibly writing down some of the principle. There are, I understand, about eleven hundred pages of “to do list” in the stimulus bill.
Like the Republican Party, the Democratic Party appealed to a side of the American psyche that makes the size of this stimulus package appear necessary. They made compelling arguments to support its benefit. But hidden from view is a scary truth. Consider a construction company that is hired by a government agency to rebuild a bridge. That construction company must have employees, equipment, fuel to run the equipment, etc, etc as real time expenses. The construction company is not paid up front. Like most government contracts, payment in 60 days is a luxury. If, as in many cases, the construction company needs an advance in funds in order to hire more people (creation of jobs), upgrade and support the equipment etc. Where will the company get the money from? The banks are not lending money. You get the idea!
Will the economy respond, or will this be a mirror image of the previous attempt to halt the economic slide?
It appears to me that our government has been dealing with this crisis similar to a doctor who treats the symptoms, and ignores the etiology. No one has precisely diagnosed and document, definitively, the cause of the economic slump. If the disease is correctly diagnosed and treated, the symptoms will disappear. For example, the banks, with all of the money handed to them, are not making loans. They are not making loans because they cannot package and sell them as before. They cannot sell the loans because investors are not buying them, and the investors are not buying loans because the banks sold bad loans in the past. What will a tax credit do for a home buyer who cannot get a mortgage? How will a decrease in mortgage rates or write down of principle solve this problem?
Are we heading for more of the same?
About a month ago, I received a late notice in the mail from one of my creditors. This surprised me, as I haven't been late on a payment in a long time. So I looked in my register and saw that, yes, I did mail it a bit late and sometimes those late notices are sent within 24 hours of the due date. But surely they had it by now.
A week or so later, I got a second late notice from them. WTF? So I go onto my bank's website and find, to my dismay, that the check has not been cashed. To my further dismay, I see some ugliness.
See... the outgoing mailbox here at our apartment does not lock. It's just a standard mailbox such as you might see atop a post at the side of the road. Evidently, some fucktard had stolen the contents of said mailbox one day... a day in which I happened to mail out four bills. (Yes, I do pay most of my bills online, but some of my creditors either aren't set up for that or charge for it.) This asshat then proceeded to make two payments via telephone to his credit card using my checking account number.
This was really stupid of him, since when you make a payment to your credit card, your name shows up in the information line on your bank statements. So yeah... I got the dude's name and proceeded to forward it to the police... who will probably do nothing about it.
Anyway, I was able to contest those charges and get them reversed. But of course, the credit didn't happen immediately, and in the intervening time, my rent check bounced. And all four of those other bills were late. And now I had to close the account and get a new one. Pain in my fat, hairy ass.
Now we get to the real point of this entry.
After getting my new account number, I ordered a box of checks. Because I knew I had rent coming due on the first of the month, I did the expedited order, figuring that if it didn't make it here by the first, the order would certainly be here by the fourth (today), in time for me to have the check ready for them tomorrow when they pick them up.
But as of my return from work today, no checks. So I immediately zipped off down to the bank to get a money order before they closed. Wasted that extra to expedite the checks, and now had to pay for a money order on top of that.
And of course, after returning from the bank, the delivered checks were sitting in front of my door.
The people who govern America on all levels have a tendency to place the burden for solving problems on consumers. But consumers cannot solve the problems they are encouraged to solve. Some are simply unwilling to do what is required, some cannot afford to do what is required, and some who are willing and can afford to simply cannot.
I have written about this before concerning water conservation:
"You present eight suggestions for ordinary people to follow in their homes. And although each would indeed save water, the effectiveness of these solutions would depend entirely upon the number of people you could get to work together in these ways. But anyone who believes that it is possible to get enough people to cooperate in such ways to have a significant effect on the problem is a dreamer.
Yet I can think of things that can have significant effects on the problem. I have over the past many years lived in seven American states, and not once have I lived in a house that had insulated hot water pipes. As a result, one had to run the hot water two or three minutes before the water became hot enough to bathe in. And I suggest that this is happening in almost every American home. This waste could be eliminated with good building codes. But building codes require businesses to tackle the problem, and American legislators are not inclined to do that.
Here in Texas, cities are always imposing watering restrictions; yet they allow builders to put houses on unstable soil using foundations not meant for such conditions. The owners of these homes are told to keep the soil around their foundations moist year round to ameliorate foundation problems. And one city I lived in that had watering restrictions also had a recycling program that required citizens to wash any glass ware that was to be recycled."
Any water saved by the eight suggestions would be dwarfed by better building codes.
Similar problems abound concerning recycling. Many are unwilling to go to the trouble, and others simply cannot recycle. I live in a single family home with a two-car garage, but I don't have room for multiple boxes into which to separate and store recyclables. And the alley behind the house is not wide enough to accommodate recycling bins. People who live in apartments have even less room. Many elderly and urban dwellers don't drive or have vehicles into which they can load their recyclables and cart them to recycling centers. A program requiring consumers to recycle can never succeed.
But my present concern is a more serious problem—protecting our good credit. Given the explosion of identity theft, insurance companies are now selling identity theft and credit protection insurance. But identity theft and credit protection are not consumer problems; they are banker problems caused by banking practices.
Why do bankers and other businesses continue to use social security numbers as identifiers? Why aren't the identities of borrowers verified by bankers? Why do they rely on signatures on credit card receipts and loan papers when fingerprints would effective deter fraud, especially if fingerprints were accompanied with a photograph? Technology to enable both of these has been available for some time. And finally just who benefits most from so-called good credit?
A consumer with good credit does enjoy some convenience, but s/he pays a hefty price for it. Consumers who don't use credit or use it sparingly save all the money that goes to banks as interest. As a result, they can buy more, not less. And if everyone had bad credit, the bankers would either have to find other means of identifying reliable borrowers or curtail their lending. But lending is the mana of banking. No lending, no profit. Consumers with bad credit save the money that consumers who use good credit regularly send directly to banks.
So as long as bankers continue to use the practices that allow fraud to flourish, consumers will always be at risk of identity theft no matter what safeguards they engage in. Consumers cannot solve the problem, only bankers can. But the bankers will lead you to believe that they can sell you something that will protect your good credit when all they really want is more of your money. The good credit they want you to pay to protect is the credit that is good for them, not you.
©2008 John Kozy
Man I have to tell you Church’s Chicken is one of the best fast food franchises serving good tasting Chicken. Alas, being a confirmed Islamophobe, I may think twice before I patronize Church’s Chicken again.
JRH 5/1/08
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