Okay, you probably have a credit card. You’re hoping to get air miles for a vacation.
Let’s say you charge lunch every workday, at say $5 a day, very modest. Twenty days a month is $100. $1200 a year. You do this for three years. Your burgers have cost you $3600– if you pay cash.
If you charge them to get the air miles, and pay the minimum every month, at the end of the three years you will still owe $2243 if you’re paying 29% interest –or so my financial guru tells me.
There went that vacation.
How did we get in this mess? Up until the seventies, we had usury (say “YOU-sur–ree”)laws on the books in most states. They prevented charging over 10% interest on things like mortgages. We used to call rates like 29% LOAN SHARKING. But in the 70’s we had some serious inflation and the laws were overturned. A mortgage at 12% was a steal in the early 80’s.
Now fast forward to today. If your bank pays you 1% on deposits, you’re lucky. Mortgages can go for 4%. Yet some credit cards charge 18-21%. Let your credit score drop, and your rate can soar to 29%. How does this happen?
The financial services lobby is one of the biggest on Capitol Hill. They make sure that Congress does not return to usury laws. OpenSecrets.org says the financial services/realestate/misc. financial lobby spends $182 million a year — equally divided among Democrats and Republicans. I don’t know exactly how much the financial services lobby itself spends.
Predatory lending practices (29% interest rates) work because the lender knows via computer modeling and data mining pretty much to the penny how much they will end up making — and how many people will end up declaring bankruptcy — as a result of a given interest rate. They care a great deal about the first number. The last one? That’s not their problem.
So what should we do? Aside from taking your lunch, which is more sensible anyway nutritionally, we need to drive a stake through the wallet of the lobbyists. Read The Accidental Senator and The Accidental President. Get on board with the Constitutionally mandated campaign reform.
Congress has made it plain they cannot regulate their own campaign finances. A) it takes forever and B) it gets gamed. In trying to keep out businesses and unions, we’ve come up with PAC’s, super PAC’s and 527s. We don’t know where the money is coming from, but it is coming as a tsunami. Likely $5 Billion will be spent this year on the elections of 435 Members of Congress, 33 Senators and the President/VP ticket. And the people elected say they will represent YOU? I don’t THINK so.
In my books, the Constitutional Amendment that regulates federal campaign finance reform is simple. All money for campaigns comes ONLY from individuals and goes only to ONE candidate for whom they can vote in any given race. You can give money for one candidate seeking to be your US Representative, your US Senator and the President/VP ticket. (If there’s a primary and your gal loses, you can give again to your guy in the fall election.) The candidate then pays all the expenses of the campaign. No one loans him or her an airplane, or brings donuts to the rally, or pays for a poll.
The lobbyists HOWL that this will be a violation of free speech. THEY’LL HOWL BECAUSE THEY ARE WRONG.
Speech is speech and money is money. And if this Amendment is in the Constitution, it is, by definition, constitutional.
Besides, free speech is not unlimited. You cannot make threats of terrorism, you can’t yell, “FIRE!” in a crowded theatre. You can call the President a bum, but you cannot call for his assassination.
Your group can still exist and you can “endorse” a candidate –much like a newspaper endorses a candidate, but you can’t spend money on the furtherance of anyone’s campaign or the hindrance of someone else’s. Do that and you’ll spend five years in federal prison — WHERE THERE IS NO PAROLE.
Just think, without the financial services lobby calling the shots on Capitol Hill, think of what we, the people, could do.
1. We could demand — and get — a return to usury laws. This would protect people from Loan Sharks in Three Piece Suits.
2. We could demand — and get — Federal law that would require financial documents be written in plain English, so no one trips in the fine print.
3. We could ban junk mail that poses a risk of identity theft. We wouldn’t all need shredders to protect us from our own mail.
4. Lawmakers would look at proposals about banking and investments in what is in the best interest of the people back home, not the lobbyist taking them to Pebble Beach for a weekend of golf. (Besides, they won’t be going to Pebble Beach — under my plan, they’d have to declare it as income and pay taxes on the fair market value of the weekend. Failure to do so would land them in the federal pen for five years without parole. Lobbyists would also have to file paperwork saying what they spent on the lawmaker or, you guessed it, they’d spend five years in the federal pen without parole.)
Under my Constitutional Amendment, no one in his right mind would have allowed mortgage-backed securities. Why? If I hold your mortgage and you default, I get your house. If I own 1%, what do I get? A brick? If I knew this back then, where, oh where were our watchdogs? They were out eating fresh meat while the financial guys wrote their own tickets.
But I rant, and I’d rather have lunch. I won’t go out for a burger, but if I do, I’ll pay cash, thanks. And I’ll count my change.