Posts tagged: bailout

Failed Bailout and Credit Card Interest Rates

The $700 billion bailout plan was voted down today. Apparently Republicans in the House of Representatives were angry that Nancy Pelosi scolded them. That’s pretty much what Representative John Boehner said about why so many Republicans voted against the bill. You can read a transcript of her 16 minute speech here on The NY Times website. Boehner thought that the bill would have passed if Nancy Pelosi hadn’t made her speech.  I watched the speech and I thought she was awesome. I find it hard to believe that her speech so traumatized House Republicans that they could no longer vote for the bill. What a bunch of crybabies.

The vote was Democrats 140 yes and 95 no. Republicans 65 yes, 133 no. The bill is H.R. 3997: Emergency Economic Stabilization Act of 2008. It is an amendment to a bill called Defenders of Freedom Tax Relief Act of 2007 and the title of that bill is: To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes. Huh? I kid you not. Where did they get that bill title? Well, this OpenCongress website tries to explain it. It’s enough to make your head spin. I’m getting dizzy.

This is the bailout that a few days ago Bush said we urgently needed with no oversight or regulation attached to it. The House is going to take off tomorrow and Wednesday for Rosh Hashanah and reconvene at noon on Thursday. I guess they like to sleep late.

I love this quote in the New York Times, “This is a huge cow patty with a piece of marshmallow stuck in the middle of it and I am not going to eat that cow patty,” said Representative Paul Broun, Republican of Georgia.” Not even with an ice cold Coke to wash it down?

I was thinking that since they were working so hard on bailing out Wall Street that maybe they could give consumers a break on credit card interest rates too. I think that 30% is a little steep. I received an offer in the mail today for a MasterCard. It says, “save BIG on Purchases and Balance Transfers.” There is a 0% percent rate for the first 15 months. After that it goes to 8.99%. I am just going to round these numbers up, OK? Let’s make that 9%. If I take a cash advance the rate goes to 24%. Yikes. The default APR is 29%. Now to the fine print. If my payment is received late, I fail to pay at least the minimum due, my payment is not honored by my bank, or I exceed my credit line, the APR on all balances may be increased to the applicable Default rate, 29%. Ouch. I bet it is more like WILL be increased instead of may be increased. It sounds like extortion to me.

There are five states with no cap on interest rates. They are Delaware, Virginia, Utah, South Dakota and New Hampshire, the “Live Free or Die” state. Can you really live free if you are paying a 30% rate on your credit card? Arizona has a cap, but it is 36%. Nice.

The federal government used to have “usury laws” that set a limit on the amount of interest that could be charged on a loan. The federal usury laws were repealed during the Great Depression. I hope we don’t have to start referring to it as the 1st Great Depression. Many states had their own usury laws. In 1978, the Supreme Court ruled that a national bank could charge the highest interest rate permitted in its home state. It didn’t matter where the customer lived. Nakedcapitalism.com has an interesting article about this called “The Pentagon as Financial Regulator.” It explains how credit card companies took advantage of this. Frontline on PBS.org has a great article about credit cards too, “Eight Things a Credit Card User Should Know.”

I think that if we capped credit card interest rates at say 12%, consumers would get some relief and credit card companies would cut down on mailing credit card offers. That would make the postal workers who have to deliver all these offers happy too.

Have you ever heard of the Glass-Steagall Act? Me either. It was enacted in the Great Depression to prevent commercial banks from underwriting stocks and bonds. Frontline on PBS.org has a shocking article about that too.  You might recognize some of the names that are mentioned in the article like Senator Phil Gramm and Robert Rubin, the Secretary of the Treasury. Glass-Steagall was watered down slowly over the years and finally repealed in 1999. The Financial Services Modernization Act of 1999 was enacted to replace Glass-Steagall. It replaced a good, common sense law with a bad one. It was enacted because hundreds of millions of dollars were spent on lobbyists to enable the merger of Citicorp and Travelers. The Secretary of the Treasury of the United States, Robert Rubin, accepted a job with the merged companies as soon as he knew Glass-Steagall was going to be repealed. It is an absolutely disgusting story and a perfect example of what is wrong with this country.

If you go to the United States Department of the Treasury website they paint a glowing picture of Rubin. It says that, “Upon Mr. Rubin’s retirement, President Clinton called him the “greatest secretary of the Treasury since Alexander Hamilton.” He didn’t retire, he went to work at Citigroup. Disgusting. This sort of thing should be illegal and it still isn’t. Why?

Here is another article about him in the New York Times. Apparently he is still at Citigroup, but he doesn’t know anything about what happened to the markets and it wasn’t his fault. He has made over $100 million since he started working at Citigroup. Not bad for a retired guy.

I’m voting for Barack Obama. You should too.

Say No to the Bailout

Bush wants to shove this bailout down our throats and he is in an awful hurry to do it. Bush basically wants us to give him a  blank check and trust him to do the right thing. And he wants it done this week. Alarm bells should be clanging all over the country. He has not done the right thing in 8 years. Why would he start now? I don’t trust him AT ALL and you shouldn’t either. He lied to us about Iraq, lied to us about the Patriot Act and he lied to us about the tax cuts for the rich that he rammed through Congress when he first took office. He is lying now. He has never apologized or admitted that he is wrong and he never will. He is a a national disgrace.

I guarantee you that the bailout will be worse than the problem it is supposed to fix. It is an absolutely stupid idea that will reward the greedy, incompetent, morons on Wall Street for being greedy, incompetent morons. It will stick hard working Americans with another bill that they can’t afford. Let all the bigshots on Wall Street pay for the bailout with the millions and millions of dollars in their golden parachutes. They screwed it up big time and will walk away laughing, live in luxury and let some man or woman making $12 an hour pay the tab. No way.

I am afraid that our representatives in Congress will not have the backbone to stand up to him over this. I don’t understand why. Oh, they might put on a little show and complain a little bit, but they will probably cave in and give Bush what he wants. I don’t have any confidence in them at all that they will do the right thing either. It would be nice to see, but they will probably roll over like they usually do.

Maybe we can inspire them a little. Let them know we will stand with them if they will stand up to Bush.

Write your Senators and Congressman today. Right now. I did it this morning. It’s easy. In a few days it could all be over. Tell them to say no to the bailout. Tell them to say no to Bush. Tell them to come up with another solution instead of sticking it to the little guy. Tell them to have a backbone and do the right thing.

You can find your U.S. Senator’s email address here. You can do this in 10 minutes or less. Let them know you want them to stand up to Bush and say no to the bailout.

You can find your Representative’s email address here. It’s easy and takes 10 minutes or less.

You can get phone numbers and call them at either link too and regular mail addresses, but this is all going to be over in a matter of days.

You can email both of your Senators and your Representative in the time in takes to watch 1 half hour sitcom!

While you are at it, send an email to Barack Obama and John McCain and tell them to say no too. I’m going to do that right now.

Paul Krugman was on The Bill Maher show Friday night and said, “We really need a better government than the one we’ve got.” I love it.

I’m voting for Barack Obama. You should too.

Note added on October 22, 2013: For more information about the political process, both major parties and how our government works visit Politics.Answers.com.

 

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