The Bonddad Blog: Two Really Important Points From Barron's
There are two points that I find fascinating. First, his 2nd point:
So far this decade, nominal gross domestic product has risen at a 5.1% pace, while outstanding credit-market debt is increasing at 8.4%, notes Punk Ziegel analyst Richard Bove.
[T]he perfectly casual, matter-of-fact mention of similarities to 1929 in a conservative financial publication.
The annual Medieval Fair in Norman, Oklahoma takes place this weekend. I always try to make it a point to go. You get all these normal everyday people try to dress in anachronistic costumes, talk with fake British accents, and generally make complete fools of themselves.
The crowd's favorite events are always the Jousting Tournament and Human Chess Game. You can always go and eat food that's not good for you, watch exotic dancers, fire-eating comedians, watch artists and crafters at work and generally marvel at the merriment around you.
If the Medieval Fair comes to town, you know the Oklahoma City Arts Festival is not far behind.
If you are from the Oklahoma City area, these events are not to be missed.
Josh Marshall has a new angle to the Carol Lam firing based on a forgotten unindicted co-conspirator.
I echo the sentiments of the DailyKos poster Thomas C:
There's something terrible going on in our government, and the particular problem I speak of is centered in the U.S. Justice Department. Good lawyers who are doing their best (and have done their best) to see that the laws of our nation are faithfully executed have been subject to intimidation and coercion. They have been belittled, slandered and generally treated with disdain. Some of these lawyers have been forced to choose between their oath and their careers. And now we know that some sacrificed their careers rather than violate that oath. Some of these lawyers are speaking out now. We're all familiar with the Attorneygate Eight. But others are speaking out now too, lawyers like Sharon Eubanks. Ms. Eubanks has firsthand knowledge of the Bush administration's political interference in the federal government suit against the tobacco companies. Joseph D. Rich, a Justice Dept. attorney until 2005, had an op-ed in today's Los Angeles Times that asserts that the politicization of the Justice Dept. has been pervasive under this administration, and that our system of justice has been traduced.
Look, I've got to concede that many of the people who have so disrespected these lawyers (and have thereby shown disrespect for the very practice of law) are themselves lawyers. Gonzalez is a disgrace. Kyle Sampson is obviously a very misguided young man. Harriet Miers is a pathetic striver who has readily exchanged her professional dignity for the approbation of an ignorant and shameful president. My profession is an honorable one, but we have always had our share of miscreants and opportunists.
David Iglesias makes me proud to be a lawyer. Carol Lam makes me proud to be a lawyer. So do Cummins and Chiara and McKay and the rest of the Attorneygate Eight. So do Sharon Eubanks and Joseph Rich. I think Patrick Fitzgerald is a great prosecutor and a great lawyer, but he was doing his job when he prosecuted Libby. The lawyers I've just cited did more than do their job. Some of them - perhaps all of them - honored their oath and their profession when they wouldn't bend to the will of political hacks like Gonzalez and Rove.
My profession has to speak out on this subject and speak clearly. We need to say something as a profession. The ABA and the state bar associations need to express solidarity with these people. David Iglesias is getting swift-boated in New Mexico. Each of these lawyers has already suffered aspersions on their competence by Bush's thugs.
The roofers finished putting the new roof on Wednesday and the contractors finished constructing my new carport this week also. It was none too soon. Yesterday and today it has been raining cats and dogs; so they are both certainly getting a good workout. The carport is leaking in several places but I'm sure that it will get fixed. If not, I'll raise the roof with the owner of the business that's making the repairs.
However, it feels good to have a (new) roof over one's head.
Over the last six years, this Justice Department has ignored the advice of its staff and skewed aspects of law enforcement in ways that clearly were intended to influence the outcome of elections.
It has notably shirked its legal responsibility to protect voting rights. From 2001 to 2006, no voting discrimination cases were brought on behalf of African American or Native American voters. U.S. attorneys were told instead to give priority to voter fraud cases, which, when coupled with the strong support for voter ID laws, indicated an intent to depress voter turnout in minority and poor communities.
Something that has not been discussed much is how official debt obligations pushed onto the middle class -- such as student loans -- are a form of taxation. It used to be the case that scholarships and grants were used to help a student pay for a college education. Neither scholarships nor grants are used much anymore. Grants were provided through taxation and scholarships were provided by wealthy benefactors who bestowed endowments to colleges and universities so that non-wealthy students could attain a college degree.
There used to be a value system among wealthy individuals called noblesse oblige. Sadly, it does not appear that the current generation of wealthy have been taught this value system.
What few people know is that until the changes in the bankruptcy law in 2005, income tax obligations were dischargeable under certain conditions while student loan debt was not except under exceptional circumstances. In other words, it was easier for a high-earning wealthy person who didn't pay tax obligations to get rid of their tax debt than it was for a poor college graduate to discharge student loan debt. Income tax obligations were routinely wiped out in bankruptcy automatically whereas a disabled person who owed student loans would have to (and still has to) file a lawsuit against the government (known in bankruptcy court as an "adversary proceeding") in order to have a chance at getting the unsecured student loan debt discharged.
By the way, what did these non-tax-paying people do instead of paying their taxes? They lived it up: big houses, fancy cars and vacations. They often were held up as shining examples of success in their churches and communities. If their friends only knew what I knew.
As accountants and lawyers say: "All great wealth starts with a crime."
Obligations to pay for health care and pensions are still dischargeable in chapter 11 bankruptcy proceedings. Chapter 11 is a reorganization bankruptcy mainly used by corporations, but also used by wealthy (or at least seemingly wealthy) but largely-indebted individuals. That is why I have suggested that we create a national health care system and expand Social Security into a national pension system. Large corporations will deliberately underfund pension obligations because they will be able to overpay executives and pay "retention bonuses" to executives before filing for bankruptcy.
By way of analogy, if a consumer debtor did what corporations are allowed to do in chapter 11 proceedings, the bankruptcy trustee would invalidate the consumer debtor's transfer of their property and the court would probably dismiss their bankruptcy without a discharge.
We need to change health care and pension obligations to a kind of "priority debt."
For those of you unfamiliar with bankruptcy law, let me explain what I mean. There are basically three levels of debt in bankruptcy: secured, priority and unsecured non-priority.
A secured debt is one that is tied to a piece of property (such as your home mortgage and car payment). Priority debts are unsecured debts that are non-dischargeable for public policy reasons. Examples include most taxes and child support obligations. Unsecured non-priority debts are all other debt obligations such as medical bills, credit cards, payday loans and signature loans. Student loan debts are unsecured non-priority debts that are non-dischargeable except for "undue hardship."
When the Bankruptcy Abuse Reform Fiasco ("BARF"), aka BAPCPA, was passed and signed into law in 2005, it made debt obligations that middle-class taxpayers would incur harder to discharge. The court fees were increased almost 50% (from $209 to $299 for chapter 7 and from $179 to $274 for chapter 13). Attorney fees also increased by about the same percentage. I used to be able to have someone come into my office, go over their financial information, analyze it and determine if bankruptcy was a proper remedy in about an hour. Then I could prepare the paperwork in about another hour. Now things are completely different. I have to have three different meetings with the potential client: one free consultation on the ramifications of bankruptcy, wherein I have to give them disclosure forms mandated by the new law, inform them of the cost, tell them about the credit counseling requirement, etc; then I have to have a separate meeting wherein I collect their 6 months of pay stubs for the Means Test calculations (which itself takes a couple of hours); then the rest of the paperwork takes another hour or two to prepare. Then I have to re-review everything before filing as the new law creates a new liability on me personally to verify that everything they told me is true.
I've gotten a little off-topic here. But the point is that more debt obligations that used to be borne by the wealthy are being foisted onto the middle and lower classes and the only safety net -- bankruptcy -- is being restricted and made more expensive to those who have the least ability to pay. Debt obligations (student loans, medical bills and loss of pensions) are becoming a hidden tax that only middle and lower class workers pay.
The question is: how long will working class Americans be willing to accept subsidizing the lifestyles of the rich and famous by taking on their debt obligations?
Sen. Kennedy (D-MA) makes a very good point. The prosecutor firings and replacements just happen to be in all the key 2008 swing states, and not in any states that are safe for either party -- with the exception of California, where the Lam -Cunningham investigation is. Why do you think that would be? -- Josh Marshall
WASHINGTON (Reuters) - An FBI agent was warned to keep quiet about the dismissal of a U.S. attorney after he told a newspaper her firing would hurt the agency's ongoing investigations and speculated politics was involved, a U.S. Senate panel heard on Tuesday.
'POLITICS INVOLVED?'
Carol Lam, who helped win the 2005 political corruption conviction of then-U.S. Republican Rep. Randy "Duke" Cunningham of California, was among seven prosecutors fired on December 7.
On January 13, the San Diego Union-Tribune quoted Dan Dzwilewski, head of FBI's San Diego office, as saying Lam was crucial to ongoing investigations. "I guarantee politics is involved," he was quoted saying.
Feinstein said her chief counsel had called the FBI's San Diego office to verify the accuracy of the story. She said the office confirmed it was true "but they also said they'd been warned to say no more."
But what is the actual pattern of prosecutions by U.S. Attorneys under the Bush administration? Here's a month-old statistical study that seems to me to be worth wider examination. The authors of the study notice a fascinating wrinkle: there is not much partisan disparity in prosecutions at the state-wide or federal level, where the national press keeps tabs. But when you look at the local level, below the radar of the national media, you find something much more striking. If you remove Justice Department investigations of State-wide and federal elected officials from the tally, and look solely at investigations of local officials, you're left with a stunning disparity:
From 2001 through 2006 the Bush Justice Department investigated elected Democratic office holders and office seekers locally (non-state-wide and non federal offices) at a rate more than seven times greater (nearly 85 percent to 12 percent) than they investigated local Republican elected office holders and seekers. This was so even though, throughout the nation, Democrat elected officials outnumber Republican elected officials at the rate of only 50 percent to 41 percent. Nine percent of elected officials are Independent/Other.
This strikes me as classic Rove. He works below the radar, using the U.S. Attorney system to throttle the opposition party, knowing that only local media will pick up on the local stories and that the pattern likely won't emerge in the national media. Hence the panic from Gonzales when the media started pulling at the thread. Pull some more, guys. We may have deep, deep corruption of the justice system, all designed to foment unstoppable, uncheckable one-party rule.
Now, again, life is made of grey areas. And our laws and regulations often take into account that even people of good faith may not be able to impartially investigate their own. That's why we had the Independent Counsel statute. The partisan affiliation of prosecutors and judges often hangs in the background of cases. And probably most Democrats and Republicans feel a bit better when a member of their party is brought down by a prosecutor of the same party because then you can assume -- whatever fairness or unfairness may have been involved -- that partisanship wasn't a factor.
So, all of this is to say that no system is perfect and partisan affiliation may distort the justice system at the margins.
But none of what we're seeing here is at the margins. What we seem to see are repeated cases in which US Attorneys were fired for not pursuing bogus prosecutions of persons of the opposite party. Or vice versa. There's little doubt that that is why McKay and Iglesias were fired and there's mounting evidence that this was the case in other firings as well. The idea that a senator calls a US Attorney at home just weeks before a federal elections and tries to jawbone him into indicting someone to help a friend get reelected is shocking. Think about it for a second. It's genuinely shocking. At a minimum one would imagine such bad acts take place with more indirection and deniability. And yet the Domenici-Iglesias call has now been relegated to the status of a footnote in the expanding scandal, notwithstanding the fact that there's now documentary evidence showing that Domenici's substantial calls to the White House and Justice Department played a direct role in getting Iglesias fired.
So what you have here is this basic line being breached. But not only that. What is equally threatening is the systematic nature of the offense. This isn't one US Attorney out to get Democrats or one rogue senator trying to monkey around with the justice system. The same thing happened in Washington state and New Mexico -- with the same sort of complaints being received and acted upon at the White House and the Department of Justice. Indeed, there appears to have been a whole process in place to root out prosecutors who wouldn't prostitute their offices for partisan goals.
We all understand that politics and the law aren't two hermetically sealed domains. And we understand that partisanship may come into play at the margins. But we expect it to be the exception to the rule and a rare one. But here it appears to have become the rule rather than the exception, a systematic effort at the highest levels to hijack the Justice Department and use it to advance the interest of one party over the other by use of selective prosecution.
(Emphasis mine) To read the rest of Marshall's post, click on the title.
Scott Krippayne is a Christian pop artist that got attention with his first hit I'm Not Cool. The video below is one from YouTube where someone took his song and put it to Sonic the Hedgehog video clips. I could not find a video of Scott Krippayne doing this song; which is surprising, because it was such a big hit on Christian radio.
He also had a pretty song May I Have This Dance. Here he is performing his song live with this video on YouTube.
Both songs can be found on his All of Me
In an editorial at Findlaw today former legal counsel to President Nixon during Watergate, John Dean, writes that if you want to understand the current US Attorney firing controversy, you need to understand the "unitary executive" theory:
Professors Manheim and Ides trace the origins, evolution, and current uses of the unitary executive theory. While it is beyond the scope of their analysis, they also, along the way, provide information useful to deconstruct and critically analyze this concocted effort at legal (and historical) legerdemain. This is not the place for me to unload on this hogwash theory, but I must pause to comment, at least, on its purported links to Alexander Hamilton's purported vision of "a unitary executive."
This was not remotely Hamilton's vision. Listen, for example, to what Morton Rosenberg says; he is a specialist in American Public Law at the non-partisan Congressional Reference Service of the Library of Congress, and he is described by many of those who know him as the smartest guy in the place. Rosenberg was one of the first to correct this loopy scholarship when it began appearing in the early 1980s.
Rosenberg places Hamilton in a realistic context, as he knocks down several shaky pillars upon which unitary executive theorists have tried to build: "The framers had no reason to envisage the management of an industrial nation as the essential function of the office [of the president.]," Rosenberg explains. "Whatever managerial insights Hamilton had were confined to commerce, banking, and monetary policy…. Nor did [the framers] conceive of the presidency as an institutionalized representation of popular will distinct from, let alone capable of opposition to, the will expressed by the legislature. Even Hamilton's most strenuous defenses of executive authority emphasized the president's role as the managerial agent for the legislature, not his popular independence in reflection of some other popular will."
Manheim and Ides explain that the essence of the unitary executive "theory" is "more about power than it is about law." And power, here, means presidential power: The "unitary executive" theory is a theoretical, legal, historical, and Constitutional hook conservatives have invented to expand presidential power.
These "unitarians" postulate, as Manheim and Ides note, "that the authority to enforce federal law and to implement federal policy rest exclusively in the Executive Branch and, most importantly, the ultimate prerogative over this executive function is vested solely and completely in the President, who sits atop the hierarchy of executive power and responsibility." This exclusivity, in the unitarians' view, precludes any but the most minimal role for Congress: Its role, they believe, is simply to decide whether to appropriate money; otherwise, it must butt out completely.
In a post today over at TPM, Josh Marshall expresses his incredulity at Michael Kinsley's unwillingness to believe that the US Attorney firings (or "resignations" as the President puts it) is anything other than an ordinary business-as-usual act by the White House. As Josh Marshall says:
There are many people in this conversation trying to avoid the issues, confuse the issues or just ignore them. And more than a few people are just plain confused. But it's not that complicated. Administration officials have repeatedly and demonstrably lied about the firings. And there is now abundant evidence of a pattern of using the president's power to hire and fire US Attorneys to stymie public corruption investigations of Republicans and use the Justice Department to harass Democrats by mounting investigations of demonstrably bogus 'voter fraud' claims. It's really that simple.
Charles Hugh Smith over at OfTwoMinds.com has written a thought-provoking post about the potential effects of high-risk investments in subprime mortgages and the sale of derivatives getting wrapped in with AAA-rated trusts. Charles says that according to his memory of the book Fiasco: The Inside Story of a Wall Street Trader
He admits he is an amateur. But then again, so am I. Still, it is worth considering -- especially given how many retirement accounts are invested in them.
From his editorial in the New York Times:
Young men and women are leaving college with debt loads that would break the back of a mule. Families in many cases are taking out second mortgages, loading up credit cards and raiding 401(k)s to supplement the students’ first wave of debt, the ubiquitous college loan.
At the same time, many thousands of well-qualified young men and women are being shut out of college, denied the benefits and satisfactions of higher education, because they can’t meet the ever-escalating costs.
You want a recipe for making the U.S. less competitive over the next few decades? This is it.
Tamara Draut, in her book, “Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead,” tells us:
“Back in the 1970s, before college became essential to securing a middle-class lifestyle, our government did a great job of helping students pay for school. Students from modest economic backgrounds received almost free tuition through Pell grants, and middle-class households could still afford to pay for their kids’ college.”
Since then, tuition at public and private universities has soared while government support for higher education, other than student loan programs, has diminished.
This is a wonderful example of extreme stupidity. America will pony up a trillion or two for a president who goes to war on a whim, but can’t find the money to adequately educate its young. History has shown that these kinds of destructive trade-offs are early clues to a society in decline.
The kids who graduate with enormous debt burdens — $40,000, $80,000, $100,000 or more — face a range of uncomfortable and even debilitating consequences, the first of which is the persistent anxiety over how their loans are to be repaid.
I’ve spoken recently with a number of law students who have already decided to go into corporate practice because their first choice — public interest law — would not pay enough to cover their loans. Many students have turned their backs on teaching for the same reason.
At that stage of life, you shouldn’t have to choose between a job you would love and one that you would take simply because it would pay the bills. Talk about stepping on a dream.
There are also plenty of cases of students who have postponed marriage or buying a home or having children because of their college loan obligations.
And then there are those who never see a graduation day. There’s no way of telling what talents have been squandered, or what great benefits to society have been lost, because bright students who were unable to afford the costs have been forced to leave college, or never went to college at all.
In a nation as rich as ours, it should be easy to pay for college. For some reason, we find it easier to pay for wars.
The unease at the way the system benefits the well-off is captured by the decision of 120 billionaires, including Warren Buffet, America's [now second] richest man, to found a pressure group to oppose the elimination of taxes on capital gains and inherited wealth. Buffet's argument is that the US is developing an aristocracy of the wealthy. Just as it would be absurd to select the US Olympics team for 2020 from the children of the winners of the Olympics in 2000, he says, so it is wrong to construct a society whose likely leaders tomorrow - given the advantages that wealth confers - will be the children of today's wealthy. This offends not merely the values of democracy and equality of opportunity on which the US is constructed, but will be economically disastrous.
From the Washington Post:
The leader of the Justice Department team that prosecuted a landmark lawsuit against tobacco companies said yesterday that Bush administration political appointees repeatedly ordered her to take steps that weakened the government's racketeering case.
Sharon Y. Eubanks said Bush loyalists in Attorney General Alberto R. Gonzales's office began micromanaging the team's strategy in the final weeks of the 2005 trial, to the detriment of the government's claim that the industry had conspired to lie to U.S. smokers.
She said a supervisor demanded that she and her trial team drop recommendations that tobacco executives be removed from their corporate positions as a possible penalty. He and two others instructed her to tell key witnesses to change their testimony. And they ordered Eubanks to read verbatim a closing argument they had rewritten for her, she said.
Here is the opening statement of James Rokakis, Treasurer for Cuyahoga County, Ohio, discussing the problems that such lending practices have caused for his community.
Apparently, the talk about an 18-day gap in the emails that were disclosed to the press in the 3000 page document dump is all the rage now on leftist blogs. Shades of Rose Mary Woods as Josh Marshall puts it.
Bush has his 18 days vs. Nixon's mere 18 minutes.
Wow, maybe John Dean is right. It is Worse Than Watergate
***Update***
The White House claims it is a "lull" rather than a gap.
NYSE Margin Hits All Time Record
(via Bloomberg News)
The amount of money borrowed from brokerages that do business on the New York Stock Exchange to buy stock rose 3.6 percent to a second straight monthly record, reaching $295.9 billion in February. Margin debt, as the borrowing is called, in January broke the prior high set at the peak of the so-called Internet bubble.
Changes in the level of margin debt have mirrored those of U.S. stock indexes. After setting an all-time high of $278.5 billion in March 2000, margin debt dropped to less than half that amount by September 2002. It reached $285.6 billion in January.
Paul Krugman, in an editorial in today's New York Times, says that Republican shenanigans at the Justice Department are nothing new. The money quote:
Why is there such a strong family resemblance between the Reagan years and recent events? Mr. Reagan’s administration, like Mr. Bush’s, was run by movement conservatives — people who built their careers by serving the alliance of wealthy individuals, corporate interests and the religious right that took shape in the 1960s and 1970s. And both cronyism and abuse of power are part of the movement conservative package.
In part this is because people whose ideology says that government is always the problem, never the solution, see no point in governing well. So they use political power to reward their friends, rather than find people who will actually do their jobs.
The politicization of Justice got so bad that in 1988 six senior officials, all Republicans, including the deputy attorney general and the chief of the criminal division, resigned in protest.
In a story in the New York Times on March 11, entitled Crisis Looms in Mortgages, there are dire warnings of complete market implosion that will affect the entire US economy as a result of the downgrading of credit ratings.
The [credit rating] agencies say that they are confident that their ratings reflect reality in the mortgages they have analyzed and that they have required managers of mortgage pools with risky loans in them to increase the collateral. A spokesman for S.& P. said the firm made its ratings requirements more stringent for subprime issuers last summer and that they shored up the loans as a result.
Meeting with Wall Street analysts last week, Terry McGraw, chief executive of McGraw-Hill, the parent of S.& P., said the firm does not believe that loans made in 2006 will perform “as badly as some have suggested.”
Nevertheless, some investors wonder whether the rating agencies have the stomach to downgrade these securities because of the selling stampede that would follow. Many mortgage buyers cannot hold securities that are rated below investment grade — insurance companies are an example. So if the securities were downgraded, forced selling would ensue, further pressuring an already beleaguered market.
Another consideration is the profits in mortgage ratings. Some 6.5 percent of Moody’s 2006 revenue was related to the subprime market.
Brian Clarkson, Moody’s co-chief operating officer, denied that the company hesitates to cut ratings. “We made assumptions early on that we were going to have worse performance in subprime mortgages, which is the reason we haven’t seen that many downgrades,” he said. “If we have something that is investment grade that we need to take below investment grade, we will do it.”
Interestingly, accounting conventions in mortgage securities require an investor to mark his holdings to market only when they get downgraded. So investors may be assigning higher values to their positions than they would receive if they had to go into the market and find a buyer. That delays the reckoning, some analysts say.
“There are delayed triggers in many of these investment vehicles and that is delaying the recognition of losses,” Charles Peabody, founder of Portales Partners, an independent research boutique in New York, said. “I do think the unwind is just starting. The moment of truth is not yet here.”
In 1996, my husband was diagnosed as needing an organ transplant, but he was still in the early stages and was very healthy. In fact we had no idea he was even ill, he felt and looked as healthy as a horse. He took care of himself, didn't drink or smoke. We were told it could take three or four years for his name to reach the top of the list and get the transplant, but there were no guarantees. They are very straightforward with you. They also tell you that if you lose your health insurance and do not get on medicare or medicaid, you will be removed from the transplant waiting list.
In 2000 my husband's employer found out about my husband's condition and started harassing him. Even being a union worker did not help protect him from this. He withstood it for about ten months, by which time he was diagnosed with severe depression brought about by the fear of what losing his job and health insurance would bring. I took the Family and Medical leave act to care for him, during this brief time Fleet was taken over by Bank of America (none of the workers saw this coming) and my job was lost due to downsizing. My husband was terminated in 2001.
In a story at Consumer Affairs, credit card executives faced bipartisan criticism of excessive charges to consumers on their credit card bills.
March 7, 2007
In what played out as a good versus evil scenario, Senators and consumer advocates battled with three of the most powerful men in the credit card industry at a Capitol Hill hearing today.
...
One of the witnesses was Wesley Wannemacher, a former Chase Bank credit card holder who placed $3,200 of wedding expenses in late 2001 on his card. He never spent another cent on that card, yet his debt to Chase ballooned to $10,700 -- that is until Chase saw his name on the witness list last week and forgave his debt.
Unfortunately, not every American in debt can be made the poster boy of unfair credit practices.
"Credit card debt is often seen as a very personal problem, but the burgeoning level of household debt in America has implications for the entire nation," Sen. Norm Coleman (R-Minn.), ranking minority member said. "Over the past 25 years, U.S. household debt has ballooned from a collective $59 billion in 1980 to approximately $830 billion in 2005.
"Even more staggering, the number of consumers filing for bankruptcy has increased by 609 percent," Coleman continued.
Throughout the hearing, the crowd that packed the room occasionally burst into laughter at the seemingly absurd credit card terms and the lack of direct answers from the bank executives.
Of the more than a dozen complaints raised against the credit card companies, Levin also raised an issue which he coined "trailing interest."
Trailing interest is the practice of charging interest on entire bill no matter what percentage of it is paid.
"Suppose a consumer who usually pays their account in full, and owes no money on December 1, makes a lot of purchases in December, and gets a January 1 credit card bill for $5,020," Levin said. "That bill is due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed. What do you think the consumer owes on the next bill?
"If you thought the bill would be the $20 past due plus interest on the $20, you would be wrong. In fact, under industry practice today, the bill would likely be twice as much. That's because the consumer would have to pay interest, not just on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time.
"The consumer would have to pay interest on the entire $5,020 from the first day of the billing month, January 1, until the day the bill was paid on January 15, compounded daily," Levin continued. "In our example, using an interest rate of 17.99 percent ... the $20 debt would, in one month, rack up $35 in interest charges and balloon into a debt of $55.21."
Bruce Hammonds, president of Bank of America Card Services, Richard Srednicki, chief executive officer of Chase Bank USA and Vikram Atal, Chairman and CEO of Citi Cards, all said that "trailing interest" is a practice shared by various lending schemes but gave no specific examples.
...
Sparking around round of laughter, Chase's Srednicki said, "I think the large majority of our customers understand (that grace periods only apply to accounts paid in full)."
From TPM Muckraker:
1. In an email to the White House, Mr. Sampson refers to a “problem” with Carol Lam. What was this “problem” and was Lam’s firing motivated by her investigation into former Congressmen Randy Cunningham and Representative Jerry Lewis?
a. Gonzales’ chief of staff, Kyle Sampson, contacted William Kelley, Deputy Counsel to the President, on replacing Carol Lam, stating, “[t]he real problem we have right now with Carol Lam that leads me to conclude that we should have someone ready to be nominated on 11/18, the day her 4-year term expires.”
b. Mr. Sampson’s email was sent the same day that the Los Angeles Times had broken the news that Ms. Lam’s investigation of former Congressman Randy Cunningham (R-CA) had expanded to include Representative Jerry Lewis (R-CA).
2. What was the involvement of the President and members of the White House staff on the removal of these eight U.S. Attorneys?
a. White House spokespeople have portrayed the White House as having only limited involvement in the plan to dismiss these U.S. attorneys. Yet the documents released to the Senate Judiciary Committee clearly show that the idea of removing a group of U.S. attorneys originated in early 2005 with Harriet E. Miers, then serving as the President’s Counsel. Ms. Miers suggested dismissing all 93 U.S. attorneys. Mr. Sampson replied, "Harriet, you have asked whether President Bush should remove and replace U.S. Attorneys whose four-year terms have expired. I recommend that the Department of Justice and the Office of the Counsel to the President work together to seek the replacement for a limited number of U.S. Attorneys."
3. Who at the Department of Justice was responsible for inserting a line into the USA PATRIOT Act in March 2006 that allows the appointment of interim U.S. Attorneys without Senate approval? Did the President know of or approve this effort?
a. Documents provided to Congress indicate that, during reauthorization of the USA Patriot Act in March 2006, the Justice Department specifically requested a provision that authorizes the Attorney General to appoint interim U.S. attorneys for an indefinite period of time. This provision may have been deliberately exploited – and perhaps even deliberately added to legislation – in order to bypass the Senate confirmation process for U.S. attorneys. At
b. Mr. Sampson told Ms. Miers: “I strongly recommend that, as a matter of policy, we utilize the new statutory provisions that authorize the AG to make USA appointments…. By not going the PAS route, we can give far less deference to the home-State Senators and thereby get (1) our preferred person appointed and (2) do it faster and more efficiently, at less cost to the White House.”
4. Was Karl Rove or Ms. Miers involved in lobbying for the appointment of Tim Griffin as U.S. Attorney in Arkansas?
a. In a letter responding to questions from Senator Schumer dated February 23, 2007, the Department of Justice informed Schumer that it was “not aware of anyone lobbying for Mr. Griffin’s appointment” and that “[t]he Department is not aware of Karl Rove playing any role in the decision to appoint Mr. Griffin.”
b. An email from Mr. Sampson sent an e-mail on December 19, 2006 contradicts these statements. His email stated, “I’m not 100 percent sure that Tim was the guy on which to test drive this authority [of the Attorney General to appoint interim U.S. attorneys], but know that getting him appointed was important to Harriet, Karl, etc.” Please explain any involvement of Karl Rove or members of his staff in the decision to request the resignation of H.E. (“Bud”) Cummins III as U.S. Attorney for the Eastern District of Arkansas and to install Tim Griffin in his stead.
5. When and why did U. S. Attorney David Iglesias become a target for removal? Was President Bush involved in that decision?
a. On March 2, 2005, D. Kyle Sampson provided identified David Iglesias in bold type as an individual that Sampson “recommend[ed] retaining” based on Iglesias’s strong job performance and “loyalty” to the Administration.
b. On October 17, 2006, Mr. Sampson drew up a list of Attorneys they “should consider pushing out”; Mr. Iglesias was not among those names.
c. On November 15, 2006, Mr. Sampson prepared a detailed “Plan for Replacing Certain United States Attorneys” that lists Mr. Iglesias among the prosecutors to be dismissed by the Department. As you know, in accordance with that plan, the Department contacted Mr. Iglesias on December 7, 2006, to request his resignation.
I haven't been posting much because when I came back from vacation I was:
1) ill (Allergic Rhinitis and Bronchitis, according to my doctor); and
2) trying to catch up on some work.
I have been following the roiling of the financial markets (down another 2% yesterday, with several world markets also slumping overnight) when I was vegging out on my sofa with my hacking cough and going through a box of tissues. The illness has just left me without much motivation to blog (or read) much.
The builders are supposed to be by today and tomorrow to fix my roof and build my new carport. Among the repairs, I have been making other improvements because I am still leaning toward selling the house I inherited (with its payment) to move into a smaller house. A 1700 square foot house with almost an acre of land is just too much for one person, really. That's not to mention the three storage buildings. I thought about converting one (the largest one) into an efficiency apartment/cottage, but my heart wants to move to another area. Most of my neighbors are elderly and I want to live in a more vibrant area.
The conundrum is that under current prices here in Oklahoma City, the realtors that I trust are saying that my 1700 sf house with almost an acre of land would only sell for about the same amount as one in the part of town that I want to live in for a house that is half the size, a yard 1/3 the size and about the same age as the one I am in now (and not necessarily in as good of a condition). Even with the new roof, new carport, new paint inside and out, new water tank, a remodeled bathroom, new gravel in the driveway and all the other repairs and improvements that I have made, the value of my house, I am told, will stay about the same. Just those repairs alone have cost me over $15,000. Mind you, the large repairs, like the roof and the carport, were mostly covered by insurance, but all the other stuff wasn't.
I am looking for ways to downsize and save money, but other than the savings coming from having a smaller electric and gas bill, I am not seeing much savings moving to a smaller place in another neigborhood. The insurance and taxes would actually be higher somewhere else. The payment would be about the same and there are the fees associated with both buying and selling a home.
What to do? I am not sure I can get a good answer.
Click on the title above for a documentary film online regarding our national use of credit to pay bills and a discussion of the effects of the new bankruptcy law. It covers such items as predatory lending, payday loans, credit cards and other forms of consumer debt.
The Gonzalez Eight, as they are called, are the eight prosecutors who were informed they were being fired on December 7, 2006 -- another day that will live in infamy -- and will once again harken back to an earlier scandal: the Saturday Night Massacre.
The firing of the prosecutors have enough parallels to Watergate (many in the Bush Administration served under Nixon) that it warrants the same type of Congressional investigation now as it did then.
Paul Krugman has it right when he says that the last election was about subpoena power:
In the last few days we’ve also learned that Republican members of Congress called prosecutors to pressure them on politically charged cases, even though doing so seems unethical and possibly illegal.
The bigger scandal, however, almost surely involves prosecutors still in office. The Gonzales Eight were fired because they wouldn’t go along with the Bush administration’s politicization of justice. But statistical evidence suggests that many other prosecutors decided to protect their jobs or further their careers by doing what the administration wanted them to do: harass Democrats while turning a blind eye to Republican malfeasance.
Donald Shields and John Cragan, two professors of communication, have compiled a database of investigations and/or indictments of candidates and elected officials by U.S. attorneys since the Bush administration came to power. Of the 375 cases they identified, 10 involved independents, 67 involved Republicans, and 298 involved Democrats. The main source of this partisan tilt was a huge disparity in investigations of local politicians, in which Democrats were seven times as likely as Republicans to face Justice Department scrutiny.
How can this have been happening without a national uproar? The authors explain: “We believe that this tremendous disparity is politically motivated and it occurs because the local (non-statewide and non-Congressional) investigations occur under the radar of a diligent national press. Each instance is treated by a local beat reporter as an isolated case that is only of local interest.”
And let’s not forget that Karl Rove’s candidates have a history of benefiting from conveniently timed federal investigations. Last year Molly Ivins reminded her readers of a curious pattern during Mr. Rove’s time in Texas: “In election years, there always seemed to be an F.B.I. investigation of some sitting Democrat either announced or leaked to the press. After the election was over, the allegations often vanished.”
Fortunately, Mr. Rove’s smear-and-fear tactics fell short last November. I say fortunately, because without Democrats in control of Congress, able to hold hearings and issue subpoenas, the prosecutor purge would probably have become yet another suppressed Bush-era scandal — a huge abuse of power that somehow never became front-page news.
Before the midterm election, I wrote that what the election was really about could be summed up in two words: subpoena power. Well, the Democrats now have that power, and the hearings on the prosecutor purge look like the shape of things to come.
In the months ahead, we’ll hear a lot about what’s really been going on these past six years. And I predict that we’ll learn about abuses of power that would have made Richard Nixon green with envy.
The subpoenas were issued in connection with allegations of corruption on the part of Senator Bob Menendez, a Democrat who seemed to be facing a close race at the time. Those allegations appeared, on their face, to be convoluted and unconvincing, and Mr. Menendez claimed that both the investigation and the leaks were politically motivated.
Mr. Christie’s actions might have been all aboveboard. But given what we’ve learned about the pressure placed on federal prosecutors to pursue dubious investigations of Democrats, Mr. Menendez’s claims of persecution now seem quite plausible.
In fact, it’s becoming clear that the politicization of the Justice Department was a key component of the Bush administration’s attempt to create a permanent Republican lock on power. Bear in mind that if Mr. Menendez had lost, the G.O.P. would still control the Senate.
I just got back from my vacation. On the plane back to Oklahoma City, I sat next to a semi-famous concert pianist, Peter Miyamoto. He held a concert here in Oklahoma City tonight somewhere near Oklahoma City University, although I couldn't find any information about it online.
Tomorrow it's Back To Reality for me. I hope to bring you some pictures of my furlough soon enough. I also hope to get back to serious business by tomorrow.
I went to the Winter Jam concert last night in Norman, Oklahoma. The tour is sponsored by the Christian group Newsong.
When Hawk Nelson came to the stage, the crowd went wild. They are a relatively new pop/punk/Christian band from Canada and they get regular airplay on K-LOVE radio with the song Everything You Ever Wanted, a song about one of the band member's friend who had to struggle with his father's divorce.
Click the title for the report.
This relates to the post on the New Debt Bondage I did about two weeks ago.
A new story in the New York Times shows that 64% of Americans support creating a national healthcare program and 60% (a total that includes almost half of all Republicans) would support raising taxes to do it.
Click on the title for the complete story.
***Update***
Here is a video report on the same poll.
My job as an attorney is very stressful. I try to make it a point every few months to take a break from the madness. So for the next few days I am going to take some time off to recharge. During the next 4 days, I will be posting lightly. In the meantime, a lot of important economic news is coming out, so I suggest you follow the links on the right side of the page to such places as Calculated Risk, Big Picture, Mish's site, and, of course Of Two Minds.
Also, a relatively new blog you may never have heard of is Bonddad Blog. Bonddad is a regular blogger over at DailyKos and his posts are always recommended.
I will post the Sunday Music tomorrow morning. After that, check back Wednesday evening, and I will try to bring you some pictures. I will be posting in the upcoming few days only if I have access to high-speed internet and only if I have extra time.
Charles Hugh Smith is wondering if we getting the real story on the economy.
He gives some background information on some things that are probably happening behind the scenes in our financial markets around the world. He also says that we need to be wary of the financial press' commitment to bullish thinking. It certainly is worth wondering about.
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