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Below is an article by JOURNAL senior writer Michael Winship. We welcome your comments below.
Franklin Roosevelt, A Nation Turns Its Lonely Eyes to You
By Michael Winship
We thirst for leadership, vision, someone who can speak to us in a way that refuses to avert its eyes from the crisis but shines a light of truth upon the problem, then offers hope and possible solutions.
If this is indeed an economic 9/11, as some have suggested, we need that voice now. Right now. And so far it has yet to be heard. Not from McCain, or Obama, or President Bush.
After September 11, 2001, the President stood on a pile of debris with a megaphone and said that the whole world could hear the rescue workers and shared their grief. Soon, words of sorrow degenerated into bumper sticker rhetoric: Axis of Evil, Wanted Dead or Alive, Mission Accomplished. Nor, at a time when people were ready to do whatever needed to be done, was there a call for national sacrifice. Instead, the President invoked not poets or statesman past but variations on a tee-shirt slogan: when the going gets tough, the tough go shopping.
Over the last two weeks, he has been seen infrequently and when he has spoken his words have rung false. This Harvard MBA speaks Economics as though he were phonetically reading a foreign language.
The President has seemed under-informed, disconnected and not, you should excuse the word, invested. In his address to the nation Wednesday evening, he said that the government was blameless for the financial crisis; it had done what it was supposed to do but had been victimized by overseas lenders, greedy banks and Americans taking on more credit than they could carry. And as he has done too often before, he tried to make us afraid.
“The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold.” President Bush said. “More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.”
Contrast what he had to say with President Franklin Delano Roosevelt when he was sworn into office for the first time, in 1933, during the Great Depression . Rather than foster anxiety and panic, FDR proclaimed, “The only thing we have to fear is fear itself,” despite the fact that 13 million were unemployed, nine million had lost their savings and a quarter of the banks had closed. Wages had plummeted 60 percent.
“The only thing we have to fear is fear itself” is the phrase that everyone remembers, but here’s a little more of what FDR had to say:
“This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure, as it has endured, will revive and will prosper…
“In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunk to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income... More important, a host of unemployed citizens face the grim problem of existence and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment…
“The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of that restoration lies in the extent to which we apply social values more noble than mere monetary profit…If I read the temper of our people correctly, we now realize, as we have never realized before, our interdependence on each other; that we can not merely take, but we must give as well.”
Idealism and truth-telling intersected in FDR’s speech. There was no equivocation, no pass-the-buck. But as decades passed, the belief in government as an instrument to advance the common good was rejected. Ronald Reagan became President, proclaimed that government was not the solution but the problem, and joked that, “The 10 most dangerous words in the English language are, “Hi, I’m from the Government, and I’m here to help.”
Now, like a last-minute, battlefield conversion, the White House has rediscovered the value of government as backstop -- not to relieve the misery of the people but the agonized indigestion of financial institutions suffering morbid obesity because they ate too much at the big shot banquet.
In these bailouts, there is no altruism but cynicism, the same attitude that scorns the Constitution and tramples civil liberties, that uses national tragedy to advance an unrelated global agenda, that doesn’t give a damn as it tries to game and subvert the electoral process because deep down it fundamentally disdains democracy. Winning isn’t everything; it’s the only thing.
We need solutions, not sound bites or pandering. We need inspiration and hope, not spin or cant. The way things are going we may have to find it within ourselves. But in the next five weeks, if one of the candidates can discover how to articulate that hope without pandering, can define our national trauma and tell us how to try to make it better without terrifying us, can give us something to believe in without false expectations, he will be our next President.
Please note that the views and opinions expressed by Michael Winship are not necessarily the views and opinions held by Bill Moyers or BILL MOYERS JOURNAL.
(Photo by Robin Holland)
In his conversation with Bill Moyers on this week’s JOURNAL, scholar and former army colonel Andrew Bacevich discussed his vision of what has gone wrong with American government and policy over the last several decades.
“The Congress, especially with regard to matters related to national security policy, has thrust power and authority to the executive branch. We have created an imperial presidency. The Congress no longer is able to articulate a vision of what is the common good. The Congress exists primarily to ensure the reelection of members of Congress... As the Congress has moved to the margins, as the President has moved to the center of our politics, the presidency itself has come to be less effective...
Because of this preoccupation, this fascination with the presidency, the President has become what we have instead of genuine politics, instead of genuine democracy... We look to the next President to fix things and, of course, that lifts all responsibility from me to fix things. So one of the real problems with the imperial presidency is that it has hollowed out our politics and, in many respects, has made our democracy a false one. We’re going through the motions of a democratic political system, but the fabric of democracy really has worn very thin.”
What do you think?
Do you agree with Bacevich’s assessment? If yes, how can we fix it? If no, explain.
Bacevich talks about the legislative and executive branches. How does the judicial branch relate to his discussion?
(Photo by Robin Holland)
Below is an article by JOURNAL senior writer Michael Winship. We welcome your comments below.
Andrew Bacevich, America and the World
By Michael Winship
In a letter written in 1648, the Swedish statesman, Axel Oxenstierna, chancellor to both King Gustavus Adolphus and Queen Christina, counseled, “Know, my son, with how little wisdom the world is governed.”
The fighting between Russia and the former Soviet republic of Georgia is an unnerving reminder of that, and of how quickly the balance of global power can be tilted from unexpected directions with barely a warning.
Some hawks and neo-cons called for NATO intervention or even suggested we send in Stinger missiles or the 82nd Airborne as a peacekeeping force. President Bush warned, “Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century.”
Perhaps, but the reality of the early 21st century is that, in the short run, at least, the President’s words ring hollow. In spite of past promises of support to Georgia, Russia is key to our efforts in the Middle East and our European allies are dependent on Russia for energy. The invasions of Afghanistan and Iraq have both our military strength and our international credibility stretched perilously thin at a time when oil-rich Russia is reemerging as a superpower. We’ve boxed ourselves in.
It was in that light that I came upon the Oxenstierna quote the other night, while re-reading the late historian Barbara Tuchman’s THE MARCH OF FOLLY, a knowing compendium, from ancient Troy to Vietnam, of the ways in which, given half a chance, those in power will steer their ships of state straight into the rocks. In the first chapter, she also quotes American President John Adams: “While all other sciences have advanced” – you can almost hear him sighing – “government is at a stand; little better practiced now than three or four thousand years ago.”
Andrew J. Bacevich probably would agree with all of the above. The retired Army colonel, a West Point graduate, teaches history and international relations at Boston University. His latest book, THE LIMITS OF POWER: THE END OF AMERICAN EXCEPTIONALISM, explores our nation’s current predicament, not just on the world stage but here at home as well. He spoke with my colleague Bill Moyers on this week’s edition of the PBS series BILL MOYERS JOURNAL.
Bacevich speaks truth to power, no matter who’s in power, which may be why those of both the left and right are eager to hear his views. Perhaps it’s also because when he challenges American myths and illusions, he does so from a genuine patriotism forged in the fire of his experiences as a soldier in Vietnam and the death a year ago of his son, an Army lieutenant in Iraq. THE LIMITS OF POWER is dedicated to the young man but the senior Bacevich, a man of quiet, solid gravitas, holds his grief privately between himself and his family.
“Our foreign policy is something that is concocted in Washington, D.C., but it reflects the perceptions of our political elite about what we the people want,” he told Moyers. “And what we want, by and large is… this continuing flow of very cheap consumer goods. We want to be able to pump gas into our cars regardless of how big they may happen to be… And we want to be able to do these things without having to think about whether or not the books are balanced at the end of the month, or the end of the fiscal year.”
To that end, he says, “One of the ways we avoid confronting our refusal to balance the books is to rely increasingly on the projection of American military power around the world to try to maintain this dysfunctional system or set of arrangements that have evolved over the last 30 or 40 years.”
“… I think historians a hundred years from now will puzzle over how it could be that the United States of America, the most powerful nation in the world, as far back as the early 1970’s came to recognize that dependence on foreign oil was a problem, posed a threat, compromised our freedom of action. How every President from Richard Nixon down… declared, ‘We’re going to fix the problem.’ [But] none of them did.”
He continued, “The clearest statement of what I value is found in the Preamble to the Constitution. There is nothing in the Preamble to the Constitution which defines the purpose of the United States of America as remaking the world in our image, which I view as a fool's errand… I believe that the framers of the Constitution were primarily concerned with focusing on the way we live here, the way we order our affairs. To try to ensure that as individuals, we can have an opportunity to pursue our, perhaps, differing definitions of freedom, but also so that, as a community, we could live together in some kind of harmony. And that future generations would also be able to share in those same opportunities… With the current crisis in American foreign policy, unless we do change our ways, the likelihood that our children, our grandchildren, the next generation is going to enjoy the opportunities that we've had is very slight because we're squandering our power. We are squandering our wealth.”
Bacevich believes, “The Congress, especially with regard to matters related to national security policy, has thrust power and authority to the executive branch. We have created an imperial presidency. The Congress no longer is able to articulate a vision of what is the common good. The Congress exists primarily to ensure the reelection of members of Congress.”
That imperial presidency, he says, “has made our democracy a false one. We’re going through the motions of a democratic political system. But the fabric of democracy, I think, really has worn very thin.”
Iraq, Bacevich concludes, “was a fundamental mistake. It never should have been undertaken. And we're never going to do this kind of thing again.” This might, he thinks, “be the moment when we look ourselves in the mirror [and]… see what we have become. And perhaps undertake an effort to make those changes in the American way of life that will enable us to preserve for future generations that which we value most about the American way of life.”
Andrew Bacevich’s words should echo down the corridors of Congress and the halls of the White House, no matter who becomes our next President.
Please note that the views and opinions expressed by Michael Winship are not necessarily the views and opinions held by Bill Moyers or BILL MOYERS JOURNAL.
We're asking our guests and our viewers what is their vision for the future of the American Dream — and how we can achieve those visions.
Andrew Bacevich, Professor of International Relations and retired Army Colonel, appeared on the JOURNAL to talk about the military, the war in Iraq and his new book THE LIMITS OF POWER. More on Andrew Bacevich.
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Check up on all the answers to date and find out more about the Deepening the American Dream project.
Numerous viewers have written to BILL MOYERS JOURNAL lamenting what some say has been the most sensational – and least educational – election coverage that the corporate news media has yet provided.
Whether or not you agree with that dire diagnosis, you may have some questions for the Presidential candidates that have not penetrated coverage of the horse race.
What questions would you ask of the Presidential candidates?
Please respond below or email your questions to moyersblog [at] thirteen.org
This week on the JOURNAL, Bill Moyers spoke with several guests about what’s been on everyone’s mind: the financial meltdown and the historic government bailouts.
NEW YORK TIMES financial columnists Floyd Norris and Gretchen Morgenson discussed what bailouts entail. Morgenson said:
“The ugly thing about this is privatizing gains and socializing losses. So when things are going well, the managements make out, the shareholders make out, the counterparties are fine. All the private sector people do well. But when something goes wrong, when decisions are made that turn out to be bad decisions, the U.S. taxpayer has to take on the problem. And there’s something very wrong about that.”
Economic and political critic Kevin Phillips argued that both parties bear responsibility for the economic crisis and are unlikely to shake up the status quo.
“It’s been a bipartisan phenomenon. You can go back to the 1980s and say Reagan and George Bush, Sr. got a bubble started. Clinton got in and got an even bigger bubble going. And then George W. Bush with the biggest bubble of all. But it’s not that the Clintonites didn’t play. They did... The Democrats think it's going to be another 1933, they get in there [and] they can do all the New Deal stuff. My feeling is that they're coming in halfway and they're going to have to make hard decisions that are going to eat the Democratic coalition like a bologna sandwich.”
Some commentators on the left see a silver lining in getting the government involved in various companies. Welcoming what he terms “massive socialism,” Matthew Yglesias of THINK PROGRESS wrote:
“Isn’t there an enormous progressive opportunity here? ... If the government directly controls major financial institutions, that would give the new administration extraordinary leverage over the national economy... I think it creates a real opportunity for ‘socially conscious insurance underwriting’ or whatever you care to call it.”
But INVESTOR’S BUSINESS DAILY contends that government social policy has been a major contributor to the economic mess:
“It was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans... Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.”
What do you think?
Are the financial bailouts a good idea? Why or why not?
Do you want the government to enact social policy through the companies it has nationalized?
How do you think the economic crisis should be handled? Are your ideas politically possible?
From our offices in Manhattan, we look out on the tall, gleaming skyscrapers that are cathedrals of wealth and power – the Olympus ruled by the gods of finance, the temples of the mighty, the holy of holies, whose priests guard the sacred texts of salvation – the ones containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.
This last couple of weeks, ordinary mortals below could almost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landings -- all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.
During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld’s total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O’Neal, retired with a package valued at $161 million, after the company reported an eight billion dollar loss in a single quarter. And remember Bear Stearns Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.
Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac – aka the gods who failed – are fighting to keep severance packages of close to $24 million combined – on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.
But let’s change the metaphor for a moment and go to our sports desk, because if religion is no longer the soul of capitalism, as Max Weber once taught us it was, we have to venture somewhere else to try to understand the continuing follies of the new gilded age. And so we travel just a few miles north of Wall Street to the House that Ruth Built. Babe Ruth – the Sultan of Swat – who ruled Yankee Stadium and sired generations of princes after him: DiMaggio and Gehrig, Mantle, Maris, Berra and Jackson. Yankee Stadium, as fabled a place to Americans as Ilium was to the ancient Greeks, about to be demolished and replaced next year by a brand new stadium.
On Opening Day in 1923, New York Governor Al Smith threw out the first ball and John Philip Sousa led a big brass band playing his famous marches. It was the Roaring Twenties, when the money flowed liked bootleg whiskey, the pride before the fall. In 1930, the year after the market crashed, as the Great Depression began, Babe Ruth was taking home $80,000 a year, more than the President of the United States, Herbert Hoover. “Why not?” Ruth asked. “I had a better year than he did.”
Yankee star Alex Rodriguez had a better year than both of them. This season, A-Rod is making $28 million, just part of an annual Yankee payroll of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country’s richest tycoons.
But when it came to paying for the new, $1.3 billion pleasure dome, the millionaires on the field and King Midas in his skybox came up with some razzle-dazzle plays to finance their new wealth machine – tax-free bonds, requiring ordinary citizens to subsidize the construction, and hundreds of millions more for new parking garages, a train station and parks that supposedly will replace the ones seized by the city to make room for the new stadium. The Little League games that used to flourish on sandlots just outside the old ballpark have been moved miles away, sent down to the minors on a long road trip.
That’s okay, you may think, there will be plenty of room in the new stadium for the tax-paying public to come root, root, root for the home team – even the Coliseum in ancient Rome had bleachers for the commoners. But, in fact, there will be 5,000 fewer seats in the stands. And while the Yankees reportedly promise that half of what’s left will cost $45 or less, those seats that used to cost $250, right behind the dugout, will now cost you $850. And if you want to be near home plate, you’ll have to cough up $2500 – per game.
Meanwhile there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year – tax deductible – assuming they haven’t filed for bankruptcy this week.
Why aren’t the fans and taxpayers giving the Yankees a Bronx cheer? They did, but city officials rolled over them while making sure local politicians stay in the lineup. The pols are getting their own luxury suite at the new stadium for free – and first shot at buying the best available seats.
The new colossus will cast its majestic shadow across the South Bronx, one of the nation’s poorest neighborhoods. The residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of New York City, respiratory disease is already so high they call it “Asthma Alley.”
Not that the well to do in the infield seats will have to hear the wheezing. They’ll have exclusive access to a private club, a private entrance and a private elevator, totems of this gilded age. Let the games begin.
With ominous news of financial turmoil dominating the headlines, this week’s edition of BILL MOYERS JOURNAL will focus on the economy. But first, we want to know what questions you would ask of economic experts, journalists and U.S. financial leaders like Chairman Ben Bernanke of the Federal Reserve or Secretary of the Treasury Henry M. Paulson.
Please submit your questions below.
(Photo by Robin Holland)
Below is an article by JOURNAL senior writer Michael Winship. We welcome your comments below.
Lipstick On Polar Bears
By Michael Winship
Where would politicians be without the Titanic? As metaphors go, it’s far more majestic than putting lipstick on pigs or pit bulls.
Farmyard bacon and junkyard dogs may come and go but in the world of political rhetoric the Titanic sails on. The most famous shipwreck in modern history is the mother of all metaphors. Just last week, at a rally in Tampa, Florida, Hillary Clinton declared, “Anybody who believes that the Republicans, whoever they are, can fix the mess they created probably believes that the iceberg could have saved the Titanic.”
A political cartoon shows the President at the helm, yelling, “I’m king of the world!” as the mighty vessel plows into bergs labeled “Deficits,” “Unemployment” and “Foreign Policy.” Democratic strategist Paul Begala writes, “Selling the old Bush line in this economy would be like trying to sell tickets for the return trip on the Titanic after it sank.”
And, of course, there are infinite variations on the notion of rearranging the deck chairs on the Titanic, or buying new ones, as metaphor for wasting time on a trivial task as disaster looms – an especially apt image when it comes to politics, Congress or virtually any government agency. Heckuva job, skipper.
When it’s functioning well, government is often referred to as a ship of state (See Longfellow: “Thou, too, sail on, O Ship of State! Sail on, O Union, strong and great!”), so when it veers perilously off course, comparing it to the well-known leviathan that slipped beneath the waves nearly one hundred years is a logical skip of the stone. Titanic is an iconic symbol of hubris, a manmade behemoth built in defiance and brought low by a random natural phenomenon. “God Himself could not sink this ship,” sneers the villain in the James Cameron movie and at that point, even if for some unlikely reason you weren’t aware of the outcome, you know for sure that this is not going to end well.
Humankind’s ability to help bring calamity down upon itself is what makes Titanic such a powerful image, especially as we face the growing immutability of what we’re doing to our planet. Despite being distracted by the current campaign’s side trips into sludge and triviality, with Karl Rove simultaneously telling Fox News the attacks have gone too far, but that the non-partisan, fact-check organizations that challenge falsehoods can’t be trusted(!), we would do well to consider that the icebergs are still out there, rhetorically, and, in the case of Sarah Palin, very much for real.
In her new position as princess regent of the Republican Party, the vice presidential candidate has had to do some fancy skating, finding herself – with a team of Republican coaches at her ear -- positioning herself on many issues for the very first time and altering some of her existing views to more closely mirror those of her running mate.
Climate change, for example. In her interview with ABC News’ Charles Gibson Palin said, “Man’s activities certainly can be contributing to the issue of global warming,” although last December she was quoted by the Alaska newspaper the Fairbanks Daily News-Miner saying, “I’m not an Al Gore, doom-and-gloom environmentalist blaming the changes in our climate on human activity.”
Her partial conversion along the road from St. Paul comes not a moment too soon, as a big chunk of the entire Arctic region appears to be melting, perhaps endangering the McCain/Palin campaign’s boast that Palin is governor of the largest state in the union. An Associated Press article noted late last month, that, “Federal wildlife monitors spotted nine polar bears in one day swimming in open ocean off Alaska’s northwest coast, and environmental groups say the event is a strong signal that diminished sea ice brought on by warming has put U.S. bears at risk of drowning or dying from effects of fatigue.”
Palin is not the polar bear’s friend – in May, when U.S. Interior Secretary Dirk Kempthorne declared the charismatic megafauna a threatened species, the governor announced she would sue the Federal government and said state officials backed her belief that global warming was not affecting the bear population. Recently released e-mails from those same scientists actually said the opposite.
“She and other Alaska elected officials fear a listing will cripple oil and gas development in prime polar bear habitat off the state's northern and northwestern coasts,” the Associated Press reported. “…Polar bears are well-managed and their population has dramatically increased over 30 years as a result of conservation, she said.”
Secretary Kempthorne disagreed and the figures back him up. A US Geological Survey study predicted Alaskan polar bears could be extinct by 2050, which is important because the bears are an indicator species – what happens to them is relevant to the entire food chain. And it tells us a lot about how quickly sea ice – which the bears use as platforms on which to live and hunt seals – is disappearing.
According to the AP, “Summer sea ice last year shrunk to a record low, about 1.65 million square miles in September, nearly 40% less than the long-term average between 1979 and 2000 and most climate modelers predict a continued downward spiral, possibly with an Arctic Ocean that's ice free during summer months by 2030 or sooner.” In fact, the British newspaper THE INDEPENDENT reported August 31, “Open water now stretches all the way round the Arctic, making it possible for the first time in human history to circumnavigate the North Pole… the most important geographical landmark to date to signal the unexpectedly rapid progress of global warming.”
The resulting opening of Arctic sea lanes creates a morass of issues that will affect American foreign and energy policy for years, and which neither campaign is significantly addressing. As noted in this column a couple of years ago, “Melting of the Arctic icecap would create a sea five times the size of the Mediterranean and shorten global shipping routes by thousands of miles.” The impact on maritime trade and commercial fishing thus will be enormous, not to mention the new availability of natural resources worth hundreds of billions of dollars. Eight nations are fighting over territorial rights to the Arctic seabed – including not only Russia, the United States and Canada but also Norway and Denmark.
But among the many disastrous side effects is that south Florida, the Marshall Islands and half of Bangladesh will be underwater. The UN estimates that by decade’s end around 50 million people will become environmental refugees. Because of global warming, we’ll find ourselves in a manmade, hubristic mess of, um, Titanic proportions.
So here’s the lipstick part: Maybe there won’t be as many icebergs.
We thank BUSINESSWEEK reporters Brian Grow, Paul Barrett, Keith Epstein, and Robert Berner for taking time to answer your questions about their story on "The Business of Poverty."
Please note that the views and opinions expressed by the reporters are not necessarily the views and opinions held by Bill Moyers or BILL MOYERS JOURNAL.
Question: Are there any efforts in Congress to instate new usury laws?
--Marion
Answer: While there are moves afoot in Congress to address credit card rules, including how interest rates can be changed, there do not appear to be any efforts to instate new usury laws. Usury laws are generally implemented at the state-level and have been in place in most states for some time.
Question: Re your report on the poverty business. We used to have monopoly laws like the one that broke up Ma Bell and we used to have usuary laws – Do you know anything about how these laws have been eroded away over time - how that happened stage by? Thank you soooooo much for the work you are doing. Please keep it up.
-- Judith
Answer: Thanks, Judith. It’s not clear that anti-monopoly laws would be applicable in industries we described in “The Poverty Business” and other stories, as no one company has a dominant position; and most states do have usury laws which set a maximum interest rate that companies can charge. One way, however, in which some companies such as payday lenders, tax-refund loan issuers and others appear to get around state usury laws is by classifying their charges as “fees.” These “fees” are often, in effect, a type of interest charge. And when the “fees” are calculated as an annual interest rate, they very often exceed state limits. Some states are moving to set rules which cap the fees according to their equivalent rate as interest.
Question: My niece went to payday loan companies about a year ago to get a "quick loan" to help pay for wedding expenses. When she and her husband-to-be brought the loan agreements to me for help in paying out the loans the interest rate on one was 549%. Not so many years ago anything over a 21% interest rate on a loan was consider usury and criminal. I want to find if there are any organizations or groups that advocate against these companies/practices that I can volunteer time to.
-- b d bounds
Answer: Dear B.D. Bounds – Your niece’s experience is a very common one with payday loans. Several states have cracked down on payday lenders and capped the effective interest rate they can charge. The state of Ohio recently passed such as legislation. Advocacy groups such as the National Consumer Law Center, The Center for Responsible Lending, ACORN, Consumers Union and a range of local groups such as Legal Aid societies all advocate for the reform of payday lending. Many of them have local chapters where you might be able to volunteer.
Question: It is interesting to read two of the posts shifting responsibility to the individual and indirectly protecting current business practices. How can people pull themselves up by the bootstraps if the bootstraps are not even on the boot or the boots are in concrete?
-- Anthony
Answer: Anthony, that is indeed a challenge that has been highlighted by some economists and by others who study the impact of prices and interest rates. For instance, while costs may go up for all of us, and many of us borrow money, some economists note that costs can impact or rise disproportionately for those at the lower rungs of the socioeconomic ladder. And certainly someone who finds himself or herself in spiraling debt can find those boots sinking on a lowering floor.
Those who, as you put it, shift responsibility to the individual, sometimes also point to a commonplace reality in which the individual – through lack of education or awareness, for instance, and the inability to make a realistic assessment of the situation – have walked into a precarious financial condition and bootstrapped themselves.
Extending loans – even high-interest loans – to the poor also promises to provide access to goods, services and opportunities they might not have been able to achieve otherwise. Microlending thrives around this ideal. (Of course, even microlending sometimes falls short of the goal; see our story on >The Dark Side of Microlending, Roxanne Tsosie, the Navajo woman whose situation was highlighted in this program, appears to have been trying to exercise individual responsibility; to keep her job, to avoid returning to the reservation and welfare, and to improve her life, she needed a car. She went to one of the few places she thought she could obtain one.
Question: I say we pass a law preventing anyone who can't pass a financial literacy test from getting any type of loan. Wonder what Mr. Moyers and the BusinessWeek writers would say about that?
-- tarsus4
Answer: Well, Tarsus4, there are some initiatives around the country aimed at improving financial literacy. I recently had lunch with someone who aims to start a national organization that would help improve individuals’ awareness of their financial options, which he describes in almost epidemiological terms; more than half of all Americans at most income levels, he says, have no idea they could pay less on their loans or earn more with investments. In places such as Latin America, some microlenders require that borrowers undergo a rudimentary course in borrowing, complete with lessons on calculating interest rates and setting budgets, so they better understand what they’re getting into.
As for a requirement to get a loan? As writers at BusinessWeek, we don’t take positions in favor or against laws. I don’t think there’s any serious momentum for Congress to pass a literacy test requirement for loans. But there are many people who worry that borrowers know too little and should be taught. Some advocates would like to see financial literacy at least become part of the nation’s high school curriculum, or even earlier. Some states and school districts offer or require such classes.
Some bankers are even rethinking how they approach this subject. A PNC Bank manager in Pennsylvania, quoted recently in the following article, says “we feel financial literacy should be almost mandatory, not just with schools, but with parents” and that “if you look at some of the issues plaguing our economy now, we are a country of debtors. We’ve lost the concept of savings.” (see )">http://www.oregonlive.com/kiddo/index.ssf/2008/09/teach_financial_literacy_early.html)
Question: So the woman in the piece "buys" a car, uses it for x number of days to get to work, defaults on her loan, the car goes back to the dealer and she's back at square one. All she's done is rent the car. It's not exactly exploitative. If she doesn't know she'll default on the loan, she should. If she goes into it knowing she'll default on the loan, signs on anyway, then the inevitable reposession comes, who loses. She can do this again and again and it becomes the dealers problem. Credit score? Is building credit even a goal for the woman in the piece. If you can't afford a car and someone is willing to give one to you for no money down and not expect to ever get paid for it, that seems like something a "borrower" can exploit.
-- jason
Answer: Until BusinessWeek entered the picture and started asking questions, one customer had forfeited a – to her – significant deposit. That would have made the car a rather expensive rental indeed. Imagine paying half your income to rent a car.
As you point out, though, a person who pays a high price, even an unexpectedly high price, isn’t necessarily “exploited.” In our stories we never reach that conclusion.
Some people would argue that some consumers are at a disadvantage because of what you call their lack of “knowing” – lack of education, awareness, understanding, even a basic understanding of how interest rates are calculated. Is a car dealership aiming for this demographic, whose members often lack sufficient credit to get a car loan on better terms elsewhere, taking advantage of them – or offering them a badly needed service? And if the terms are difficult to handle, who is responsible? Some have argued on this site, as elsewhere, that the individual always is; others say it’s the business; others say it’s society overall.
Those working for the dealership we wrote about said they had created a socially beneficial business model – one, in fact, that can help no-credit, or bad-credit customers establish credit. For the woman highlighted in our story, it doesn’t appear to have been much of a benefit, and the manager of the dealership said it should never have extended the loan to her.
Question: Great report, even if it was in May 2007. Is there a follow up report? Thank you for all your work! Keep on!!
--marie
Thanks, Marie. We’re always on the look-out for more interesting story opportunities and BusinessWeek has and is doing more work in the area of consumer finance. If you have any ideas, send them our way!
This week, THE JOURNAL examined the provocative and often hostile language used by some ‘shock jock’ talk radio hosts to criticize liberals and liberalism.
Unitarian pastor Chris Buice, whose congregation was attacked by a gunman with an expressed aversion to liberalism and Christianity, said:
“A man came in here [and] dehumanized us. Members of our church were not human to him. Where did he get that? Where did he get that sense that we’re not human? ... When you hear in talk radio that liberals are evil, that they are traitors, that they are godless, that they are on the side of the terrorists – that’s hate language.”
With Americans’ interest in – and feelings about – the Presidential election reaching a fever pitch, commentators have been parsing the nation’s political discourse to analyze how Americans view one another.
ATLANTIC MONTHLY editor Clive Crook wrote in a recent column that many liberals themselves have a basic disrespect for those with whom they disagree:
“[Democrats’] concern is real and admirable. The trouble is, they lack respect for the objects of their solicitude. Their sympathy comes mixed with disdain, and even contempt. Democrats regard their policies as self-evidently in the interests of the US working and middle classes. Yet those wide segments of US society keep helping to elect Republican presidents. How is one to account for this? Are those people idiots? Frankly, yes – or so many liberals are driven to conclude. Either that or bigots, clinging to guns, God, and white supremacy; or else pathetic dupes, ever at the disposal of Republican strategists... Voters in small towns and suburbs, forever mocked and condescended to by metropolitan liberals, are attuned to this disdain. Every four years, many take their revenge.”
What do you think?
Has American political discourse become so toxic as to be counterproductive? Do you expect it to get better, stay the same, or become worse?
How consistently is your own political expression tolerant, even-handed and fair?
What are your ideas for restoring civility to America’s political discourse?
In this week’s JOURNAL, Bill Moyers spoke with journalists Les Payne and Brooke Gladstone about the media and the upcoming elections.
Gladstone said that press coverage revolves around sensationalism:
“This [election coverage] isn’t about relative importance. This is about celebrity. This is about putting your finger in the air and following the public mood. Is it news? No. Is it an audience generator? Yes.”
We invite you to discuss in the space below.
This week, the JOURNAL followed several members of the New Jersey National Guard as they prepared to leave their homes and family for deployment in Iraq, some for their second or even third tours of duty.
Citizen soldier Sergeant Beverley Curl, who has been with the National Guard for nearly twenty years, said:
“[The National Guard] paid for school. The Guard has been good to me. I mean, I’ve had no problem with the Guard and I tell my friends all the time ‘I totally believe that everybody should serve some time in the military’... I’m not gonna say ‘oh yes, I want to go, I want to go.’ I don’t want to go. I don’t want to leave my husband, my family...
We’re supposed to stay in Jersey. The regular army is to take care of things that happen worldwide. And I understand that the regular army is stressed and they’re pulled at the seams or whatever. But then what happens, God forbid, if something happens to New Jersey? You’ve taken most of the troops out of the state, so what happens then? So, no, I don’t think the guard should be there – simple, I don’t. I believe they should be in the state to do what they’re supposed to do for this state. But you gotta go, you gotta go.”
According to the Department of Defense, there are 84,820 members of the Army National Guard and Army Reserve as of September 3rd, 2008.
Do you know anyone serving in the wars abroad? How has their absence affected their families, friends, and communities?
This week on the JOURNAL, Bill Moyers spoke with media and politics expert Kathleen Hall Jamieson about the Republican National Convention.
What issues are on top of your agenda? How would you rate the convention speakers' handling of them?
(Photo by Robin Holland)
Below is an article by JOURNAL senior writer Michael Winship. We welcome your comments below.
St. Paul’s Police Protest the Press
By Michael Winship
Chronicling his life as a journalist in the colonial British Raj, a young Winston Churchill wrote that “nothing in life is so exhilarating as to be shot at without result.”
Nor, I’d add, is there anything in life quite so discombobulating as to turn a corner and unexpectedly walk into a wall of tear gas.
It happened to me on a couple of occasions during the years of anti-Vietnam war protests, when I was a college student and young reporter in Washington, DC. One time I was gassed while filming a counterdemonstration on Honor America Day, a nationally televised celebration hosted by Bob Hope. As God is my witness, the gas hit just as Kate Smith was singing, “On a Clear Day You Can See Forever.”
The following year, 1971, demonstrators came from around the country to shut Washington down during morning rush hour. A photographer, another reporter and I were on the scene covering a failed attempt to close the Key Bridge crossing of the Potomac. Police in pursuit, we dashed uphill into the Georgetown neighborhood only to run smack into more police lobbing canister after canister of gas until it blanketed the streets. I remember then Rhode Island Senator Claiborne Pell standing at the top of his townhouse stoop in robe and slippers, bewildered at the scene unfolding below him, clutching his rolled up copy of the Washington Post for dear life. Momentarily blinded, students took us in hand and led us to a makeshift infirmary in the basement of a university building.
So, attending the Democratic National Convention in Denver and watching events at the Republican National Convention in St. Paul via television, the sights and sounds of police and protesters were familiar. And that scent, the heavy, cloying smell of gas and pepper spray, as evocative as, but far less delicate than a Proustian cookie.
In both cities, getting tickets to the big shindigs hosted by major corporations seeking to bend the ear of party VIP’s was a media challenge – they were blocked by sometimes heavy-handed attempts by police and private security to keep the press out. A very few, like ABC News’ Brian Ross got in, recording, for example, the bash thrown for Republicans by Lockheed Martin, the American Trucking Association and the NRA, featuring a band named Hookers and Blow. However, in Denver, one of Ross’ producers, Asa Eslocker, was arrested while trying to interview Democratic senators and donors leaving a private event at the Brown Palace Hotel.
What was different in St. Paul was that the police seemed especially intent on singling out independent journalists and activists covering the Republican convention for the Internet and other alternative forms of media. Over the weekend, police staged preemptive raids on several buildings where planning sessions for demonstrations were being held, one of them a meeting of various video bloggers, including I-Witness Video, a media group that monitors law enforcement. Later in the week, I-Witness’ temporary headquarters were entered by police, claiming they had received news of a possible hostage situation.
Why all this interest? One can only speculate, but footage that I-Witness shot at the Republican convention four years ago in Manhattan has helped exonerate hundreds who were arrested and detained by the New York Police Department, their cases either dismissed or resulting in acquittals at trial.
In St. Paul, two student photographers and their advisor from the University of Kentucky were held without charge for 36 hours. The ACLU of Minnesota ID’d several other journalists, bloggers and photographers from Rhode Island, California, Illinois, Florida, and other parts of the country who also were arrested. Many others were gassed or hit by pepper spray.
Perhaps the most prominent arrest was that of journalist Amy Goodman, anchor of the daily television and radio news program, “Democracy Now!” Police had taken two of her producers into custody as they were trying to cover the news. Goodman went out looking for them, but didn’t get very far. She was stopped, slapped into handcuffs, and hauled into a detention center, along with almost 200 hundred other people. They had come to demonstrate, she had come to report on them.
Goodman was released a few hours later and back on the job anchoring her daily radio and TV show, a favorite of listeners and viewers who go to her for news they won’t find in the mainstream or rightwing press.
What has those in control worried is that despite what the politicians tell us from inside their fortified compounds where the party line rules, more and more people outside have cameras and laptops, and they’re not afraid to use them.
Forty years ago, protestors in Chicago shouted, “The whole world is watching.” More and more, the whole world isn’t just watching. From Minnesota to China, citizen journalists are reporting what they see and hear, and the powers that be don’t like it.
Please note that the views and opinions expressed by Michael Winship are not necessarily the views and opinions held by Bill Moyers or BILL MOYERS JOURNAL.
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