[Marxism] Credit card larceny

[Louis Proyect <lnp3@xxxxxxxxx>]

Not long after I started using Chase Online Banking, I discovered that I
had to pay a $15 late fee when I made an online payment to my Chase Visa
Card on the day it was due! When I contacted Chase, they told me that
when you were paying online, you should pay at least 5 business days in
advance of the due date since it supposedly took that many days for the
payment to be processed. As a computer professional, I regarded that as
complete bullshit since it should actually only take milliseconds for
the money to be transferred between two Chase accounts.

At the time, I didn't give it much thought. But after watching a PBS
Frontline documentary on the credit card industry this week, it became
clear to me that this was a typical maneuver by Chase to rip off
customers without them knowing about it until it is too late. They
incorporate all sorts of ways to screw the customer with fees and
penalties that are only mentioned in the fine print.

Starting tonight at 10pm Eastern Standard Time in the USA, the show can
be watched in its entirety on the Internet at:

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

Just click the "watch online" tab.

Frontline relied heavily on information provided by Harvard law
professor Elizabeth Warren who wrote, "The Two-Income Trap: Why Middle
Class Mothers and Fathers Are Going Broke." On the PBS website, which
has lots of useful information about the credit card racket, she
describes the typical credit card victim:

"About half of the families who file for bankruptcy have serious medical
problems. Sometimes it's ... Mom or Dad; sometimes it's a child;
sometimes it's an elderly parent that they've been trying to support.
And for about 20 percent of the families in bankruptcy, it's divorce;
it's ... family breakups that land them in the bankruptcy courts. Now,
if you added that up, you saw it added up to way more than 100 percent,
and that's because, for many of them, it's two out of those three, or
even for a lot of them, three out of three ... that are just more blows
than they can take, and that's how they end up in bankruptcy."

This describes my mother to a t. Before going into a nursing home, she
had racked up $10,000 in credit card debt. She kept switching to a new
card in order to pay off the debt accrued on an older card--and all at
18% plus. All this was the result of having inadequate health insurance.
Medicare paid the brunt of her hospital bills, but the deductible was
just too much for her to handle. If your hospital bill is $100,000 and
Medicare pays for $95,000, that remaining $5000 becomes impossible when
your Social Security payment is $600 per month.

Believe it or not, I was ready to pay off these debts since I have a
strong sense of financial duty inherited from my late father. But after
further reflection, I decided that I was dealing with loan sharks and
told my mother to just ignore the collection agencies. When I was
upstate cleaning out her house, they used to call every morning
demanding payments. I looked forward to their phone calls since it gave
me an opportunity to give them a piece of my mind. I should add that I
use the word loan shark advisedly. Did you ever wonder why these credit
card companies are all located in South Dakota? The simple answer is
that this state lacks anti-usury laws. If you operate in South Dakota,
you can charge any interest rate you like.

Here's an excerpt from Elizabeth Warren's book on the PBS website that
describes Hillary Clinton's turnabout on a bankruptcy bill that promised
a measure of protection for people like my mother. It epitomizes the
folly of backing these politicians, including the individual who might
be the DP standard-bearer in 2008:

Mrs. Clinton's newfound opposition to the bankruptcy bill surprised me.
Given her legal training and her devotion to women's causes, I had
certainly expected her to grasp the importance of the issue. But
President Clinton's staff had been quietly supporting the bankruptcy
bill for several months. Bill Clinton wanted to show that he and other
"New Democrats" could play ball with business interests, and the major
banks were lobbying hard for changes in the bankruptcy laws. I had
expected that it would take a lot more than thirty minutes to convince
Hillary Clinton to depart from the position widely rumored to be
supported by her husband.

But Mrs. Clinton stayed firm in her fight against "that awful bill." She
was convinced that the bill was "unfair to women and children," and she
intended to stand by her principles, even if it cost some Democratic
party candidates campaign contributions. Over the ensuing months, she
was true to her word. With her strong support, the Democrats slowed the
bill's passage through Congress. When Congress finally passed the bill
in October 2000, President Clinton vetoed it. The following summer, an
aide explained to me the abrupt about-face: "A couple of days after Mrs.
Clinton met with you, we changed sides [on the bankruptcy bill] so fast
that you could see skid marks in the hallways of the White House."
Thanks to Mrs. Clinton, families still had one financial refuge left --
at least for the moment.

But the story doesn't end there. The banking lobbyists were persistent.
President Clinton was on his way out, and credit card giant MBNA emerged
as the single biggest contributors to President Bush's campaign. In the
spring of 2001, the bankruptcy bill was reintroduced in the Senate,
essentially unchanged from the version President Clinton had vetoed the
previous year.

This time freshman Senator Hillary Clinton voted in favor of the bill.

Had the bill been transformed to get rid of all those awful provisions
that had so concerned First Lady Hillary Clinton? No. The bill was
essentially the same, but Hillary Rodham Clinton was not. As First Lady,
Mrs. Clinton had been persuaded that the bill was bad for families, and
she was willing to fight for her beliefs. Her husband was a lame duck at
the time he vetoed the bill; he could afford to forgo future campaign
contributions. As New York's newest senator, however, it seems that
Hillary Clinton could not afford such a principled position. Campaigns
cost money, and that money wasn't coming from families in financial
trouble. Senator Clinton received $140,000 in campaign contributions
from banking industry executives in a single year, making her one of the
top two recipients in the Senate. Big banks were now part of Senator
Clinton's constituency. She wanted their support, and they wanted hers
-- including a vote in favor of "that awful bill."

--
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