RSSCategory: Consumer Protection

Happy Ponzi Day!

March 3, 2011 | By | 4 Replies More
Happy Ponzi Day!

Charles Ponzi was born 129 years ago today, so I guess that makes it Ponzi Day today. The man for whom the pyramid scheme was named though, was a chump. Today’s schemers have been many times more successful. By the time Ponzi’s scheme peaked in 1920, Wikipedia notes that “he had made $420,000 ($4.59 million in 2008 terms).” See what I mean? $4 and half million isn’t even enough for today’s ponzi artists to get out of bed.

For example, let’s look at the currently best-known ponzi artist, Bernie Madoff. The amount missing from Madoff clients’ accounts was nearly $65 billion, although that includes fabricated money– actual losses total about $18 billion. Even at $18 billion though, that’s still almost 4,000 times the ponzi scheme than Ponzi himself. Madoff made headlines again this week, saying that “It’s unbelievable, Goldman … no one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme.” And who better to know Ponzi schemes than the man who bested Ponzi?

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We Are Not Parts

February 21, 2011 | By | 13 Replies More
We Are Not Parts

I’ll admit up front that I’m shooting from the hip here. There are many aspects to what is happening in Wisconsin right now with parallels to several past instances in the country in the fight over workers’ rights, unions, and moneyed interests, but I frankly don’t have the time to research them all right now and get something up before it all comes to a head.

Isn’t it interesting, though, that we are collectively cheering what is happening in the Middle East right now and something similar is happening right here and people don’t seem to be paying attention to what’s at stake?

I grant you, it’s a stretch. But on principles, not so much. We’re talking about who has the right to speak to power and over what. The protesters in Madison aren’t having their internet access and phone service pulled and it’s doubtful the military will be called in, but on the other hand the Wisconsin state police are being asked to go get the now-labeled Wisconsin 14 and bring them back to the state capitol to vote on something that is clearly a stripping of the right of petition and assembly. So this can become very quickly a constitutional issue and that’s scary, because right now the Supreme Court has been decidedly against workers’ rights.

Governor Scott is at least being clear. I’ll give him credit, he’s not ducking questions about what he’s trying to do. Wisconsin, like many states, has a budget crisis. He’s already gotten concessions from the unions, a lot of money. The unions have not balked at doing their civic duty in terms of agreeing to pay cuts, freezes on raises, and some concessions on benefits to help the state meet its budgetary responsibilities. But he’s going further and asking that all these unions be stripped of their collective bargaining abilities in order to make sure they never again demand something from the state that the legislature or the governor believes they don’t deserve. In other words, Governor Scott doesn’t ever want to have to sit down and ask them for concessions ever again—he wants to be able to just take what he wants.

[More . . . ]

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Mandatory arbitration featured at the movies

January 25, 2011 | By | Reply More
Mandatory arbitration featured at the movies

A new movie called “Hot Coffee” is featured at Democracy Now. The new film:

looks at the stories of four people whose lives were devastated when they were denied access to the courtroom after being injured. The film documents how corporations have spent millions to promote the case for tort reform.

One of the main ways to keep injured people out of courtrooms is to use mandatory arbitration clauses, a topic I addressed here.

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Remember states’ rights? Sit back and watch the power of money

January 13, 2011 | By | 2 Replies More
Remember states’ rights?  Sit back and watch the power of money

Mix Lux sees what’s coming. Will it be another bailout for the banks in the form of a federal invasion of states rights? Will it be a federal law that says that banks don’t need to obey state law? It could be ugly, and it might involve the transfer of massive amounts of money to banks that caused the current foreclosure problem.

Lux cites to the writings of someone named “Numerian“:

With increasing desperation, banks along with their enablers in Washington are going to try to jerry-rig a way out of this problem. Unfortunately for the banks, ex post facto laws are strictly forbidden by the Constitution, which is now being treated with new-found reverence by the Congress. It may be impossible to construct a law that solves problems like this that already exist. Perhaps the banks will get lucky, and some courts will begin to find in their favor, though that is certainly not the trend at the moment. Maybe the US Supreme Court will accept the banks’ argument that the securitization process in itself established a valid foreclosure claim even though mortgages were not properly assigned as required by state laws. This, however, would require the Supreme Court to make up a legal doctrine out of the blue (as the banks have done), thereby overturning all state laws and court rulings going back well over 100 years. Only a Supreme Court bought and paid for by bank lobbyists, and willing to prostitute itself publicly to its paymasters, would issue such a ruling.

This means that the likely progression of events – the path we are now on – will lead to a near complete collapse of the housing market, because the big banks and the two government enterprises responsible for supporting the housing market will be fatally crippled wards of the state. The US government itself, including the Federal Reserve, will be equally crippled. Try as you might, you will find no words in the Bible – no phrases applicable to The Flood or to the destruction of whole cities at the hands of a vengeful God – that appropriately capture the financial gravity of this situation. But if we are forced to come up with some metaphor, Financial Armageddon will have to do.

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Lessons Learned?

November 7, 2010 | By | 2 Replies More
Lessons Learned?

What can be drawn from this recent election that speaks to America?

To listen to the bombast, this election is all about money. Who has it, where it comes from, what it’s to be spent on, when to cut it off. An angry electorate looking at massive job loss and all that that implies tossed out the previous majority in Congress over money. This is not difficult to understand. People are frightened that they will no longer be able to pay their bills, keep their homes, send their children to college. Basic stuff. Two years into the current regime and foreclosures are still high, unemployment still high, fear level still high, and the only bright spot concerns people who are seemingly so far removed from such worries as to be on another plain of existence. The stock market has been steadily recovering over the last two years. Which means the economy is growing.

Slowly. Economic forecasters talking on the radio go on and on about the speed of the recovery and what it means for jobs.

Out of the other end of the media machine, concern over illegal immigrants and outsourcing are two halves of the same worry. Jobs are going overseas, and those that are left are being filled by people who don’t even belong here. The government has done nothing about either—except in Arizona, where a law just short of a kind of fascism has been passed, and everyone else has been ganging up on that state, telling them how awful they are. And of course seemingly offering nothing in place of a law that, for it’s monumental flaws, still is something.

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Aftermath

November 3, 2010 | By | 3 Replies More
Aftermath

I should probably wait a few days or weeks before writing my reaction to last night’s national insanity exhibition. But I doubt I’ll “level out” on what has happened.

First off, what part of Mr. Obama’s “fixing this will take a long time” did people not understand? Did anyone seriously expect all this mess to be cleaned up in two years? Or is it really just that people are only concerned about their own situation and everyone else can just—well, worry about their own situation?

Let me say this slowly, so there can be no misunderstanding: we have been digging this hole for 30 years. It will take a bit longer than two years to climb out of it.

Thirty years, that’s right. Since Reagan. Dear Ronnie, so classically American in so many ways. Carter began the deregulation frenzy with oil, hoping the oil companies would plow their new profits into development of American resources in the aftermath of the first major OPEC embargo. Reagan was surrounded by the rest of the business community, who whispered into his ear, sweetly, oh so sweetly, “Take the restraints off, Ronnie, and we will build you that shining city on the hill all those Moral Majority types are going on about.” So he did. And that started it.

(Unlike others, I am inclined to believe that Reagan was naive about this. I think he was from that generation that actually trusted people of a certain stature, relied on native patriotism, and so was completely blindsided by the corporate vampires who talked him into deregulating damn near everything. I think he expected them to reinvest in America, not start the whole ugly off-shore account boom and the outsourcing of American jobs. Inclined, I say, but not willing to give him a complete pass. Because along with that, Reagan oversaw the foreign take over of hundreds of American businesses, many of which were involved in basic research and development and manufactured things vital to our national interest. Throughout the 80s, one company after another was bought by Japanese, British, German, French, and occasionally Korean interests and the result was a serious hemorrhage of expertise, know-how, and manufacturing capacity, not to mention the loss of good-paying, high-tech jobs as those businesses were all moved out of the United States and to their new host countries. Why did he do this? Because Reagan was a traditional conservative who believed government should have nothing to do with private sector business, either pro or con, and he refused to establish an “industrial policy” that would have protected these businesses. At the time there was a tremendous wave of sentiment opposed to protectionism, which smacked of a “liberal” or at least Democratic program, but in hind sight clearly was all about keeping international boundaries as open as possible for the multinationals that have presided over the disemboweling of our economy.)

Deregulation has been the culture in Washington ever since.

[More . . .]

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Grass Roots Groups: Big Banks are quietly profiting from payday lending

September 16, 2010 | By | 4 Replies More
Grass Roots Groups:  Big Banks are quietly profiting from payday lending

A group called Grass Roots Organizing (GRO) held a rally in front of the Bank of America Building in downtown St. Louis, announcing that big banks are quietly financing the biggest payday lending companies. The announcement was based on a report issued by National People’s Action out of Chicago.

I videotaped portions of the rally, which was led by an energized woman named Robin Acree, Executive Director of GRO. When you understand how payday lenders operate (and subvert the political process), you’ll also understand why it takes some spunk to stand up to the lenders and to expose these shady dealings. [Note: Acree’s microphone had malfunctioned just prior to this segment–she was still carrying it, but it wasn’t working].

After seeing a bit of Acree’s presentation, you’ll see a two-minute confession by Graham McCaulley, who formerly worked at a payday lender and offers a laundry list of the unscrupulous practices he saw first hand.

Consider that these two presentations constitute a formidable indictment of big banks. Here’s an excerpt from the NPA document handed out at the St. Louis Rally:

Major payday loan companies receive their funding from the largest national banks . . . Major banks provide over $1.5 Billion in credit available to fund major payday lending companies . . . The major banks funding payday lending include Wells Fargo, Bank of America, U.S. Bank, JP Morgan Bank, and National City (PNC Financial Services Group) . . . Our analysis find that the major banks indirectly fund approximately 450,000 payday loans per year totaling $16.4 Billion in short-term payday loans . . . Major banks access credit from the Federal Reserve discount window at 0.5% or less, these banks extend an estimated $1.5 Billion annually to eight major payday lending companies, who in turn use this credit to issue millions of payday loans to consumers every year at average rates of 400% APR.

For a lot more information about 400% payday loans and why they should be outlawed, see this earlier post, which includes a powerful video of St. Louis attorney John Campbell (John and I work together as consumer lawyers at the Simon Law Firm). And isn’t it incredible that it is almost impossible to convince state legislators to cap consumer loans at the substantial rate of 36%? Sad but true.

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Is USDA Organic Certifiably Insane?

September 2, 2010 | By | Reply More
Is USDA Organic Certifiably Insane?

I saw a very brief and hurried post from ERV on ScienceBlogs. In it, she noted that organic farmers let their animals die from treatable diseases, because to do otherwise would deny them the valuable ‘organic’ label.

WTF?

In Europe, organic livestock MUST be treated humanely, and may receive therapeutic medication (including antibiotics) – to do otherwise is a complete denial of everything science and medicine has learned in the past three hundred years.

But, apparently, that’s what Organic means in the US!

As ERV says

‘Organic’ farmers? All concerned about their free-range, cage-free, at harmony with the Mother Goddess animals? They let their fucking animals die from treatable diseases, because if they treat them with even one dose of antibiotics, the animals are no longer ‘organic’.

She quotes Ronnie Cummins, National Director of the Organic Consumers Association

Allowing one-time therapeutic antibiotics is “a slippery slope”, and would “undermine consumer confidence in organics. It’s the same position [I have] as on human vaccines. They are dangerous, and that’s why I didn’t vaccinate my kid.”

Never mind the epic FAIL in Ronnie Cummin’s statement about the dangers of vaccines – that woo is worthy of a post all by itself! The issue is that animals are allowed to die, often painfully, from completely preventable and treatable diseases.

Why is this so?

ERV linked to her source (this article at the blog “In These Times”). According to that article,

Department of Agriculture (USDA) regulations defining organic standards mandate that if [a] calf had gotten one dose of antibiotics, even to save her life, she could never give organic milk—even after the two years it takes for her to become a milker, and even though neither she nor her milk would retain any trace of antibiotics.

So why would the USDA have such nonsensical standards for ‘organic’?

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Do you think that sunscreen really protects you from skin cancer?

July 29, 2010 | By | 5 Replies More
Do you think that sunscreen really protects you from skin cancer?

If you think that sunscreens really protect you from cancer, think again. Read this detailed information from the Environmental Working Group and you’ll be astounded. How can so much false and unsupported information can be freely plastered on bottles of sunscreen? Why isn’t the federal government clamping down on sunscreens? Who do our img_3219representatives represent? Apparently, their greatest loyalty is to companies that make money by misrepresenting their products. Can you believe that sunscreens are not regulated to make sure that they do what they claim to do?

The best approaches to protecting your family: Wear clothes and stay in the shade. Any product that claims protection greater than SPF 50 is misleading. Note that most people put on only a 1/4 to 2/3rds enough sunscreen to actually reach the product’s SPF rating. Check out the oftentimes toxic ingredients at EWG.

Check out EWG’s Hall of Shame.

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