For consumers, it’s not the free market. It’s the Wild West.

Bob Sullivan is quickly becoming one of my heroes, based upon my reading of his new book: Stop Getting Ripped off: Why Consumers Get Screwed and How You Can Always Get a Fair Deal (2009). Bob also offers a blog called the Red Tape Chronicles, where he reports on numerous consumer issues. It's well worth your while. I recently mentioned Bob's book on a post focused on America's profound case of Innumeracy. I'm a bit deeper into the book now, and I am highly impressed with Sullivan's ability to write clearly and persuasively with regard to consumer issues. I am also impressed with his ability to give an evenhanded account of many consumer issues. He doesn't deny that consumer greed has played a role in modern-day screwing of American consumers. On the other hand, consumer greed is only part of the story. The other big part of the story is that our federal agencies that we have had set up to serve as watchdogs for Americans, are doing a pathetic job. Consider the case of Bernie Madoff. The securities and exchange commission (SEC) was presented with overwhelming evidence that Madoff was running a Ponzi scheme way back in 1999. They did nothing about it. Sullivan as "if the SEC isn't hunting down folks such as Madoff, do you really think it's protecting you?"

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Can you tolerate NAMBLA?

image courtesty of the Federal Art Project, via Wikimedia Commons You think you're open-minded? What if the North American Man-Boy Love Association wanted to distribute a newsletter in your town? What if they wanted to hold a local parade celebrating pederasty? I am currently studying social psychology in graduate school, and I'm particularly interested in political psychology. One of my present research interests is political tolerance. "Political tolerance" refers to individuals' willingness to extend equal civil liberties to unpopular groups. When political scientists and psychologists measure political tolerance, they often probe individuals for their ability to withstand the most offensive, outlandish groups and speech possible. For example, a liberal-minded person may be asked whether they would be willing to allow a rally for the Klu Klux Klan or some extremist, militaristic group. Paradoxically, a truly tolerant person must be willing to allow racially intolerant speech. Political tolerance plays a cornerstone role in functioning democracies (at least, we think so). If voters can strip away the civil liberties of disliked political groups, those liberties lay on precarious ground indeed. If we cannot tolerate the words of anarchists or members of the Westboro Baptist Church, then we do not really believe in the boundlessness of speech at all. Academics say as much. In reality, voters are not so tolerant.

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Against all odds: How marijuana was legalized in Denver

If your quest were to convince the people of your city to legalize a highly demonized drug which was entirely safe, how would you run your campaign? At the recently concluded True Spin Conference in Denver, I had the opportunity to listen to an animated yet highly focused Mason Tvert describing for the audience how he and his small and not-well-funded organization (“SAFER”) convinced the people of Denver to legalize marijuana in 2005, with 51% of the people voting in favor. He also spearheaded a 2006 campaign to legalize marijuana throughout Colorado. Although that latter measure failed, an astounding 41% of the people of Colorado voted in favor. In case you’re thinking that I’m promoting the use of marijuana, I am not, but neither would I attempt to prohibit any other adult from using it. I’ve never used marijuana (even though I once worked as a musician and the opportunities were ubiquitous. Millions of gainfully employed and otherwise law abiding people do like to use marijuana, but they are paying dearly for their attempts to feel good and seek stress relief. I am for the legalization of marijuana because that our country arrests more than 750,000 people each year for possessing or using an extremely safe drug that successfully makes people feel good. This destructive and expensive waste of government law enforcement is absolutely shameful. The number of people arrested each year is more than the entire population of South Dakota. and these users include many people you know and respect. There is rank hypocrisy in the air, given that marijuana inexpensively offers the harmless escape that most of us seek much of the time (in one way or another), without any serious side effects and without the expense of many other methods of escape. If there were no such thing as marijuana, when it was finally invented by a pharmaceutical company, we would hail it as a miracle drug (Big Pharma wouldn’t need to lie about its efficacy or safety, as it does for many other drugs). Governments would allow it to be sold at drugs stores and they would happily tax it.

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Why bailouts might not be long-term solutions for distressed homeowners

Well-founded criticism abounds that we shouldn't be bailing out large banks that have profited by providing imprudent (and oftentimes scandalous and even criminal) sub-prime loans to homeowners. One oft-mentioned alternative to bailing out the banks is to bail out the homeowners. One might justify this move on the ground that many recipients of sub-prime loans were invited to take out loans with exploding ARMS (adjustable rate mortgages). These are not the ARM's from decades past, mind you. Rather, these are loans that, within a few years of the loan closing, are guaranteed to require monthly payments that the homeowners couldn't afford, regardless of market fluctuations. Imagine, for example, a loan requiring payments of $1,000/month that would rise to $1,800/month within a few years, even when the cost of money stays relatively stable. The mortgage companies offering these types of refinances would be long gone by the time that this kind of loan explodes, forcing many of these homeowners into foreclosure or bankruptcy. In addition to the exploding ARMS, many distressed homeowners were victimized by hidden fees and penalties, including substantial pre-payment penalties, as well as "yield spread premiums," which are essentially under-the-table bribes paid to brokers. But why did so many homeowners sign up for loans they wouldn't be able to afford? Many of them were lied to by the mortgage companies (disclosure: In my law practice, I've represented many of these folks). Other borrowers were clearly irresponsible. Most of of the borrowers suffer from a condition mathematician John Paulos calls “innumeracy”: the “inability to deal comfortably with the fundamental notions of number and chance.” I'm not accusing the borrows of stupidity; rather, they tend to lack a specific skill set, the origin of which often extends all the way back to the grade school struggles with mathematics. The above observations serve as context to a discussion of a potential plan of action. The simple question are these: Should we bail out distressed homeowners? [more . . . ]

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Climate and Conspiracy

Climate Change--Those Hacked Emails It's been a week or more since a gentleman hacker stole a bunch of private emails from the University of East Anglia in an attempt to liberate supposedly secret evidence that the entire climate change crowd is in on a conspiracy to defraud the public. I haven't yet heard if anyone is filing charges against the man, but evidently some folks, especially the Limbaugh-Beck screaming meme crowd, feel this is the new Pentagon Papers and the hacker in question is their Daniel Elsberg. It is an unfortunate fact that some things---like this issue---are so complex that most people cannot follow all the data to the conclusions. They haven't the time, the resources, or, frankly, the inclination. But then if anybody could parse evidence at this level, what would need scientists for? Why would anyone devote an entire life to researching one thing? If Joe the Plumber could actually understand the science behind the Large Hadron Collider, Paleontology, Evolution, and Climate Change, what do we need specialists for? I'm sure someone has an answer along the lines of "We don't! They just sponge off taxpayers and study stuff no one gives a damn about!" I'd like to think most people are not so easily gulled, but I've been disappointed before and probably will be again.

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