Imagine trying to pass the Civil Rights Act of 1964 using the legislative techniques of 2009

The Civil Rights Act of 1964 is an impressive piece of legislation, but it would never pass today, certainly not in anything like the form in which it currently exists. Note: The actual Civil Rights Act of 1964 (which can be found here) is only 56 pages long (double spaced in 12 point Times Roman font). It contains clearly written provisions throughout its ten titles. For example, see the following language from Title II, SEC. 201.:

(a) All persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, and privileges, advantages, and accommodations of any place of public accommodation, as defined in this section, without discrimination or segregation on the ground of race, color, religion, or national origin.

But what would it have been like if present-day legislative techniques had been used by those attempting to pass the Civil Rights Act of 1964? Most significantly, using modern strategies means that the proponents would be much more interested in passing legislation that sounded like it prevented discrimination, than passing legislation that actually prevented discrimination. Here are some specific differences. If the 2009 legislative techniques were being used back in 1964:

-The Civil Rights Act would have been thousands of pages long, so long that most legislators would not be well-versed regarding its terms.

-Key deliberations and debate regarding the Civil Rights Act would have been conducted entirely in secret.

-The Civil Rights Act would've been filled with terms that the citizens themselves would not understand the effect of the bill. If asked about the bill, most American citizens would say something like, "I think it has something to do with discrimination but I'm not quite sure what the new law allows or prohibits.

Continue ReadingImagine trying to pass the Civil Rights Act of 1964 using the legislative techniques of 2009

Time for a national usury law?

First Premier Bank has just introduced its new 79% interest rate sub-prime credit card. No, that's not a typo, and some experts expect to see more credit cards with sky-high interest. Which makes me again bring up the topic of a national usury cap. Thomas Geoghegan recommended such a cap last year, in his article in The American Prospect. He suggested a credit card interest cap of 12% and a law completely barring payday loans.img_1180 I have filed several class action suits against large payday lenders (here's a post on one of those suits). These lenders often argue that people need these 400% interest loans for short term emergencies. At what cost, though? In my experience, these lenders are commonly stretching out these "short term" loans for many months. People who borrow $500 will pay $2000 in interest over the year and they will STILL OWE THE $500. Many states allow payday lenders to charge in excess of 1000% interest. These loans suck the very life out of working class folks. They amount to financial crack cocaine, because people often end up taking out a second, and a third payday loan in order to pay off the first one. It's a terrible mess and it's ruining lives. That's why 13 states have passed laws making sure that payday lenders cannot operate in those jurisdictions. It's time for the other states, and Congress, to get with the program. To put this all in perspective, remember the stories about "loan sharks?" Those were the good old days. "Simple nominal annual interest rates on extortionate mafia loan shark debts averaged 250%." Syndicate Loan-Shark Activities and New York's Usury Statute, 66 Colum. L. Rev. 167, 167 (1966). And here's another irony. The Bible clearly holds that usury is a sin comparable to murder. Usury is prohibited by Exodus 22:25: "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.” Usury is also prohibited by Leviticus 25:35-37. In spite of these Bible quotes, if you want to find lots of payday stores and payday lenders, look for geographical areas where you'll also find conservative Christians. That is the finding of Steven M. Graves and Christopher Peterson, in a law review article entitled "Usury Law and the Christian Right: Faith-Based Political Power and the Geography of American Payday Loan Regulation," 57 Cath. U. L. Rev. 637, 640 (2008):

We conclude, with a high degree of statistical certainty, that states with powerful conservative Christian populations tend to host relatively greater numbers of payday loan locations per capita as well as a greater commercial density of payday lenders. These findings propound a tragic and sad irony. Those states that have most ardently held to their pious Christian traditions have tended to become more infested with the progeny of money changers once expelled by Christ from the Hebrew temple. Legislators in those states, who have effectively used biblical principles to shape their legislative agenda on social and cultural issues, have failed to consistently apply biblical principles to economic legislation.

All it would take for Congress to outlaw payday loans is to write up a bill, have a majority of members of Congress approve of it, and then refer it to the President to sign it. But that can't happen these days because the financial services industry pays our politicians huge amounts of money so that they WON'T sign these sorts of bills. And, of course, with regard to Congress, the banks "frankly own the place."

Continue ReadingTime for a national usury law?

Four litmus tests for Congress

According to consumer advocate Ed Mierzwinski, the following four reforms "seem obvious to taxpayers. Not to Wall Street." I would add that they don't seem obvious enough to most members of Congress. They should have been passed at least a year ago:

1) Will Congress enact a strong version of the Consumer Financial Protection Agency? [It needs to be independent, needs to regulate all financial products, needs to reinstate federal law as a floor, not a ceiling, of protection]. 2) Will Congress regulate the shadow markets, e.g., unregulated derivative, hedge fund, and private equity shadow markets? 3) Will Congress audit the Fed? 4) Will Congress end the too-big-to-fail system that led to taxpayer-funded TARP bailouts?
I agree with Mierzwinski that these needs are obvious. The only reason they aren't yet law is that Congress is flooded with banking industry money. It's time for Congress to show whether it has any integrity for enacting these four reforms, which constitute some very low bars, indeed. These are minimum standard that any reasonable person would immediately support. Members of Congress need to show us that they really represent the People of the U.S. by immediately voting for these four reforms.

Continue ReadingFour litmus tests for Congress

Peasant mentality at large

In a post from a few months ago, Matt Tabbi described the peasant mentality so common in America today. It's a mindset that refuses to criticize the ruling class, no matter how oppressive things get:

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. . . But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit.

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William K. Black: It’s time for real economic reform

We are a nation in severe crisis. According to William K. Black, a white-collar criminologist, President Obama doesn't deserve any more of our patience:

The Obama administration promoted Bush's architects of the financial disaster and demands that we hail them as heroes. President Bush was ridiculed for saying: "Brownie, you're doing a heck of a job." FEMA administrator Michael Brown stood by while Hurricane Katrina reduced a single large city to ruin. Geithner and Bernanke stood by while scores of large cities were devastated.
Black offer much more than criticism. He offers ten opportunities for digging us out of this mess. It will be difficult to attain any of these while the banks own Congress, but we need to dig deeply an somehow find the political will. Here are two of Black's points that stand out to me:
Can the Wrecking Crew. Fire the senior leaders of Bush's and Clinton's financial Wrecking Crews and stopping treating them as financial experts. President Obama should not reappoint Bernanke as Fed Chairman. He should dismiss Geithner and Summers and cease to take any advise from Rubin. Replace them with the Reconstruction Crew -- people with a track record of getting things right and being effective economists, regulators, and prosecutors . . . End "too big to fail." These banks are "systemically dangerous institutions" (SDIs). They should not be allowed to grow. They should be shrunk to the point that they no longer pose systemic risk, and they should be subject to vigorous regulation while shrinking. They are too big to manage and too big to regulate. They are ticking time bombs that will cause recurrent global crises as long as they are SDIs.
Here are some of Black's other suggestions. I agree with all of them whole-heartedly: - We need to provide the FBI with 1,000 more specialized white-collar crime investigators. - No more executive compensation looting. - Kill TARP and PPIP. ("Use the funds to help honest homeowners that would otherwise lose their homes because of predatory loan terms.") - Make the Federal Reserve System public. - Defeat any proposal to make the Fed the "Uberregulator." - Create a robust "Consumer Financial Product Agency. - End the waste of long-term unemployment (Instead, of paying them to do nothing, pay them to do public works) Consider, also, Black's Five Fatal Flaws of Finance.

Continue ReadingWilliam K. Black: It’s time for real economic reform