Joining the John Galt strike

[a_majoor]

Many people are actually becoming strikers without realizing it (scaling back to reflect reduced circumstances, avoiding higher taxes or predatory regulations all have similar effects), but to be really effective, you should target your strike actions to inconveinience the looter class.

To nullify the takeover of the auto industry in favour of the UAW/CAW, buy a late model used car that is in good condition. With routine maintainence and keeping your annual driving to the practical minimum (reduce the amount you pay out in fuel taxes as well), you can potentially keep your machine on the road for a decade.

The takover of banks and financial institutions in the US will have spillover effects in Canada, both due to the integration of our economies and also the "Progressive" coalition of Liberals, New Democrats and the Bloc will work hard to import various elements of the US admininstration's program here. (They got a $32 billion dollar spending spree, so anything is possible). American law is now transferring the cost of deadbeat credit card holders to the responsible cardholders (and how well that idea worked for mortgages!)

Here is an easy to start program:

http://althouse.blogspot.com/2009/05/people-who-routinely-pay-off-their.html

Wednesday, May 20, 2009
"People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride..."

You need to see it that way, so you'll understand why you should pay interest from the time you pay for something with a credit card. I'm one of those people that pay the entire balance every month to avoid paying any interest, and being told I've been taking a free ride all these years does not soften me up to pay my supposed fair share to support the credit card system. I just won't use the card if that's the deal. I'll switch to a debit card or pay cash.

IN THE COMMENTS: rhhardin said:

The reason not to ever use a debit card is that in case of fraudulent charges, you're the one out the money, so help is hard to find.

With a credit card, they're the ones out the money because you simply don't pay the contested charges, and everybody is really motivated to help you clear the thing up.

Don't give up that protection easily.
I'm instantly convinced not to use a debit card!

AND: I'm instantly unconvinced as John Lynch said:

I protect my debit card by simply not keeping much money in the account its drawn from. If I'm making more than a trivial purchase, I transfer the money from another checking account, which costs nothing at my bank. So, if someone gets my number it's no big deal because all they can steal is lunch money. There's no overdraft allowed on that account, either.

And TMink said:

I was recently charged $810 on my debit card to the WalMart in Seneca, South Carolina. This occured while I was home in Nashville. Seems I was part of the Heartland Compromise.

My bank refunded the $810 quickly and kindly.

 

[a_majoor]

And just so you don't think these American ideas won't find traction here:

http://www.officiallyscrewed.com/blog/?p=960

Jack Layton is Canada’s Barney Frank
Filed under: Politics-Federal, Business, Moonbattery — TrustOnlyMulder @ 9:34 pm

Today in Power Play, Jack Layton said that a reasonable credit card rate is needed for low income Canadians.  Jack Layton is dead wrong.

Good credit card rates are given to people who have a history of paying their cards off.  Bad credit card rates are how banks and lending institutes pay for cards that people default on.

So why is Jack Layton our version of Barney Frank?
In 1999, Democrat Barney Frank called for Freddie Mac and Fannie Mae to provide low income mortgages to Americans known as NINJA loans.  NINJA stood for No Income, No Job or Assets.  So in essence, what the Democrats, under Bill Clinton, did was to create the conditions for the sub prime implosion that has caused the current recession by allowing people who had no business owning a home to get one at great rates usually reserved for people with Jobs, Income or Assets that are used as collateral.
If you doubt the validity of this, you can read the article at the NY Times by clicking here.

So today, Jack Layton feels that Canadians who are not eligible for low interest rates should get them in a similar fashion to what Barney Frank called for back in 1999.

The whole reason there are different credit card rates is many fold.  One is for points options or freebies.  But the main reason is because people who have no business getting credit often default on their payments and put their credit rating in further disarray.  This in turn makes it almost impossible for them to get a half decent rate.

So the question that Jack Layton needs to answer is…..Does he expect the tax payer to bailout people who have bad credit when they default on the credit cards they have no business getting in the first place?

 

[DBA]

Even if you pay your balance in full each month so you don't get hit with interest fees the banks still make money from the transaction fees charged to merchants. The average for Canadian retailers is around 2% of the purchase. That more than covers advancing the money for a month or so, and any costs and profit.

Some of the fees and practices currently used by banks and CC companies are abusive and much too numerous for the average consumer to wade through and realize the impact they will have in different situations. There is a difference between a complex set of options and a set of rules and fees purposely made obtuse to fleece customers.

I don't think the NDP extreme would be a good idea, but some controls over the current practices was sorely needed.

 

[chris_log]

I don't think the NDP extreme would be a good idea, but some controls over the current practices was sorely needed.

I disagree. I've never paid interest on a credit card and I pay my balance off in full in each month. If I need to buy something expensive, it either comes out of my savings or the balance for that purchase goes onto a much lower interest line of credit.

I know people who have cards (often more then one) who whine and moan about how banks and credit card companies rip off consumers. It's quite simple, if you don't like the product, don't use it.

It's quite simple to actually get yourself ahead of the bank and the card companies (as of next week I'll start doing it as I've seen the light and gotten a real credit card).

Step 1: downgrade your chequing account to the basic no frills one (with my bank, at no cost it's 10 transactions a month and each one above is $0.65). Stop paying money for no reason (for 'unlimited transactions'...I've tossed away enough money with that for the past few years).

Step 2: get a cash rewards card (I just got a Gold Visa...99$ a year and 1% back on all purchases). Travel rewards cards are stupid, and anything else is a waste of time.

Step 3: make ALL your purchases on credit. If you need cash, plan ahead...withdraw a couple hundred at the beginning of each month and keep that as a cash reserve so you dont need to make continual debit transactions or expensive service fees at interac ATMs. Pay your rent, bills, insurance, everything via credit (if you're able to). If someone gives you stink eye for making a $5 purchase at McD's on credit...ignore them.

Step 4: pay your balance in full at the end of each month to avoid interest charges. Pay into your savings, RRSP etc at the end of the month too and do it in as few transactions as possible (to keep service fees down).

Step 5: collect your cash reward at the end of each year. At the moment, with my plan, I'll have the annual fee covered (Gold/Platinum cards have other good benefits, hence why I chose it) and still be ahead $50 a year just by paying my monthly rent, insurance and bills for a year...not counting all my other purchases.

This way we can beat the credit card companies and they can keep rates high to keep people who shouldn't have cards from getting them.

 

[DBA]

A free market can develop problems when deceit is involved. Some players will fail to see through it harming the market as a whole. Degenerate markets then evolve with built in deceit by most or all players. Look at plane ticket list prices and cell phone monthly plans for example. The large print advertised prices are bullshit. 

For credit cards one example would be low interest rates on transferred balances (an enticement to switch cards) combined with the practice of payments going torwards the balance with the lowest interest rate. So counterintuitively for the consumer such a card should not be used. They would be better off using the old credit card for new purchases and paying it off first, then the new card. The consumer usually uses the card to their detriment and the banks profit. This practice will cease under the new regulations as payments must go towards the balance with the highest rate first. It was allways more of a bait and switch tactic by the banks than an informed exchange of money and services.

I agree with your comments about financial management, myself I have a no fee Visa card, a basic chequing account ($3.95/month for 15 transactions, waived if balance over $1500) and a higher interest account where I put extra balance. The Visa is paid off each month automatically from the chequing account. Still I also help friends and relatives with problems and seeing how punitive and downright abusive some of the bank's practices are annoys me. The sales pitches and marketing from the banks is all friendly and in complete contrast to how they treat some of their customers.

 

[Brad Sallows]

I am unfamiliar with any "marketing" in which the aim of the sales force is inevitably to cheerfully and tirelessly bring to your attention all the defects, limitations, pitfalls, caveats, etc.  Auto sales or repair?  Real estate?  Fast food?  Sports equipment?  Clothing?  Consumer electronics?

Feel free to enumerate any which come to mind.

 

[DBA]

I am unfamiliar with any "marketing" in which the aim of the sales force is inevitably to cheerfully and tirelessly bring to your attention all the defects, limitations, pitfalls, caveats, etc.  Auto sales or repair?  Real estate?  Fast food?  Sports equipment?  Clothing?  Consumer electronics?

Feel free to enumerate any which come to mind.

My comment was more on general advertising claims that aren't fullfilled not full disclosure of all details and drawbacks. A fast food place that advertises "A place to eat healthy food" should have a decent number of menu items that fit that description. Banks need the trust of customers and tend to advertise in that regard. A company going for the trust angle should not be trying to screw it's customers. Read some of the links off the TD bank Codes of Conduct and Public Commitments and you can see they are going for the trust angle. This doesn't match with for example the hidden foreign exchange fees they charged in the past that are the subject of a class action lawsuit. TD VISA Card class action

 

[a_majoor]

In order for a free market to grow and prosper, a culture of trust must exist, backstopped by the ability of a neutral arbitrator to settle disputes and provide legal remedy against force and fraud.

The culture of trust is both vital and powerful. Once breach of trust is realized, the market punishes the malefactors butally and efficiently. Companies like Enron and Bre-X were ruined and reduced to shells very rapidly once the fraud was discovered, far faster than any legal remedies were imposed or applied. While it sucks to be an investor in one of these companies, or fleeced by a sharp operator, the damage is limited to those people who allowed greed or stupidity to overcome common sense, not the general public at large. Trust allows the development of efficient credit and clearing mechanisms, lack of mutual trust limits economies to "family" enterprises and tribal economies (i.e. you only deal with the limited number of people you know personally).

Nationalizing large sectors of the economy shifts the risk to the prudent since their tax dollars are used to bail out the greedy and stupid, and their economic choices are constrained by the loss of potential investment dollars they could have put to productive use.

 

[a_majoor]

More hard numbers that indicate the strike is indeed on. The last time this happened in the United States was the "Capital Strike" in 1937 which was the deepest and darkest year of the depression (and almost a full decade after the Crash and "New Deal" progams kicked in).




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‘Going Galt’ Got Going Last Summer

Posted By Tom Blumer On April 23, 2009 @ 12:00 am In . Positioning, Money, Politics, US News | 87 Comments

[1] My Pajamas Media column last week hasn’t generated a lot of leftist love.

In it, I had the unmitigated gall to note that the federal government has collected far less in tax receipts during this fiscal year compared to last year than an economic contraction of less than 1.75% would seem to predict (not annualized, the economy contracted 0.125% in the third quarter of 2008 and 1.61% in the fourth).

I also “sinned” further by suggesting that the “going Galt” phenomenon has contributed to the shortfall.

That suggestion has plenty of support beyond “mere” anecdotes [2] cited by ABC and those recited by several Pajamas Media commenters during the past few months.

April 2008 saw an all-time record for federal tax collections of over $400 billion, largely buoyed by final 2007 tax payments and first-quarter 2008 estimated tax remittances from business owners, investors, and entrepreneurs who pay taxes as individuals. It was a performance I characterized at the time as a “[3] supply-side stunner,” because it showed, five years on, that George Bush’s investment-related tax cuts of 2003 still had growth-generating legs.

The collections record occurred as the economy was [4] in the midst of recovery after a difficult fourth quarter of 2007. First-quarter growth was a tepid 0.9%, but the second quarter’s 2.8% was just short of [5] the 1958-2007 median of 3.1%. The real (i.e., not seasonally adjusted) economy added jobs, though not as many as in previous years, [6] from February through June.

Thus, we were not in a recession [7] as normal people define it — not numerically and not mentally. As I wrote at the time of the high producers who were generating so much cash for Uncle Sam: “many … are thinking, in the face of relentless media harping to the contrary, that 2008 will be at least as profitable [as 2007].”

But a short time later, receipts began tailing off and went comparatively negative:



What triggered the sudden shift? It was the beginning of [8] the POR (Pelosi-Obama-Reid) economy in mid to late June.

Starting in June and all the way through to Election Day, Nancy Pelosi, Barack Obama, and Harry Reid repeatedly told the country that they were ready, willing, and would soon be able to starve the country of the conventional sources of energy it needs to keep its economic engines running, regardless of the consequences, bowing before what may be [9] the greatest hoax in human history. Enough high producers to make a difference believed them and abandoned their previous guarded optimism.

Starting in June and all the way through to Election Day, Pelosi, Obama, and Reid — but especially presidential nominee Obama — told the country that they were ready, willing, and would soon be able to punitively tax the 5% of the nation’s most productive so they could redistribute money to everyone else. Enough high producers to make a difference believed them and abandoned their previous guarded optimism.

In September, the decades-in-the-making, Democratic Party-driven housing and mortgage lending mess came to a head at Fannie Mae and Freddie Mac. Washington then allowed itself [10] to be blackmailed into a series of financial sector and other bailouts that appeared to be, and have turned out to be, seemingly endless. Enough high producers to make a difference headed for the lifeboats and abandoned what little optimism remained.

Enough high producers to make a difference abandoned their spring optimism, not because of then-current economic conditions, which were at worst mediocre. They did so because of their assessments of what economic conditions would be in the not-too-distant future, based on the perilous pronouncements of Pelosi, Obama, and Reid. Many of those who didn’t catch on during the summer did so after observing the reckless September-October actions of the Washington establishment.

As a result, they took steps that businesspeople, entrepreneurs, and investors ordinarily take when a serious recession takes hold — not hiring, not expanding, letting people go and not replacing them, making worn-out equipment last longer instead of buying new, and others — before the serious recession took hold. They deliberately downsized in response to stated promises by powerful government officials Pelosi, Obama, and Reid to penalize and punish them and the economy as a whole, if and when they gained power.

In other words, enough high producers to make a difference preemptively “went Galt.”

Their perfectly logical and understandable reactions have caused the recession to be much deeper than it could or should have been. The “going Galt” phenomenon and the recession itself have also sent federal receipts into a frightening free fall. The following graphic includes March’s actual receipts and my estimated results for April ([11] detailed here):



I estimate that April 2009’s receipts will be about $250 billion instead of last year’s $407 billion. A final result as low as $220 billion would not surprise me a bit.

This collections slowdown is far worse than anything seen in 2001 or 2002. If it continues, in combination with a current Washington spending spree that may be unrivaled in human history, the federal government’s fiscal 2009 deficit could top $2 trillion — far worse than the Congressional Budget Office’s current estimate [12] of “only” $1.845 trillion.

Maybe, just maybe, if this administration and Congress would decide that economic growth is more important than environmental purity, class warfare, and de facto government takeovers of large corporations, those who have “gone Galt” might come in from the wilderness. Does anyone think that Pelosi, Obama, and Reid are up to doing what it takes to make that happen?


--------------------------------------------------------------------------------

Article printed from Pajamas Media: http://pajamasmedia.com

URL to article: http://pajamasmedia.com/blog/going-galt-got-going-last-summer/

URLs in this post:
[1] My Pajamas Media column last week: http://pajamasmedia.com../../../../../blog/tax-receipts-plummet-as-americans-go-galt/
[2] cited by ABC: http://www.realclearpolitics.com/articles/2009/03/going_galt_americas_wealth_pro.html
[3] supply-side stunner: http://www.bizzyblog.com/2008/04/29/supply-side-stunner-april-us-receipts-on-track-for-record/
[4] in the midst of recovery: http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=2&ViewSeries=NO&Java=no&Requ
est3Place=N&3Place=N&FromView=YES&Freq=Qtr&FirstYear=2007&LastYear=2008&3Pla
ce=N&Update=Update&JavaBox=no#Mid

[5] the 1958-2007 median: http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=2&ViewSeries=NO&Java=no&Requ
est3Place=N&3Place=N&FromView=YES&Freq=Qtr&FirstYear=1958&LastYear=2007&3Pla
ce=N&Update=Update&JavaBox=no#Mid

[6] from February through June: http://pajamasmedia.com../../../../../blog/ap-plays-fast-and-loose-with-jobless-numbers/
[7] as normal people define it: http://www.investorwords.com/4086/recession.html
[8] the POR (Pelosi-Obama-Reid) economy: http://www.bizzyblog.com/2008/07/03/the-pelosi-obama-reid-recession-porr-may-have-begun/
[9] the greatest hoax in human history: http://newsbusters.org/blogs/noel-sheppard/2007/11/07/weather-channel-founder-global-warming-greates
t-scam-history

[10] to be blackmailed: http://www.bizzyblog.com/2008/10/06/bailout-saga-proves-that-elites-dont-care-what-we-think/
[11] detailed here: http://www.bizzyblog.com/2009/04/20/if-you-dont-think-theres-a-collections-train-wreck-in-progress/
[12] of “only” $1.845 trillion: http://www.bizzyblog.com/wp-images/PrezAndCBOdeficitEstimates0309.jpg