BernieHund: The Political Watchdog

Well, once again this morning President Bush was on television before the stock market opened. He was telling Congress that it needed to pass the bail out bill. However, he seemed to rephrase the wording to make it more palatable for Main Street.

Furthermore, both the nonpartisan Congressional Budget Office and the Office of Management and Budget expect that the legislation considered would ultimately cost the taxpayer far less than the $700 billion. Because the government would be purchasing troubled assets and selling them once the market recovers, it is likely that many of the assets would go up in value over time. Ultimately, we expect that much _ if not all _ of the tax dollars we invest will be paid back.

The difference in wording was subtle, however for many it may be substantial. Just the hint from the President that we may recover the $700 Billion when the assets are sold after the market recovers may be enough to get the bill through the House.

Perhaps, while the credit is “seized up” we should put a few other issues on the table. Of course, Congress will be out on the campaign trail, and I suppose that by the time they return to Washington the heat will have settled to a mild simmer. However, it may be the time for the people of the country to force a few issues on the credit front.

Credit card companies are the ones who have taken advantage of the average American. First of all, if you have a name… and who doesn’t? … you could get a credit card. I told the story in an earlier post of how BernieHund was offered credit… BernieHund! Talk about the irresponsibility of banks and their credit card departments.

Just as with the mortgage crisis, credit card companies have been left to set the rules and change them at will.

Debra Tanner was thrilled earlier this year when her longtime credit-card issuer cut her interest rate nearly in half, from 16% to 9%. But a few months later, the thrill was gone. In August, Tanner discovered that the card issuer, HSBC Bank, had jacked up her rate to 30%. In fact, the rate hike had gone into effect several billing cycles earlier without Tanner noticing.

When she called to protest, a customer-service representative told Tanner that her rate was being raised because she had been two days late with a payment. The bank refused even to consider restoring her lower rate until at least November.

If you have a credit card, you have seen this. When the banks need more money, they squeeze it from us. Credit card interest rates rise and fall and rise and rise like a ride on a roller coaster. Unfortunately, the credit hard holder has no alternative but to pay at whatever rate the issuer demands or cancel the card. The card issuers are within their legal rights. Nothing has been done to protect the consumer from rates that can zoom from 9.99% one month to 29.99% the next.

Personally, I would love to see the American consumer learn something of value from this bail out. Stop feeding the banks. Just as we have all cut back on our comsumption of gas due to rising prices, we can cut back on our credit card debt. As the price of a barrel of oil has begun to come down once we began to cut back on driving, credit card rates will be forced to come down when we stop being lured by the concept of buy now, pay later. I’m not suggesting that we all cut up our credit cards or park our cars. I’m suggesting that if all of us tightened our belts now, the banks would finally realize that they need us as consumers. Because the truth is they do need us.

So, while we have the attention of Congress perhaps we should stand strong and get some regulations in place before we feed the greed on Wall Street. There are going to be those in Congress who will give in to the pressure on Capitol Hill and from the White House and surely, the bill will be passed. However, voters can have the last word in November by voting for change. And the American people can have the last word with the banks by refusing to be lured into more debt. We can tighten our belts now or continue to wait for the banks to tighten the nooses.