Tuesday, May 5, 2009

Fed Refuses to Help Credit Card Holders

If you needed any more proof that the U.S. is now a "Corporate welfare state", the Fed is refusing to implement any regulations to preven credit card companies from gouging individuals with interest rate hikes and the other shenanigans they pull.
Fed Refuses to Help Credit Card Holders

All the Senate is asking for is some semblance of fairness. When card issuers can borrow money at 2% from the government, there seems to be an element of organized crime at work when they can charge over 20% interest. When did banking get to the point that they can mark up credit at 1000% over costs? What philosophy allows us to give trillions to corporations that gambled away their money and ours, yet not help individual consumers who have not frittered away their wealth at all but are now being punished further by corporations, under the guise of "we can't survive otherwise"? Maybe they shouldn't survive if they can't make money fairly.

If our nation refuses to help individuals, then they've become what Jefferson warned about, "tyrannical and unresponsive to the people." When do the rights of companies who can't survive on their own usurp the rights of individuals, of consumers?

What bothers me is that corporations are nothing more than legal entities, "paper tigers". When they need money, they simply print more stock. This in itself is inflationary and dilutive to current owners of the equity. Apparently both the fed and all corporations can print money, and the latter without any special permission or with any checks and balances.

This system is completely insane. How we let ourselves come to be both governed and gouged by corporations is a lengthy history of gradually letting the crooks have all the keys to the "national bank".

For me, the way to stop this is several steps: (a) do not allow corporations to issue "secondary offerings" of stock unless under financial duress of survival, and only with SEC approval (b) remove the "one share, one vote" rule, which allows a few wealthy individuals to "buy votes" by buying more shares, then the major shareholders can collude to completely control all the other shareholders and override their wishes, then finally (c) declare corporations unconstitutional, which is a bill that comes up in Congress annually, but since the politicians are all owned by corporations through campaign donations, will never happen.

As the current crisis shows, they will rob us blind, gamble away the money, then expect the consumers to pay that back as well as continuing to pay high costs as well. When legal entities become more important than individuals then we have NO democracy, no freedom, and we all become slaves to the whims of big money, who can continue to rob us through the legal system.


lionmother May 6, 2009 at 2:06 AM  

Great post!!! it's been happening to us. We have lost credit for no reason. This just sucks, but good of Schumer to try to change things. I live in NY so we're at least represented by someone good.:)

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