Racism Is Alive And Well

When I heard about this story I just couldn't believe it. In this day and age I can't believe that there's an instance of racism as blatant as this. You may have heard about it but for those who haven't I summarize: There's a police district in Little Rock, Arkansas that recently had a large number of slots to fill in the "upper" roles of captain and lieutenant. The higher ups decided to conduct a test to determine the most qualified people because, after all, wouldn't you want the most qualified people in that field leading the task of protecting citizens?

Of course you would.

To that end, they rigorously planned this test out so that it would be racially neutral. They didn't want to disparage anyone, so they even went to the trouble of hiring an outside firm that specialized in creating politically correct tests (to the tune of about $100,000).

When the results finally came in, the white test-takers did very poorly, while the Hispanic and black recruits excelled. Many of them had worked long hours, quit second jobs, even dealt with learning disabilities in order to pass this test. When the powers-that-be got word of the test results, they decided to throw them out to avoid lawsuits. Unfortunately for them, it produced exactly the same outcome. The odd twist of irony is that the council who decided to throw out the results was comprised of 3 blacks and 1 Hispanic; the only groups that performed well enough on the tests to be promoted.

Now black and Hispanic policemen are suing, saying the results were thrown out simply because they are black. They played by the rules, they studied hard and scored high enough to make the promotion cut, yet that promotion was denied simply because of the color of their skin.

Like I said before - can you believe this is happening in this day and age? I mean, in the past affirmative action and social engineering has been utilized to "equalize the playing field", but this is ridiculous. The council's defense is that they are not promoting anyone based on the test score, so they are not discriminating; they're simply throwing the scores out. To make matters worse, this happened a few years ago, and since then they have been rotating people in and out of those positions in order to be fair, thus placing in some cases the non-qualified whites into those positions just for the sake of equality.

Sufficiently riled up?

Ok; I have a confession to make...the above story is not true. Well, at least not entirely true. They weren't policemen, they were firemen. It wasn't in Little Rock, it was in New Haven, Connecticut. And finally, it wasn't blacks who excelled on the test while whites failed miserably, it was the other way around.

Still think it's a travesty? The sad truth of our nation is that if the above situation would have happened that way, there is no way they would have held back the recruits from their rightful promotion. As a matter of fact, I would venture to say the NAACP and other minority organizations that have chimed in on this case would have touted the fact that the most successful test-takers were non-whites. It would have been entirely acceptable to promote deserving minorities, but deserving majorities? Not a chance.

I understand there is political pressure (at every level) to promote people evenly distributed among the various races, or at least proportional to the numbers available in each race, but this is not some job that requires little skill. This is a job that directly affects peoples' lives. It affects the lives of the firemen and of the people they're trying to save. I guarantee you one thing: If my house was burning down, I wouldn't care who or what came through my door to save my children or try and save my property.

I bet the vast majority of Americans feel the same way.

So why did they do it? Well, in this case it was a "damned if you do, damned if you don't" situation. The minority groups were threatening to sue if the tests were not thrown out and the ones who passed were threatening to sue if they did. Despite the political backlash, the council showed bad judgment. Thankfully, this case has finally wound its way to the Supreme Court, who should be layout out a verdict any day now.

If you'd like to read about this case and its history, this website is very thorough.

What Are They Thinking?

The Credit CARD (Card Accountability, Responsibility, and Disclosure) Act of 2009; what a clever name! I wonder how much the guy in Congress who has the unofficial title of Bill-Namer gets paid? Whatever it is, it's not enough. Anyway, it's only a few closed-door meetings and a President's signature away from becoming a legislative reality. But this is a good thing, right? Senator Harry Reid felt pride because the Congress "stood up for consumers and stood up to abusive credit card companies". Senator John Kerry chimed in that Americans were "[getting] whacked with unfair credit card fees". So we should all thank Congress, right? Everybody wins, right?

Hardly. Nothing Congress ever does allows everybody to win. It's an impossible goal. For someone to win, another has to lose. That's the nature of the world, though there's a chunk of the population that honestly feels that nobody should ever lose. Unless of course, you're talking about the evil corporations. Of course they should lose.

Many of these provisions have me thinking: Are these really things that need to be into a law? Look, if you've ever gotten a credit card, you know you get all this verbiage that you never read. Somewhere buried in there is something that looks like this (pulled from an online Citi application, 5/19/09):

First they specify the variable rate specifications:
--Your APRs may vary each billing period.
--The purchase and balance transfer APR equals the Prime Rate plus 9.99%.
--The cash advance APR equals the Prime Rate plus 16.99% (never lower than 21.99%).
--The default APR equals the greater of (1) the Prime Rate plus up to 23.99% or (2) up to 29.99%.

Then, in the footnotes they clarify it:
How do we calculate variable rates?
For each billing period we use the Prime Rate published in The Wall Street Journal two business days before the Statement/Closing Date.
When can we change the rates, fees, and terms of your card agreement?
We will not voluntarily increase your rates and fees or change other terms of your card agreement until your card expires, typically in two years. At that time, we will review your credit history and general market conditions. If we decide to make changes after our review, you will receive advance notice and a right to opt out. If you opt out, we will close your account. You can then pay the remaining balance under the old rates, fees, and terms. Of course this paragraph does not apply to the automatic default APR and Prime Rate changes. It also does not apply to changes required by law, our regulators, or our network providers.

Does that sound unfair to you? Is it their fault that you didn't read it? I know I never read them, but I don't hold them liable for my laziness. President Obama said last week, "You should not have to worry that when you sign up for a credit card, you're signing away all your rights. You shouldn't need a magnifying glass or a law degree to read the fine print that sometimes doesn't even appear to be written in English." Excuse me? Exactly which rights were infringed by those rules? And a law degree? Is our educational system that bad that it is assumed a law degree is required to understand what I just pasted above? On second thought, don't answer that.

Let's take a look at some of the key provisions of the bill:

• Credit companies can no longer raise interest rates on existing balances until after those balances are 60 days past due.
  
  
  Why 60? It sounds so arbritrary. Why not 30? 90? 120? It's just a number, and you're not going to solve anything. You will still have people not pay. TODAY most may pay by 60 days (I don't know this; just trying to think of why they picked 60), but if the deadline is 60, then most will probably pay by 90. Then what? Just keep pushing it out? Eventually, don't we all have to just realize the cutoff is there, it's detailed in the agreement, and call it a day? You can't push it out because people don't read.


• Consumers will be notified 45 days in advance of any rate increase.
  
  
  Again - another arbritrary date.
  


• Statements will be forced to be mailed 21 days before the payment due date.
  
  
  Uh...how exactly is this supposed to help, and why is this being legislated again? Look, consumers, if you are using a credit card, you do realize that at some point you'll be required to pay the debt off, right? They're going to come knocking at around the same time every month for at least a portion of the debt. I'm not really sure how legislating that you find out so early suddenly offers the consumer more protection. This is an unnecessary clause.
  Actually, you know what? I just thought of a potentially ever-so-slightly-harmful side-effect of this. I already get my Discover statement via email around 29 days BEFORE it's due. It basically comes right after it closes for the previous month. I then promptly forget about it because, after all, it's not even due for another month. For ME, this legislation is potentially harmful. My point is that any legislation will hurt some and help others. Those that are lazy and forgetful, who don't set up reminders and stay on top of debts will be harmed because they will be notified too soon and it will fall off their radar. Those who are diligent will take the opportunity and set up the payment ahead of time, regardless of when they are notified. Net effect: NOTHING.
  


• It will be harder for companies to issue credit cards to people under 21.
  
  
  Yet another case of the government acting like parents. Look, this is and should be a business decision of the credit card companies. They probably shouldn't even hassle themselves with 18-21 year olds. They should jack up rates on them and in general make it difficult for them to obtain their product. They should consider that age group a high credit risk and treat them as such. Wait a minute - if they did that, then...[gasp]...they'd be implementing a form of age discrimination! Why isn't the government stepping in and forcing them to reduce restrictions! Oh yeah, it's because the government wants to absolve anybody, even those legally considered an adult in practically all other matters, of personal responsibility. How about a pro-active attempt to curb financial ignorance? How about an introduction of financial education into our American primary/secondary education system? Instead of accepting stupidity, why don't we work to avoid it in the first place? The government shouldn't be a parent (though they try), but it's in the country's best interest to have a financially educated public.
  


• Rates can't be increased in the first year, with two main exceptions: 1) variable interest rate increase, and 2) promotional rate period end. In line with that, all promotional periods must be at least 6 months.
  
  
  Great. Now we have the government specifying how long a sale or discount can last for a business. Imagine a government stipulation that stores be obligated to offer last week's sale prices up to 3 days after the sale ended? In effect, increasing the length of sale? That's essentially what they're doing. Why should the government come in and specify business practices? THIS IS MARKETING! They didn't lie, they didn't cheat. As a matter of fact, they didn't even have to offer a promotional period at all - they do so in order to entice customers to use their card rather than others.
  

The list goes on and on, covering gift card expirations, etc., and even going so far as to specify the date time of day deadline for bill payment! Really? The time of day??

It's not all bad, and some of these things will benefit the average consumer. Unfortunately, most of the effects of this will be negative for exactly the wrong people. If you divide borrowers into two categories, those who pay and those who don't, then those who don't pay are subject to fees, penalties, rate increases, credit problems, etc. (Yes, I realize that some(most?) who don't pay have just fallen on hard times with job loss, etc. and physically can't pay. They didn't necessarily do anything wrong at all. With this in mind, businesses can choose to have a heart and handle accordingly or be a hardliner and collect. It's a business decision; likewise it's our decision as a consumer to choose a hardliner credit card company or not.) This is a fact of life. If you do what you should and when you should do it (i.e. pay on time), then you shouldn't be unnecessarily penalized. When these rules go into effect, the credit card companies will not sit idly by and watch their profits dwindle with an, "Aw, shucks." NO. They're going to find some way to keep the revenues coming in, and if they're not allowed to "pick on" the bad payers, then they'll be forced to raise fees/rates across the board to cover the balance. This will likely reduce usage by good payers, which will cause their customer base to become lopsided toward the bad payer side. Now call me crazy, but I don't think that's good for business.

My final thought on this is simple: This is yet another case of the government stepping in where they don't belong, in the interest of "the people". When will we stop this bailout mentality that it's not OK to fail? This will have unintended side-effects, and only time will tell what those are. Do I think that the credit card companies should be restrained and should act ethically in regards to business practices? ABSOLUTELY. Do I think the government should create laws in order to control business direction? NO. I would much rather see a public effort toward the credit card companies to force them to band together and create an agency/group/board/something that would set industry standards they would all abide by. As a consumer it is our right to protect ourselves, and we shouldn't depend on the government to protect us from us.

Me On The Glenn Beck Show - 5.19.09

I called into the Glenn Beck Radio Show this morning and (after staying on hold for about an hour) finally got on. If you've never called into a radio show (and I've only called into a few), you can sit on hold for quite a while. It's ok though, because you get to listen to the show through your phone...

Anyway, here's my question and his answer. If any clever state legislators (not just Georgia) are out there and have an idea for how to have control of the money that goes to Washington from the state (more specifically how to avoid having it go to support a failing state), please do so!

$900,000 To Prove A Point? Priceless.

We learn today of yet another colossal failure in the world of global warming climate change initiatives. (forgot the name change...) Students at the Lawrence Technological University and DTE (Detroit power company) came together to create a work of art. Actually, if you were going to look at it as a work of art alone, then it wouldn't be so laughable. However, this house was supposed to be a full-fledged demonstration about how a "green" house could perform. It is entirely solar powered and has no electric or gas hookups. Seven months ago, it was unveiled to the public at large as a glimpse into the future of our lives; or at least a proposed future if we would all just go green.

You could go see it today and marvel at its wondrous achievements, but you wouldn't be allowed to go inside. You see, some idiot forgot to flip the breaker during the winter that would have powered a heater and, as (un)luck would have it, the pipes froze and burst, causing $16,000 in damage. I should note the other 'official' story is that the heater drew too much power and the batteries drained which caused the system to back down. So, for now, the house is closed to avoid human safety issues. (rotted floors kinda suck when you walk on them...) So far, nobody is forking over the repair costs. I guess $900K is ok to spend, but $16K is just pushing it too far!

In a way, the official story is even more disturbing. If that's true then how can they expect to be taken seriously when the water pipe heaters drew too much power with absolutely zero other drain from people living in it?!? This thing was designed to support a home office and an electric car. If it can't even support water heaters...FAIL.

But let's just say, for a moment, that this was simply human error (which it was either way; either an idiot or a poor designer). Let's say the idea is sound and we'd really have something useful here had the pipes not burst. I don't know of anyone that would argue that such a house could be built. I mean, any person with a bit of sense would know that if you throw enough solar panels at something, you can power it. That has never really been the critical blocking point for widespread adoption of solar power. So, from that perspective, the house proved absolutely nothing by simply claiming to be "grid-free".

In order to be a true public-shifting piece of work, you have to factor in cost, marketability, ease of construction, and a slew of other factors. You can't just say, "Guess what? This house is grid free and it's the wave of the future! Jump on board!" People like me (and most of America) will tell you to have fun with that house; we'll buy a normal house that costs 1/5th the amount this one did.

Oh - you didn't catch that? Yeah, this beauty cost NINE HUNDRED THOUSAND DOLLARS. Cha-ching! What do you mean you don't have a million bucks to drop into a house?!? Don't you care about the environment!?!?!

It gets better.

The average American home is about 2400 sq. ft. So you would think that any rational person/organization that was trying to make a point would at least build a house that was somewhere in that neighborhood. Wanna know how big (small) this house is? 800 sq. ft.

EIGHT HUNDRED.

I'm sorry, but if you've got 900K to drop into a dwelling, it ought to hold more than a chair and table. This is just another indication that the green movement 'pioneers' are just plain out of touch with common America.

Now, in Troy at least, they're out of house and home too. Though, really, those words are stretching it a bit, don't you think?