Screwing the little guy

The economic situation in the US right now is not good. We are in debt up to our ears (the country's trade deficit, the governments fiscal deficit and individual consumer's private debt). The value of the dollar is declining, which is the same as saying that prices are rising and things are getting more expensive.

Towards the end of the Roman empire, they were running out of money to finance their luxury at home and imperalism abroad, so they began to devalue their currency. First they went from gold to silver, then silver to copper, then they literally carved holes out of their coin money to print more coins. Each time they did this the money was worth less, but they hoped no one would notice and people would use the new, lighter coins just as they did the old, solid coins. Today, we use paper money so this devaluation process is even harder to notice...but it is happening.

I believe that the US economy peaked long ago in terms of real material benefits for consumers and that this carving out process has been happening slowly in many ways over the intervening years. Remember that it is just as bad to get less for the same money as it is to pay more for the same amount. I think that is what has been happening: we have been getting less and less for our money, a little bit at a time, in subtle and hidden ways. It may even be as subtle as a gradual increase our daily risk which we won't notice until it is too late. Like the frog in a pot of boiling water, we don't know to jump out because the temperature change is too gradual.

Here are some things I consider to be part of this process and ways in which the "little guy" is slowly getting chiseled away. Can we wake up soon enough to jump out of the pot? Some of these scams and deceptions are becoming so blatant that I hope people begin to notice.


Deceptive credit cards (Increasing risk)
We are enticed to spend more and more on our credit cards, particular with low initial rates. But miss a payment and you may find youself paying as much as three times the "teaser" rate! I think companies are hoping and expecting this will happen. Likewise, they'll provide you a 0% balance transfer rate, but what they don't tell you is that is that there is a hidden transfer fee of 3%, AND that lower interest rate balanced are paid off first (e.g. if you use the card to make purchases you will keep paying interest on those until all of the transferred balance is gone first), and if you miss a payment, you jump the super high default rate also!

You may also find yourself denied credit mysteriously only to find out there are errors on your credit report that it is your sole responsibility to try to solve, which requires wading into a Kafka-esque bureaucratic hell.


Bad loans (Increasing risk and predation)
Adjustable rate mortgages may seem on the surface to be a good thing because they can get you lower initial payments, but is it worth it if you may be forced to foreclose on the house in 3 years when the "teaser" rate period is over (which you may not have even realized would happen), and then the interest rates have continued to rise? We fall for these things because we expect to be able to have what our parents had: our expectations remain constant while the reality shifts beneath our feet.

And of course there are predatory lending practices that target those who cannot or will not ask the tough questions and find themselves in a loan that they can never pay off and from the start was meant to lead to foreclosure and the effective stealing of their rightful property.


Tougher jobs (Less for the same, or even less for more)
Compared with a generation ago, and also compared with our European counterparts, we are working harder for less. First they cut maternity/paternity leave. Then they have layoffs and so everyone remaining has to work more for the same pay. You still get vacation time, but no one dares to use it. They they stop giving us annual raises and bonuses. Then they cut our benefits package and free pensions. Then they fire us as employees and ask us to work on a contract basis without benefits at all. Then htey ship the jobs overseas and fire everyone who's left.


Shoddy products (Less for the same)
The products we buy may have the same price, but the quality is much much lower. There is planned obsolescence so we need to buy a new product in two years, and there is crap consutrction, so that it falls apart in one year.


Non-existant or impossibly poor customer support (Less for the same)
First they introduced phone systems to keep us from getting the help we need, or requiring us to spend precious time we don't have on hold waiting for help from someone who has no experience with the product and has a list of 4 possible problems and 2 possible solutions, none of which apply to you.

"Money back Guarantees"are provided that, if you try to exercise them, you find that after restocking fees and services that (surprise!) not part of the refundable portion you only get 25% of your money back. Or you may find that they guarantee is good for only 2 weeks including a week to receive it, a week to get service set up and no time to evaluate it!


Public education and civic infrastructure (Shifting burdens)
Common goods, like an educated population and prepared workforce are being undermined as people with means move away from people without means, leaving problems to concentrate and inequalities to grow. The cream is skimmed and the burdens are shifted to those with fewer choices. People move into gated communities in an effort to protect themselves from threat, but really only increasing those threats as resentments breed as disparities grow.


Failing health care (Less for more)
More and more people do not have and cannot afford health care. Those of us who do have it find the cost going up and the benefit we receive going down.


Impossible insurance (Deceptive benefits)
Denied claims due to pre-existing conditions or improperly filed forms or delays created by trying to navigate the labrinth of rules and regulations and ambiguities or some administrator's personal assessment that you've had enough! And resolving these problems falls on your already burdened shoulders and there is no one to represent your interests for you.


Junk mail and spam (Invasions of privacy and undermined quality of life)
Why should it be hard to ensure that you don't get any junk mail or spam? All it would require is a federal opt-in database and serious penalties. Is that really that hard to figure out?


Mega-jumbo sizing and manipulative pricing (Abuse of human frailties)
Companies have learned how to price things to get us to buy and eat more (we are all just monkeys after all). Is this good for us? No. In effect they are buying our health from us to pad their bottom lines.

A related problem is manipulative advertising that plans on emotions and fears, overriding our better judgment to get us to buy things that we don't need or may even do us harm. Advertising has gotten more and more sophisticated but consumer protections have not kept pace.


Traffic jams (Costly externalities)
We are spending more and more time sitting in our cars getting to work adding up to a collosal waste of time and money, cutting into our leisure time and reducing the net cost of our employment.


Vegetables cost more than meat (Outdated subsidies lead to market inefficiencies)
Why should a vegetable patty cost more than a hanburger patty? The answer is subsidies won by certain industries that lead to mispricing. And of course, pesticide laden food is cheaper organic and junk food is cheaper than healthy food of almost any time. If all the related externalities were internalized into the prices we pay, all of these situations would be reversed. But years of corporate policy gains have turned everything on its head in the name of their bottom lines.


I certainly understand that companies are facing tough times too, but there is no excuse the kinds of behavior I am describing above. It is unethical and immoral. Not all should be allowable in the name of competition. We need to demand that our government take care of our best interests. I think we've forgotten that it is there to serve us.

Instead of trying to steal, cheat and otherwise screw each other for our own welfare, let's wake upt what is happening, accept the facts and plan a sensible and fair strategy together. I guarantee we can create more value together than we can extract from each other. It will require some tough choices, but the alternative is worse. And the dark future is now.