Debating In My Local Newspaper

I refer to my commentary entitled: "The Bankruptcy Bill and Arlen Specter" which can be found here.

I published this commentary in my local newspaper, the Fort Lee Suburbanite, and it prompted a response from a Mr. Chiu, who has been a frequent contrarian of my opinions.

I quote his letter in full below along with my rebuttal. I think the exchange speaks for itself and accordingly I will not burden the reader with any further comments.

"I agree with Emil Scheller that it's unfair for corporations to have the right to abuse bankruptcy laws while individuals don't. Unfortunately, a few bad individual apples spoiled everything for ordinary people. Some deliberately ran up credit card debts and simply declared bankruptcy later on. It was common knowledge that one's bad credit record would be wiped clean after 7 years and credit card companies would again be mailing offers. No more.

"Of course, Scheller blames Republicans for the passage of legislation changing the bankruptcy laws. He states that 14 Senate Democrats also voted in favor of the bill, which passed 7425. I just checked on Google: 19 Democrats voted for the bill. 25 Democrats voted against the bill. There was one abstention. Whatever the case, Democrats could have filibustered to block the bill if they felt strongly enough about it. Could such inaction have had anything to do with campaign contributions sullying our political process? Ideally, Congress would pass similar legislation to crack down on corporate abuse of bankruptcy laws.

"Scheller justifies his use of the term "right-wing" by resurrecting his old straw man argument that conservatives want to undo the New Deal and Great Society. In fact, he gleefully uses his explanation as an excuse to throw out the word "reactionary" against conservatives. Now everyone knows full well that Big Government is so much a part of our lives that it would be impossible to repeal any part of the New Deal or Great Society, if even we wanted to. There's no going back. For example, we all have grandparents (and even parents) on Social Security. Or we may be beneficiaries of some social program or subsidy. In fact, when Republicans controlled Congress, they even increased the size of government. I recall one occasion in which the Bush administration wanted to slightly trim some social programs. Republican congressmen angrily refused to cut programs as they wanted to protect their poor constituents. No one has the heart to cut anything. Government just grows and grows. There are no reactionaries.

So pejorative terms like "right-wing" have no place in polite discourse. I avoid the use of terms like "Left-wing" or "Leftist" because those can also be construed as code words for "Communist" and "Socialist". We don't always have to agree with one another, but we should try to treat each other with respect."

"Mr. Chiu plays gotcha. I complained in my letter entitled, "The Bankruptcy Bill and Arlene Specter" which appeared in the Suburbanite of May 8, about "14" Democrats who voted for a bankruptcy bill in 2005 that took bankruptcy protection from ordinary Americans. Apparently I miscounted. As Mr. Chiu gleefully points out, actually 18 Democrats and 1 Independent voted for this outrageous bill. But this simply reinforces the point I was making, that there are too many Democrats who did the bidding of the banking lobby. But at least a majority of Democrats voted against it. Not a single Republican voted against it. The party of "No" wasn't the party of "No" then. They are never on the side of ordinary Americans.

"Mr. Chiu then goes on to try to justify this outrageous bill. He says "Some deliberately ran up credit card debts and simply declared bankruptcy later on." but Mr Chiu doesn't tell us where he gets this information from, and even if some did, does that justify such a drastic remedy? The fact is that according to the Harvard Journal of Health Affairs, in 2001 'medical bankruptcies affect about 2 million Americans annually -- counting debtors and their dependents, including about 700,000 children.

'Surprisingly, most of those bankrupted by illness had health insurance. More than three-quarters were insured at the start of the bankrupting illness. However, 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy.

'Most of the medical bankruptcy filers were middle class; 56 percent owned a home and the same number had attended college. In many cases, illness forced breadwinners to take time off from work -- losing income and job-based health insurance precisely when families needed it most.

'Families in bankruptcy suffered many privations -- 30 percent had a utility cut off and 61 percent went without needed medical care."

"Chiu then goes on to claim once again that Republicans don't want to do away with Social Security. Has he conveniently forgotten Republican attempts to push for individual savings accounts invested in the stock market that would be funded by diverting a large portion of the SS taxes to such accounts, which would deplete the SS fund even faster than it is already being depleted. Ronald Reagan saved SS by increasing the limit on the payroll tax, provided for the the retirement age to be increased, and taxing higher income SS recipients and plowing the proceeds back into the trust fund, but the new Republicans want no such reforms. They want SS to be bankrupt just as quickly as possible.

Has Mr. Chiu conveniently forgotten McCain's comment on Social Security during the campaign, "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that’s a disgrace."

"There is nothing wrong with terms like Right and Left any more than there is anything wrong with using Republican or Democratic, but there is something wrong with misrepresenting the positions of the parties or of the issues as Mr. Chiu consistently does. There is something wrong with the smears like the Swift Boaters, which Mr.Chiu defended in a previous letter, There is something wrong with the Willie Horton ads, which Mr. Chiu defended in a previous letter. There is something wrong with the phony Harry and Louise ads which doomed Health Care reform in the Clinton Administration. And as I said in my previous letter, there is something wrongwith calling progressives Communists, Fascists, Socialists, Muslim and friend of terrorists, in the case of Obama
and even lesbian, in the case of Clinton, (not that either Muslim or lesbian should be a term of opprobrium).

"But I don't hear Mr Chiu criticizing these smears. Truth hurts Mr. Chiu! Attempts to divert attention from the real issues don't work anymore. Attempts at pretending that everybody is for Social Security don't work anymore; not when the record is so clear. The party of "No" is dooming itself. It is the party that has even turned its back on the positive aspects of Ronald Reagan, who, by the way, advocated trying to do away with nuclear bombs, an objective which todays Republican nay-sayers denounce. From the web-site of the Libertarian Cato institute website, "Reagan, contrary to his image as a champion of the bomb, was a nuclear abolitionist. This is not a mere historical curiosity. Abolishing nuclear weapons was one of Reagan’s fundamental goals for his presidency."

"We could easily carve two parties out of the Democratic Party and no-one would miss the one whose voice is Cheney and Limbaugh. Other parties in American history have vanished. Gone are the Federalist Party,
the Democratic-Republican Party and the Whig Party.

"Too many Democrats are too often on the wrong side of issues. But the party of "NO" deserves to see the setting sun. Lies can no longer save it."

The Bankruptcy Bill and Arlen Specter

Why are the bankruptcy laws available to the rich but not to every-man? What do Democrats gain when they embrace Arlen Specter?

Some may wonder how they are interrelated, but they are.

We have witnessed many large and small corporations become overwhelmed with debt. They file for what is known as Chapter 11 bankruptcy under which their debtors are encouraged, and many are required to forgive at least part of the debts and the corporation emerges from the process with a new beginning. We saw that happen with Continental Airlines, and we now see the process unfolding with Chrysler and quite possibly soon with GM.

It used to be available to the average Joe or Jane (maybe even to Joe the Plumber) but it was taken away in March of 2005. The matter is summarized by the BSC Alliance.com Credit and Debt solutions alliance, as follows: "After an eight year long battle funded by the banking and credit card industries, who contributed more than $40 million to federal election campaigns during this period, The United States Bankruptcy Code has finally been amended. The new bill was approved by the Senate in March 2005 and by the House on April 14, 2005. The changes to the Bankruptcy Code became official law on October 17, 2005." 

Today adequate publicity has been given to the predatory practices of the credit card industry. They drive people into bankruptcy by taking a relatively small debt, and by encouraging the debtor to pay the smallest conceivable amount each month, create a situation where the principal instead of shrinking gets bigger over time, and then by increasing the interest rate at will and adding exorbitant fees if a monthly payment is missed, they create a situation where the debtor often ends up in debt to a multiple of the debt incurred. G-d forbid the debtor should get sick resulting in his loss of job, health insurance and now mounting debts he finds the door to debt relief through the bankruptcy courts no longer available.

That 2005 bill passed the senate by a vote of 74 to 25. Not a single Republican voted against it. They are not always the party of NO. Not when it comes to protecting the interests of the banking industry. Where was Arlen Specter? He voted with his brethren. According to "On the Issues", he voted with the Republican Party 67% of 322 votes. Democrats are not so united. Fourteen, including now VP Biden and now majority leader Reid voted with the Republicans. But at least these Democrats didn't vote 67% of the time with Republicans. The pressure after eight years of lobbying was intense and Bill Clinton signed the bill.

Fast forward to 2009, we have a bankruptcy bill to protect homeowners from foreclosure when their homes are "under water" pending in the Senate. 

Once again the party of NO was solidly against this. They don't believe in giving anyone, but the rich, a break. Where was Arlen Specter? You guessed it, he was now officially a Democrat, but who did he vote with? He voted with his former brethren. We know where his heart lies. To be sure, once again 12 Democrats voted against every-man but that is the more reason why we don't need another like Specter.

What happened to Arlen Specter? In today's Republican Party 67% isn't good enough. It's like the Communist party of old. They expect 100%. Specter was about to lose the Republican Party primary in Pennsylvania to a true blue acolyte of Right wing politics from the Club for Growth. This Republican nominee would have had no chance to win and a real Democrat would have been elected; one who could have been counted on to support the Obama agenda. But instead the Trojan horse in the form of Specter has entered the gates. The Democratic party is a big tent. There is no problem with having a Democrat who only votes 67% of the time with his party. But do the Democrats need someone who votes 33% of the time with them, and 67% with Republicans? What have Democrats gained? If this were a situation of needing one vote to organize the Senate, it might have been understandable. But that is not the case, and Specter cannot be counted on to be the 60th vote to prevent a filibuster. He has already announced on "Meet the Press" last Sunday that he will oppose the Presidents Health Reform initiative.

I say Republicans don't want him and Democrats shouldn't either. It is to be hoped that Specter will be challenged in the Democratic primary and will be sent into the retirement he so richly deserves.

In referring to a "true blue acolyte of Right wing politics" above I do not, as Mr. Chiu suggests in his Letter to the Editor of the Fort Lee Suburbanite, which is quoted below, mean to imply Fascist or Nazi. I simply cannot find any other suitable word for this movement. The media often calls them "conservative" but they are anything but conservative. They do not want to conserve, but to radically change things to the way the were in the days of President Harding, to undo the "New Deal" and the "Great Society" and even many reforms enacted under Republicans, Teddy Roosevelt and even Richard Nixon. That is not conservative. Some would have called them Reactionaries, but I don't know what that tells us. Right Wing is appropriate, and the bellyaching from people who have called progressives Communists, Fascists, Socialists, Muslim and friend of terrorists, in the case of Obama, and even lesbian, in the case of Clinton, (not that either Muslim or lesbian should be a term of opprobrium) have no standing to complain about a term that does no more than honestly describe their philosophy. As for the suggestion that the debate is just about which stimulus is better, that makes Republican opposition seem even worse, for that would hardly justify their unanimously trying to block a plan that they consider only not as good as theirs.

The letter from Mr. Chiu is quoted below:

"I have read many of Emil Scheller's letters. I wonder if his use of "Right Wing" isn't just for some descriptive purpose, but also code language for Nazi or Fascist. In liberal New York, this term is hardly a compliment. 

"If he took a friendlier tone, I'm sure he could convert some people to his positions. In fact, many people, especially if they don't double check his "facts" because his arguments can be persuasive. But instead he labels people who don't agree with him as "minions of the Republican party" or uses other epithets synonymous with "idiot". 

"In his letter published in the April 24, 2009 issue, he mentions his previous statement that Republicans claim the New Deal was "totally ineffective". I've never heard any Republican say that. My old high school history teacher, a Democrat, said the New Deal created jobs but did not itself end the Depression. It was WWII that did. That's the consensus of the history books. And, again, no one ever said "totally ineffective". Any stimulus would create economic activity. If Democrats spent $1 and get 50 cents of stimulus, the Republicans may want 60 or 70 cents of stimulus from that dollar. And they may claim that their plan is better. That's what the debate is about."

Congress’ Response To The Credit Card Outrage

In my last post I discussed some of the outrages perpetrated on the American public by a banking industry that appears to specialize in predatory lending, and that because it can get exorbitant profits by lending without regard to credit-worthiness, takes on increasing risk by lending to people who can ill afford such loans. This was true in the mortgage crisis and it is equally true in the credit card business.

I discussed some of these practices, which result in borrowers paying fees and interest out of all proportion to their debt, charging what, in any context, are usurious rates worthy of the Mafia, and enticing people into becoming victims with teaser rates and minimal monthly payments. Needless, to say this started to cause an increasing number of defaults even before the mortgage crisis exploded.

The banks had an answer to this rising tide of default and it wasn’t by becoming more responsible lenders. Instead they decided that their victims must not be allowed the customary means of discharging their debt through bankruptcy protection, which is provided for in the US Constitution, Article I, Section 8 which says, that Congress shall be empowered “To establish … uniform laws on the subject of bankruptcies throughout the United States and by Title I of the US Code.

But in 2005 after many years of lobbying they pushed through an amendment to the bankruptcy act that made it much more difficult, if not impossible for people to discharge their debt. The late, great, Molly Ivens, who wrote for the Fort Worth Star-Telegram until 2001 and as an independent syndicated columnist until her death in 2007, wrote in various publications, including Creators Syndicate, and I quote in part:

“The bankruptcy bill was a gift to big bankers and credit card companies to begin with, in return for copious showers of campaign contributions to our very own elected representatives in Congress. Same old, same old…

“According to a study by two associate medical professors at Harvard, published in Health Affairs, bankruptcies are indeed shooting up. Between 1981 and 2001, personal bankruptcies rose by 360 percent, but those caused by medical debts rose an astronomical 2,200 percent. Only job loss now slightly leads medical crisis as the reason for bankruptcy -- it's ahead of divorce.

“Another cause, as well the usual usury, is that the card companies push accounts on people whose credit is only marginal -- your teenager has doubtlessly been offered several. Ooops, it turns out many of those with shaky credit can't pay (!), so of course the banks want the law changed even more in their favor. Poor little card companies -- only $30 billion in profits last year.

“Elizabeth Warren, a Harvard law professor, pointed out in testimony before Congress that the bill assumes everyone is in bankruptcy because they're spendthrifts. “ A family driven to bankruptcy by the increased cost of caring for an elderly parent with Alzheimer's disease is treated the same as someone who maxed out his credit cards at a casino. A person who had a heart attack is treated the same as someone who had a spending spree at the shopping mall. A mother who works two jobs and who cannot manage the prescription drugs needed for a child with diabetes is treated the same as someone who charged a bunch of credit cards with only a vague intent to repay."

In the House the bill passed with 229 Republicans and 73 Democrats voting for it. Not one Republican voted against it. Opposing it were 125 Democrats and one independent, Vermont's Bernard Sanders. In the Senate it passed by a vote of 74 to 25. Not one Republican voted against it. Sadly, 18 Democrats voted for it. Even more sadly, among them was our V-P elect, Sen. Biden of Delaware, where most of these banks are incorporated, and Sen. Reid of Nevada, the Democratic majority leader. President Bush promptly signed it into law. President elect Obama, who voted against it, has his work cut out to get anything decent out this coalition.

On the other hand, reform was attempted in March of 2008 when two bills aimed at protecting consumers, especially young consumers were introduced by Senator Menendez D-NJ, entitled the "Credit Card Reform Act of 2008" S2753 and Representative Maloney D-NY HR 5244. Although both bills have there own nuances, a look at the Senate’s version reveals that it has the following provisions:

-Consumers under the age of 21 would be allowed to choose whether to receive credit card solicitations. Cardvissuers could only solicit young consumers if they receive affirmative consent in advance.

-Card issuers could not use the widespread practice of charging higher interest rates on balances incurred before a rate increase went into effect.

-Credit card issuers could not alter credit card agreements while they are in force without specific written consent from the cardholder. This will stop issuers from giving themselves the right in cardholder agreements to increase interest rates and fees at any time, for any reason.

-The bill would require that penalty fees be reasonably related to the costs that credit card issuers incur because of a late or over-limit transgression.

-Credit card issuers could not increase a cardholder's interest rate based on adverse information relating to other creditors they find on the consumer's credit report.

-Card issuers would be required to limit penalty interest rate increases to 7 percent above the previous rate if a consumer fails, for instance, to make a payment on time.

-The Act would prohibit late fees on payments that have been postmarked by a designated date.

-The bill prevents issuers from offering credit or raising credit limits to consumers unless they determine that the consumer will actually be able to make the scheduled payments based on their current income, obligations, and employment status.

-The bill requires lenders to make a firm offer of credit that includes specific — not deceptively low — terms, including the interest rate, fees, and credit line.

It appears that the bill dealt with a serious problem.

It passed in the House by a vote of 312 to 112. 228 Democrats and 84 Republicans voted for it. 1 Democrat and 111 Republicans voted against it. It never got out of committee in the Senate.

Yes, we really NEED CHANGE WE CAN BELIEVE IN. I hope and pray that our new President and our new Congress can and will deliver it.