Author: Peter Weldon

The Imposition Distinction

Remember Chuck Colson? He had a saying mounted on the wall in his White House office that read, “When you have them by the balls their hearts and minds will follow.” Charming.

Today we have a White House with pseudo Chuck Colson’s who insist their motives are pure. To them, government is so obviously the answer to all our problems that only the ignorant would complain about following their lead. They pass laws, issue regulatory edicts, co-opt and extort private industry, manipulate the media, and buy votes with handouts to impose their ideology. Another saying, this time from that dear sage Woody Allen goes, “When you are sure you are right you will have a moral obligation to impose your will upon those who disagree with you.” Hmmmm…

Both Mr. Colson (see: Nixon) and Mr. Obama approach their problem of compliance with different words but identical actions, seeking to compel compliance with their beliefs through law, regulation, and the bald application of political power.

At the other extreme from the Obama administration we have groups certain their ideology founded in religious faith is similarly worthy of imposition. If you look closely it is difficult to distinguish some at the far end of the Christian religious right from Islamic extremists who would impose Sharia law if they had political power. There is no meaningful distinction between the political implications of imposing one or another ideology, whether religious or political. Imposition defines authoritarianism in all its forms, overwhelming the American principles of individual liberty and limited government. This is why freedom is never free but available to our children only if we are willing to fight to obtain and keep it.

When you combine the use of government to impose a particular ideology with the ability of government to print and borrow virtually limitless amounts of money to enable and enforce the imposition, you have our Federal government today; confused, misdirected, and incompetent.

As at the founding of America, the hope of the world is freedom from imposition. Let us focus here as we seek to replace the imposers with those who will enforce our freedom and expect us responsible for our actions as individuals.

An excerpt from Thomas Jefferson’s first inaugural address in 1801:

All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression. Let us, then, fellow-citizens, unite with one heart and one mind. Let us restore to social intercourse that harmony and affection without which liberty and even life itself are but dreary things. And let us reflect that, having banished from our land that religious intolerance under which mankind so long bled and suffered, we have yet gained little if we countenance a political intolerance as despotic, as wicked, and capable of as bitter and bloody persecutions.

Regards, Pete Weldon
americanstance.org

The FFEB (Federal Financial Extortion Bureau)

The recently formed Consumer Financial Protection Bureau (CFBP) is an arm of the US Treasury accountable to no one and funded independent of Congress, charged with taking consumer complaints (seemingly at random with no limiting criteria) and doing something about them (what, exactly, is uncertain). It should be renamed the FFEB.

The CFBP stated mission: “Our mission is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.” Yes, you are right, that mission statement has no meaning whatsoever. They do get more specific, however, with this list:

Congress established the CFPB to protect consumers by carrying out federal consumer financial laws. Among other things, we:

  • Write rules, supervise companies, and enforce federal consumer financial protection laws
  • Restrict unfair, deceptive, or abusive acts or practices
  • Take consumer complaints
  • Promote financial education
  • Research consumer behavior
  • Monitor financial markets for new risks to consumers
  • Enforce laws that outlaw discrimination and other unfair treatment in consumer finance

For each bullet point above we need to ask some questions. To what purpose? At whose expense? For what benefit?

Effectively, CFPB forces banks, depositors, borrowers, credit and debit card users, and those paying income tax to pay to supposedly “protect” the financially illiterate from their own illiteracy as the cost of compliance and enforcement is necessarily built into the pricing of the products being regulated and taxpayers contribute to the nearly $500 million annual CFPD budget.

But wait.

So, why does the CFPB exist?

The CFPB’s effective mission statement is “to use the unaccountable power of the Federal government to extort monetary and political concessions from companies offering consumer financial products and services — mortgages, credit cards, or any number of other consumer financial products.”

I would think the above wording severe except for the realities of how the CFPB is actually operating. Two recent articles in the Wall Street Journal clarify that CFPB is merely a political entity.

“Consultants Snap Up Alumni of Consumer Watchdog Agency” confirms that the industry is already co-opting the loyalties of people who work for CFPB.

“Banks Seek a Détente With New Consumer Bureau” confirms the industry and CFPB management are working together in private to reach accommodations hidden from public view. In other words, “we will do the this if you do that” and all consumers of financial services as well as the general taxpayer pay for the cost of regulation, compliance, and the cost of the agency itself.

CFPB will contribute zero improvement in consumer education at the margin and will do nothing but increase costs to consumers and taxpayers. This is clear from readily observable voluntary consumer behavior the CFPB (and anyone else) can do nothing about. Two examples of such behavior are “rent to own” and State lotteries.

You can purchase a 60 inch Sharp LCD television with Wi-Fi for less then $1,000 today, or you can “rent to own” an equivalent television from Aaron Rents for 24 monthly payments of $142.98, totaling $3,431.51. Effectively, with “rent to own” you are borrowing $1000 for 24 months at a cost of $2,431 resulting in an Annual Percentage Rate of 164%. This is perfectly legal and fully disclosed today, yet there is a market for this, people voluntarily sign up for this.

Perfectly legal lotteries (the Powerball jackpot odds are one in 175 million) and other forms of legalized gambling exist. Over $57 billion in lottery tickets were sold in the US in 2011. The States permit lotteries and gambling to get a rake-off (money) from the willingness of consumers to gamble (as it has been clearly demonstrated that such gambling would exist underground if illegal).

So, where is the Consumer Financial Protection Bureau to “protect” those poor souls “renting to own” and participating in legal lotteries and legal gambling? The only difference between consumers voluntarily using financial services and voluntarily buying lottery tickets/gambling is that there have been disclosure requirements governing financial services before CFBP existed and no disclosure requirements governing legalized lotteries and gambling. The absence of such disclosure results from the vested financial interest of the States. The States actually spend money advertising, telling you lotteries and gambling are “games” while CFPB (as a small example) requires banks to put signs on ATM’s disclosing that there may be a fee for using that service (but you already knew that).

Those who established CFPB believing it would help consumers need to take a closer look at the real world. CFPB is just another Federal power grab over the financial industry and a self-perpetuating bureaucracy that adds cost and complexity for the very consumers its claims to “protect.”

CFPB is another Federal bureaucracy that costs us half a billion to a billion dollars a year that does more harm than good and needs to be closed down.

Regards, Pete Weldon
americanstance.org

Point of Attack – Focus on Limited Government

I respect the morality that says a pregnancy is a life. I also respect the morality that says a woman has a right to choose abortion. The controversy involves whether our laws should enforce absolutism at either extreme, no abortions under any circumstances or abortions under every circumstance.

Up to a point, each woman assumes responsibility for her actions, whether accepting the consequences of a life she may bring into the world, or the consequences of ending that possibility for her own reasons. I would support only some of those reasons but in the end, every woman lives with the consequences of her decision and should have access to a safe abortion, up to a point.

The point of “up to a point” is that no one can successfully argue that a mother who kills an infant under any circumstances is not responsible for murder. Such accepted morality requires there be a point at which every fetus is a life, for if not aborted after that point, is virtually certain to become an infant outside the womb.

There is a point at which a woman has a right to chose and a point at which a moral community has an obligation to intervene.

The media and political class continue to exploit both extremes of the abortion issue because the extremes are useful to sell eyeballs to advertisers and attract campaign contributions from those at the extremes.

It is time to get to and stick with the point.

We are going broke and have given limitless power to a federal government subject to a constitution whose purpose is assure that power instead resides with the individual.

The point is that we should not allow anyone promoting social extremes to change the subject. First and foremost, we need to remain focused on re-establishing limited government, individual freedom and personal responsibility.

Regards, Pete Weldon
americanstance.org

CFBP, Protect Us From State Lotteries (a satire)

The recently formed Consumer Protection Bureau (CFBP) has regulations concerning disclosures on bank teller machines, Loan Originator Compensation Requirements, and credit card fees, among many others. Isn’t it about time that those purchasing lottery tickets had the same protections?! By God!

I recently filed the following complaint with CFPB here (its the only complaint category that seems to apply) on behalf of those who buy Powerball lottery tickets.

Dear CFBP:

I became interested in the recent “$590,500,000.00” Powerball lottery and found I had been subjected to unfair and deceptive practices. Why don’t we have laws to stop state lotteries from exploiting citizens who don’t understand math and statistics and freely buy lottery tickets without understanding what they are signing up for? Given CFPB’s earnest efforts to protect the innocent in consumer finance I am counting on CFPB to hold state lotteries accountable for their unfair, deceptive, and abusive practices as is your mission.

Lottery jackpots are deceptively advertised, unfair, and abusive.

Advertisements and public relations efforts broadly disseminated information that the Powerball jackpot for May 19, 2013 was $590,500,000.00. Wow!

  • Actually, that number represents the amount a sole winner of the Powerball jackpot would receive as an annuity in equal installments over 30 years ($19,683,333.22 per year before taxes).
  • The actual cash available from lottery ticket customers for the May 19, 2013 Powerball drawing after fees and the take from ticket distributors and the state was $370,896,780.54, the amount a single winner can take as a lump sum payment in lieu of the annuity. This is after paying an unknown amount to those selling the tickets (e.g., 7-elevens), $85,000 to the store that sold the winning ticket, and some amount that went to the state of Florida.
  • The Florida state lottery web site says, “This series of POWERBALL jackpot rollovers generated more than $40 million for the Educational Enhancement Trust Fund.” That $40 million is over a series of six “rollovers” and the statement does not clarify how much went to education as a result of the “$590,500,000.00” Powerball event being reported. (And all you Floridians, keep in mind that lottery money going to “education” since inception of the state lottery has simply been a replacement of other funding sources, not additional funding for education.)
  • When buying a ticket there is also no disclosure that you have to pay income taxes on the winnings. If a sole winner took the lump sum payment the net payment after Federal income taxes at 39.5 percent would be about $224,392,255.22. If a sole winner is a taxable resident of Manhattan, New York they would net about $200,000,000.00 after an additional 12.618 percent in taxes.
  • The chances of winning are certainly material in making a decision to buy a lottery ticket but the odds of winning are not disclosed when purchasing lottery tickets. I had to poke around the Internet to locate the actual odds of the Powerball jackpot prize which are 1 in 175,223,510.

Certainly, enticing people to buy lottery tickets by overstating the value of the winnings, not disclosing the after tax value of the winnings, and failing to disclose the odds at the point of purchase must be regulated if the same types of abuse are regulated in consumer finance! By God!

Regards, Pete Weldon
americanstance.org

President Elsworth Toohey

Paraphrased from Wikipedia: Elsworth Monkton Toohey is the primary antagonist in Ayn Rand’s novel The Fountainhead. Toohey is Rand’s personification of evil, the most active and self-aware villain in any of her novels. Toohey is a socialist, and represents the spirit of collectivism more generally. He styles himself as representative of the will of the masses, but his actual desire is for power over others. He controls individual victims by destroying their sense of self-worth, and seeks broader power (over “the world”, as he declares to another of the novel’s characters in a moment of candor) by promoting the ideals of ethical altruism and a rigorous egalitarianism that treats all people and achievements as equally valuable, regardless of their true value. As one reviewer described his approach:

Aiming at a society that shall be “an average drawn upon zeroes,” he knows exactly why he corrupts Peter Keating, and explains his methods to the ruined young man in a passage that is a pyrotechnical display of the fascist mind at its best and its worst; the use of the ideal of altruism to destroy personal integrity, the use of humor and tolerance to destroy all standards, the use of sacrifice to enslave.

The President has no clothes.

Regards, Pete Weldon
americanstance.org