Categories
Legal, Laws, and Regs

Koi-side economics

Recovered from the Wayback Machine.

New bankruptcy laws went into effect in the US this week. For the best detailed description of these law changes, check this NOLO article.

The new law makes little sense in relation to today’s economy. Surveys of those filing for bankruptcy find they do so because of medical bills, loss of jobs, and divorce–only 3% could be considered as abusive filings. Unlike the banking industry’s assuptions given in a press release on the matter, I know of no one who filed for bankruptcy because they lived expensively and then decided to just bug off from the responsibility.

I don’t know what I consider of the new law to be the most flawed. There is the issue of ‘credit counseling’, whereby new industry will now spring up to provide spurious ‘economic advice’ and charge $75.00 or more to people who have little or no money. I find the concept of forcing people into credit counseling from a Congress that has managed to create a history making deficit to be rather ironic myself.

Then there’s the valuation of property if you do file Chapter 7. Each person filing is given so much in exemptions of what they make keep, all of which changes from state to state. In Missouri, you can keep about a 1000.00 dollars of exempt personal property. Before the change in law, items you kept were valued at what their sale would bring, using eBay or other auction or yard sale. Now, each item has to be valued at retail, in consideration of age and condition. Since the trustees would not get this amount selling the items, the only purpose for this change in the law is punitive–forcing those in bankruptcy to literally lose everything: from a 3 year old television, to a 10 year old bed, to a 13 year old frying pan. Even a pet has to be valued at it’s ‘retail’ value.

No, I think my favorite flaw is that those under Chapter 13 bankruptcy have to follow IRS guidelines for cost of living. These are set the same for all 48 states (Alaska and Hawaii have their own), which means whatever you pay for food in St. Louis is the same amount you can spend for food in San Francisco and so on. These are so restrictive, there’s almost a guarantee that Chapter 13 filers will fail before the five years is up.

This is ultimately the legacy of the new law: it won’t work. Unfortunately, though, while it won’t work, people already harmed by circumstance will be further harmed by law. According to Judge David Houson in Mississippi:

Congress changed the “gem of our bankruptcy system” so much that there’ll be “a subculture of people that will owe a lot of money and just move away,” Houston said in a recent interview.

The new law imposes restrictions aimed at preventing people from using the bankruptcy court to dodge debts they could actually afford to pay.

The “gem” in the current system, Houston said, is the Chapter 13 bankruptcy provision, which lets people with large debts reorganize their finances with court oversight to repay some or all the money over an extended period to creditors.

While Congress intended to steer more debtors to take the Chapter 13 route, Houston said the reforms could have the opposite effect – meaning more debtors will run away from creditors and they won’t get the money due them.

The law imposes disincentives for people to repay debts over time in a court-monitored process to ensure creditors get their money, he said.

“That’s one of the sad parts of the legislation. It’s going to (hurt) the Chapter 13 program,” Houston said.

Even before it went into practice, caveats had to be added to waive credit counseling for those whose homes and all livelihood were wiped out by Katrina. As for the provision that people filing bankruptcy have to do so from their local community, this is problematic when you consider that many new victims no longer have a local community.

In the meantime, to compensate for the surge of bankruptcies this new law has generated, credit card companies are raising their interest rates to 29 percent, for those already struggling with card costs. When one considers that wages have been virtually flat for the last several years while health insurance costs rise an average of 11 to 13% a year and fuel costs have jumped 200%, this interest increase will most likely force even more into bankruptcy next year–a cause and effect these companies seem incapable of understanding.

I used to think that those in favor of bankruptcy reform were being greedy and rapacious. Lately, though, I think that the laws reflect a growing mediocrity in the economic and financial community. In other words: those pushing for change aren’t thinking through the consequences; they’re just looking for quick ways to increase today’s bottom line, even at the risk of tomorrow’s financial stability. The last few years have shown a number of optimistic predictions from these same economists–ones that don’t match what we’re seeing and experiencing for ourselves. They remind me of weather forecasters who never look out the window and persist in predicting a sunny day even while it’s pouring rain outside. In the case of bankruptcy law, though, the credit card companies and banks are seeing a quick way to keep money flowing from people who literally have none.

There is some small justice, though, a bit of black humor associated with the new bankruptcy law. MBNA, the corporation most active behind the new law, has seen a significant decrease in profits this year. You might think it’s because of the increased bankruptcy filings, but no, that’s not it. According to Consumer Affairs:

Of potentially greater long-term significant, more and more consumers — perhaps stung by exorbitant increases in their interest rates — are paying off their MBNA credit card debts faster than expected.

Like other banks, MBNA relies on the interest, service fees and late charges it gets from its credit cards.

Perhaps the passage of S.256, the Bankruptcy Reform and Consumer Protection Act, which makes it harder to resolve credit debt through bankruptcy, has scared debtors into taking care of business faster. The financial giant spent millions of dollars priming the political pump to ensure it would be able to wring the last drop of blood from its credit card customers.

The moral of this story?

Paying off your credit card debt not only cleans up your balance sheet and gives you extra cash to spend and invest, it also puts a chink in the armor of the companies who’ve steadily tightened the noose around consumers’ necks.

Categories
Connecting Weblogging

When the tilt in pinball is a good thing

Stavros the Wonderchicken returns in true style:

I hit post, now, dear lost readers in their thousands, not sure if this is resurrection or coda, but hoping a few diehard outliers of the wonderchicken army are still out there, and when their newsfeed ticks over from that limp and dusty (0) over to an erectile (1), that they’ll put the word out: ‘Wonderchicken returns, brethren and sistren! He returns! Dance dervish, and spill the blood of politicians in tribute and walleyed joy!’.

But having turned my back on the webs and the logs, on the adsense whores and their corporate pimps, having peed in the pool and pooped on the flag, having committed the unpardonable sin of dissing the digerati, I’m probably on the ignore list again.

Never with me, my friend. Never with me.

Categories
Travel

Why American businesses are dying

Recovered from the Wayback Machine.

A favorite mode of transport for skiers is to take a train to and from their ski destinations. Sandpoint, Idaho–a popular ski resort–does have a train stop but not a train station. As such it has no baggage checking facilities, which means that if you travel to and from Sandpoint you’re restricted to two carry-on bags and your purse and/or laptop or briefcase.

Doesn’t matter if you’re skiing and have skis. Doesn’t matter if you’re taking the train all the way to Florida for a two week holiday. No, Amtrak does not have baggage checking facilities at their stop at Sandpoint, so you have to restrict your baggage for your entire journey because of it.

Perhaps they’ve outsourced their baggage handling to Indonesia, as a way of plumping up their quarterly revenue. I’ve heard that they’re outsourcing the entire province of British Columbia, which is only about 50 miles away. Maybe it’s a northwest thing.

Come to think of it, with software job loss at 20 percent for 2003-2004 alone, maybe I can get a job checking baggage.

Categories
Weather

Alpha

Back in the first few decades of the 1900’s, when a hurricane would hit in Florida, the papers would report on the storms by referencing the “Florida hurricane”. After a few of these in a year, it seemed to the rest of the country as if Florida was constantly being battered by high winds; threatened by huge ocean surges. Ambitious developers in the state, particularly in the Florida Keys, would have to calm nervous investors with each storm; downplaying the effects of the storms, including the number of deaths and the extent of destruction.

 

Still, their job was made that much more difficult every time the papers in the smug and distant North and West would report on that new Florida hurricane. And with each storm it became harder to hide the dead–especially after the Labor Day Hurricane of 1935.

In 1935, as part of one of the New Deal construction jobs, unemployed World War 1 veterans, increasingly angry at not being able to find work after their sacrifices for their country, were employed to work on a highway connecting the Keys. This works project not only generated employment for the veterans, it also got them out of Washington DC, where they were a public embarrassment to the then current President, FDR:

The vets were sent to the islands in a move that combined compassion with political expediency. Soon after FDR took office in 1933, jobless veterans began assembling in Washington hoping to persuade him and Congress to immediately pay them a bonus for their wartime service that they were scheduled to receive in 1945. Roosevelt opposed early payment but wanted to help the desperately needy vets. And he also wanted them out of the capital and off the front pages of the Washington Post and New York Times.

The solution was to send the veterans to the Keys in November 1934 to build a highway intended to help restore Key West’s Depression-shattered economy. The men were paid $30 a month plus food, and were housed in three beachfront work camps.

Late in August of 1935, a hurricane formed east of the Bahamas and quickly intensified into a category 5 storm, heading straight for the Keys. The beachfront camps the veterans were house in were little more than shantytowns. If the hurricane hit the camps, FDR knew that the results could be devastating–to the men, and to his administration. He sent a train down to rescue the veterans; unfortunately, it came too late.

Hurricane headline

Following another practice of the day, the storm was named after the holiday during which it hit: the Labor Day hurricane. It was lucky, too, that the hurricane did hit during Labor Day as many of the veterans were at a baseball game and were spared. If they had been in the camps, the deaths would have been in the thousands.

I digress, though. In 1953, ostensibly inspired by the Navy, the National Weather Service began to name hurricanes–using female names because the storms seemed to move by whim, just like a woman was the philosophy. In actuality, the NWS most likely picked up the idea of naming storms from a novel, Storm by George Rippey Stewart, which featured a storm named Maria.

The system of names worked. Rather than “Labor Day hurricane” each storm in a season gets a name: Betsy, Camille, and when the women got uppity as women do Andrew and David. Not only is there no longer any confusion about which storm we’re discussing, especially in a busy season such as this, Florida developers could finally downplay the danger of hurricanes in Florida — just in time to lure all those retirees from New Jersey.

Now, for the first time since the naming system went into effect in 1953, the NWS has run out of names for storms and has had to resort to using the Greek alphabet. This new storm in a season that seems to never end is named Alpha. Sounds innocuous, doesn’t it?

We’ve now reached our worst hurricane season in recorded history. Add to this the warmest year on record, and the hottest ocean water–not to mention the alarming ice melt at the polar caps–I think we can safely say that global warming is no longer a figment of some scientists’ imaginations. Yes, this is the season inspired by big cars and vanishing rain forests and worrying less about the air we and our children breath than who marries whom.

Right after the flooding in New Orleans a few weeks back, a journalist posed a question to webloggers: what impact will Katrina have on American society? I responded at the time that Katrina marked the end of an age of plenty.

We have evolved into reflexive consumers. Rather than do without, we’ll buy at the dollar store or from the dollar menu, but the operative word is buy. Thanks to the lessons learned, corporation profits have jumped 60% while wages have increased only 2.9. With this continuous round of purchasing comes a price, and it isn’t just in dollars: pollution, over development of land, wasteful use of limited resources, flat earth economics and outsourcing, over-population, and a growing class of poor and vulerable–like the veterans put into harm’s way by a society not wanting to be reminded of its debt.

Rather than ask about Katrina’s impact on American Society, we should be asking what impact American society has had on Katrina. And Rita. And Stan. And Wilma.

And Alpha.

Categories
Travel

New travel plans

Recovered from the Wayback Machine.

Fall came today. I don’t need the calendar or even the cool weather to tell. When I start to cocoon, I know it’s Fall; when a hot shower feels really good, I know it’s Fall; when I get the urge to make an apple pie, I know it’s Fall; when I like to wear a flannel shirt and cuddle in my chair with all the lights on at 5pm, watching quirky new movies or old science fiction, I know it’s Fall–and it’s not the two margaritas I’ve had tonight talking.

Isn’t it odd how things work out. All the ifs and doubts about traveling leaving things uncertain, and it looks like I may be traveling after all. Monday I’ll find out if I need to head to Sandpoint, Idaho next week; it’s most likely. The trip is for a family matter, not a conference, but I can fake it: create a wiki, start using a lot of superlatives, and find three hundred white dweeby guys to invite. You know, the usual.

If I do go, I’ll be gone for at least a few weeks–perhaps longer. I’ll try to get a connection, and I may be able to get a DSL off my Mom’s Dish, but chances are it will be a modem. I’d do without, but I have existing, as well as new, work. Besides, how else will I post photos of Sandpoint if I don’t have a connection?

Sandpoint is a beautiful, rustic, western town, nestled in the mountains of Idaho, and having a world class ski resort. This time of year is when the town really starts hopping, so one could say that I’m one of the hip and beautiful people for being in Sandpoint in ski season; however, I’ll most likely be driving my Mom’s old Honda, wearing well worn clothes, and little or no jewelry or makeup. Of course, being environmentally sound is the new ‘cool’ thing now, so perhaps I can fake this, too.

Well, except that I’ve never been one of the beautiful people, and it takes one to know one. I’m a small town girl who has traveled around a lot but have never been able to knock the edges off. I’m well read, but not necessarily well lived. I’ve never once spent more than 80.00 for a pair of shoes, and these were for hiking boots that were on sale. I still get hurt by believing people–now that might be the two margaritas talking.

Taking a train, too, to Sandpoint; to sit for 36 hours and read or look out the window, as it flows from St. Louis to Chicago, through Wisconsin, Minnesota, North Dakota, and Montana, before arriving at Sandpoint. Long enough to be an adventure; not so long as to be tedious.

I hope to get some of the code I’m working on finished this weekend, first, so you can try it out as I’m traveling. As such, things may or may not break at times in these here parts (see, I’m already getting in a Western frame of mind). However, it’s the weekend, and weblogging goes into a slump that is only woken by photos of very cute little kittens; as such you most likely won’t notice.

I’ve also downloaded and tried the Flock Browser. Contrary to the *jaded pundits, I thought it was rather fun to play with. I’ve even posted to the Plugins weblog with it. But enough with fun–I have code to write; fueled by two margaritas, it might even do something I don’t expect. Like now, when I save this…

…update, and it worked out of the box. Damn, I’m good.

*Though I rather liked the Skype comment by Mark Evans