Making Work Pay will cost millions of American taxpayers anywhere from $250 to $400 this coming tax season. These people may need payday loans. (Photo: flickr.com)

Were you one of those people who were elated to hear about the “Making Work Pay” tax break that President Obama gifted to the American people? Truly, it did benefit many people. Workers were paid back to the tune of 6.2 percent of their earned income, with a max of $400 for individuals and $800 for married couples filing jointly. Those singles making more than $95,000 and couples making more than $190,000 weren’t eligible, but then they didn’t have to be.

With that refund, those eligible didn’t have to resort to short term loan options like payday loans. However, for millions more, perhaps they’ll be wishing they had gotten a payday loan instead of having to pay back hundreds of dollars. And don’t even get me started on the farce that is tax refund loans (aka refund anticipation loans).

15-Million-Plus Owe Uncle Barack $250 Apiece

And that’s just the retirees!

That’s what the Associated Press is reporting as consumers are attempting to dig their way out of the blight of the recession. People are looking forward to some debt relief without the pain of tax refund loans, and in this instance, perhaps even without payday loans. But according to the IRS, many of people are going to be disappointed. What goes around comes around … and bites you in the hindquarters.

Who Will Owe Money Because of Making Work Pay?

We’re talking those with more than one job and married couples where both parties work (that’s a big one). These groups will have to repay $400, which could mean a smaller refund or even a tax bill. Even those in their golden years with rusty old Social Security and taxable wages will not have the lamb’s blood painted on their door. Their Obama giveback will be $250. Pony up, America!

Ah, the Memories of Magic Refunds and High Hopes

Individuals felt up to $400 worth of love for Making Work Pay, while couples doubled their pleasure up to $800. It was all part of the revolutionary stimulus package back in February of 2009. It pumped paychecks full of chicken broth, which most consumers promptly spent. If you spent it and you aren’t sure if you’re having enough withheld from your paycheck, click here for a handy calculator. If you don’t like what you find, file a new W-4… fast, because the 2009 tax year is almost over! The IRS has known about this problem since last spring, and they’ve been urging people to check their withholding amount since then.

Picking Up the Pieces of a Shattered Stimulus Plan

Payday loans may be short-term glue for what ails your budget, but this whole stimulus thing replaced pro-mise with pro-blems. For instance, a single worker with two jobs could get a $400 Obama-boost for each job, even though he’s only eligible for one $400 buff. That will have to be paid back. Similarly, with married couples where both work, if they combine to earn over $13,000, they enter a new tax bracket. There’s a total $1,200 boost instead of the $800 that should have been allowed. That’s $400 to pay back, friends. The Census Bureau says that 55 percent of all married couples in America are in this boat. That’s 33 million couples with 400 reasons to love Making Work Pay.

Wait, Don’t Forget Victimized Students

If they’re single and work part-time, they were eligible for the $400 credit. But, all my payday loans and garters, if their parents claimed them as a dependent, they didn’t qualify! In this case, Making Work Pay means paying back that $400.

Retirees Making Work Pay for Obama

More than 50 million Social Security recipients got $250 lump sum payments each, all thanks to Making Work Pay. But they were already receiving the credit for being employed, so the $250 refund will have to be paid back. It keeps getting better for American citizens.

Don’t Make the Same Mistakes in 2010

The Making Work Pay credit is still available, so tread cautiously. You certainly don’t want to create the same problem for yourself again. The average refund was about $2,800, so this Making Work Pay giveback will not result in a bill for many. However, some won’t be quite so lucky.

Iowa Sen. Chuck “Seppuku” Grassley of Iowa took a break from his more breathless moments to nail Making Work Pay on the head. It was “another unfortunate example of what can happen when Congress and the White House rush through legislation like the stimulus without thinking through the consequences,” he told the AP.

(Insert forehead slap and “I shoulda had a payday loan!” here)

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Image of Sarah Palin from Flickr.

Though Sarah Palin’s book, “Going Rogue: An American Life,” officially comes out tomorrow, copies of the book already are making the rounds. Many people have pre-ordered the book from Amazon, and ABC News reports John McCain has already received a signed copy.

An interview with Sarah Palin will air on “Oprah” today. Next week’s Newsweek cover, which will come out Nov. 23, features Sarah Palin. The “Oprah” show and the Newsweek cover might sound like the ultimate publicity machine — and they might be. I have no doubt that lots of copies of “Going Rogue” will sell. Though Palin and her fans hope “Going Rogue” will serve as a form of credit repair,

If  no news is good news…

However, I think many people won’t be buying “Going Rogue” for the reasons Palin would want them to. New York Daily News reports that “Going Rogue” already is more popular than Sarah Palin herself. And the Sarah Palin Newsweek cover certainly doesn’t paint her in a favorable light.

Whoever said “there’s no such thing as bad publicity” probably never saw his or her own picture on the cover of Newsweek with the words “How do you solve a problem like Sarah?” next to it and a subhead that says “She’s bad news for the GOP — and for everybody else, too.” Check out a photo of Sarah Palin on the Newsweek cover from NewsBusters.

Sarah Palin plus Newsweek plus Oprah

One thing is for sure, most Americans will know by the end of the day today that Sarah Palin’s “Going Rogue” officially comes out tomorrow. For those who don’t watch “Oprah” or have televisions, they’ll find out when Sarah Palin is on the Newsweek cover, if not before.

“Going Rogue” will likely sell a lot of copies and thus help Sarah Palin financially, but it’s debatable whether it will help her political career. In fact, it might hurt her. Already, before the book has even been released to the public, aides who worked for the McCain-Palin campaign are disputing parts of the book, saying they’re not true. ABC reports that many aides were not exactly Sarah Palin fans. Already people who worked for her have set out to prove wrong some of the stories she shares in “Going Rogue.”

Sarah Palin popularity

I was pretty surprised to read in the Daily News that 43 percent of Americans who participated in a poll view Palin favorably. That seems pretty nigh to me, but I guess that’s just a reflection of my own circle of acquaintances.

Until people have a chance to read it themselves, it’s impossible to say whether “Going Rouge” will improve Sarah Palin’s popularity. I am sure the Newsweek cover of Sarah Palin will turn some heads and maybe turn a few more people against her. Of course, it could also catalyze her fan base to defend her and push even harder for her to get a job in the White House. Maybe 2012 will be the Year of the Maverick! (Palin, if you steal that for your campaign slogan, I want royalties.)

The Obama administration is working hard to reform laws for companies who issue credit cards. On May 22, the president signed off on the Credit Card Accountability, Responsibility and Disclosure, or Credit CARD, act of 2009.

The bill is set to improve the way companies deal with consumers and act as a watchdog agency that protects users. Here are some of the benefits of the new law.

Increases are retroactive

Card companies can no longer raise rates on an existing balance unless the customer is 60 or more days past due. There will no longer be “anytime, any reason” clauses that almost every credit company employed in former contracts.

If the cardholder does trigger the default rate, the bank has to be willing to restore the rate if the cardholder maintains six consecutive on-time payments. Rates also can’t be raised the first year after the card is issued and low introductory rates have to last at least six months.

Rate hikes

Lending companies are still able to raise credit card rates, but they have to give consumers 45 days notice before the new rate is effective. This can help consumers to budget more wisely and switch to new credit cards if needed. Currently, notification time is only 15 days.

Gail Scherwood, a consumer in Billings, Montana stated, “The notice we received was dated two weeks prior, but we didn’t get it until four days before the increase. That didn’t seem fair.” This new rule hopes to resolve this issue, and give customers time to react to pending increases.

Fees

Fees are another hot topic with credit cards. Cardholders no longer will face over-limit fees “unless they elect to allow the creditor to approve over limit transactions.” Also, in general banks won’t be able to charge fees to consumers who pay their bills over the phone or online.

The only fee they will be able to tack on is an expediting fee at the consumer’s request. In addition, if cardholders pay at a bank’s branch, the payment must be posted same-day to avoid late fees.

Student credit cards

There are restrictions on students ages 18 to 21. This consumer group has to have:

1. An adequate income or a co-signer
2. Attended a financial literacy course

If they don’t have both, they won’t be approved for a credit card. This law protects young people who, in the past, were heavy targets for the credit card industry. As a result, many young people were overwhelmed with debt because of the “free” credit cards they were being inundated with. A recent survey showed that the average college student is holding $3,173 in credit card debt. This is a record high since 1998 when the first study was done.

Double-cycle billing is over

Another result of the new credit CARD law is a ban on double-cycle billing. This is when credit card companies base their finance charge on the current and previous balances. This allowed companies to charge interest on debt already paid from the previous month.

Payment allocations

Previously, payments were applied to lower-rate balances first, thus bringing in fees and interest rates on higher balances. Credit card companies are no longer able to do this. The new law requires that any “above minimum payment is applied first to the credit card balance with the highest interest rate.” This could save thousands for consumers.

More time

Finally, consumers will have more time to pay. Card companies must send out statements to consumers 21 days prior to payment due dates. This will give people adequate time to make their payments and adjust their budgets.

Credit CARD

The new law for credit cards should be enacted shortly. It will do a lot to monitor companies’ actions and protect card users. President Obama’s goal was to set in motion a safeguard for credit users, and this law is the first step to reaching that goal.

Payday loans in Ohio still exist, but the opposition continues to bulk up for the next battle. (Photo: Wikipedia.org)

The battle for payday loans in Ohio has been a difficult one for consumers. The recession hit the Ohio workforce harder than most, and the need for emergency short term loans is greater than ever before. Yet the state legislature in their infinite wisdom decided that what their constituents needed was nanny state regulation. Rates were capped at 28 percent APR, which effectively crippled the industry in Ohio and sent credit- and liquid asset-constrained consumers scrambling toward more expensive options. That rate is more stringent that the federal rate of 36 percent APR set for lending to active military, and we know that even at that level, the business model in unsustainable.

Payday Lending is Now

Consumers desire the flexibility to choose what is best for their financial situation. The Columbus Dispatch, rather than turning away from this point in order to blow with the political wind, recently produced an article that was pleasantly even-handed. For some, it’s true: payday loans are “the only way to get by.” While no reputable lender would advocate payday loan dependency, it’s been proven not only in customer surveys but in studies conducted by the Federal Reserve and institutions of higher learning that payday loan can be an invaluable tool for smoothing out financial shocks.

Choice is Good

CheckSmart CEO Ted Saunders pointed out to the Dispatch that “There is a bank right there,” in reference to a traditional institution just a football field away from one of his stores. “They could go right there if they wanted to.”

Competition fosters choice. It also tends to help regulate prices, both of which are benefits to the consumer. But activists like Bill Faith of the Coalition on Homelessness and Housing in Ohio (COOHIO), who appears to be a firm believer in the nanny state, reminds that “People at one point also were excited about high-interest subprime mortgage loans that helped ruin the housing market.” Yet Faith makes an apples-to-oranges comparison. Wall Street shenanigans and impotent governmental policy that allowed it to go on are what destroyed the economy. Payday loans aren’t even in the same ballpark. In fact, studies like those by Dartmouth College’s Jonathan Zinman suggest that capping payday loan rates and otherwise restricting the industry harms consumers’ financial welfare.

Don’t Believe? Ask Somebody Who Has Used Payday Loans

The Dispatch interviewed Amie, a 47-year-old mother of six. Recessionary times have been tough for her budget, and her low earnings make getting ahead almost impossible. Even though she’s found herself jumping from one payday loan to another, she said “I can’t complain. At least they’re helping me,” referring to CheckSmart in Ohio.

That’s ammunition that payday loan critics would use to say that companies like CheckSmart are pulling Amie into an endless cycle of debt. But what we truly have here is a financial landscape where banks, credit unions and even employers have for the most part failed to serve the populace. Requirements to apply for consumer loans through old-school channels often exclude those who need the most help. As wages have not kept pace with the rise of inflation, too many consumers like Amie find themselves in a large hole.

Legislation: Like an Ant Lion’s Hole

Legislators who fight for 28 percent APR and other such unreasonable restrictions upon businesses without the deep pockets of the financial mainstream are creating a nanny state scenario where consumers with nowhere else to turn will have to depend upon the “alms” of the government and their banking tentacles. Freedom of choice sinks beneath the waves. Or, if the government does not assert total control and credit-restricted consumers are left to fend for themselves, regulating payday loan companies out of the market most frequently leaves consumers with even more expensive options, from loan sharks to overdraft fees. At least payday lenders make their costs clear up front. That’s something a bank never does with overdraft fees. If you’re skirting the red, using an ATM card becomes a deadly game, as every infraction can incur a fee of $25 or more, even if you overdraw your account by as little as one penny. But that’s OK, says banks. It’s all in the micro-fine print!

“Banks and other lending institutions aren’t doing their jobs,” says Koziura

That’s what House Financial Institutions Committee chair Rep. Joseph F. Koziura of Lorain, Ohio told the Dispatch. “The system is built on making money on fees now instead of the old-fashioned loaning money and putting money in the system. That’s 90 percent of the reason we’re screwed up.”

What happened when half of Ohio’s 1,600 payday lending outlets closed down after approval of a 28 percent APR rate cap? Lots of people hopped into the unemployment line, for one. Consumers kowtowed to the voice of government and made life more difficult for those who can ill afford such windmill chasing. There were certainly some payday lenders who were unscrupulous in their dealings with customers, but it was not a majority. Payday lending is a regulated industry with a keen eye toward consumer relations. Groups like the Community Financial Services Association and the Online Lenders Alliance are there to ensure that consumers can safely enjoy the use of payday loans.

But Payday Lenders Aren’t Being Allowed to Run Legitimate Business

Charging $15 per $100 loaned is common for a payday loan. For a two-week loan, paying 15 percent interest is reasonable for an emergency service that can expose the lender to a great deal of financial risk. But Ohio legislators managed to convince consumers (lead the lemmings?) into laws that prevent payday lenders from even doing that. According to the Dispatch, CheckSmart charges up to that rate, but it’s broken down into numerous fees in order to circumvent faulty legislation. It gets around the 28 percent APR rate cap as it currently exists. And CheckSmart makes each of the individual fees clear to its customers, who continue to use their services. The truth is what consumers want, not horror stories that leave you thinking, “Yeah, that really doesn’t happen to most people.” No hook hands scraping the door at midnight, no dolls that move on their own and no payday loan debt traps… that’s story time, kids.

Legislators Still Aren’t Satisfied

Ohio legislators are continuing to drive for a 28 percent APR rate cap that applies to any payday loan and closes the loopholes. “The latest bill up for debate in a House committee,” writes the Dispatch, “would cap interest at 28 percent for all loans of up to $1,000 made for a term of three months or less.” That would kill payday lending in Ohio. A vote is set for early December.

Payday Lending: A Tool to Be Used with Healthy Caution

Payday lending is not a magic ATM. It isn’t money to fulfill your wildest cash desires at a moment’s notice. Such unbridled use can easily lead to dependency, when what a consumer’s finances need is sound budgeting. But regulating payday lending out of business in Ohio because a minority of consumers use the payday loan product in ways it was not intended to be used is no answer. If people fear the nanny state when it comes to bailouts and healthcare, shouldn’t they also fear it in this avenue of consumer finance?

Speaking of government, there’s an invention called Social Security. While it has been a cash lifeline for some, many others worry that it may be a financial scam, a Ponzi scheme that is costing the modern workforce millions each year. Yet legislators make no earnest attempt to reform that system. They consider payday loans a more desirable target, perhaps? There might just be more of a campaign war chest in that field, thanks to the banking industry. Vote as the dollars go; isn’t that the way?

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Senator. Chris Dodd (Photo: Wikipedia.org)

The people of American are looking for debt relief any way they can find it these days, and it appears that the only way true gains in this area are going to be made is if major restructuring of America’s financial regulatory agencies occurs. Along those lines, controversial Connecticut Sen. Chris Dodd (who some consider to have turned a blind eye to the financial shenanigans that greased the way for the mortgage industry collapse) is hard at work. He wants to push through a new financial reform plan that would completely change the way the government would control banking oversight and debt relief.

Obama Praised Dodd’s Consumer Protection Agency Work

It appeared that Dodd was preparing to take banking regulation and debt relief in an exciting new direction much in tune with the president’s plans. However, recent signs indicate that Dodd’s plan will be significantly different that what was previously expected by the current administration. Specifically, Dodd wants nearly all bank-supervising powers to be removed from the Federal Reserve and FDIC (where they currently reside). An entirely new agency would pick up the reins. They would be responsible for all national finance institutions as sole regulator and guide toward debt relief on both the institutional and consumer level. It would replace the four federal regulatory agencies that exist.

Enter the Watchdog

Watching out for potential risks to the country’s banking and finance industries would become the responsibility of a new kind of watchdog council that would be a chaired by a single White House official. What this would accomplish is to take the teeth out of the Fed’s ability to conceive of consumer protection and debt relief measures on its own. America’s 12 Federal Reserve Banks would also potentially be in jeopardy or closing, according to the Wall Street Journal.

And guess what? In a time when President Obama constantly extols the virtues of bipartisan support, Senator Dodd’s actions could be seen as somewhat extreme. That’s because Dodd is going after his version of the finance reform/debt relief bill on his own. Sheila Bair of the FDIC is against Dodd’s ideas, and the Journal predicts that Senate Republicans will be as well.

The Frank-Man Commeth

Rep. Barney Frank (Photo: Wikipedia.org)

Rep. Barney Frank and the House Financial Services Committee is currently working on its own debt relief and regulation program. According to the Washington Post, Frank’s bill would take a much more conservative approach to regulatory reform. It would get rid of just the Office of Thrift Supervision. At the same time, rather than stripping the Fed of power, it would give them even more power to step in and control the actions of America’s banks.

Consumer Debt Relief Appears to Be Covered

That’s where the Consumer Financial Protection Agency the House has already concocted comes in. Mortgages, credit cards and various consumer loans will fall under that agency’s jurisdiction. Dodd and Frank are battling for a solution to the problems in the banking industry as a whole. Frank estimates the House will vote on his plan by the end of 2009, but Dodd is attempting to push his plan through even sooner than that, perhaps as early as next week if the Washington Post’s sources are accurate. Get ready for some major debt relief debate, America.

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Image from Blogspot.

The unemployment extension, passed November 5, 2009, was included in a bill with the homebuyer tax credit, and now millions of Americans can continue to collect benefits. The homebuyer tax credit was extended to 2010 in April. The unemployment extension means workers whose unemployment insurance was set to run out before the end of the year can collect benefits for an additional 14 weeks.

In states with especially high unemployment rates, the unemployment extension includes six weeks in addition to the 14-week extension. People collecting unemployment in states with rates higher than 8.5 percent will be eligible for a 20-week unemployment extension after the president signs the bill tomorrow morning.

Who is paying for the unemployment extension?

Don’t worry, you won’t have to go into tax debt because of this bill. The government isn’t taking money from tax payers just to turn around and give tax credits to those same taxpayers. The unemployment extension will be paid for the same way unemployment insurance has always been paid. That wouldn’t make any sense. CNN reports:

The proposal would be funded by extending a longstanding federal unemployment tax on employers through June 30, 2011.

How many people does the unemployment extension cover?

Nearly 2 million people collecting unemployment in the U.S. are scheduled to have their benefits expire before the end of the year. The sad thing is, if Congress had agreed on this bill sooner, 200,000 Americans could have gotten their unemployment extension, too. CNN reports:

The Senate had been bickering over the details since September, and that cost more than 200,000 people their benefits. Some 7,000 unemployed Americans run out of benefits each day, according to the National Employment Law Project.

The national unemployment rate now is 9.8 percent, the highest it has been in 26 years. Tomorrow, the day the president signs the bill, new unemployment statistics will be released. I wonder if that had anything to do with Congress finally deciding to pass the unemployment extension on November 5, 2009.

Image from Flickr.

Congress today passed a bill that extends the homebuyer tax credit, which was set to expire at the end of this month. Homebuyers who initiate their purchase between now and April 2010 will be able to take advantage of a $6,500 deduction in their federal taxes for that year.

Of course, this tax credit isn’t available to all homebuyers. And, of course, there have been some changes to the tax credit that exists through this month. The most noticeable change is the amount, reduced to $6,500 from $8,000. But, hey, if you really need the extra $1,500, you can always apply for a pay day loan. First-time homebuyers are still eligible for a tax credit up to $8,000.

More changes to homebuyer tax credit 2010

You may have noticed that I wrote “homebuyers who initiate their purchase” earlier. Anyone who has purchased a home knows that it doesn’t happen overnight, so the bill stipulates that the buyer must sign a sales contract by April 30 and close the sale by June 30 to get the credit.

This year, only people who had not owned a home for three years were eligible to receive the credit.  Now, people who have owned their current home for at least five years can be eligible for the tax credit if they buy a new home. Also, the maximum income you can earn and still be eligible has been reduced to $125,000 for individuals and $225,000 for couples.

Exemptions from homebuyer tax credit

So, to review, people who have owned a home less than five years, people who make too much money and anyone who doesn’t sign a sales contract within the allotted time frame are not eligible for the credit.

Furthermore, the credit only applies to purchases of a primary residence. The cap on the home’s price is $800,000.

On a side note, the same bill that extends the homebuyer tax credit to 2010 also extends unemployment benefits so that people can collect them for an additional 13 weeks.

No more doctor's note needed in Breckenridge, Colorado.

The federal government still states that possession of marijuana is illegal, as does the state of Colorado. However, in the city of Breckenridge, Colorado, people who possess less than an ounce of pot will not face any criminal or civil charges.

Yes, on election day 2009, Breckenridge, Colorado, voters made marijuana legal — to an extent. Basically, police who work for the City of Breckenridge can’t charge people with a crime for possessing up to an ounce of marijuana, though the police chief says they “still have the ability to exercise discretion.” Let’s pick this apart, shall we?

No state revenue

People often argue that pot should be legalized because it would bring in revenue through sales tax for states and perhaps provide some debt relief. However, Breckenridge, Colorado, has legalized only the possession of pot, not the sale of it. So the only people who benefit financially are still the dealers, who can still be busted if they’re found with more than an ounce.

Furthermore, anyone who gets caught by state police or federal agents can still be arrested for pot possession. So, really, the numerous publications that are saying the vote was “largely symbolic” are right on the money.

Do you have a doctor’s note?

Of course, medical marijuana is legal in the State of Colorado, and unfortunately for the voters of Breckenridge, Colorado, their symbolic vote might get the state some extra attention from the feds. In states such as California, where medical marijuana is illegal, federal agents are trying to shut down dispensaries.

This is, of course, because even medical marijuana is still illegal on a federal level. Now that Breckenridge, Colorado, has established itself as a progressive player in the game of legalizing marijuana, the state might become more of a target for federal enforcement of pot laws. Then again, maybe they don’t care if a bunch of hippies in a ski town smoke a bowl. I guess we’ll see.

Installment loans have been there for people from all walks of life who have been failed by the traditional credit and lending system. (Photo: flickr.com)

You’ve more than likely heard the call to arms “Stimulate the economy!” before. It takes expenditure in order to keep the wheels of commerce flowing. While the current recession has made that difficult – people are still highly unwilling to spend on non-essential purchases – the standard progression in America has been that accumulation of household debt can be just the grease needed to lubricate the economic wheels.

Of course, access to credit is a very large first step toward accumulating the managed debt and consumerist desire that creates the consistent cash infusion the American economy requires. But what happens when traditional credit is unavailable?

For large segments of the American population, being denied for traditional credit has forced them to consider other options like installment loans. The reason for these denials, according to researchers like Christian Weller of the University of Massachusetts and Center for American Progress, are multiple.

However, concepts of race and ethnicity may indeed be a determinant. In his study “Credit Access, the Costs of Credit and Credit Market Discrimination,” Weller considers household debt information in an effort to determine whether discrimination in the consumer credit market has declined, gone away or actually persisted as deregulation of credit industries has occurred. The survey referenced is the Survey of Consumer Finances (SCF), which the Federal Reserve conducts on a tri-annual basis.

Borrow to Spend, Spend to Stimulate

As families borrow, more of them can afford to undertake major purchases like homes, cars and education than otherwise. Consumer credit such as installment loans also help smooth over financial shocks that come about due to medical emergencies and other situations. If the playing field were level, it would indeed be that simple.

Yet Weller acknowledges what we all know: families don’t all have the same access to consumer credit. Demographics, minority status and income levels have contributed toward lessened chances to obtain a loan and high loan costs. Weller identifies this as “credit market discrimination.”

Restricting access to traditional loans on the basis of race, ethnicity or other personal traits yet not providing sufficient access to some form of installment loan credit when consumer need is imminent has been a failing of the traditional banking industry. As deregulation began in the late 1970s and grew to fruition in the 1990s, the message became clear: America’s economy was on track for more market competition and less discrimination.

Payday loans and installment loans filled consumer need, promoted competition (an invitation banks still haven’t taken up in earnest) and turned back some of the tide of discrimination.

Measuring the Credit Market

Weller analyzes evidence of financial constraints from the years 1989 through 2004. Looking at a sampling of borrowing families, demographic characteristics like family size, marital status, living arrangement and others are considered. Financial indicators like credit history, family income and accumulated wealth are also potential factors, although some of Weller’s findings indicate a “taste-based” form of discrimination based upon prejudicial perception may play a role. Sometimes this is even a more socio-economic form of discrimination, where those of higher income judge those with less negatively.

Consulting Professionals in Times of Financial Insecurity

When consumers face financial stress and don’t have the liquid assets on hand to absorb their financial shocks, seeking out assistance is wise. Among those surveyed by Weller, however, we see that consumers in need of aid don’t always do this. Not only that, but a disparity appears to exist along racial lines. The percentage of Caucasians who relied on financial professionals in 2004 was 45.7 percent, compared with only 27.7 percent of African–Americans and 27.2 percent of Hispanic consumers. Those families who did rely on professional assistance were found to be 17.3 percent less likely to be denied for a traditional loan.

On a related note, the rate of those who applied for traditional loans but were denied also bears a connection to race. Weller found that African–Americans were 41.7 percent more likely than Caucasians to be denied a loan. This difference became even larger when larger-scale loans like home mortgages were considered. The author cites a 1996 study by Jonathan Crook, which suggests that lower-income and older families were also more likely to experience denial on traditional loans.

Negative Expectations

Weller found that 14.9 percent of African-American families and 11.9 percent of Hispanic families claimed that that rather than experiencing a denial, they didn’t even apply for a loan because they figured they’d be turned down. Among Caucasian families, this figure was only 4.9 percent. Low versus high income levels showed a similar order. Tracking these figures from the beginning of the study period in 1989 to the end in 2004, loan denial and application discouragement increased.

For those groups who experienced the greater traditional loan denial or discouragement, Weller finds that short term consumer loans like installment loans tended to be more prevalent. In 2004, 18.2 percent of African-Americans respondents used installment loans, while 10.5 percent of Caucasians and 10.9 percent of Hispanic families. While critics of the installment loan industry would point to some of the short term consumer loan products a small number of credit unions across America offer, Weller found that only 3.6 percent of all consumer debt in the survey originated with credit unions.

An Important Distinction

Weller found that even though minority groups borrowed less from traditional lenders, which did not mean that they were significantly more likely to borrow from sources like installment loan companies or rely upon credit cards. “There is no statistically significant difference by race and ethnicity when it comes to borrowing from consumer lenders,” writes Weller. “The combination of these results with the ones on traditional banks is consistent with the earlier finding that denied and discouraged applications are larger for minorities.” The common conclusion here is that minority families in the survey had restricted access to credit when compared with Caucasian families. Low- versus high-income showed a similar breakdown.

Installment Loans are an Answer

Used responsibly, installment loans can enable any consumer to handle the financial shocks that life inevitably will throw your way. The credit restrictions that have existed in various segments of American society have necessitated the need for short term consumer credit, and products like payday loans and installment loans have filled the need. If consumers are going to partake of whatever source is available when the need is great, then the presence of a regulated industry that saves consumers from highly negative alternatives.

Thus, installment loans fill a need; they do not target groups in need. Claims of “aggressive advertising” would seem to apply more to traditional lenders, as their advertisements are much more prevalent than anything the payday loan and installment loan industry offers. I base this on my own observation, but I’m convinced it is accurate.

Weller’s suggestion that further study is needed as to why such a disconnect exists between minority and low-income groups and traditional banks is an interesting suggestion that could possibly help to close the gap and create more of the competition that fuels the American economy.

With this debit transaction cost $35 more than you think?

The Associated Press reports that some senior congressional Democrats want to draw up legislation that would limit how much banks can charge customers in overdraft fees. Personally, I have been slapped with $105 in overdraft charges before for transactions that equaled a lot less than that, so I certainly would feel better knowing that banks are no longer allowed to charge $35 per purchase

Of course, I could have saved a lot of money if I had gotten a payday cash loan. The average fee for a $100 payday loan is $15, so if I would have been smart and taken the initiative, I’d be $90 richer.

Picking on payday loans

Of course, banks do not want this legislation to become a reality. And, of course, as banks always do when when people point out their unethical practices, they are trying to shift focus onto a different institution. The common strategy is that when people say “banks are bad” the banks say “payday lenders are worse!” Even though this is totally untrue. The Associated Press reports:

Michael Menzies, president of Maryland’s Easton Bank and Trust Company, said eliminating overdraft protection for many customers will mean denying charges and embarrassing customers or forcing them to rely on high-cost payday lenders.

Clearly, Menzies has no idea what he is talking about. The numbers I have already presented you with prove that overdrawing your bank account is more expensive than getting a payday loan, even if you’re only charged once. How can a guy whose bank charges $35 when someone goes $1 over their balance point fingers at payday lenders, who charge $15 for a $100 loan?

Overdraft fee legislation

The idea behind the overdraft fee legislation is to require banks to ask customers whether they want overdraft protection or not. Banks insist that their customers would rather be charged an overdraft fee than have their debit card denied, but I am pretty sure that is universally untrue.

How many people do you think have kicked themselves because they bought some cheap thing they didn’t really need and ended up paying an additional $35 for it? Another idea for the overdraft legislation is that banks would only be able to charge customers overdraft fees once a month and no more than six times per year. I think that regulation would really help out customers and it definitely makes sense. I think it is atrocious that banks can charge such high fees over and over, each time you make a purchase after your account is overdrawn. I think it makes a lot more sense to charge the fee only once.

Proportional charges

The senators also say the legislation should require that banks base the overdraft charge on the amount by which the account is overdrawn. As it is now, most banks charge $35, whether the customers overdraws the account by $2 or $200.

Essentially, an overdraft charge is the bank’s way of lending  you money for your purchase — with or without your consent — and charging you for that loan. A $35 fee for a $2 loan is a little ridiculous, but $35 for $200 is understandable.

Millions of Americans who can't find work could benefit from the unemploment extension vote.

The unemployment extension vote that took place Tuesday cleared the way for the unemployment extension bill to make its way through Congress. The House has passed the bill, which would allow unemployed workers to collect benefits for an additional 13 weeks beyond what is already allotted.

Originally, the bill specified that only states that have unemployment rates of 8.5 percent or higher would receive the benefits, but that provision has been amended. Because some states with lower overall unemployment rates have areas with very high unemployment, the bill was amended to include all states. Another unemployment extension vote must take place before the benefits will be extended.

Unemployment extension vote sorely needed

The nation’s unemployment rate is hovering uncomfortably near 10 percent, at 9.8 percent, and several million Americans are scheduled to stop receiving unemployment benefits before the end of the year. People who aren’t getting payday cash rely heavily on unemployment benefits.

The bill would provide emergency unemployment compensation for people who are actively seeking work but unable to find it. If the Senate passes the bill when it holds the unemployment extension vote, job seekers would have another three months to try to find jobs while still collecting unemployment insurance.

Why unemployment extension is needed

Out-of-work citizens who are collecting unemployment must actively seek work. In the state I live in, people are require to apply for three jobs per week in order to be eligible for unemployment. Though the jobs the insured applies for do not have to be in the person’s field, people aren’t required to accept job offers unless the pay and position match their previous job.

People in many different fields are having a very tough time finding work during this recession. Many people often think that someone who is collecting unemployment should take whatever job he or she can get, but the reality is that sometimes people can make a lot more from unemployment than they’d make working at Starbucks. Extending unemployment benefits would allow people more time to find a suitable job in the right field of work. This could prevent people from having to uproot their families and move for a job or accept positions below their skill levels.

As anyone who has tried to find a job during this recession knows, the unemployment extension vote could greatly help or hurt millions of Americans.

Drama in the unemployment extension vote

So far, there have been some near scuffles involving the unemployment extension vote. Congress held a cloture vote Tuesday, which is simply a vote agreeing that they should proceed to have a vote on the bill. This was necessary because some members were unable to reach an agreement regarding amendments to the bill.

Sen. Harry Ried at one point threatened to hold a vote at midnight this morning. That would have been the soonest time Congress could legally vote on the bill, as it was 30 hours after the cloture vote. He didn’t follow through with holding the unemployment extension vote at midnight, but the bill passed in House anyway.

Do you think the tax credit will stimulate home sales?

A Senate committee on Wednesday reached an agreement regarding the first time home buyer tax credit. If they have their way, the first time home buyer tax credit wouldn’t be just for first-time home buyers anymore.

If lawmakers approve, the tax credit will be extended to people who have owned and lived in their houses for at least five years. Also, the credit was set to expire Nov. 30, but the proposal will extend it to April 2010.

Details on first time home buyer tax credit

I don’t know what they are going to call the first time home buyer  tax credit once it’s not for first time home buyers anymore, but I do know that the credit will change from the original $8,000 to $6,500. Obviously, the first time home buyer tax credit does not put quick cash in the hands of people making the biggest purchase of their lives, but it does give them a $6,500 discount on what they owe the federal government.

So, potentially, if an individual or couple pays their taxes in full, they could get a check for $6,500 come tax time. But not just anyone. The credit will be available to couples making up to $250,000 per year or individuals who make $125,000 or less. Right now, couples making $150,00 per year or less and individuals with salaries of $75,000 or less are eligible for the first time home buyer tax credit.

My, how stimulating

So, if the Democrats on the Senate Committee who drew up this proposal have their way, the first time home buyer tax credit would be extended to a lot more people — people who make more money, people who have already owned houses, people who want to buy a house after Nov. 30. Clearly the government is attempting to stimulate the housing market, which has been and still is in a slump.

Last month, home sales in the U.S. fell to the lowest levels seen since 1982. Of course, a $6,500 tax credit is not enough to get people who were not previously considering buying to go out and sign mortgage papers. However, for those who have been thinking about it, this not-just-for-first-time home buyers tax credit might be the push that they need.

Remember the mortgage crisis

Of course, anyone who is considering buying a home should not let this first time home buyer tax credit convince them to do something risky. Remember the whole sub-prime mortgage crisis? Yeah, that was the thing that pushed us into a huge, foreclosure-filled recession. So home buyers must make sure, tax credit or not, that they do not sign up for a mortgage they cannot afford.

Your monthly mortgage payments should be no more than one-third of your income, and even that is a little much if you ask me. There is no such thing as “a good time to buy” for everyone. Whether buying a house is a smart decision depends on your financial situation, and yours alone. The price of the home and its possible value in the future doesn’t matter as much as whether  you can realistically afford your house payments.

Scammers at  every turn

It remains to be seen whether this new version of the so-called first time home buyer tax credit will pass. Many critics have pointed out that a lot of people scammed the government out of $8,000 when they were ineligible for the tax credit.

Some people scammed the government by getting the credit even though they were not purchasing their first home. The new version of the tax credit would deem this a non-problem. Trouble is a lot of people pulled off getting the tax credit without purchasing homes. That scam is one that hurts fellow taxpayers because it does not stimulate home sales, and it does bilk the government out of much-needed funds.

Sarah Palin, image from Wikimedia.

It is confirmed, by the Chicago Sun-Times and the New York Times, Sarah Palin will appear on “The Oprah Winfrey Show” next month, the very day before her book “Going Rogue” hits the shelves.

Needless to say, people have some pretty strong opinions about this turn of events. Oprah is arguably the most powerful force in the media when it comes to giving publicity to products and businesses. Oprah also campaigned heavily for Barack Obama, but now she will interview a woman on the opposing presidential ticket the day before her books hits the shelves.

Selling power

Needless to say, anything mentioned on Oprah gets huge publicity. The only thing that can cause more hype than Oprah’s show is controversy. Here we have both. And this is no installment loans versus instant payday loans sort of controversy. This is pitting two very vocal groups with very different opinions against each other.

Understandably, many of Oprah’s viewers are angry that she would use her amazing powers of publicity to promote a book by someone they view as and enemy of sorts. Some of Sarah Palin’s fans believe that Palin is “lowering herself” by being on Oprah’s show. Clearly, any Palin fans who are opposed to her being on Oprah’s show don’t understand how much publicity this will give Palin’s book, “Going Rogue.”

Details, details

Oprah will interview Sarah Palin on the episode of “The Oprah Winfrey Show” that airs Monday, Nov. 16. Sarah Palin’s book “Going Rogue” is scheduled to hit shelves Nov. 17, and right now you can pre-order it from Amazon for $9.

I predict “Going Rogue” will sell out after Sarah Palin goes on Oprah’s show. I also predict that “Oprah” will have an unusually high number of viewers on Nov. 16. When you meld the fans of these two you get a pretty broad cross-section of America, plus I think a lot of people will tune in just to see what happens.

It's people like these who voted to evict six-year-old Kimberly Broffman. Not these people specifically, but people like them. You can see it in their eyes. (Photo: flickr.com)

I’m a parent, so I’m going to proudly display just a bit of bias here. If the homeowners’ association at the Largo, Florida retirement community where Jimmy and Judie Stottler live think it’s a good idea to force them to evict their six-year-old granddaughter Kimberly Broffman, I cry for their misplaced humanity. That is, if I give them the benefit of the doubt that they possessed any humanity in the first place. With short term loans, perhaps they could afford more mirrors so they’d be forced to take long, deep glances at themselves.

Yes, that’s right. “Grandparents ordered to evict 6 year old” isn’t something you hear every day. The Huffington Post reports that the bylaws of the retirement community require that all residents must be older than 55. This is unlike many communities where only one of the residents has to be 55 or older. In the infinite benevolence of the HOA, young Kimberly is the only one mandated to leave.

The Stottlers Have Tried to Sell

Considering what a lovely place it must be to live (And the people! Oy!), it comes as quite a shock that Jimmy and Judie have been looking to sell their home and return to humanity. Yet the housing crash has made sale that much more difficult. They’re now asking for $129,000, so if you know any miserly folks who love petty rules and regulations, have them call the Stottlers. I’ll take out short term loans for their bus fare.

So despite the unreasonable requests of their HOA, the Stottlers have tried to comply in the best way they could imagine.

Kimberly Broffman Could Become a Foster Child

NBC News claims that “there is a real possibility that (Kimberly) could be placed in state foster care.” That’s a road that nobody should have to travel if there are other options present. The feelings of rejection and confusion at being uprooted from all that she knows could certainly be enough to cause depression and anger in what appears to be a perfectly happy little girl. Blindly adhering to rules rather than looking out for the best interests of humanity is a sure sign that the HOA members are either intensely confused or deliberately deserving of being slammed against a bed of nails continually.

Wither Justice?

A judge’s ruling in the matter is to come, and I hope Kimberly Broffman is allowed to remain in the place she calls home. An interesting note here (which is unconfirmed) comes from a reader response to this story on the Huffington Post Web site. Supposedly, the May 2009 HOA meeting minutes for this same retirement community included discussion of renting out their lodge for high school graduation parties. The HOA is apparently aware that alcohol to minors is served at these parties, but they continue to rent the hall… because they’re making money off the deal! They don’t want short term loans, they want cash without questions!

So, if Kimberly Broffman simply went out and got a job (perhaps in a fiberglass insulation plant) and paid dues, the HOA would happily withdraw their hasty complaints. Lesson learned, little Kimberly. Adults can be mean and nasty, but money tames the savage beast.

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Image of Bernard Kerik from Wikimedia.

Bernard Kerik knows that committing tax fraud is a no-no. He made that clear in 2004, when he withdrew his name from consideration for Secretary of Homeland Security. At that time, Bernard Kerik admitted that he had committed tax fraud.

Bernard Kerik had employed an illegal immigrant to work for him as a nanny. Although he had failed to pay taxes on his employee, Kerik said he didn’t know the worker was undocumented. This was only the beginning of his legal troubles. He apparently didn’t know, or didn’t care, that confidential information must remain confidential when one is being investigated for conspiracy, fraud and possible mob connections. But let’s back up.

More charges flood in

Shortly after Bernard Kerik withdrew his name from the running for Secretary of Homeland Security, investigations began regarding ethics violations, unclassified misdemeanors. He pleaded guilty to those and paid a $221,000 fine.The court said “pay the money now, and you’ll be free,” so he did.

But it wasn’t over. Near the end of 2007, Bernard Kerik was indicted by a grand jury. His charges include conspiracy, tax fraud and making false statements. That brings us to the present, where Bernard Kerik was out on bail and waiting for his trial, which begins Monday.

Breaking the rules

Just a quick primer on the justice system: When someone gets arrested on charges, they get thrown in jail and have the opportunity to post bail. If the accused pays the bail money, they can be let out of jail until they get their sentence, which happens after the trial. However, people who are out on bail generally must agree to certain conditions in order to remain out of jail.

In major cases such as Bernard Kerik’s, it’s imperative that the accused does not share sensitive information about the case with the public. So although Bernard Kerik posted his $500,000 bail, he violated the conditions of his release when he posted confidential documents on his defense web site, according to USA Today. The judge ruled that this action could potentially sway jurors and that Bernard Kerik could not be trusted to honor the terms of his release, so he was hauled back to the slammer.

Who cares about Bernard Kerik?

So why is everyone so interested in this Bernard Kerik fellow? He was police commissioner in New York City during the Sept. 11, 2001, attacks on the World Trade Center. He was seen often on television with Mayor Rudy Giuliani, and Giuliani recommended him for Security of Homeland Security.

Bernard Kerik also served as Interim Minister of Interior of Iraq for a few months in 2003, just after the start of the Iraq War.

Sheila Jackson Lee image from Wikimedia. http://commons.wikimedia.org/wiki/File:SheilaJacksonlee.jpg

When I wrote earlier about the possibility of Rush Limbaugh buying the St. Louis Rams, I kind of thought that whole process had been snuffed out already. Apparently I was mistaken, as yesterday Rep. Sheila Jackson Lee (D-Texas) in a floor speech said the NFL should not accept a bid from Rush Limbaugh to buy the team.

Several people already have voiced their opinions that they were opposed to Rush Limbaugh owning an NFL team, including NFL Commissioner Roger Goodell. Last week, the commissioner suggested he would not accept a bid from Limbaugh when he said “we’re all held to a high standard here, and I think divisive comments are not what the NFL is all about.”

Sheila Jackson Lee is not alone

It looks like no amount of instant money will convince certain people within the NFL to vote in favor of Rush Limbaugh’s bid, which hasn’t officially been made yet. At this point, Limbaugh has simply expressed interest. Colts owner Jim Irsay has already made it clear to the public that he would not vote in favor of Rush Limbaugh owning the Rams. Several players on the team have also said they wouldn’t want to be on the team anymore if he owned it.

In fact, The Hill reports that the entire “NFL Players Association … has expressed major concerns about Limbaugh’s bid.” Outside the NFL, The Revs. Jesse Jackson and Al Sharpton have both urged the NFL to vote down any bid Limbaugh makes. However, it appears Limbaugh has not given up on the idea that he could buy the team, as he talked about Sheila Jackson Lee’s comments on his radio show today.

One vote for Rush Limbaugh

Sheila Jackson Lee is not the only politician who has voiced an opinion about the idea of Rush Limbaugh purchasing an NFL team. Rep. Emanuel Cleaver (D-Mo.), who joins Sheila Jackson Lee as a memeber of the Congressional Black Caucus, said he would have no problem with Limbaugh owning the Rams. He even said he thinks Limbaugh could help the team.

Limbaugh used to work as a commentator for ESPN on its NFL pregame show. However, he resigned after saying — on the air — that he thought Donovan McNabb was getting more attention than he deserved. He attributed this attention to the fact that Americans “wanted to see a black quarterback do well.”

Grassroots movement opposes Limbaugh’s racist quotes

An online campaign to get people to sign a petition urging the NFL to reject any offer from Rush Limbaugh. The campaign, housed at RushIsARacist.com, has compiled video of Rush Limbaugh racist quotes.

Considering that the NFL commissioner has already implied that he would reject Limbaugh’s offer, all of this campaigning — by grassroots movements, famous reverends and Sheila Jackson Lee — might be unnecessary. But nowadays it seems people will jump on any excuse to get riled up about racism.

Short term loans are a popular option with Americans as the deficit reaches record highs.  Budget deficit totals were released, and the federal deficit has surpassed $1.8 trillion, according to the White House.  That’s more than four times last year’s high. It’s reached this level because the stimulus package handed out billions more than anticipated to fuel the economy, and the government is receiving less money from taxes because of lost jobs and companies making much smaller profits.

The huge deficit is a direct result of the combined impact of the 2008 recession, the Wall Street bailout and Obama’s stimulus bill. In addition, the economy isn’t performing as well as hoped, and that’s having a huge impact on the government’s financial outlook.

What is being done

Obama announced an administrative cut of $17 billion in wasteful programs a few weeks ago. However, the deficit increase is more than five times that amount. Budget director Peter Orszag said, “The deficits … are driven in large part by the economic crisis inherited by this administration.”

The White House is working on officially releasing its proposed 2010 $3.6 trillion budget. Included are the details of various tax proposals and the pending health care reform. This budget represents President Obama’s vision for fiscal policy for the next decade.

Largest deficit since WWII

Americans have not seen such a deficit since World War II.  Economic analysts state that the most telling statistic is the ratio of deficit to GDP, which would be 12.9 percent, the largest it’s been since the war. In the past 30 years, the government has sought to keep this number at 4 percent, and is attempting to bring it down to 2.9 percent within the next four years.

Because higher-paying jobs are sparse, consumers are looking to short term loans and careful budgeting, along with major cutbacks, to get them through the recession and beyond. Polling data is proving that Americans are more concerned than ever with the huge deficit and managing debt.

A call for action

Marc Goldwein of the Committee for a Responsible Federal Budget, a bipartisan group that advocates budget discipline said, “Even using their February economic assumptions — which now appear to be out of date and overly optimistic — the administration never puts us on a stable path. The president … understands the critical importance of fiscal discipline. Now we need to see some action.”

Obama’s budget outline was submitted to Congress in February, but it remains an arguable topic. It does introduce higher taxes for higher-income Americans, an effort he maintains will bring about the funds to challenge global warming and fund health care reform.

Deficit troubles

It’s not clear whether the health care reform so sorely needed will ever reach the people. It’s not clear whether the unemployment rate will dip considerably, once again sustaining workers.

It’s not clear how long lending companies will be tightfisted.  Many Americans are bracing for a long cold financial winter, looking to short term loan options and cutbacks as a way to make it through these difficult times.

Get Short Term Loans HERE!

Democratic Senator Al Franken of Minnesota votes for people over corporations. (Photo: flickr.com)

Following one of the more vile incidents against a woman in American history, the Senate has voted in favor of Sen. Al Franken’s amendment to the 2010 Defense Appropriations bill that gives the government the right to withhold defense contracts (no small cash loans, either) from companies like Halliburton/KBR (not just that company) that deny employees from taking “workplace sexual assault, battery and discrimination cases to court,” reports Think Progress.

If you aren’t already aware, Jamie Leigh Jones was gang-raped by Halliburton/KBR co-workers in Iraq during the year 2005. After the tragic incident, she was imprisoned in a shipping container for at least 24 hours without food, water, or a bed. If small cash loans could have bought a human conscience, perhaps her captors could have found it within themselves to stop.

Talk and Lose Your Job

Furthermore, she was told that if she went against the company’s mandatory arbitration clause and sought treatment and justice outside, she’d lose her job. Apparently Jones was not alone in receiving this type of treatment. Considering that multiple source tend to corroborate that Halliburton/KBR’s record with cases that went to their “independent” arbitrator, one wonders why they even bothered with the charade of mandatory arbitration clauses.

Here’s What Sen. Franken Proposed

And Here’s the GOP Rebuttal

Sen. Jeff Sessions (R-AL) called it “a political attack directed at Halliburton,” and Franken’s response (read the amendment yourself) was that “This amendment does not single out a single contractor. This amendment would defund any contractor that refuses to give a victim of rape their day in court.”

(Photo: wikipedia.org)

For the record, here are the 30 who voted against the Franken amendment:

• Alexander (R-TN)
• Barrasso (R-WY)
• Bond (R-MO)
• Brownback (R-KS)
• Bunning (R-KY)
• Burr (R-NC)
• Chambliss (R-GA)
• Coburn (R-OK)
• Cochran (R-MS)
• Corker (R-TN)
• Cornyn (R-TX)
• Crapo (R-ID)
• DeMint (R-SC)
• Ensign (R-NV)
• Enzi (R-WY)
• Graham (R-SC)
• Gregg (R-NH)
• Inhofe (R-OK)
• Isakson (R-GA)
• Johanns (R-NE)
• Kyl (R-AZ)
• McCain (R-AZ)
• McConnell (R-KY)
• Risch (R-ID)
• Roberts (R-KS)
• Sessions (R-AL)
• Shelby (R-AL)
• Thune (R-SD)
• Vitter (R-LA)
• Wicker (R-MS)

If you’re interested in telling your senator what you think, I encourage you to do so. You elected these officials, and they are accountable to you. If you need small cash loans to pay for the ever-increasing cost of postage or Internet bandwidth, click the button to apply. Be a citizen of a representative democracy.

Jaime Leigh Jones’ Response

Jones made an appearance with Sen. Franken following the vote. “It means the world to me,” she said. “It means that every tear shed to go public and repeat my story over and over again to make a difference for other women was worth it.”

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Obama wins the Nobel Prize: For world peace or Miller Time? (Photo: flickr.com)

Theodore Roosevelt (1906), Woodrow Wilson (1919) and Jimmy Carter (2002) preceded him in winning. Now President Obama has won the Nobel Peace Prize. This time, however, some people are skeptical. The Norwegian Nobel Committee says he won due to his “extraordinary efforts to strengthen international diplomacy and cooperation between peoples,” but it remains to be seen whether his nuclear disarmament efforts will bear fruit. And with the rate at which taxpayer dollars are being used to bail nearly everything and everyone one, we may need a short term personal loan or two to fund the missile disposal.

Jump the Shark Lately?

If you ask the Taliban (and I know they’re the first people most of us consult in matters of peace), Obama’s choice as the Nobel Peace Prize recipient is questionable. Spokesman Zabihullah Mujahid exclaimed to Reuters via telephone, “The Nobel prize for peace? Obama should have won the ‘Nobel Prize for escalating violence and killing civilians.’” Of course, you can’t please everyone all the time. But perhaps we should have waited to see if peace is the actual result before giving President Obama the award. That’s reasonable, and I’m not Taliban.

Some World Leaders Agree

Japanese President Yukio Hatoyama and German Chancellor Angela Merkel appear to look at the Obama Nobel Prize from the standpoint of possible future gains. They think it should encourage other nations to assist him in achieving the nuclear disarmament goal.

Palestinian peace negotiator Saeb Erekat sees it as a sign for the Middle East that peace in their time is possible. He’d like to see a return to the Israel/Palestine borders that existed in 1967, where Israel would withdraw and Palestine would be left to exist as an independent state with Jerusalem as the capital city. As Israeli Defense Minister Ehud Barak sees it, the Obama Nobel Prize should enhance the America president’s ability “to contribute to establishing regional peace in the Middle East and a settlement between us and the Palestinians that will bring security, prosperity and growth to all the peoples of the region.” Just exactly where the lines in the sand would be drawn with such a settlement tends to fuel the flame of conflict, however. We’ll see what Obama can do there, if anything.

Hamas Has a Bone to Pick

What a shocker! Despite Rush Limbaugh, Sean Hannity and Glenn Beck’s contention Barack Hussein Obama is a pal of radical Islam, Hamas is up in arms over the Obama Nobel Prize. I hope Glenn doesn’t see what they’re saying about Obama’s policy, because he may not have enough tears to go around. Hamas Prime Minister Ismail Haniyeh told Reuters that “(Unless U.S. policy changes regarding) recognizing the rights of the Palestinian people, I would think such a prize would be useless.”

“Waiting For Deeds, Not Words”

That’s what Lebanese Hezbollah parliament member Hassan Fadallah had to say about the Obama Nobel Prize. Unfortunately, that’s what many Americans are saying about President Obama on the domestic front so far, but I’m willing to give him more time. Being president is just among the toughest jobs imaginable, and for that reason I’m not quite so willing as some to jump on the “bash George Bush” bandwagon as others. President Obama certainly doesn’t lack in oratory skills, but I believe we need to let the sand of time pass before we even begin to talk about his legacy. I still think he’s in his “probationary period,” to use corporate talk. There’s much to do in a world gripped by financial difficulty.

But Expectations Are Rising

Will the Obama Nobel Prize raise the pressure on America’s president? Irene Khan of Amnesty International thinks so. “We look to him for decisive action to pursue peace with justice in the Middle East, end the rollback on human rights in the name of counter terrorism and reinforce the fight against poverty at a time of economic crisis,” she said.

Other notable world figures like Poland’s Lech Walesa and South Africa’s Desmond Tutu see promise in Obama, but they tend to agree that we need to see how things play out.

What Won Obama the Nobel Prize?

To cast so levity on the Obama Nobel Prize situation, humorist Andy Borowitz wrote that it was “Beergate” that tipped the tap. The beer summit between President Obama, Henry Louis Gates and James Crowley (invite Aleister and you would have had a different summit altogether) supposedly swayed the Nobel Prize Committee. In Borowitz’s version of events, a Nobel official claimed that “someone brought up the beer summit, and we all agreed that that was awesome.” Not only that, but it was “a tribute to the healing power of beer.”

So long as you aren’t going to drive or operate heavy machinery and you have a vital political summit to host, perhaps the healing power of hops can set you to stepping. If recessionary economics set upon your budget, perhaps a short term personal loan can help with the morning after.

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Will the Federal Reserve create the framework consumers need to experience debt relief? (Photo: flickr.com)

Due to the recession, people are looking for debt relief more than ever.  Credit lenders are no longer as readily available as they once were.  Mortgages are difficult to handle.  The unemployment rate continues to rise.  Because of these problems, the Obama administration is calling for a new “financial rulebook.”  The administration aims to arm the Federal Reserve with increased power to regulate risk of large institutions in the financial industry. The goal is to police banks whose potential failure could cause economic instability to the nation.

The Federal Reserve also wants to create a strong framework of regulations and have a part in coordinating responsibilities within the financial system.  Investors would have increased protection, with the Fed focusing a committee on consumer products such as credit cards and annuities.  Treasury Secretary Timothy Geithner stated that the overhaul will “eliminate gaps in the financial system that encouraged risky behavior leading up to the meltdown [of the recession].” Geithner added, “We had a financial system that was fundamentally too unstable and fragile, and it did a bad job of basic protection of consumers and investors. Those are things we have to change.”

Unveiling the Plan

This week, President Obama is supposed to introduce his overhaul plan to the media. Initially the plan was for an intense restructuring that would consolidate all financial directives into one agency.  Senator Chuck Schumer of New York was a strong supporter of the consolidation, believing that “retaining multiple regulatory entities preserves the regulatory arbitrage that allows institutions to pick the oversight scheme that benefits them the most, often at the expense of consumers and the health of the system overall.”  This plan was ultimately vetoed by the Obama administration.

Another vetoed plan was to merge the Securities and Exchange Commission and the Commodity Futures Trading Commission.  Supporters believe the merging would offer a greater security in investments, bringing debt relief to aging Americans when they most need it, at retirement.

What We Should Expect

The plan to be unveiled will most likely leave the Fed, the OCC and the Federal Deposit Insurance Corp as the largest banking regulators.  In addition, the plan will impose “robust reporting requirements” on asset-backed securities and require banks that sell them to keep a financial involvement in their performance.  As Geithner stated, “We want the regulators to have a financial interest in the development of the products they are selling to ensure they are acting honestly and focused on growth.”

Easing the Strain of the Recession

Consumers are anticipating the new plans, hoping they will offer debt relief and ease the strain of the recession.   Banking Coordinator Susan Largina of Bank of America, stated, “We’re seeing a more hopeful clientele coming in. They want to believe the good news the media is interspersing throughout the daily news… It’s our job to maintain that hope by increasing the benefits and long-term viability of our banking products.”

Consumers Want Answers

With the new financial rulebook coming to the marketplace, consumers are waiting impatiently for answers.  They have suffered through the economy as best they could manage, using credit cards, tapping into savings and budgeting wisely.  With the recession coming to a close, consumers see debt relief as something they can reach in the near future. Hopefully with the new financial changes in the economy, banks and lending institutions will help consumers find their way back to a normal life.