697 Comments
Feb 16Liked by Robert Reich

Right on. I have a question for you, Professor. Why in holy hell is credit card interest so damn usuriously high? When interest rates have been historically low for so long? I’m no economist. But it freaking looks like collusion to me.

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Kerry, the credit card companies say their interest rates are high because (1) they don't charge any interest as long as you pay the purchase balance in full by the due date, (2) they're

unsecured loans, so the card companies are taking added risk by not requiring consumers to provide collateral for the money borrowed, (3) their high processing costs from the volume of transactions, (4) their high costs of protecting (and reimbursing) cardholders from credit card fraud, and (5) as the Fed raises interest rates on all lending, they have to recoup these costs as well. But all these standard reasons given the public leave out the fact that Visa and Mastercard (which have the bulk of the credit card business) are a duopoly, which easily coordinate their interest rates and fees, keeping them higher than they'd be in a competitive credit card market. Hope this helps.

RR

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Robert Excuse #3 is a lie. Credit card companies charge vendors a transaction fee for each purcchase. I donate to a Feral Cat Spay and Neuter program and my local Animal Protection society and they ask when I donate if I will pay the processing fee which is about .2.06 percent

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I agree with Lee; this egregious practice of charging merchants transaction fees is especially hard on small businesses. I always write a check to my hairdresser: he is a one-person business who shouldn’t have to pay for a service that the customer already pays for.

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At least way back when I was a bank teller, businesses had to pay a fee per check deposited that came out to roughly the same as the card charge. So I pay cash, if I can, but that's not always feasible.

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Feb 16·edited Feb 16

Yes, and the general public is not aware of these fees. And - since when is a small business under 100 million??? The real small businesses are less than 250K.

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Really good point about small businesses, Janet. I snorted at that $100 million figure myself. What do they call the small-town mom-and-pop places that are lucky to clear $80,000 a year? Micro businesses?

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Janet and. Denise, I worked for a small city in the San Francisco Bay Area. It was a bit over a square mile and a little over 20,000 pop. $100 million, not in your wildest dreams! The credit card fees at the end of the month always made me wince.

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Exactly, Stephanie. Obviously, we actual small businesses must have no idea of the scale of things these days. $100 million??? By that measure, the publishing company for which I worked, with four business journals and operations in half a dozen cities, was a small business.

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LMAO - I call myself a micro mini business. It barely made enough for me and a couple of seasonal assistants.

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I hear ya! I'm a one-person design studio. I laugh when I get all the calls offering business financing and consulting on HR, etc. My dream over 15 years ago was to make enough money selling my creations to be able to quit my day job. Well....THAT never happened!

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I call them "hobby businesses".

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In some cases, sure. But if they're livelihoods, then people are serious about them. Where I live, clearing $80K is a better-than-average living.

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If you have a business license and sell - then it's a true small business. If you are not selling anything then it's a hobby.

sorry, but I find it a put down to call it a hobby business. If I'm selling and collecting sales tax. It is a business ;)

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Under $100 million is a HOBBY? Small family business is the so called backbone of our economy! You must be out of touch with reality!

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Those of us that own a sole proprietorship and employ skilled workers have been paying for all the credit card fees for the last 50 years

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Pay cash for everything as much as possible.

And, stop drinking coke and pepsi.

reference) Salt, Fat, Sugar by Michael Moss.

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Consumers do have some power when it comes to which companies they support. I know it can be difficult (in the 1970s we tried to boycott Kraft but they owned so many companies around the world, the list was 35 pages long). I like the paying cash idea, and I will start doing that. Thnx.

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And stop buying candy from Mars and Hersheys for the same reasons and because of the plastic wrappers. See Robert‘s video on the subject of their monopoly.

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Agreed! The book Salt, Fat, Sugar by Michael Moss explores the underworld of making people eat junk food..

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I just had a hankering for a McDonald's fish sandwich, it being Friday. Glad I did! Corporate prison food, and shrunk ..

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Lee points out a common practice. Several years ago non-profits added on (asked if you want to cover) the credit card processing fees as a surcharge on top of your donation. In the last few years, I’m seeing more and more small for-profit mom and pop businesses doing the same. They tell you up front. Cash or check - no fee. Credit card - added processing fee of three percent. Sometimes cash gets a ten percent discount. I smile at that offer and tell them I don’t want to know about their bookkeeping (polite for tax avoidance).

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No, many of the Square processors have flipped and they are charging you the fee instead of the merchant.

It's not a bookkeeping thing. The small businesses (real ones) have a tiny profit margin and those small fees add to staying in business or laying off the few employees they have.

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Yes, Square passes on the fee to customers. The cash discounts “bookkeeping” comment is because they don’t report it on their taxes.

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No, that's not true. To assume that cash payments are not being reported is not true. Small businesses report sales tax and have bookkeeping to report on tax forms as well as inventory etc.

To assume that small business are bad? No.

Watch this video https://youtu.be/_Y10b88us5E?si=trrzVrPGP9ZsL1X-

It's WALL STREET that's commuting the fraud not the little people.

References

The Inside Job, The Con, How to Rob a Bank is to Own One.

Elite White Collar Crime is stealing billions a year from all of us - don’t you care?

https://youtu.be/T2IaJwkqgPk?si=ZaP5CZZz7W_Xxmj-

https://youtu.be/J_IFGV9Y13c?si=_S3yf2ZDcc1I3MkN

https://youtu.be/T2IaJwkqgPk?si=6HsYWwy8P_KKJgDX

https://www.thecon.tv

https://www.ted.com/talks/william_black_how_to_rob_a_bank_from_the_inside_that_is?utm_campaign=tedspread&utm_medium=referral&utm_source=tedcomshare

https://www.youtube.com/watch?v=Rz1b__MdtHY

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Try and hire a small contractor or handyman for a house remodel. It’s true. The under-the-table economy is a multi-hundred billion economy in the United States.

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“ (3) their high processing costs from the volume of transactions”

What? No economies of scale?

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Yeah, their computers got together and complained about all the work, so their generous human overseers now charge us a fee for their computers doing the hard work.

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Yes, I understand. But seriously, rates that hover near 20% are significantly higher than they were a decade or so ago. I remember rates that were in the 12-15% rate, in an era when interest rates in general were higher than the recent past. Many of your readers have responded with facile comments about simply paying off the debt monthly, or avoiding credit interest altogether. Well, certainly, in a perfect world, with perfect income. But I raised the point precisely because the most vulnerable people can’t follow these suggestions, and they are forced further into debt, paying usurious interest to institutions that are basically loan sharks.

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Additionally, I think the practice indicates collaboration between credit rating agencies and issuers of credit cards. I started receiving emails from all these agencies after reporting an attempted scam a few years ago. The agencies continuously email me offers for new credit cards, which I always ignore, because carrying a combined credit limit greater than what these "gods" of credit determine for each of us can lower ones credit rating. The practice seems very unethical to me. I complained to them once, and they replied with something like understanding the annoyance, but basically their software does this automatically. Yeah, right, they set it up this way... I use credit cards in a limited manner and pay the entire balance each month, in order to keep a decent rating.

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There is a way to stop those offers. I don’t remember what it was because I did it decades ago. It’s like the Do Not Call list but it’s a different one. I imagine the Consumer Financial Protection Bureau could tell you.

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Thank you! Will look into it.

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I made this point because everyone recently seemed to get very excited over the fact that the food industry is creating smaller packaging to sell stuff for the same price, a clearly deceptive trade practice. But a few cookies or chips less...compared to 20% credit card interest on the massive consumer debt in this country and we get...crickets? I'd like Bernie or Elizabeth or Joe to just mention it once.

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Robert “the bulk of the credit card business” is vague and leads to a subjective interpretation. https://wallethub.com/edu/cc/credit-card-companies/20409

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They are lying and robbing us. They walk away with billions.

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Cut mine up last year !!

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Nailed it in One…

Thank You !!!

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👍👍👍

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American Express and Mastercard have approximately the same market share - so this is not a duopoly.

https://upgradedpoints.com/credit-cards/us-credit-card-market-share-by-network-issuer/

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RemovedFeb 16
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Agree, Citizen Raff---the credit card companies are sneaky and ruthless. I got a card for emergency use, and then didn't have to use it. After about a year, I got a notice that they were canceling the card, because of a poor credit rating stemming from delinquent bill payment, over-extended balances, and so on. I freaked out, thinking my identity had been stolen. I called the credit reporting agency, which told me they saw nothing amiss with my credit. I called the card company, and their rep said, "Oh, no, we have nothing on you. There's nothing wrong with your credit. It's just our policy to cancel cards if they aren't used enough. You just got a standard letter." And no, they wouldn't reinstate the card, even if I promised to use it occasionally.

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I had the same problem with the same result. One of their classic moves.

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Kerry--They are high because people will pay them. Stop using the cards and the interest rates will come down. The only problem lies in how we get along without them until the time when the rates come down, if ever.

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Donald, I remember my mom telling me NEVER get a credit card because it will get you in a lot of trouble!!! She was right. I did have credit cards and I did overuse them. I wound up paying and paying and paying. I was finally able to pay them off and then I cut them up. I decided that if I didn't have the cash to purchase whatever item I wanted then I wouldn't get it then. I would save up and then purchase it. We need to change our thinking on using credit cards, cell phones, and other luxury expenditures. We got along without them before they came along, maybe we should learn to get along without them again. Wouldn't that be something? Actually having conversations with people rather than burying our heads in our phones? Writing letters rather than texting? That would sure be something to see!

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Peggy--My grandfather has a saying, "Take care of the pennies and the dollars will take care of themselves." Maybe its time we looked at the penny in a different light.

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Absolutely!! 'Find a penny, pick it up...all the day you'll have good luck!' Find enough pennies and you will amass an awful lot of dollars!!

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Peggy, for 1 whole year I saved every coin and paper I found and placed it in a jar. At the end of the year, I had $136.10. Compared to what my measly $1000.00 in savings account which earned about $10 in interest, I made out pretty well!

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Nancy, I have been doing that for years! My husband leaves change in his pockets, anything in the washer or dryer, cushions, catch bowls, closets, hampers and last but not least the bottom of my purse gets sorted and saved in jars.

Last year’s take which included $125 in dollar bills came to $535.34. It’s fun to guess with the grands how much we’ve saved. Then we use it for a family dinner when everyone including nieces, nephews and their families are home all at the same time. Usually in the summer. The left over money goes back in the till for our next get together.

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Way to go, Nancy!!

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Doesn't that depend upon where you found the money? If you found it in on the street, you can compare it to your savings account interest. If you found it in your house, it was yours to begin with...no savings there.

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Peggy--It's a shame they are only copper clad.

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That's true!!

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The discontinued the copper penny because there was more than 1 cents worth of copper in it.

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Pick it up only if it is heads up, otherwise bad luck (LOL. just one more of those superstitions).

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Peggy--Sadly, please change the has to a had.

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There is the problem,doing the wrong thing generation after generation.Believing the wrong thing generation after generation.The delusions can never be destroyed.The opposite to that is penny wise,$foolish.

Banks operate on net interest margin,the difference between how much interest they pay out,and how much interest they collect in. Thus your CD or whatever pays 4%, the bank lends that money out at 6% .From that gross margin of 2% there is around 0.9% net profit margin after tax wages etc.The other 1.1% runs the company.

For example ( Australian numbers,so smaller population) a bank would have $800 billion lent out in mortgages.So the interest paid out would be $32 billion ( 4 X 8 = 32). The interest collected would be $48 billion ( 6 X 8 = 48 ),net interest margin $16 billion..Round the numbers so $8 billion is net profit after tax,$8 billion goes to pay wages,tax,rent,computer systems etc etc etc.Feel free to deny it,99% of people will deny that simplicity.

The multiplier effect,all those houses built,maintained,serviced ( electricity,water,sewerage etc,etc,etc ,a fortune in economic activity ,and a fortune in taxes paid because of that economic activity.

The really simple bit,if these companies are making a fortune ( they aren't ) would you not like to be a part owner of such a business.Or would you prefer to believe in delusions all of your life.

The really simple bit,as the company grows and profits increase the company becomes more valuable ( share prices increase purely on expectation that profits continue to increase as populations grow ).

Again really simple,probability.Start compounding.Compound $1,000 @ 11% for 40 years and the answer is $65,000. I am a part owner of a bank that did that,and may continue to do that. Slightly increase that to 16% and $1,000 grows to $378,000 over 40 years Continue that for 4 generations ( 100 years)

The UK version is look after the pennies and the pounds will look after themselves.

Penny wise,pound foolish.Your choice.The human race still has infinite ability for self delusion.

They see what they want to see,and they hear what they want to hear.

The business analysis has been simplified of course to explain it..

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founding

I agree! When I was a Child Pepsi and Coke were luxury items that were only made avaliable to guests or for special events( usually once a Month) ! Today I know people who Drink 3 Cans of Pop a day and is Mandatory Food Requirement no matter how much it costs or how bad it is for their health!

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I stopped drinking soda pop because of issues with kidneys. I'm so glad I did!! Don't even have a hankering for soda anymore!!

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Brent, they are probably drinking Diet (TM) sodas or drinks. Any beverage with the word Diet like Diet Coke, Diet Pepsi, Diet Snapple, has aspartame as an artificial sweetener.

Aspartame is addictive, people addicted buy it by the case lots, they also buy crap like Twinkies by the case lots.

The reason is, that aspartame fools the endocrine system into thinking that you just took in sugar, and it signals the pancreas to o to work and pump out insulin, that depletes your glucose level and makes you hypoglycemic and thus crave sugar.. ergo Twinkies or some such crap.

As a diet drink, it is a fraud, one gains weight with Diet drinks. Aspartame is also a known carcinogen, but thanks to Donald Rumsfeld and regulatory capture, the FDA has never banned it.. Coke and Pepsi would ruin political careers.

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Years ago, I noticed obese people often are accompanied with diet Cokes.

I worked at a big restaurant as a Server. If a younger person of normal weight ordered a diet drink, I tried to say something politely about how bad diet it and wouldn't they like regular. They didn't care. They were addicted. I had some serious ethical dilemmas at the job. Lol.

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That is the thing about Diet (TM) drinks, with aspartame they are addictive, that is why Coca Cola pays TV and Movie producers to mention Diet Coke in their movies, and shows, sublimal propaganda.

My mother in law, was addicted to Diet Coke, and when I mentioned it's health effects, and that it was addictive, she went into denial. But finally when she found herself living on nothing but Social Security, she finally gave up Diet Coke, she must have gone through withdrawal.

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Credit is a tool, and it needs to be used for its intended purposes. Only carry a balance for a purpose that has a higher expected return than the interest you have to pay by carrying that balance. It’s not a way people are used to thinking in their personal lives, but if you can get used to it, it can be helpful.

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Peggy, for us, the equivalent to having enough cash to buy something is having enough on hand to pay the credit card bill in full each month. The same kind of thinking you describe also can be used in this way. In addition to the significant cash back (this year’s is over $340) on our credit card purchases, the convenience is a huge factor, as is being able to pay so many things online. That includes paying off hospital bills (using payment plans without interest charges) online.

Doing it this way also allows me to keep very detailed records on the computer that would be so much more difficult if we were using cash for everything. And the only checks I use (also printed with the computer, so they are legible 🙂) are for a few things that can’t be paid online or that charge a “service fee” for doing so.

I also haven’t been in a bank branch in quite some time.

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You can do the same thing with cash. It just requires more discipline...you must keep the receipts until you get home.

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Harry, it sounds like you are a very savvy person using credit cards. Sadly, there are so many that don't think or plan as you do and wind up with debt that consumes them.

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I pay mine off every month. Still pay for the process of borrowing. One huge bank keeps stopping my credit card saying I have fraud. Want a new card? I say no and solve it myself. I hate those off shore Customer Service problem persons.

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Panamanians didn't use credit cards when I left in 78, and the cost of living was stable and affordable for the most "impoverished" of campesino's. Everyone ate and had shelter.

Then CitiCorp launched a massive propaganda campaign to have credit cards, and the country has experienced inflation , and Panama is plagued with the same "diseases" the U.S. has.

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Their greed knows no bounds!!

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When I was young, there were no credit cards. There were layaway plans and maybe the odd charge account at a small grocery store. Credit cards have made people live way beyond their means. Its a house of “cards”.

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I love how you worded that!! It is most definitely a house of 'cards'!

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Not to mention that sheep (their wool) get carded.

Brings to mind the perfume company that made their scents from all parts of the sheep except for the coat and mammary glands, which were reserved for their shear and udder non-scents.

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This was so good!! Spot on, Dean!

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Dean day-thank you for the laugh. It made my day!

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founding

I feel like if we hadn't been led down this Neoliberalism pathway that so many wouldn't be living paycheck to paycheck. Often times the purse strings could have been tightened, but we aren't very used to living without. I saw how those that lived through the Great Depression knew how to pinch their pennies (yet I joked about it). Yet, I can only get angry that trickle-down economics have ruined a comfortable retirement for my parents and am not sure where it will leave me. These economic messages need to get to the masses (through the propaganda), as it would change some minds and ideologies.

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I never use credit cards unless forced to.i prefer paying in cash.

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Right on Peggy!!!

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Hey, Peggy, here's a thought experiment for you: Imagine you are a time traveler from our present day to the 16th century in Europe or the Americas and knowing that eras language(s). You are sailing on a merchant ship to a distant land with goods, cash and documents to be delivered upon arrival. You stand and whip out your smartphone with its own magical hotspot, lay down a spread of credit cards and demonstrate/explain their functions. You then offer to magically obtain these things for everyone.

How long would it take for these be-knighted folk to either label you as a witch or pocket your plastic cards and throw away their quill pens/parchment to have their communications be delivered instantaneously?

Hint: not four hundred years!

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Nothing we have in the 21st Century would work, at least not for long 400 years ago. There is no infrastructure, to support them. A car would run so long as there is gas in the tank, then when that ran out it would be a monument, until it rusted away.

You might take pictures with a cell phone, but not download or print them, and the cell phone would be worthless when the battery ran down.

Credit cards would e an amusement, because they never saw plastic.

And you would have difficulty conversing, if English, the English of Chaucer and Shakespeare are barely readable today, and the spoken language with it's thousands of accents and brogues, would be as incomprehensible as a foreign language.

These time travel shows, and books like Connecticut Yankee in King Arthur's Court, are hilarious. Even if you could time travel back centuries, your chance of being understood and understanding, even in your own native language, are slim, you would be considered a spy, maybe an enemy, or a witch.

Here is an interview with Tamar Fletcher of Yorkshire, she was born inthe 19th Century, and at the turn of the 20th A person from Yorkshire and one from Surrey would have had a hard time communicating.https://www.youtube.com/watch?v=0Wq0pvMpi7w&ab_channel=WilliamBramhill

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Well, Lee- I guess you read my comment literally because you missed the word 'magical'. This was just a thought experiment! Lighten up!

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Ilene, only you knew what your use of magical meant, only you know it was a thought experiment and if you want to make enemies, continue to assert your pseudo superiority with phrases like lighten up.

Actually you betrayed yourself with that phrase.

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I have never paid interest on my credit cards. Actually AMEX pays me 6% on groceries, hundreds e very year! AMAZON Visa also pays on purchases....

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I was planning to pay cash for a car at a dealership when an unexplained $1500 charge showed up on the pricing sheet. When I questioned that unexplained charge the salesman said it was for the interest they wouldn’t make if I paid cash. Imagine that. Paying interest on money NOT borrowed. Buyer beware!

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Roger-- That conduct should be reported to the trade commission. It's more than out of line it borders on being a sick bird, ill-eagle.

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Thanks. What’s to be expected from a used car salesman. i was dealing with him on line, but i’m guessing he was wearing white shoes, a white belt, smoking a cheap cigar and getting his kicks by ripping customers off.

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Roger--That's exactly what he had in mind for you.

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Roger--You can't tax something that has already been taxed and you can't charge interest on something that never existed.

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The more common ploy is the value of your trade-in car just went down $1,500. The trick I use is play along with the financing song and dance, smile, say thank you, and then whip out the check book for cash buy. Just don’t sign anything yet. Salespeople work the deal through the floor sales manager, then you get handed off to financing for the paperwork even if you pay cash. Financing people are loan sharks also trying to add in after-market alarms that malfunction, additional warranties that don’t cover your car longer than the manufacturer’s warranty, and three years of free oil changes for an upfront charge (I’ve even heard of that line used on a EV!).

My dad had me sit in on the negotiation with financing when I was 14 (he knew I was good with numbers). Quite the education. I did the same with my oldest kid when she was 17.

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Easy to say for me, but the best move at that point would be to say “if you want this sale, delete that absurd charge” and walk out the door if he doesn’t. Odds are you wouldn’t get to the door before he called you back. And that might have to be repeated if he only offered to reduce the absurd charge.

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Did you negotiate that $1,500 Roger.? I would have. The problem with Americans is that they don't negotiate. If you pay asking price in most countries, you lose respect

My wife gets embarrassed when I dicker. A typical American.

I negotiated the price of a bun my in Vietnam, for 35 piastres, I drew a crowd and the people love it. Ever after I could get a bun my (American Sandwich) for the same price. A local tried to purchase one for the same price and the lady said no. He had to dicker.

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a “typical” American you’re not, but you are lucky enough to be married to one.

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So what you are saying is that Paying the sticker price is admirable, but dickering for a better [price isn't.

I disagree, never buy a car for the asking price, but Americans have no experience and in fact are ashamed or afraid to bargain.

I even dickered for a house, and when I solid it, the buyers dickered with me.

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Wow! Send a copy of that to the Consumer Financial Protection Bureau.

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That’s unconscionable!!!

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With still stagnant or ‘just too low to catch up’ pay, coupled with bi-monthly paychecks in many companies, most people are unlikely to be able to do this. Modern day ‘Robber Barons’ have us over a barrel.

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Lias--What would happen if everyone across the country stopped paying on their credit cards simultaneously. It's a crazy idea but so is paying a 30% interest rate on a credit card.

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Then the credit card companies would use that as an excuse to jack up the interest rate even more.

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Jody--And who would they collect it from?

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Senators Elizabeth Warren and Bernie Sanders have some ideas about that. Too much to go into here.

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If people, universally, stopped using credit cards, there would be a depression caused by a shortage of money. I can explain why but it is lengthy and most won't read, or their eyes will glaze over.

In short form all Dollars in existence are created out of debt, public, corporate, private, and when and as the debt is paid down and finally paid off, the balance on the books (that is the money in circulation) is reduced.. double entry book keeeping.

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Lee--I didn't say stop using them I said stop paying on them.

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A thought. National labor unions go on strike in order to get things changed in their favor what about the private citizens who suffer financially who don't have a voice.

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Donald ; That is why cash is going to be a thing of the past, If the corps and banks have their way.

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Laurie--My son has been warning me of the day when currency will be a thing of the past, but for that to happen interest rates will have to find some sort of control.

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That might be good.

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Laurie--That would mean coin collectors must hurry to grab what they can before all is lost.

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Then the coins would only be worth something to the numismatics! Or lunatics! (Unusable).

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Laurie--They would become lost items that reflected our past.

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founding

Use them, pay off every month. If you have a balance, pay off new charges plus 10% each month. Takes two years to get to zero because of interest.

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Ben--It's the 30% interest rates that people are complaining about. When I was young, I wouldn't take a card that carried an interest rate that was over 10%, now that's a dream from the past.

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founding

@Donald. Lot's of talk about this, but not much action (broadly speaking). My fortune cookie says "The greatest of all mistakes it to do nothing because you think you can do only a little." If each of us pays down our credit card debt ($1.129 Trillion) by 10% we could round that number down to only $1 Trillion. Instead Americans are still increasing their debt (in aggregate).

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Ben--It is how they're bridging the gap between what they have and what they need.

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founding

@Donald. I know... But it's a short term solution, long term problem for them. I know lots of young people who get $20, but instead of buying groceries they buy a $9 coffee drink and an $11 burger. Culture of under 30 years old...

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Ben---No matter what the prime rate is, credit card companies shouldn't be allowed to charge more than twice that when applying interest rates to their customers.

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Up until the 1970's the only credit cards were gas cards (I had Gulf and Texaco), Diners Card and American Express, and I didn't qualify for either, and they weren't accept in most brick and mortar stores anyway, Visa did start in 1958, and Mastercard in 1966, but unless you lived in an Urban center which accepted the cards they were useless, they use to have signs in the window, that Visa/Mastercard accepted here.

The store owner had to collect the receipts, tabulate them and mail them in to get reimbursement, none of this instantaneous transactions we have now.

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Lee--Times change, and I do remember how proud my grandfather was when he showed me his Shell credit card. Long, long time ago.

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Donald, I have a very clear memory of my parents disgust at being turned down for a mortgage when they bought our first house in 1959 or 1960. They had paid cash for everything up to that point, so they had no credit history. They had to go to the department store, open a credit account, make a purchase, and pay it off before the bank would make the loan for the house!

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Credit cards are convenient--but pay them off every month!

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founding

@Kay. I know a lot of people who intend exactly that. But, surprise! Balance goes up month over month anyway...

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One must pretend it is cash equivalent and for record keeping only. Tempting to over spend though.

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Kay-- Wise words everyone should follow.

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I only use my card for online shopping (I live rural and that's the only way I can get anything) but I pay my credit card's total balance when due, and haven't paid any credit card interest in over 20 years.

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Lee--That is how you properly use a credit card, however so many are finding the need to use them to purchase items and food that can't be paid for at the end of the month.

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Lee--At present it's easier to pay off student loans than a healthy balance on a credit card.

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A lot of folks max out their credit cards, and when they die, the creditors have first dibs on your estate. The debt always gets paid,

If your property is encumbered by a debt (like a mortgage or car loan), your heirs will either have to assume the debt, after other creditors attach it, or you forfeit it.

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Lee--I know I'm in the process of paying off my last credit card so who ever I leave behind will have no incurred debt of mine to pay off.

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Donald Hodgins: Many of the repair people who come to my home refuse payment by card; they want cash or check and since my bank is close by will go to my bank to get paid in cash. They tell me the rate they are charged to transfer money from my card to their accounts is very high. So maybe we will be forced to stop using cards because merchants and repair people will refuse to accept them.

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Barbara--That and some unscrupulous repair men want cash because that form of payment doesn't get reported, hence no taxes.

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I have to use a credit card Donald, no choice

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Lee--There is nothi8ng wrong with doing that, it's all in how you handle the balance each month.

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If you want lower interest rates for a car or a house, you have to have credit cards for a good rating.

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Mark--The system is rigged that way, but they don't have to carry balances that would sink a large ship.

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RemovedFeb 16
Comment removed
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Citizen--I had to fight with one of the companies I pay monthly dues to, they weren't even going to send me a return envelope with my bill. I told them send me a return envelope or I'll take my business somewhere else. They sent me the envelope I requested.

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Never charge more on a card than you can pay off monthly. Credit 101.

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Yes. Pay off every month. My credit card PAYS me to use it. 1-3% depending on what I am buying. By using my credit card for ALL my expenditures, I get several hundred dollars back every year.

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Agree, and me and my wife do the same, but for those less fortunate with less cash on hand pay higher monthly interest to cover those cash rewards perks. Those perks also get covered by annual fees that may only get waived if a certain annual card spending threshold is met (processing fees cover the rewards costs). Banks aren’t giving away free money.

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A card designated for emergencies is good to have, too. (Unexpected doctor bills, etc.)

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Collusion + lack of information easily accessible to customer to compare. Works wonders.

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The terms and conditions (and perks) are easily found on the web and in the cardholder agreements,

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Feb 16·edited Feb 16

Yes, and why are we not also mad as hell at Elite White Collar Crime stealing billions a year from all of us - doesn't anyone care?

References -

A podcast with two former federal prosecutors -

https://youtu.be/_Y10b88us5E?si=CvQSw5grX_E5gFWf

The Inside Job, The Con, How to Rob a Bank is to Own One.

https://youtu.be/T2IaJwkqgPk?si=ZaP5CZZz7W_Xxmj-

https://youtu.be/J_IFGV9Y13c?si=_S3yf2ZDcc1I3MkN

https://youtu.be/T2IaJwkqgPk?si=6HsYWwy8P_KKJgDX

https://www.thecon.tv

https://www.ted.com/talks/william_black_how_to_rob_a_bank_from_the_inside_that_is?utm_campaign=tedspread&utm_medium=referral&utm_source=tedcomshare

https://www.youtube.com/watch?v=Rz1b__MdtHY

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Thanks! They make Trump look like the poker he is.

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Trumpie is a carnival act. The real billionaires cleaning out the treasury are talked about in this video

https://youtu.be/_Y10b88us5E?si=MB4s1lwvtfz-XcLC

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Usury! The only time Christ got violent in the bible was over usury. The fact that you are not an economist better enables you to see this usurious collusion. Economists are inclined and particularly good at clothing emperors-naked truths- in clever technical terminology.

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Usury meant interest at that time. Today it means excess interest, and that is not legally defined, credit card interest is usury. Mortgage loans are not, interest is charged because of risk, and the so called time value of money. But lending institutions don't have a justifiable excuse for the time value of money, since the money that they loan is a fiction, a book keeping entry, save for the fractional reserve which was the basis of their loan.

The Quran forbids usury, and of that the Muslims like to brag, but Islamic countries have financial institutions, they could not function without them, and they do loan money, but instead of charging interest on unpaid balance as does in the west, they calculare the interest based on the time value and risk, and front load it.

Thus if you need $10,000 and the risk and time value is calculate at say 10% they will loan you $11,000 and you are stuck with the interest of $1000 even if you pay the loan off early, unlike in the west, where all you have to pay off is the unpaid principal, not lost interest.

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Kerry was talking about credit cards and so was I. I am sure the credit card industry has economists and MBS that can explain what they charge as not being usury when it just is.

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Glen talking of credit cards is talk of interest, and that leads to usury and I can't help myself I am afflicted with the teacher preacher gene.

As regards economists. My undergrad is economics, my graduate is finance and accounting, and I am here to telll you that economics is a pseudoscience, just because they use algebra and calculus to compute crap like economic order quantity to does not make them a science.

Point is, if you want a desired result hire the economist who will provide that result.

Fat of the matter is that credit card interest is usury.

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typed fast...has us in its grips- pedantic lol. ... Here he was at his closest to being that honest little boy who said, “look the emperor has no clothes.” Here he was couching things less in economics’ technical terms and speaking in human terms without unnecessary bullshit.

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Lee, we could not agree more Lee! My background is political science, and I too am a teacher., I am currently writing about the lie that the social sciences are sciences at all. Man is irrational and society is harder to predict or understand than rocket science because it's so uncontrollable with so many variables. And when you really look hard so many things in history have happened as flukes. The use of data polls...as to dress things up making them look like a science. Since you are trained in economics Lee you might appreciate this exert from my book.

After calling the 1960-70s Chicago school of economics the sickest cult the Western civilization has ever known, and its neoliberalism still has us in our grips I write: John Kenneth Galbraith was always trying to breakthrough the cult of economics he was trained in. His last book after a long life of writing many books was his shortest book. The Economics of Innocent Fraud: Truth for Our Time. Here he was as free of the cult as he could be. Here he was at his closest to being that honest little boy who said, “look the emperor has no clothes.”

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Thanks for the reminder, JKG one of my earliest hero's.

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founding

I pay my balance every two weeks ...via Going on line and paying direct from my checking account. This also resulted in a Increase in my FICO score

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I have one card through my credit union. The rate is capped at 9.99% and it gets paid off every month.

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One of my cards (one that we pay the balance for automatically each month) now wants, to charge an interest rate of 34% (that’s correct) 34% on any unpaid balance at the end of the month.

As well, I am seeing more and more processing fees charged to the customer when we pay for things from mortgage payment to car registration.

Using checks today is so rife with fraud and criminals who bleach your check and drain your account.

We need a government clearing house for payment transactions. This banksters are killing us.

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Because the banksters OWN Washington DC...

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The best, if only, revenge is to pay your total bill, on time ..

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So..... why not pay off your ding dong credit card every month? The who cares what the interest rate is? My mother told me "don't live beyond your means!"

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David Sirota over at The Lever had a great analysis of this exact question (and more) back in October: https://www.levernews.com/the-great-bank-robbery/

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Thank you! This is exactly what I was looking for. "For Americans needing basic banking services, this translates into predation. As Sen. Jack Reed (D-R.I.) noted in a recent letter spotlighting the scheme, a new Bank of America customer will receive about “0.01 percent on a savings account, but pay 6.90 percent on a mortgage and 15 percent to 27 percent on a credit card.”

Not surprisingly, that bank just reported $14 billion in net interest income in the most recent quarter — a 25 percent increase.

“The biggest banks are exploiting the higher interest rate environment to benefit their executives and shareholders, not the ordinary Americans whose deposits provide the funding necessary for those banks to operate,” Reed wrote in his letter to bank CEOs, demanding to know “why your bank still pays the same very low interest rates on deposits even as it makes giant profits by charging borrowers higher interest rates on loans.” "First and foremost, after a long era of lax antitrust enforcement, the banking industry has become monstrously consolidated, to the point where just 15 banks control more than three quarters of all deposits in America. When these major banks insisted in their letters to Reed that they offer “competitive rates,” that was technically true but also wildly deceptive — they are the oligopolies that collusively set the parameters of the competition.

“The market is dominated by a small number of big players,” wrote Frederic Malherbe, an economist at University College London. “It may be the case that no major player has an incentive to deviate and offer higher rates, as long as the others do not either.”

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Hand out cc to those who are not able to act fiscally responsible. In other words not pay .

The red ink is off set by the black ink. In other words paying cc customers and businesses off set cc company losses from others by paying fees and high interest rates.

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Lol you interest rates is set by your risk rate, it was NEVER locked to prime interest rates.

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lol, duh, my 830 gets 20%? Lol. Lmao. lol.

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Kerry the following may help https://wallethub.com/edu/cc/credit-card-companies/20409

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I understand how they work. Explain to me how a FICO score of 830 has been given an account that charges 18-22%. I don't carry balances, but if I did, I'd be screwed. People who are in dire circumstances and must resort to credit are buried in a hole. Maybe if the goddamn rates weren't so high, there would be less delinquency and less need to charge such high rates? Maybe if the "investor class" wasn't getting freebies/rewards and other crap from the banks, they wouldn't load up the rest of us with usurious rates? These rates are without justification, and just twenty years ago would have been condemned when interest rates have been so incredibly low. But we've become acclimated to being ripped off...by insurance companies, veterinarians, dentists, hospitals, drug companies, food monopolies, etc., etc....

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Kerry how about supply and demand. Do you work for free?

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Monopolization destroys the supply and demand. Argument. Working for free is a non sequitir.

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What you don’t like the inference that if you don’t work for free why should all those people you listed should. So, everything you have listed in your rant is a Monopoly?

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Feb 16Liked by Robert Reich

There in lies the rub. The Brookings Institute did an economic study on inflation since the supply chain issues due to COVID. They found that after the supply chain issues were resolved, 60% of inflation was due to price gouging.

And any time democrats try to stop corporate greed, the lobbyists take a two pronged approach.

First, they buy off as many congressmen and senators as possible and support republican candidates.

Secondly, they spend money through super-pacs and industry groups; telling consumers how democrats want to take away their choices away, and control what people buy.

A perfect example is the financial industry’s attempts to kill the CFPB or Consumer Financial Protection Bureau, which was enacted under Obama after the Great Recession. And if not kill it, then render it toothless.

Or Medicare Part D; which doesn’t allow Medicare or Medicaid to negotiate drug prices; a gift to the pharmaceutical lobby by republicans during Bish’s presidency.

Companies and industries don’t need to conspire to fix prices anymore, when we have a Congress willing to do its bidding for Pennie’s on the dollar.

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And then there's the Medicare "Advantage" scam... Costing us billions.

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Costing us billions. While people die. One of the most egregious aspects of billionaire/corporate greed.

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Exactly! It is very misleading for the Medicare government website to list Advantage Plans during the Initial Enrollment period. When I first retired, I selected one of these plans, because 1) wow, it feels just like the health plan I had at work, 2) the super high deductible is not something I contemplated seriously while healthy, and 3) I just assumed I could switch to regular Medicare later. Almost "fortunately," the plan was utilizing probably the lowest cost call center they could find, who proceeded to insist I agree to a virtual MD visit in order to keep the plan, and since I could find nothing written in the policy agreement about this, I complained on Medicare.gov. Their response that the Advantage plans have their own rules under Medicare contracts struck me as odd. I called my Advantage plan to arrange the visit, but then cancelled when the different rep told me it was not required for the insurance! What? I suspected they were trying to identify issues that did not exist in order to increase premiums.

There was no way I would keep this A. Plan with reps who lie to the insured! I was still in the Initial Enrollment Period (no underwriting required), so contacted a Medicare agency that sells Supplement policies (Medigap), and enrolled in traditional Medicare, including parts D and a Medigap policy.

I could write more. If RR writes a column on it the full vent will appear! I should add that I used a government funded advisory group that helps people understand Medicare before initially choosing an Advantage Plan, and none of the pitfalls I found lati were mentioned. I heard later from someone who volunteers with this government group that they are forbidden to discuss any Advantage Plan pitfalls when explaining Medicare to the public! If this doesn't scream "corporate profit over public good," I don't know what does!

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I see Medicare Advantage ads all the time but original Medicare is not allowed to advertise. Unfair advantage.

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Yes, definitely! And in those Advantage Plan commercials everyone is happily skipping along in a park somewhere. Sure, they're great while healthy! More than one healthcare worker congratulated me on choosing original Medicare. They had relatives or acquaintances who lost everything during illnesses due to spending high annual deductibles in Advantage plans.

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Midwest, yes, great when healthy. But, as aging, genetics or whatever kicked in, despite having had a very healthy lifestyle for decades, not so much. Our plan has no premium (in addition to what is taken out of our Social Security), no deductible, and a bunch of benefits not included in original Medicare. And their network hasn’t been a problem. But recently they started using PHP Prime for pre-authorization. In true Orwellian fashion, PHP stands for “physician health partners.” When I inquired about switching to original Medicare and gap insurance (not even sure we could afford those premiums) I was told that given how many prescriptions I have I wouldn’t qualify for their underwriting.

Years back they denied one claim, but after two (!) appeals they approved it. More recently we’ve had no problems with denials, but pre-approval has been iffy. One denial supposedly because a referral didn’t include the referrer’s signature (doubtful) and had to be resubmitted. Another that had to be sent to “the next stage to be reviewed by a nurse.” Who or what reviewed it initially? That delayed necessary care for another week. But we’re stuck. Other plans don’t have the same networks, so I’d have to change doctors (unfortunately I now have a significant number of specialists trying to figure out what’s going on with me). I’m happy with my doctors, and the copay for specialists has gone down to $10. Higher expenses for some tests, scans like MRIs, surgeries and hospitals stays longer than 5 days, but no interest payment plans are available.

So on a personal/individual basis, not that bad, but I know MA plans are screwing taxpayers by manipulating (i.e., lying about) the health of their subscribers. We definitely need an Improved Medicare for All!

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Your situation is exactly what insurance agencies for Medigap plans warned me about. Nowhere (to my knowledge) are people going on Medicare warned that you can only bypass underwriting during the Initial Enrollment Period. As a result I thought initially that I could just add a Medigap policy later. It is also easy to be suspicious of insurance agents, but agents for Medicare undergo specific certifications from Medicare before they can sell the policies. I came to trust the agent I found quite well. The other aspect I read about was the difference between Medicare determinations of copays and MA determinations. Government Medicare copays are automatically determined by Medicare. With MA, it might be anyone's guess what gets approved. Apparently the experience is similar to the denials and appeals one might have experienced through previous employer's insurance. Good luck!

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2 ways. First the restrictive covenants AKA networks Rhen administrative fees. Then, wait a minute, this is OUR money..Medicare is Trust Fund...It is FBO the people who paid in. NOT profit-driven insurance acammets.

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Not to mention Steve, the cost to the suckers who fall for those ads on TV.

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Lots of money to pay for advertising!

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And it is tax deductible for business, and produces a very positive rate return for investment.

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Robert, we need a majority in both the House and Senate in order to stop corporate greed. When we have that majority, Democrats will put the guardrails back in place that have been removed by the republicans.

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True, and the more minute republicans take back the executive, they’ll dismantle it again.

We need an educational campaign on social media to convey to Americans why corporate price gouging is real, and what needs to be done; and which politicians are in the way.

If the MAGA morons can destroy Bud Light over a advertisement with a trans figure, imagine what can be done if we can galvanize enough Americans who are sick of paying too much, for the sake of corporate profits….:)

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Great idea, Robert!! We deserve better than this tit for tat that keeps happening in our government. We need to make it clear to the politicians we send to Congress that it is imperative that they do not take those laws holding corporations in their place away.

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And we need to dump the filibuster to get that and everything else done.

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Exactly!!

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I wish that were true.

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These problems have existed throughout recent history. Look at the graph that Reich posted to introduce this article. You can’t rely on useless politicians thousands of miles away to solve these problems. Start by not buying coke and Pepsi products and then when they finally lower prices don’t ever buy them again.

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Amen!!

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We hope, but all parties and all politicians are scrambling for the same donor dollars. No dollars no re election,

And if they are supplicant and reliable, they get after service careers in industry as lobbyist.

Corporations hire former government employees (military, civilian, political, based on who they know and can influence.

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Very sad, but true!

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Donald Hodgins

Donald’s Substack

5 mins ago

Mysterious profits. The costs of Logistics, because of the rising fuel prices, have increased the cost of transporting goods from the producer to the marketplace. Consumers have been forced to pay these higher prices for everyday goods. Lower production rates and the scarcity of certain products have made goods harder to come by and less affordable. This scenario has lined the pockets of manufactures while eviscerating the bank accounts of the average consumer.

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I knew big oil would be in there somewhere. Straight ticket blue. That's all.

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Then there’s the surcharges found in the fine print at the bottom of the bill. Fuel surcharge by the delivery company. Tariff surcharge pass through on imported goods. Staff health insurance surcharge found on the bottom of your restaurant tab.

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Michael--And all those items add to the total cost of whatever and they blame Biden for the poor economy.

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And if you live in California, they blame the Democrats in Sacramento. “Votes have consequences” on chat and social media feeds in California is code for being a tRumper.

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Michael--I really think it's more of a disease more than a following.

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Michael--You have to qualify to be a Trumper. First and foremost, you have to be completely ignorant of everything that is going on in this country.

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Reminds me of the “Peak Oil” scam for decades…:)

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Robert--The only peak I ever reached got me in trouble with the wife every time I tried to find one.

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And then there is the abiogenic theory of the origin of petroluem. Science insists that it is biogenic, (originally formed from dead dinosaurs.. preposterous by te logo of Sinclair Oil, now believed to be from organic mass driven under the moving plates,

However our space telescopes have detected the signature of hyrdocarbons on other planets.

And I recall reading of wells, say in Sweden perhaps that were considered dry and used, but on reopening were found to be full of oil again.

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Robert Jaffee, do you have a link to the study you mentioned? I remember seeing something like this a few years back, but I'm not finding it in a search. Is there a more recent study?

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Here you go. Besides Brookings, the Economic Policy Institute can up with the same conclusions.

https://groundworkcollaborative.org/news/brookings-and-epi-agree-rising-corporate-profits-are-driving-inflation-leaving-workers-behind/

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Thanks so much!

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Meant penny’s on the dollar and Bush, not Bish. Damn autocorrect!….:)

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what get's me is those autocorrects to a brand name

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need to find the means to inform more that their specific rep is owned, (R) Ann Wagner for example in MO 2 CD by the financial industry.

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Agreed. There are some non-profits that track corporate and lobbying spending on specific congressmen and senators, so it shouldn’t be too hard. Unless, of course the money is spent on dark money groups who can hide their donors.

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