Like everyone else, I’ve been watching with great interest the goings on with Washington and Wall Street.  I’ve been amazed by some of the hysterical things said and pleasantly surprised by some of the straight-level discussion about what’s going on. 

On a personal level, I’ve been inundated with work at the bank as we have sought to comply with new requirements (and I’m pleased to tell you that the excellent team I work with has more than met the deadlines we were given.)  Just in case I’m under any illusion that only the people who made “bad decisions” are being hurt by the current fall from grace the American economy is experiencing, all I have to do is go to work to see that we are ALL paying for what a few people did.

I have a friend who becomes red in the face with fury over the very idea that his tax money might be used to “bail out” home-owners who took mortgages they can’t afford.  Well, I understand his frustration, but I also know that a foreclosure on your street lowers the value of your property an average of 9% (in some markets it can be over 15%).  So regardless of how you look at it, we are all paying for the mistakes of a few.

So where do we go from here? 

Many of you have kindly read my blogs on economics and offered positive responses to what I’ve been saying.  Well, today Liz Pulliam Weston, a columnist with MSN Money, has an article that calls for the kind of action I hope we can all get behind.  She describes how it is that even economically savy consumers get soaked by anti-consumer practices.  I had to read it twice and think about what she was saying because I think of myself as frugal and money smart, but she’s right.  Some of the abuses she describes are things that I’ve been frustrated by and unable to find a remedy for. She’s asking readers to log into the President’s website and request specific changes that will help consumers avoid victimization by unscrupulous companies. 

Here’s the link to her article: How consumerism hurts consumers

For those who don’t want to read the article but prefer to get to the bottom line, here’s the message she’s asking us to send to President Obama at The White House Contact Form. (At the bottom of that form is a mailing address for those who feel that letters are paid more attention than email.)

Mr. President, a healthy economy needs healthy consumers who are informed and protected. No economic reform will truly be complete until we:

•  impose interest-rate caps.  An 18% rate cap on any consumer loan would give banks enough leeway to lend to those with past credit problems while stopping them from cranking up credit card interest rates to 30% and beyond with little notice or justification.  It would get rid of payday lenders too.
•  End mandatory binding arbitration.  Mandatory binding arbitration renders consumers virtually powerless and encourages businesses to adopt outrageous clauses in their contracts because they know they won’t have to defend them in court. 
•  Add a Cabinet-level position for a consumer advocate.  There’s no one to tell the President how bailouts or stimulus packages or anything else will affect the consumer.  A Secretary of Consumer affairs would be a long-overdue addition to the lineup.
  
• Create a consumer bill of rights.  All the costs of a transaction should be apparent.  Any conflicts of interest should be disclosed.  If something goes wrong you should have the right of redress.  And you should have access to information that’s being kept on you. 
  
• Give the Federal Trade Commission some teeth.  The ability to file only civil charges cripples this agency.  Give it the ability to file criminal charges or devote Justice Department resources.
  
• Protect States’ rights.  The federal government has been pre-empting state consumer-protection laws for years.  If my state legislature wants to better protect its citizens, it should have that right.
  

Liz makes another point that I want to stress (because I’ve already heard from my Dentist friend that my ideas make me one of those God Damned Socialists).  Companies who engage in dishonest practices are bad for capitalism.  The theory has always been that the best companies make it to the top, but in and environment of gutted consumer protections, it’s not the best companies, it’s the best liars who reap the reward.  That’s just UnAmerican.