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Forums - General - All financial institutions to be run by the federal government.

De85 on 16 June 2009
akuma587 said:

Really?  Under no circumstances can banks and credit card companies abuse terms in contracts that the average person would not understand without the help of a lawyer or abuse favorable legislation that the consumer doesn't even know about?  And it is certainly entirely fair that every contract you sign with these companies are almost always non-negotiable contracts that the company itself has written.  And they also can't impose arbitrary things on you like arbitration in foreign countries.  These companies are definitely never defendants in large class action suits either for wholesale abusing there power.  Your assessment is about as naive as it gets, and you obviously know very little about contract law.

And I like how your second point isn't even an argument.  You just throw out a word and assume you will convince people of something.

A little but of personal responsibilty goes a long way.  If people are too stupid to understand the terms of a credit card contract, or don't like the non-negotiable terms then they should not get one.  Open up a checking account and get a debit card instead. 

If you've never had to deal with red-tape then I wouldn't expect you to understand how bureaucracies work, but they are not benevolent entities.  Big, scary, evil corporations may be bad for the economy and the world, but excessive government is always worse.



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Kasz216 on 16 June 2009
Avinash_Tyagi said:
Kasz216 said:
Avinash_Tyagi said:
ironman said:
You sir, have no concept of how the free market works. If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control. They just mess up the way the free market works and clogs up the system. Tell me when the government has ever done something efficiently and correctly? I can site a few examples to the opposite. The DMV, Wellfare, Mass transit, Taxes, just to name a few. The kind of regulation the government is doing with the banks is actually going to do more harm than good. See, they are now forcing banks to make MORE bad loans (to fill a quota) in exchange for tax money. I say let the damn banks fail, let us go through a few months to a year of really tough stuff, and lets learn from the mistake. Of course, with Government at the reigns, history is destined to repeat itself.

First off in europe there are many examples where government involvement has been a success, resulting in situations which the free market could not bring about, just shows that well designes government systems can work well.

Also you're a fool if you think that the free market will result in beneficial outcomes on its own, first off there is the fact that information is not always shared equally, and then their is the propensity for the market to become irrational, this current crisis is a good example of the irrationality of the market and of information not being equal.

Also during the Depression many of the banks were allowed to fail, guess what we had a decade of economic collapse, you really have no idea do you, allowing the banks to fail would be the dumbest move ever, without a functioning financial market money would not flow through the economy, people would hoarde their cash and unemployment would skyrocket.

Except Europeon countries also see less economic growth and higher rates of unemployment.

Less government intervention largely coincides with larger government growth and lower unemployment.

Denmark aside due to flexicity which actually has a lot less government controls in a lot of areas in europe and even the rest of europe can't copy.

So it really depends on what you want your economy to do... much better with slight chances of systematic failure... (though the US economy is still better then most europeon economies GDP wise) or safer with slower growth.

The saftey of the section option usually seems mitigated by the growth of the first option though... such growth more then making up for what would be lost.

Yes, but in europe, the social safety net protects people who are unemployed better, and while they may have less economic growth than in the US, its hardly a big problem, since some nations in eruope have higer GDP per capita than the US, much higher in some cases, like look at Norway, while others are around the US, like Ireland, and Switzerland, doesn't sound like they are suffering over there, In fact if you use the Human Development index measure, US trails much of Europe, Canada and Japan, also you assume that the higher growth would make up for what is lost, if the economy went into total metldown like it would have without the massive government bailouts and interventions, then what would have been lost would have vastly outstripped any gains

The problem with the Human Development index measure is that it's one of very many... and it doesn't regulate out social differences... which you should know.  Iceland was number 1 in the human index... and now it's bankrupt.

Additionally the problem with GDP per Capita is that you aren't using GDP per Capita when adjusted for Purchasing Parity Power.  What's the point of having more money if it buys less stuff?

When adjusting for Purchasing Parity Power only 2 Europeon Countries are ahead of the US.  Norway and Luxemburg.

Norway because of Oil and Luexemburg because it's so small really and they do a lot of financial work... some of which may be shady.  They get a lot of outside investment... espeically from the US.



Kasz216 on 16 June 2009

Why not just make Credit Cards illegal anyway to solve all this.

Credit Cards are pertty useless... except for getting stuff you want sooner.

I know i wouldn't need my credit card... because I don't buy shit I can't afford.

I just use mine because it's a way to build a credit score.



Avinash_Tyagi on 16 June 2009
Kasz216 said:
Avinash_Tyagi said:
Kasz216 said:
Avinash_Tyagi said:
ironman said:
You sir, have no concept of how the free market works. If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control. They just mess up the way the free market works and clogs up the system. Tell me when the government has ever done something efficiently and correctly? I can site a few examples to the opposite. The DMV, Wellfare, Mass transit, Taxes, just to name a few. The kind of regulation the government is doing with the banks is actually going to do more harm than good. See, they are now forcing banks to make MORE bad loans (to fill a quota) in exchange for tax money. I say let the damn banks fail, let us go through a few months to a year of really tough stuff, and lets learn from the mistake. Of course, with Government at the reigns, history is destined to repeat itself.

First off in europe there are many examples where government involvement has been a success, resulting in situations which the free market could not bring about, just shows that well designes government systems can work well.

Also you're a fool if you think that the free market will result in beneficial outcomes on its own, first off there is the fact that information is not always shared equally, and then their is the propensity for the market to become irrational, this current crisis is a good example of the irrationality of the market and of information not being equal.

Also during the Depression many of the banks were allowed to fail, guess what we had a decade of economic collapse, you really have no idea do you, allowing the banks to fail would be the dumbest move ever, without a functioning financial market money would not flow through the economy, people would hoarde their cash and unemployment would skyrocket.

Except Europeon countries also see less economic growth and higher rates of unemployment.

Less government intervention largely coincides with larger government growth and lower unemployment.

Denmark aside due to flexicity which actually has a lot less government controls in a lot of areas in europe and even the rest of europe can't copy.

So it really depends on what you want your economy to do... much better with slight chances of systematic failure... (though the US economy is still better then most europeon economies GDP wise) or safer with slower growth.

The saftey of the section option usually seems mitigated by the growth of the first option though... such growth more then making up for what would be lost.

Yes, but in europe, the social safety net protects people who are unemployed better, and while they may have less economic growth than in the US, its hardly a big problem, since some nations in eruope have higer GDP per capita than the US, much higher in some cases, like look at Norway, while others are around the US, like Ireland, and Switzerland, doesn't sound like they are suffering over there, In fact if you use the Human Development index measure, US trails much of Europe, Canada and Japan, also you assume that the higher growth would make up for what is lost, if the economy went into total metldown like it would have without the massive government bailouts and interventions, then what would have been lost would have vastly outstripped any gains

The problem with the Human Development index measure is that it's one of very many... and it doesn't regulate out social differences... which you should know.  Iceland was number 1 in the human index... and now it's bankrupt.

Additionally the problem with GDP per Capita is that you aren't using GDP per Capita when adjusted for Purchasing Parity Power.  What's the point of having more money if it buys less stuff?

When adjusting for Purchasing Parity Power only 2 Europeon Countries are ahead of the US.  Norway and Luxemburg.

Norway because of Oil and Luexemburg because it's so small really and they do a lot of financial work.

Yeah and Iceland suffered because of all the bank failures, proof that letting banks fail is a bad idea, and the point remains that US still trails many nations that have much more government interevention and are not failing like Iceland did, Norway for example is way ahead of the US in HDI as well as GDP per Capita PPP

Yeah but Norway also has a much deeper social safety net, and lower unemployment than the US, so once again proving my point that a well thought out system can be much more beneficial than what we have in the US, look at Switzerland for example, slightly lower GDP per capita PPP and yet they do extrmely well in HDI measures.

I mean your argument is that the US without ithe same level of safety nets and  government intervention is so far ahead of the world that it doesn't need it, but clearly that is far from the facts, many nations are in the same range as US in terms of GDP per capita PPP and yet outstrip it in overall quality of life, while having much more extensive government interventions



 

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TheRealMafoo on 16 June 2009
ManusJustus said:
TheRealMafoo said:

Plus you can get a Visa ATM card, that works like a Visa, but is just a bank debt card.

Oh, and here are some terms for a Credit Card. I think a very small percentage of the population can't understand this. To think otherwise, is just elitist bullshit.

https://onlineaccess.mycreditcard.cc/WebApps/express?Action=Tac.jsp

There is nothing about that, that would take a lawyer to understand.

Not everybody can realize a good or a bad contract when they see one.  And thats not to mention that contracts are heavily biased towards the company that creates them anyways, your examples included:

We may add, change or delete any of the terms of your Account and the corresponding Credit Card Agreement (including, but not limited to, Annual Percentage Rate and fees), at any time with or without notice.

Now, I doubt American Express would screw over thousands of customers and face the public backlash.  However, I'm not entirely sure what powers that statement gives the credit card company, and what options I would have if my APR was increased to 150% overnight or if they bombarded me with fees from nowhere.

Then don't get that card. I just googled it and those terms came up. That card sucks, but the point is you don't need a lawyer to realize it sucks. The terms are simple to understand.

 



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Kasz216 on 16 June 2009
Avinash_Tyagi said:
Kasz216 said:
Avinash_Tyagi said:
Kasz216 said:
Avinash_Tyagi said:
ironman said:
You sir, have no concept of how the free market works. If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control. They just mess up the way the free market works and clogs up the system. Tell me when the government has ever done something efficiently and correctly? I can site a few examples to the opposite. The DMV, Wellfare, Mass transit, Taxes, just to name a few. The kind of regulation the government is doing with the banks is actually going to do more harm than good. See, they are now forcing banks to make MORE bad loans (to fill a quota) in exchange for tax money. I say let the damn banks fail, let us go through a few months to a year of really tough stuff, and lets learn from the mistake. Of course, with Government at the reigns, history is destined to repeat itself.

First off in europe there are many examples where government involvement has been a success, resulting in situations which the free market could not bring about, just shows that well designes government systems can work well.

Also you're a fool if you think that the free market will result in beneficial outcomes on its own, first off there is the fact that information is not always shared equally, and then their is the propensity for the market to become irrational, this current crisis is a good example of the irrationality of the market and of information not being equal.

Also during the Depression many of the banks were allowed to fail, guess what we had a decade of economic collapse, you really have no idea do you, allowing the banks to fail would be the dumbest move ever, without a functioning financial market money would not flow through the economy, people would hoarde their cash and unemployment would skyrocket.

Except Europeon countries also see less economic growth and higher rates of unemployment.

Less government intervention largely coincides with larger government growth and lower unemployment.

Denmark aside due to flexicity which actually has a lot less government controls in a lot of areas in europe and even the rest of europe can't copy.

So it really depends on what you want your economy to do... much better with slight chances of systematic failure... (though the US economy is still better then most europeon economies GDP wise) or safer with slower growth.

The saftey of the section option usually seems mitigated by the growth of the first option though... such growth more then making up for what would be lost.

Yes, but in europe, the social safety net protects people who are unemployed better, and while they may have less economic growth than in the US, its hardly a big problem, since some nations in eruope have higer GDP per capita than the US, much higher in some cases, like look at Norway, while others are around the US, like Ireland, and Switzerland, doesn't sound like they are suffering over there, In fact if you use the Human Development index measure, US trails much of Europe, Canada and Japan, also you assume that the higher growth would make up for what is lost, if the economy went into total metldown like it would have without the massive government bailouts and interventions, then what would have been lost would have vastly outstripped any gains

The problem with the Human Development index measure is that it's one of very many... and it doesn't regulate out social differences... which you should know.  Iceland was number 1 in the human index... and now it's bankrupt.

Additionally the problem with GDP per Capita is that you aren't using GDP per Capita when adjusted for Purchasing Parity Power.  What's the point of having more money if it buys less stuff?

When adjusting for Purchasing Parity Power only 2 Europeon Countries are ahead of the US.  Norway and Luxemburg.

Norway because of Oil and Luexemburg because it's so small really and they do a lot of financial work.

Yeah and Iceland suffered because of all the bank failures, proof that letting banks fail is a bad idea, and the point remains that US still trails many nations that have much more government interevention and are not failing like Iceland did, Norway for example is way ahead of the US in HDI as well as GDP per Capita PPP

Yeah but Norway also has a much deeper social safety net, and lower unemployment than the US, so once again proving my point that a well thought out system can be much more beneficial than what we have in the US, look at Switzerland for example, slightly lower GDP per capita PPP and yet they do extrmely well in HDI measures.

I mean your argument is that the US without ithe same level of safety nets and  government intervention is so far ahead of the world that it doesn't need it, but clearly that is far from the facts, many nations are in the same range as US in terms of GDP per capita PPP and yet outstrip it in overall quality of life, while having much more extensive government interventions

1) The US is 15th.   Switzerland is 10th.  5 spots isn't exactly "Way Ahead".  In fact its .995 vs .991.   Vs a $4,000 dollar difference in PPP... which is nearly a 10% drop.

 

Norway as I already stated was due to... Massive oil reserves.  They are the Qatar of Europe.

 

2) Additionally onnce again... the HDI is flawed in this regard because it ignores cultural differences. 

For example... life expectancy.  The US has something like 400% the murders Switzerland has.  

The other three factors are education... the US has a pretty crappy education system which has nothing to do with funding or government involvement.  In fact our schooling has gotten worse since all the government involvement because the government dosen't know what the hell it's doing.

 

Additionally the country that ranked the highest in HDI the most is Canada I believe... which is slightly to the left of us... and a lot to the right of a lot of europeon countries.

 



HappySqurriel on 16 June 2009
ManusJustus said:
HappySqurriel said:
ManusJustus said:
De85 said:

The amount of naivete in this post is baffling. First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch. It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current.

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life. One word: bureaucracy.

Akuma summed things up nicely. To put it simply, many low-skilled workers cant effectively read through a 20 page contract and completely understand all the legal and financial jargon. Even if they realize that they are being wronged, lawyers arent a cheap and quick alternative.

"Can't read through" or "Don't read through"?

If they don't have the ability to read the contract wouldn't it make sense to provide better education, training and or services to help people understand the contract? If they are simply too lazy to do the work to protect themself and read a contract why is it anyone's problem but their own?

So you're saying that these people are too lazy to get training or a degree in law and finance so if they get screwed its their own fault?

Your remedy to people not having enough legal and financial knowledge is for the government to step in and educate them, but it makes a lot more sense just to have the government regulate bad business practices.

I'm an educated person, and I have a background in business and economics (which was required for my civil engineering degree), but before I enter into a contract that I'm not sure about I have a lawyer look at it. Its definately worth $500+ dollars to make sure I'm safe, but not everybody is able to shell out that kind of money on every contract they dont fully understand.

My grandfather who has a grade 4 education fully understands the terms of the financial contracts he signed, so I think that any claim about needing a law degree or finance degree to understand the contracts is simply dramatic.

With that said, I wasn't (necessarily) suggesting that the education should be provided by the government because there are already several organizations (at least in Canada) which offer low cost or free basic financial and legal advice to people. On top of that, some of the biggest holes in the secondary education system is the lack of education provided about managing personal finance and the lack of a basic education in the legal system ...

We don't accept it as an excuse when someone says that they didn't read or understand their sexual harrassment policy at work, so why should we accept it as an excuse when someone says that they didn't read or understand a financial contract they entered into?

 

Beyond that, a question I have is why are these credit card contracts "Bad business practices"?

Over several decades of creating these contracts the wording has been carefully created and refined (after decades of lawsuits) to ensure that the company can offer credit to a vast array of clients, each with very different credit ratings, and produce a reasonable profit without taking on too high of a risk.

Forcing them to change the contract for political reasons could result in the company going out of business due to too high of risk exposure with too low of a return, or (more likely) everyone paying higher interest rates because of increased risk the company is undertaking.



ManusJustus on 16 June 2009
HappySqurriel said:
ManusJustus said:
HappySqurriel said:
ManusJustus said:
De85 said:

The amount of naivete in this post is baffling. First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch. It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current.

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life. One word: bureaucracy.

Akuma summed things up nicely. To put it simply, many low-skilled workers cant effectively read through a 20 page contract and completely understand all the legal and financial jargon. Even if they realize that they are being wronged, lawyers arent a cheap and quick alternative.

"Can't read through" or "Don't read through"?

If they don't have the ability to read the contract wouldn't it make sense to provide better education, training and or services to help people understand the contract? If they are simply too lazy to do the work to protect themself and read a contract why is it anyone's problem but their own?

So you're saying that these people are too lazy to get training or a degree in law and finance so if they get screwed its their own fault?

Your remedy to people not having enough legal and financial knowledge is for the government to step in and educate them, but it makes a lot more sense just to have the government regulate bad business practices.

I'm an educated person, and I have a background in business and economics (which was required for my civil engineering degree), but before I enter into a contract that I'm not sure about I have a lawyer look at it. Its definately worth $500+ dollars to make sure I'm safe, but not everybody is able to shell out that kind of money on every contract they dont fully understand.

My grandfather who has a grade 4 education fully understands the terms of the financial contracts he signed, so I think that any claim about needing a law degree or finance degree to understand the contracts is simply dramatic.

With that said, I wasn't (necessarily) suggesting that the education should be provided by the government because there are already several organizations (at least in Canada) which offer low cost or free basic financial and legal advice to people. On top of that, some of the biggest holes in the secondary education system is the lack of education provided about managing personal finance and the lack of a basic education in the legal system ...

We don't accept it as an excuse when someone says that they didn't read or understand their sexual harrassment policy at work, so why should we accept it as an excuse when someone says that they didn't read or understand a financial contract they entered into?

 

Beyond that, a question I have is why are these credit card contracts "Bad business practices"?

Over several decades of creating these contracts the wording has been carefully created and refined (after decades of lawsuits) to ensure that the company can offer credit to a vast array of clients, each with very different credit ratings, and produce a reasonable profit without taking on too high of a risk.

Forcing them to change the contract for political reasons could result in the company going out of business due to too high of risk exposure with too low of a return, or (more likely) everyone paying higher interest rates because of increased risk the company is undertaking.

I think most people understand terms and conditions of credit cards, and they tend to be trustworthy anyways, but invididual contracts between two people or between a company and a person are ones that can be unfair to the less educated party.  I'm from a rural mining area so I know of several examples of land owners agreeing to unfavorable contracts with mining companies.



HappySqurriel on 16 June 2009
ManusJustus said:
HappySqurriel said:
ManusJustus said:
HappySqurriel said:
ManusJustus said:
De85 said:

The amount of naivete in this post is baffling. First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch. It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current.

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life. One word: bureaucracy.

Akuma summed things up nicely. To put it simply, many low-skilled workers cant effectively read through a 20 page contract and completely understand all the legal and financial jargon. Even if they realize that they are being wronged, lawyers arent a cheap and quick alternative.

"Can't read through" or "Don't read through"?

If they don't have the ability to read the contract wouldn't it make sense to provide better education, training and or services to help people understand the contract? If they are simply too lazy to do the work to protect themself and read a contract why is it anyone's problem but their own?

So you're saying that these people are too lazy to get training or a degree in law and finance so if they get screwed its their own fault?

Your remedy to people not having enough legal and financial knowledge is for the government to step in and educate them, but it makes a lot more sense just to have the government regulate bad business practices.

I'm an educated person, and I have a background in business and economics (which was required for my civil engineering degree), but before I enter into a contract that I'm not sure about I have a lawyer look at it. Its definately worth $500+ dollars to make sure I'm safe, but not everybody is able to shell out that kind of money on every contract they dont fully understand.

My grandfather who has a grade 4 education fully understands the terms of the financial contracts he signed, so I think that any claim about needing a law degree or finance degree to understand the contracts is simply dramatic.

With that said, I wasn't (necessarily) suggesting that the education should be provided by the government because there are already several organizations (at least in Canada) which offer low cost or free basic financial and legal advice to people. On top of that, some of the biggest holes in the secondary education system is the lack of education provided about managing personal finance and the lack of a basic education in the legal system ...

We don't accept it as an excuse when someone says that they didn't read or understand their sexual harrassment policy at work, so why should we accept it as an excuse when someone says that they didn't read or understand a financial contract they entered into?

 

Beyond that, a question I have is why are these credit card contracts "Bad business practices"?

Over several decades of creating these contracts the wording has been carefully created and refined (after decades of lawsuits) to ensure that the company can offer credit to a vast array of clients, each with very different credit ratings, and produce a reasonable profit without taking on too high of a risk.

Forcing them to change the contract for political reasons could result in the company going out of business due to too high of risk exposure with too low of a return, or (more likely) everyone paying higher interest rates because of increased risk the company is undertaking.

I think most people understand terms and conditions of credit cards, and they tend to be trustworthy anyways, but invididual contracts between two people or between a company and a person are ones that can be unfair to the less educated party. I'm from a rural mining area so I know of several examples of land owners agreeing to unfavorable contracts with mining companies.


That's a very different situation entirely, and no one should enter into a contract like that without first consulting with an experienced lawyer who specializes in those fields.



Kasz216 on 16 June 2009

In fact those above the US in Per Capita adjusted for PPP are ahead because of

Oil, Shady banking practics, Oil, Free Trade, Oil.