So; the problem is...

   That, actually, is what I spend most of my time trying to see.  Exactly what is - the problem?

   I can tell you this; 9 times out of 10, in our world, "the problem" is misidentified or unrecognized.  Or even more frequently, denied.  What problem?

   There is an excellent bit of investigative reporting in the New York Times today (alas, not all that common).  It details how one determined man uncovered virtually all the abuses in the mortgage industry, years ago- reported it to all the various relevant authorities - and was ignored completely.

   It's an excellent study in the powerlessness of the individual, these days.  And to my mind- the reporter, well buried in the story, entirely misses her own point.

   She thinks this is a story about corruption in the mortgage and financial industries.  But it isn't.

   It's a wonderful, excellent, exhaustively documented story about how "truth", clearly and authoritatively presented, fails to penetrate our cultural apparatus to bring about corrections and change.  Systemically.

   This is "the problem" I'm talking about in the blog title.  Here on this blog, and on the various companions we all tend to peruse, we have an unusual collection of highly intelligent folks, able to see through the various cultural smoke screens, and see, really, truly, how this or that societal practice is inadequate to our needs, and we can recommend excellent possibilities for how it could, really, be made to work better.  We do it all the time.

  But The Truth -whichever one we're talking about at the moment - has no traction.  Systemically.

  The problem about this problem is- we believe otherwise.  The true religion of Academia, in particular, is the belief that discovering truth will bring change, progress, justice - good.  You just have to discover it.  Then, magically, Truth brings good.

  Manifestly- this is not so.  The present article in the Times documents that, in detail- and yet, still ends on the hopeful note that now, at last, these truths will bring change for the better.  100% of experience to the contrary notwithstanding.  Faith - not reason - claiming that reason will prevail.

  Personally- my own religion is - action.

   Now that I know The Truth Has No Traction - what do I do about that?

   First, tell you.

   Second - ask you: ok, so- from the cultural standpoint- how can we systemically give tank treads to Truth?

So long, Sam's.

I turned in my Sam's Club card on Monday.

There could be many reasons to do that, of course, but the straw that broke this camel's back was pure business- I have lost faith in the management of Sam's Club.  They are doing business according to known failed practices.  Which, incidentally, are stupid on the face, and even stupider in today's business climate.

Is all the business world contracting at the moment?  Yes.  Then why, pray tell, would you want to actively insult and drive away customers who have a long record of always paying bills on time?  Hm?  

The answer to the obvious "What ARE they thinking??"  is: they're not thinking at all.

Here's the whole story.  I signed up as a Sam's Club member years ago, as soon as one opened where I could sensibly reach it.  It's a "Business Membership"- because, duh, I have a business, and we intended to actually use some of the price breaks that are possible there.

The whole fantasy that Sam's sells "wholesale" is a big fib, of course; they do sell some stuff aimed at small businesses, but mostly they make money by selling great big packages of stuff; at a slightly lower price per pound or whatever; but you have to buy four times as much- so they still come out ahead.  If you can buy carefully from them, and have storage space- you can save some pennies.  But you also have to keep your brain turned on- some things, like engine oil, are always much cheaper somewhere else.  Very hard to beat their prices on tires or car batteries, though- and we use golf-cart batteries for the power here.  Saved money there.

By and large, we managed to save a few pennies shopping there, and it was probably actually useful.  Though always a little marginal.  Lots of things could have been had cheaper through actual wholesalers, but it would have required more time and effort on our part; some of the benefit was just convenience.

After a couple of years, they expanded their enterprise, and got into providing business credit.  It was easy, though not cheap, and- convenient.  So we signed up for a $5k credit line, as soon as it was offered.  And have used it, over the years-probably ran it up to 4k once or twice; but always paid it back down in a month or two.

Our business here is plant based- which  means cash flow highly seasonal- some times there isn't any.  Which makes credit very useful.  And of course totally standard for any business; if you go to a bank or business advisor, and tell them you aren't using credit lines to even out cash availability, they will scream at you.  Not just shake a finger, naughty naughty- they'll say you're an incompetent manager.

It seemed to make sense (at the time...).  Never any problems with it; they were providing a service.  Credit.  We bought it, and paid for it.  On time, always.

------------------------------------------------

Monday, we were in town celebrating a birthday, with a little lunch at the Chinese buffet, and stopped at Sam's to do a little stocking up.  Combine trips, of course.

As a matter of convenience, I said "leave it on the card", as we were checking out- and my Sam's Club business credit card was declined.  By Sam's.

Um.  What?

I knew, having paid the bill the week before, that the account was more than paid up, nowhere near the limit, and totally in good standing.

We also know that credit card companies are pulling in their credit lines- to cover their own sorry butts; even for customers who have nary a black mark against them.  We've bellyached about that here before.  Everyone in the community says this is a really, really bad idea; particularly right now.  Besides being dishonest.  But the credit companies are doing it anyway; bailouts or not.

I was - ok, incensed.  I'd expected this nonsense from Citi, and Chase.  But not from Sam's, whose business credit is handled internally.  They're really free to act as they choose.  And they're choosing stupid.

I gave them a chance to straighten it out.  Went to the "Membership Services" desk, and explained it (somewhat loudly, so everyone within 50 feet heard just fine).  They were well trained, and sympathetic.  The girl called up "the number", and actually tried to convince the poor woman answering the credit number to change it.  She, of course "doesn't have the authorization".  Eventually I talked to the credit person myself.  Laid it all out.

"Are you looking at my record there?"  

"Yes I am."  

"Ever late?"  

"No."  

"Over limit?"

"No."

"I know this isn't YOUR doing- but part of your job is to pass on the customers' responses to your bosses; so I want you to really pass this on."

sigh "They really don't listen to us very much..."

"Tell them they need to remember.  This is a BUSINESS.  You are doing BUSINESS - with me.  And incidentally - I have been CHOOSING to DO BUSINESS - with you.  You can change the terms of our agreements without reason or notice?  Guess what.  So can I.  Business by definition has two participants- and the entire credit industry has forgotten that."

And I hung up; and handed my member's card to the Membership girl.  "Keep it.  I'm done here.  Cancel my membership."

I got nothing but understanding grim smiles from the other customers; and actual applause, from one.

---------------------------------------

In reality, I'm not giving up much- if anything.  Sam's is far from green, and as part of the Walmart empire, has some pretty questionable economic behavior, anyway.  I'm giving up some convenience, and cheap tortillas.  We have no similar stores here, no Costco, etc.  But now my dollars are going a little more locally, which is good.  And I have credit elsewhere.

So I'm not feeling all that noble.  But it did feel good.  And loud.

And I no longer have to feel slightly sleazy shopping there.

----------------------------------------

Oh, and.  Abbie's comment made me think of this little addition.

Abbie- yeah, the banks claim lots of "rights". Got a new one in my current American Express statement.  In extremely fine print:

"Your credit card agreement is hereby amended to include this sentence, in the section on "In the event of disagreements regarding payments" paragraph 3, after the last sentence: "You authorize us, or our agent, to access your bank account and withdraw the contested amount."

Oh, I do?

Hey, American Express; back atcha; our agreement is hereby amended to include; "YOU authorize me, the cardholder, to make any payment I want, whenever I want, and under no circumstances will any additional fees be charged for anything.  In the event of disagreement, I, or my agents, may access your bank account, and withdraw double the disputed amount."

I think that has exactly the same force of law, don't you?

sheesh.

Keeping up

Look, I know, it's really hard for boring ol' me to compete with Tasty Chicken's "All Sex, -  All the Time!" blog; or " Sharon Prepper And The Lists of Doom" - but- seriously, I'd like you guys to pay attention here, and do a little screaming and hollering, for the good of us all.

Yes, we all know the financial bailouts are and always were a scam, and are not going to work in the long run.  If you don't believe it, read the last several months of posts over at The Automatic Earth.  Ilargi there is blunt and biting; Stoneleigh is patient and thorough; and they've both been RIGHT about what was going to happen next - like 98.7% of the time.  Nobody else comes close for explaining the financial debacle.

But- as much as I am in favor of always always looking to the long run- in this case, the "short term" consequences of some totally unnecessary chicanery (ie. "theft") are going to just make everything worse- hurt good people, and enrich bad ones.  

And we might, actually, be able to put a crimp in their thieving plans.

Yes, I know the elections are days away; and everybody is distracted... even so; there's been a little flurry of press; which is a large part of what the politicos pay attention to.

Now is the time.

Take a look at the previous post; and- actually READ the articles linked to there.

That article from the New York Times- has been the #1 Most Emailed story from the Business section of the Times for about 24 hours; it's still #3.  That means- a whole lot of people are thinking about it- and care about it.

Here, from The Financial Post, is a nice clear story about why this stuff matters; immediately.

The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.

Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.

"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."

This whole "letter of credit" thing is a little obtuse if you're not a financial freak; but basically both ends of the shipping business are now refusing to trust each other - as they always have- that the money for the ship, and the money for the cargo, is actually there.  And behind that lack of trust is - the goddamn, greedy, lazy, stupid, incompetent, screw everybody banks.

Then, there's this; from the Washington Post: Banks keep paying dividends...

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

Gosh.  Really.

And, today, this from our friends in the oil industry: All Time Record Profit from Exxon.

The Irving, Texas-based company has now reported back-to-back record quarters, following its $11.68 billion in profits for the April-June period.
The end of the third quarter coincided with a dramatic plunge in crude oil prices, but Exxon Mobil's revenue still climbed 35 percent to $137.7 billion, slightly higher than the gross domestic product of Algeria. When the third quarter ended on Sept. 30, benchmark crude prices were still about $100 a barrel, down 30 percent from summer highs. By the close of trading Thursday, a barrel of oil cost $65.96.
"Our integrated business portfolio, strong operational performance and financial discipline continued to allow us to capture the benefits of the commodity price environment," Exxon Mobil investor relations chief David Rosenthal said on a call with analysts. "Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil's business remain strong."

I have ranted about oil profits here before.  Something I said then: 

Big Oil is stealing money as fast as they can, before someone in Congress wakes up.

"Ooh, we're SO sorry our profits are creating ALL TIME records! It's really not our fault! It's the markets! That 40 Billion dollars we siphoned out of your pockets last year? We really couldn't help it! We also couldn't help that we did it again, and again, and again." 

Liar liar, pants on fire.

(Incidentally, if I turn up dead tomorrow, you'll know why. You think $40 Billion/yr isn't adequate motivation for killing? Many times?)

So, Exxon (and everyone else in Big Oil) you're telling me that-

a) nobody in your company NOTICED you were making record high profits, repeatedly?

b) nobody in your company thought- "hm, if we take an extra $20 BILLION out of the economy, some of our customers, and their businesses, might be hurt."? (one lucid example: fishing license purchases, and boat license purchases, in Minnesota are down- substantially- which means a bunch of related businesses will have profits- down.)

c) nobody in your company has the AUTHORITY to say "let's cut our prices just a tad- take a little less profit this quarter."?

I really don't believe it; though I suppose it's possible you're all really that stupid. Your actions certainly suggest that.

So. They're still at it.  I know; everybody in Big Biz is Bizy stealing everything not nailed down; but the oil money thefts are worse.  Because they are stealing REAL money- out of the "real" economy.  They're taking your, and my, earned dollars, the ones we used to pay off our credit cards and mortgages with; and putting them into their fat pockets, leaving ours empty.

And as wonderful as it is to have $2.00 gas- wouldn't it be even MORE wonderful to have $1.00 gas?  (from the personal budget standpoint, right now)  And know that EXXON would STILL be profitable if they were charging $1 a gallon?

A basic principle that has slipped into utter obscurity here is that "Business" is allowed to operate- profits are allowed to be made - for the public good.

The people running the Wall Street Casino have totally lost sight of that- they've utterly forgotten, if they ever knew.

They must be removed.  All of them.  Fast.

It really is tar, feathers, pitchforks and torches time.

I don't give a rat's ass about the banks.  What I care about is my Aunt Martha.  And yours.  The people who never hurt a fly, and never would; who are being dragged under- literally killed- by this huge scam.  And the little businesses, that have been using plain credit to even out cash flow.  Except now; regardless of perfect records- the banks refuse, just to continue what they've already been doing- and making money on- for years.  Morons.

Congress DOES have the ability to put a stop to it, if they wake up.

Please- call your congress people, or email.  Use the letter I wrote yesterday; cite these articles- add your own forceful words.

I think we can make a difference.  Or I wouldn't ask.

Action time again-

I haven't been screaming for folks to call/email/write your congress people recently.  Because, there haven't been many points where we could make much difference- or any.  The great financial debacle is mostly beyond our control.

But.  Once again, I'm seriously ticked off- and just sent my congress-people this:

Here is yet another financial crisis issue that needs the IMMEDIATE attention of the US Congress.

Banks Cutting Credit Across The Board

Essentially, the very banks now being bailed out by the taxpayers, are daily responding by cutting credit to all their customers- including those with completely spotless records. They are raising interest rates, and canceling "inactive" accounts- ie. those the customer actually pays off, every month.

Blatantly- they are doing this with no concern whatsoever for the common good. The rescue was sold to us- we who are paying for it- as a way to stimulate the economy.

The US Congress needs to once again call these CEOs on the carpet- and, now that we are stockholders- FIRE THEM. Now.

And replace them with executives who actually give a damn about the United States, and those who live here.

More boiling anger folks- coming very fast-

Please feel free to copy that, and send it on.  The whole URL for that NYT article is 

http://www.nytimes.com/2008/10/29/business/29credit.html?partner=permalink&exprod=permalink

or http://tinyurl.com/5wgvqf

Here is another, from my neck of the woods, with personal stories: Banks pull squeeze play on credit cards.

-----------------------------------

Sigh.  I know.  It may not make a lot of difference in the long run.  But I have a lot of small business friends, who use their totally solid credit to manage their business flow.  Buy inventory, pay it off next month.  Easy with a good credit card- very hard without.  At least, if reasonable credit was maintained for reasonable customers- they could last longer.  For many, this kind of credit cut- and raise in interest rates- means instant ruin.  What a nice idea.

Who ARE these scumbags, and why do we tolerate them?

We - all of us- are now stockholders in those companies.  

Let's scream their house down.  Fast- to keep more people from going under, just because these scumbags are finally afraid of what they've done.  

Let me know what you do!  You know- I'm more than half convinced, even now, that our early screams here about food speculation did make some difference- and at the very least, got the subject up into the headlines.

Peak Patsies - is here-

Sorry, got another one of those "I can't help it, the news is driving me crazy" posts today-

Everybody is commenting on "the economy" these days. It ain't looking good, as everybody knows. Oodles of people blame it on- oodles of things. I need to add an oodle.

We know about Peak Oil - in spades. Yep, sooner or later, we DO have to hit the end of oil- because we do, after all, have just one planet we can stripmine. Lots of quibbles are possible - oh, we'll find another Prudhoe Bay soon - probably under the Greenland icecap, or the Ross Ice Shelf. Ha ha.

Today, though, we have clear evidence of an unreported, unrecognized "peak" - the actual cause of all the credit collapses going on. And you heard it here first.

We have hit the peak on readily available - fools. Idiots. Patsies. Dupes. Consumers.

Take a look here; NYT- end of spending. Basically - in the USA, in 1989, most of us were "saving" around 10% of our income. The rate is currently - negative.

There are no more savings to stripmine- which is what the credit guys have been doing for decades ("hey, borrow a little more-cheap!- you can always pay it off if you get in a crunch...")

And, to everyone's astonishment- people are reacting. By - not using their credit cards anymore. Living within their income.

The ramifications, for "business as usual" are HUGE.

Even the analysts are starting to get it.

Also today - NYT Markets fall... did you know something like 2/3 of our economy is in the "services" sector? That means stuff where no physical goods are made, or change hands - it's things like the barber, your accountant, the dry cleaner, restaurants- where someone is doing something for you that you COULD do for yourself. Guess what? More people are doing stuff for themselves. (Because they have no money- you think Exxon Record Profits of $40BILLION AGAIN could have anything to do with that? We've talked about their record profits in this blog before- here.)

I've always suspected there was a limit to the "taking in each other's laundry" economy. Something very much like Doug Adams "Shoe Event Horizon." Doug was not dumb.

What it truly amounts to - is a catastrophe for the business world that has so long relied on sales of hyper-inflated real-estate with only imaginary value; SUV's which fill a need -oh, that NO ONE has; and plastic gizmos (thanks Colin) with a) no concept of physics, and b) no concept of human behavior - it's the loss of the target market. Suckers. Ok, not the loss-

But quite possibly the Peak. Sooner, and more certain, than Peak Oil - and with no imaginary new resources under ice waiting to be exploited-

Peak Patsies - is upon us. The end of constant growth; the end of expansion.

Peak Fools. Peak Chumps. Peak Suckers. After decades of uncontrolled strip-mining of this limited resource- the veins have finally given out. The great Patsy Mines are in trouble.

Peak Consumption - perhaps is a phrase that will fly, in the long run. Or Peak Gullibility, if we're feeling cranky.

Wow. Buckle your seat belts.

-------------------------------------------

SGL's comment made a point I'd intended to put in here, and forgot in my hurry to zip off to a chore-

The Patsy Pool has long been considered infinite. We'll never run out of fools - is a favorite saying of pundits across the ages.

Ah, but you see- that's exactly what we've always said about... oil....... North America........ oceans..... and the atmosphere. They're too big to ever be affected by our tiny actions.

It's one more "infinite" resource where we've hit the end; and the ramifications are huge.

And- we need to differentiate between "stupid" - and "fool". I ain't dumb; but I've for sure been a fool, and been fooled; more than once. :-)

A small amusement-

Memorial day is not a day off here, though we do take some time to think about it all. You've gotten plenty of that elsewhere, I'm sure.

What we've spent most of the day doing is the critically needed re-building of our solar panel array (photovoltaic).

It was so old, it was falling apart. Yep, been doing this that long. In the next post, I'll get into that in more detail, with photos. Still busy at the moment, son is still on the roof doing final wiring.

Meanwhile- in the vacation mode. I had a friend tell me of a new way they just thought of- and acted on- to annoy the credit card companies.

Lots of us are in their grips; I am. And NO, by the great horn spoon, it was NOT our fault. They treat people like dirt- and like prey; and the "government" does nothing to stop them. In what universe is charging poor people 30% interest an intelligent thing to do?

So- my friend said he had a "minimum payment" of $643 due for his good friend Chase. They suckered him into carrying a lot of business debt on that card by claiming "Act now! Pay only 3.99% until fully paid off!" - except those debts are now at 29.99% - because the post office lost one of the payments for 2 days. Excellent business practice there.

As soon as I can get rid of my Chase cards; I will.

Meanwhile- my friend was writing the check; wanted to pay a little bit more than the minimum; usually does $20 over- got to $66 - when it dawned on him.

From now on, all his payments to Chase will be some version of $666.

I think mine will too. Owe $10? Send them $6.66. Owe them $5? Send them $6.66. It'll cost them $10 to track the tiny little credit.

He hopes it will freak them out. Some of their employees, anyway. His way of saying "a curse on you!"

I kinda like it.

The Washington Post has been following this stuff for a while; this article came today- Bad credits

And, a particular example of how hideously they behave- and lie about it.

Bad company

There's little enough any of us can do to fight back. Maybe if half their payments come in with the Sign of the Beast attached, it'll start to get through to them- we REALLY HATE WHAT THEY'RE DOING.

Hard to understand their thinking- "let's make our customers hate us!" sounds like such an obviously stupid idea.

Pass it on!

Whaddya think? Other ideas?