The Credit CARD Act of 2009 (Credit Card Accountability Responsibility and Disclosure Act) went into effect today. These new rules impose restrictions on lenders and are intended to promote transparency and protect consumers from being blindsided with changes in payment due dates, interest rates, etc.

Tthe changes are meant to put more information in the hands of consumers who often struggle to understand language written by lawyers in the fine print of their statements. Here are some changes that will surely be welcomed by consumers.

- Eliminating universal default. Pay one account late and the interest rate on your other accounts zooms up? Not any longer.

- Limiting interest rate hikes. For example, the APR you have on a new account can’t increase during the first year unless you have a “teaser rate,” the rate is tied to an index, or you’re more than 60 days late on a payment.

- No more pay to pay. You can’t be charged to pay your bill over the telephone, electronic transfer or any other method of getting your money in on time.

- Total payout disclosure. Clearly written on your statement will be how long it will take to pay the account if you only make the minimum required payments – and how much it will ultimately cost.

- 45 days notice of significant changes to terms. If your credit card company is going to hike your APR or fee charges, you now have plenty of notice. Even better: you can opt out of the increase by suspending the card and concentrating on repaying the balance.

Also, according to the WSJ,

“Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.”

While the changes appear to be positive, the flip side is that they are likely to elicit a backlash from banks in the form of drawing down on credit lines, higher interest rates and all sorts of fees. These regulations on credit card lenders are estimated to cost the industry $12 billion annually. While these rules may stem from a desire to protect consumers, they may result in a diminishing of credit lines at a time when millions of Americans are struggling and might have planned to tap into their lines of credit. As Newton’s law reminds us, for every action, there is an equal and opposite reaction, and this case is no exception to the rule. As the WSJ warns, “get ready for higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.”

So it turns out that these regulations may turn out to be less helpful for consumers than they appear on the surface. This is what the current administration and majority in Congress can’t seem to understand; overreaching in the private sphere via this kind of regulation is not a foolproof formula for helping consumers. Sure, lenders operate according to a profit motive, but people run their own budgets similarly. The government should focus on providing incentives for businesses to expand and hire if they’re worried about people’s ability to pay off their debt, not on strangling lenders. And with lenders already hard-hit by the economic crisis and customers defaulting on their debts, they will look to make up lost profits elsewhere or decrease lending, which is bad for lenders and consumers alike.

Back in May of 2009, I wrote that Congress should tread lightly on credit card reform for this very reason. Erecting obstacles to the extension of credit is no way to get yourself out of a credit crunch. Here we are in 2010, and the Obama administration still hasn’t gotten this message. And once again, consumers will be stuck footing the bill for  their mistakes in the form of new fees soon.

This article from the WSJ was forwarded to me. I am as big a fan of Whole Foods as I am of conservative thinking, and I jokingly refer to myself to as a granola conservative. I defend my love of organic, all-natural foods to fellow conservatives by explaining that this evidences just how ultra-conservative I am. Going organic isn’t progressive or modern at all; it’s a throwback to the old days, when food wasn’t enriched, bleached and fattened up with unnatural food sources (read: corn, as a result of skewed government policies), antibiotics and hormones. Not only is supporting a company run on free-market principles by a conservative-minded CEO a conservative thing to do, it is, albeit on a very small scale, a vote against government policies (corn subsidies) that have interfered in the marketplace and distorted incentives for companies to create cheap, junk food that is not good for any of us. And when we get sick as a result, the government steps in to say that health care costs are unsustainable and that they should run the system. And the vicious cycle continues…

The gist of the WSJ article by Michael Petrilli is to point out that in order for the GOP to make progress among young, college-educated and often urban-dwelling voters, it must embrace those who live a progressive life but disagree with progressive politics. Petrilli begins an interesting discussion here that takes us back to the whole debate over whether the GOP should be a big-umbrella party or not. The problem is that his take on how the party should embrace this group of potential voters is inherently negative and exclusive.

Here’s where I agree with Petrilli:

What’s needed is a full-fledged effort to cultivate “Whole Foods Republicans”—independent-minded voters who embrace a progressive lifestyle but not progressive politics. These highly-educated individuals appreciate diversity and would never tell racist or homophobic jokes; they like living in walkable urban environments; they believe in environmental stewardship, community service and a spirit of inclusion. And yes, many shop at Whole Foods, which has become a symbol of progressive affluence but is also a good example of the free enterprise system at work. (Not to mention that its founder is a well-known libertarian who took to these pages to excoriate ObamaCare as inimical to market principles.)

What makes these voters potential Republicans is that, lifestyle choices aside, they view big government with great suspicion. There’s no law that someone who enjoys organic food, rides his bike to work, or wants a diverse school for his kids must also believe that the federal government should take over the health-care system or waste money on thousands of social programs with no evidence of effectiveness. Nor do highly educated people have to agree that a strong national defense is harmful to the cause of peace and international cooperation.

Next, he brings up examples of what the GOP must do to show these potential conservatives that there is a place for them in the party.

So how to woo these voters to the Republican column? The first step is to stop denigrating intelligence and education. President George W. Bush’s bantering about being a “C” student may have enamored “the man in the street,” but it surely discouraged more than a few “A” students from feeling like part of the team.

The same is true for Mrs. Palin’s inability to name a single newspaper she reads. If the GOP doesn’t want to be branded the “Party of Stupid,” it could stand to nominate more people who can speak eloquently on complicated policy matters.

Even more important is the party’s message on divisive social issues. When some Republicans use homophobic language, express thinly disguised contempt toward immigrants, or ridicule heartfelt concerns for the environment, they affront the values of the educated class. And they lose votes they otherwise ought to win.

This is where we disagree. According to Petrilli, to woo young, granola conservatives, the GOP must not extol the virtues of people who may not have been the brightest in school (President George W. Bush and Gov. Sarah Palin according to Petrilli) despite having real-world business and governing experiences to bring to the table. Why can’t the GOP embrace street and school smarts? Degrees from fancy schools don’t ensure effectiveness and success at governing — the Obama administration’s lack of accomplishments is evidence of this.

Then, he goes on to suggest that many Republicans are homophobic and perhaps racist or anti-immigrant. He doesn’t provide any evidence of this. He just makes these generalizations about Republicans and moves on.

If he’s referring to Republicans’ stance on gay marriage or immigration, one would think that ‘educated’ voters, whether they’re self-educated or college graduates, should be keen enough to dig deeper into these issues and understand what the fundamental arguments are over gay marriage and immigration. Petrilli casually brings these issues up as evidence that Republicans are “divisive on social issues” and therefore unappealing to young voters and leaves it at that. His discussion of how the GOP can appeal to this younger group of people is an interesting and important one for the future of the party, but he loses conservatives the moment he starts Bush and Palin-bashing and furthers these negative stereotypes of Republicans.

What I liked about his article is that he identified a group that I consider myself a part of — young, educated, urban-dwelling, politically sensitive (but not overly politically correct), organic buying and yet conservative voters. At some point, for younger generations, it stopped being ‘cool’ to be conservative. But after living in cities like Chicago and New York for a while, many of these young people become fed up with their city’s inefficiency and bureaucracy and start to understand the drawbacks of giving too much of your money and power to the government. And to build the party up and make a lasting effect on policy, the GOP needs to tap into this segment of the population. But it must do so in a positive way; bashing the more conservative side of the party like Petrilli does isn’t the way to get there.

CBS reporter Declan McCullagh writes in an article published yesterday of concerning behavior by California’s District Attorney, Timothy Morrison. In February of 2009, Morrison subpoenaed the personal information of readers of a news aggregation site, Indymedia. Not only did they request identifying information but also the dates and times the site was visited, the home addresses of readers, along with their telephone, credit card, bank account, social security and driver’s license numbers.

Sounds a little shifty, doesn’t it? Well the subpoena was eventually withdrawn after Indymedia retained counsel that rightly pointed out that the Justice Department’s overly broad request was neither within the boundaries of the law or executed appropriately. What’s even more troubling was what came next from Mr. Morrison’s office.

“Morrison’s office [] threatened [Kristina] Clair with possible prosecution for obstruction of justice if she disclosed the existence of the already-withdrawn subpoena — claiming it “may endanger someone’s health” and would have a “human cost.”"

As McCullagh points out, withdrawing subpoenas is not extraordinary as it happens often. But, this threat coming from a DA’s office after a request that was so mysterious to begin with is beyond suspicious and inappropriate. Revealing what happened would “endanger someone’s health” and have a “human cost”? Sounds like a threat Tony Soprano would make, not the District Attorney of California.

Just as importantly, this case has broad ramifications for news sites and bloggers alike. Is this the first time the Justice Department has demanded information on readers from news sites and threatened their chosen target to remain silent? We have no way of knowing — especially if the site or individual writer complies with this kind of brutally imposed gag order for fear of the consequences.

I’m not a reader of Indymedia, so I haven’t had much exposure to that particular site other than a quick visit to it yesterday and my review of McCullagh’s article which tends to point to it being a left of center site…which makes even less sense giving the timing of this subpoena in February of 2009 when the Obama administration and his Attorney General, Eric Holder, were already in place.

It’s even further disconcerting as McCullagh points out that this particular web site doesn’t provide original content; it merely reprints and redirects readers to articles from other sites. Imagine the type of bullying a smaller site or blogger could be subject to if they got on DA Morrison or some other Justice Department official’s bad side. I’d like to see some kind of explanation from Morrison’s office now that this story has come out, but from these facts, it doesn’t bode well for them.

Yesterday, while listening to the President’s remarks at the Pentagon, I was struck by the apathy, the flatness of the words he chose and the language he used to describe the 9/11 attacks.

The President remarked:

“Let us renew our resolve against those who perpetrated this barbaric act and who plot against us still. In defense of our nation we will never waver; in pursuit of al Qaeda and its extremist allies, we will never falter.

Most of all, on a day when others sought to sap our confidence, let us renew our common purpose.

This may be the greatest lesson of this day, the strongest rebuke to those who attacked us, the highest tribute to those taken from us — that such sense of purpose need not be a fleeting moment.”

The strongest words he used in his entire speech were ‘barbaric’, ‘extremist’ and ‘attack”. He didn’t mention the words murder, terrorism or war in his speech. “On a day when others sought to sap our confidence,” he said.

To sap our confidence? Doesn’t he mean on a day when innocent American lives were specifically targeted by terrorists? And that those terrorists wanted to make us tremble in fear to spread their suicidal message of Jihad? That is, to show the world that the American ‘infidels’ had hell to pay for our very way of life?

The President stayed away from using any such harsh language. But, “sap our confidence”? Surely, he could have chosen words better suited to show that on his first 9/11, he stood with the victims, the families of the victims and with the rest of America in opposition to these deathmongers who instigated the deadliest attack on our soil in history.

But, the excerpt above was the extent of his mentioning the 9/11 attackers. I could only shake my head reading and rereading the President’s comments. Just a few days ago, he spoke about his health care proposals more passionately than he did about the attacks on 9/11.

This prompted me to write this tweet:

“Chilling, hard to listen to. http://bit.ly/11Mrf8 Yet a reminder of the evil, not barbaric Mr. Pres. ,but evil that killed so many innocent.

I wrote that on 9/11. And I tried to bite my tongue for the rest of that day. And, it’s for that reason that I’m posting this on 9/12, because I believe 9/11 should be a day reserved for remembering and honoring those whose were brutally and suddenly taken from their loved ones. 9/11 is a day we should all strive to remember what unites us, not what divides us.

So today, I’d like to share some of my thoughts on our President. The truth is, I disagree with President Obama’s policies almost across the board. My convictions and my vision for the country are fundamentally opposed to the big-government policies Obama espouses.

But, when I disagree with someone’s politics, I try to remind myself that while the means may vary, our intentions, on the left and on the right, are the same — to implement policies that we believe are right for our country. I have reminded myself of this often since the President’s days on the campaign trail because even then, when his rhetoric was more centrist, I saw him as an extreme leftist that would push our country in a totally new direction if elected, as he promised — or threatened depending on your view of him.

But, I’m not so sure I can give our President this benefit of the doubt anymore. I don’t know if his decisions are based on what’s best for the country, what’s best for the politicians in Washington or what’s best for certain groups of people he backs, like unions for example. From his decision to appoint Eric Holder, who orchestrated the pardoning of Puerto Rican nationalist terrorists by going so far as to write their apologies when they refused to, to his decision to close Guantanamo and strip the CIA of the power to question suspects who are deemed national security threats (without undertaking any examination of the strategies and reasoning behind the former administration’s decisions), I don’t know that he sees the world as I do. That he sees America as many of us do. That he takes threats to our national security as seriously as he should. Or really, when it comes down to it, that he loves and respects America.

It seems that he exploits every opportunity he has to centralize power, even stripping the CIA and the military of their authority where he can.

While our President opted out of visiting New York City on the anniversary of 9/11, he penned an op-ed in The New York Post. He stated:

“And in the policies and principles that guide our efforts, we are reaffirming a simple truth: that our strength as a nation comes not only from the might of our military, but also the power of our fundamental values.”

I recognize that this President is seen as a supreme communicator, and maybe this is just too far above my pragmatic head, but what does this mean? His op-ed must be understood within the context of 9/11, in which he remembers what began our current struggle against the “real and present danger posed by violent extremists who would use terrorism against Americans.” And so, he continues reassuring the reader that his administration is “providing the necessary resources and strategies to take the fight to the extremists.” And, he goes down the list of measures: investing in intelligence and military capabilities, increasing the Army and Marine Corps, making efforts toward securing non-proliferation, building partnerships with allies and then he concludes by talking about these “fundamental values” and our “common sense of purpose” that he says provide us strength to defend ourselves alongside our military’s might.

So I have to ask, how does pitting the Attorney General against the CIA strengthen us? How does creating a new interrogation task force to be overseen by the FBI, instead of the CIA, strengthen us? How does spending more than all of the Presidents in our history combined strengthen us? How does backing legislation that deprives workers of the right to vote on unionizing via secret ballot strengthen us? What fundamental values do these policies suggest, and how do they strengthen our nation in our ongoing wars in Afghanistan, Iraq and the larger war on terror throughout the world? How do they strengthen us in fighting against violent, Jihadist terrorists that seek our demise?

President Obama has been hailed as one of the greatest communicators of our time. As you can probably tell by now, I don’t find this to be true. I think the utopian speech he uses, with its grand gestures, leaves much to be desired, particularly in the way of specifics. And I believe that this vague manner of speaking has started working against him — first when it came to spending and the stimulus, then with regard to the debate over health care this summer and yesterday, on 9/11.

These questions, about the President’s intentions, about his view of America, the Constitution, individual liberty and economic freedom — these are questions every American needs to ask themselves. And on 9/11, I found myself wondering if President Obama believes, like his spiritual mentor of twenty years, Rev. Wright, that America had it coming? Does he believe that those terrorists that murdered so many in cold blood on that day were pure evil, not just barbaric and uncivilized as he stated, but cold and calculating evildoers? Had he not found himself in the middle of wars in Iraq and Afghanistan, how would he have responded on 9/11? Does he believe in the Afghanistan war as he says he does, or is he just an opportunist who knew that the ‘war of necessity’ in Afghanistan would read better to those answering the polls?

I don’t know the answers to all of these questions. But, I do know that when you stack them up side by side, the facts start to paint a picture of a President whose intentions for the country are to take it in a direction so different from our deep-rooted traditions. That is why all those people marched in Washington and throughout the country today, because they believe, like I do, that this country, this great melting pot that was built on freedom is the greatest country in the world. And I don’t believe anymore that this President agrees.

This week, the House passed a bill that imposes further regulations on financial firms – on executive pay which is bad enough in itself, and to add insult to injury, on the way those firms and employees do business. The bill is“aimed at preventing financial firms from adopting compensation systems that encourage excessive risk-taking.” Once again, this overly broad, intrusive language coming out of Congress raises a plethora of questions – what is “excessive” risk-taking? Who decides where to draw that line? (Perhaps another czar? Or, do we already have one reigning over Wall Street?) And most importantly, isn’t this what Wall Street players do – take risks? Some pay off, some don’t. When they pay off, people flock to try to get a share of the rewards, and when investments fail, people pull away. Some have the foresight to see failure coming and stay away from the beginning. Isn’t that’s the beauty of the marketplace?

Two quotes in the WSJ article I linked to above (here) nicely sum up the debate. First, Rep. Spencer Bachus of Alabama “suggested the measure would allow the government to impinge on the rights of private corporations. “Government bureaucrats don’t know what’s best for America,” he said.” On the other side, Rep. Brad Miller of North Carolina said, “We have found out what happens when there are no rules, when there is no oversight, when there is no watchdog.”

There you have the two side of this debate. Each side is concerned with the broader ramifications of action and inaction. Action in terms of this bill puts the government in the driver’s seat once again, imposing terms on private companies and interfering instead of letting self-interested individual choices play out and determine the winners and losers. Inaction, we are warned, is what led us to the economic crisis we face now. So, action is urged.

But there are fundamental flaws in this second argument. First, as to the cause of the current crisis, it’s foolish and untrue to point to a lack of regulation as the cause of the crisis. A simple Google search of ’causes of the economic crisis 2008′ brings up 50,100,000 hits. This is too big a topic to delve into in this post, but I think it’s fair to say that government intervention through Fannie and Freddie along with individual greed and poor choices all played a part in bringing down the housing market. And, as far as I’m aware, banks, while they were greatly over-leveraged, were playing by the rules – investing in the safest market since Americans are known to pay this bill before all others – mortgages. To point the finger at banks and claim that a lack of regulation is to blame for the current situation amounts to singling out and demonizing Wall Street at worst and oversimplifying at best.

Second, it is simply a lie to claim that there were no rules, regulations or watchdogs around, and that in turn, their absence led to the dire economic situation we face. Securities laws and the Securities Exchange Commission were created long ago. They already dictate the makeup of boards of directors, including how many interested and disinterested directors there must be on each board. Further, unlike shareholders, boards of directors have a fiduciary responsibility to the company and must act in the interest of the company and its shareholders. A shareholder, however, can be anyone like you and me who purchases a stock and owes no responsibility to the company to become informed of the company’s structure, liabilities or finances at all. And unlike a director, if a shareholder becomes unhappy with the company, they can sell their shares and cut all ties instantly without any consequences.

It is always easy to blame the haves for anything that goes wrong. But it is irresponsible for members of Congress and the administration to oversimplify, spread misinformation and use the current economic climate to their advantage to inflate government at the expense of private industry and individual freedom. If people think a CEO’s salary is disconnected to his worth for the company, don’t buy that company’s stock. If they think a company is taking unnecessary risks, don’t invest in that company. Government interference is not going to solve problems that were created by many players, over an extended period of time, overnight. And, the ramifications of government continuously overstepping its boundaries like this should be worrisome for all of us.

*Originally published August 2, 2009 on The American Issues Project Blog, here.

President Obama wants to add yet another czar, a Health Choices Commission czar this time, to the growing list of these unelected officials that are handpicked by the President and go through absolutely no confirmation process. A Virginia paper recently asked, “how many czars can fit into the West Wing?” The same editorial points out that President Obama is not the first President to handpick senior advisers that work behind the scenes and are not confirmed by a formal process. However, the sheer number of czars that Obama has appointed is troubling. In fact, the longest serving Democrat in the Senate and a constitutional scholar at that, Senator Robert Byrd, has criticized Obama’s appointments of these czars, citing his concerns that this upsets the system of checks and balances that the Constitution requires and that the czars have “taken direction and control of programmatic areas that are the statutory responsibility of Senate-confirmed officials.”

Here are just some of the czars the President has appointed so far; it seems that no one has a definitive count. Foreign Policy and Glenn Beck put the count at 18. Here’s a partial list:

Health reform czar (this czar is different from the Health Choices Commission Czar now being proposed);

Energy czar;
Car czar;
Urban affairs czar;
Faith-based policies czar;
TARP czar;
Stimulus accountability czar;
Non-proliferation czar;
Terrorism czar;
Regulatory czar;
Drug czar;
Guantanamo closure czar;
Border czar; and
Information technology czar.

The newest czar Obama wants to add the list is the Health Choices Commission Czar who will essentially single-handedly act as a regulator of the newly formed government-run health insurance program. Health insurance is currently regulated at the state level, but when the federal government takes over this arena, this is another power that will be stripped from states’ hands. Under the federally controlled insurance scheme, states could only compete with federal programs or set up a state-based insurance exchange program with permission from the federal czar. This is a completely different vision of federalism as we know it with states answering to the federal government and not the other way around.

Robert Moffit of The Heritage Foundation writes that this is not a federal-state partnership – it is federal domination of the states. Mr. Moffit is absolutely correct. But, this is the goal of the Obama administration – to puff up the federal government at the expense of states’ rights, individual control and freedom of choice. And, with all of these czars Obama is appointing without any repercussions and without any fury from the public, he is succeeding in taking power from states, from individuals and placing it in the hands of of unelected officials who answer to no one but the President.

Obama promised us transparency in his administration. Doesn’t appointing the largest amount of czars any President has ever had cut against this promise completely? When our President has appointed more czars in the course of six months than Russia did over three centuries, it is an understatement to say that something is very wrong. The appointment of these czars is the epitome of government expansion without any accountability.

*Originally published July 7, 2009 on the American Issues Project Blog, here.

Yesterday, in his weekly address, President Obama called on Americans to “summon the same spirit that inhabited Independence Hall two hundred and thirty-three years ago”.

This is one time when I can get behind President Obama’s sentiments – although he may not like my reasons for it. What Obama failed to recognize in making that statement is that if the founding fathers were around today, they would abhor his intrusive, expansionist policies. The ’spirit’ of the founders Obama alluded to was based on a fundamental distrust of those in power and of the tendencies of government itself. James Madison once said that “all men having power ought to be distrusted to a certain degree”. Thomas Jefferson echoed this sentiment when he said, “Experience hath shown, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” And thus, the founders designed the system of checks and balances we admire today to limit power and to hold government accountable.

Not only did the founders distrust the people in government, but government itself. Madison’s distrust of government is exemplified in his statement, “In framing a government…you must first enable the government to control the governed; and in the next place oblige it to control itself.” Obliging government to control itself – in making his remarks yesterday, President Obama seems to have forgotten the fear and distrust the founders had of placing too much power in the hands of a distant few governors with a tendency to want to grab more and more power.

Indeed, the actions of this administration thus far have been completely antithetical to the wishes of our founders. President Obama, not wanting to ‘let a crisis go to waste’ believes that the current economic crisis is his best opportunity to transform America – by passing the biggest spending bill in American history, making future generations and states beholden to the federal government, fundamentally changing our health care system so that the government is at the helm of that industry, and imposing burdensome standards and regulations on us in the guise of climate change when there is far from a consensus on global warming. (As I sit here writing on the 4th of July with temperatures in Chicago in the 60s, it’s especially difficult to buy into this theory!)

According to the Congressional Budget Office, within the next 10 years, government debt will be equal to 82% of GDP. The U.S. now has the same number of jobs as it did in the year 2000, erasing 9 years of job creation. And despite massive spending by the federal government, states like California, who received stimulus dollars, are now issuing IOUs to cover their bills.

So, President Obama was right yesterday when he called on all of us to the look to the founding fathers for answers. In this time of economic turmoil and great debate about the proper role of government, we should all turn to them for guidance and remember why the structures they put in place created a system that produced the most wealthy and innovative country in the history of the world. The founders created a magnificent structure. And, it is up to us to remember, understand and defend it from those who would wish to expand government at the expense of our freedoms through monolithic changes to our system with plans such as ‘health care reform’ (which should properly be termed government takeover of the health care industry) and cap and trade (more accurately known as cap & tax).

*Originally published July 5, 2009 on the American Issues Project Blog, here.