Monthly Archive for May, 2009

As usual, conservatives and private market advocates are predicting DISASTER from the passage of the Credit Cardholders’ Bill of Rights. Also as usual, they predict that the disaster will be “deadbeats” getting a break, while hardworking folks with good credit will get hurt:

“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.

Credit card pricing is largely based on credit ratings; consumers with the best credit scores get good rates, while consumers with lower scores get higher rates. Conservatives’ argument is that the bill of rights will end this practice, thus penalizing those with good credit. There’s only one problem with the argument: This bill does not affect risk-based pricing at all. In fact, there were no maximum rates imposed by the bill at all. Whether you consider that a good or bad thing, it’s the simple truth.

In fact, the changes that would be made under the finalized bill could be described as simple fairness and common decency. The Wall Street Journal summarizes:

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NOTE: This is an edited version of a post I originally wrote last year, before I began writing for MNpublius.

With the session officially over, Tim Pawlenty will make good on his decision to once again balance the budget on the backs of the poor with massive cuts in government services, including health and human services. The decision to punish the poor, while refusing to ask the rich for equal sacrifices, is always popular with Pawlenty’s hardcore-right-wing base, although not with Minnesotans or even many conservatives.

The impetus for Pawlenty’s decision is a simple value judgment: The rich are the pillar of our society and should not be burdened, while the poor are lazy freeloaders. Pawlenty and his right-wing allies argue that it makes no sense at all to “punish” the hard workers and “reward” the lazy poor. This black-and-white view of the world no doubt makes it easier for the conservatives to feel self-righteous about their policies, but of it just doesn’t represent reality.

Are there some lazy poor people? I’m sure there are, just as there are some lazy rich people as well. But just as not all of the rich are industrious, hardworking entrepreneurs (though most are), not all of the poor are simply lazy — most of them work harder than you could imagine. The trouble is, equally-ambitious rich and poor people are not on an even playing field. The poor are always just one minor incident away from losing everything.

The middle-class mindset of “personal responsibility” tells us that success is about nothing but hard work. Hard work is crucial, but when you start with nothing, it’s not enough. You also need luck. You need your kids not to get sick, your car to not break down, etc. When you’re living paycheck-to-paycheck, any small problem can derail your plans and cancel out years of hard-fought upward mobility. Most of us in the middle class don’t think about that, because we’re used to having a significant cushion. We don’t need to rely on luck, because we have some room for error.

The question, then, is not about who’s a hard worker and who’s lazy. What we should really be talking about is: If we believe in social mobility, shouldn’t we work to make sure the poor have the same opportunities to succeed as the middle class? We love to talk about “pulling yourself up by your bootstraps,” but as Al Franken likes to say, some people don’t even have the boots.

It’s too easy to just claim that all poor people are lazy, and that you don’t want to “waste your hard-earned money” helping them. The fact is, many of us in the middle- and upper class have had a better jumping-off point for our success; we still had to work hard, but there was room for a mistake or a bit of bad luck. And that’s exactly why we pay higher taxes: we owe our success at least partially to our starting position in life, but we believe in the American Dream and we want everyone to have the same opportunities.

I agree wholeheartedly with Rep. Ann Lenczewski’s take on taxes and cuts. There’s a perception that tax increases are harmful, while cuts have no impact — they simply eliminate “waste.” The fact is that state spending isn’t just throwing money down the toilet; it actually goes to pay for operating state programs. Eliminating funding for these programs has major impacts, such as eliminating health coverage for thousands and thousands of Minnesotans.

One reason for crafting policies that strike a balance between spending cuts and tax increases is that, as Lenczewski says, spending cuts often have a disproportionate impact on the poor, while tax increases can be more targeted. Adding tax increases to the mix spreads the sacrifices more evenly — it’s hard to make an argument that we should balance the budget solely based on sacrifices by the poor.

Did you know that at the end of session, the legislators blare “school’s out for the summer” in the chambers, do a choreographed dance down the center isle and have an air guitar competition?  I hear that Ron Erhardt used to win handily.

Here are some letters to the editor that perhaps you are interested in reading.  Let’s try not to compete with the Star Tribune for the title of Most Annoying Comments Made on the Internet, please.