CORDOVA, S.C.– Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.
To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds. She could visit a Bank of America ATM free of charge. But this small community in the state’s rural center, her hometown, does not have a Bank of America branch. Neither do the surrounding towns where she drops off her kids at school and attends church.
She could drive north to Columbia, the state capital, and use a Bank of America ATM there. But that entails a 50 mile drive, cutting into her gas budget. So Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits.
“It really boggles my mind,” she said. “This bank is taking little bits of money out of thousands of pockets, including mine.”
Bank of America recently aborted plans to charge ordinary banking customers $5 a month to use their debit cards in the face of national outrage. But the bank has quietly continued to mine another source of fees: jobless people who depend upon the bank’s prepaid debit cards to tap their benefits. Bank of America and other financial firms — including U.S. Bank, Wells Fargo and JP Morgan Chase — have secured contracts to provide access to public benefits in 41 states. These contracts typically allow banks to collect unlimited fees from merchants and consumers.
In short, the same banks whose speculation delivered a financial crisis that has destroyed millions of jobs have figured out how to turn widespread unemployment into a profit center: The larger the number of people who are out of work and dependent upon the state for sustenance, the greater the potential gains through administering their benefits.
What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of third-world countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies. In particular, since euro-area countries can’t print money even in an emergency, they’re subject to funding disruptions in a way that nations that kept their own currencies aren’t — and the result is what you see right now. America, which borrows in dollars, doesn’t have that problem.
The other thing you need to know is that in the face of the current crisis, austerity has been a failure everywhere it has been tried: no country with significant debts has managed to slash its way back into the good graces of the financial markets. For example, Ireland is the good boy of Europe, having responded to its debt problems with savage austerity that has driven its unemployment rate to 14 percent. Yet the interest rate on Irish bonds is still above 8 percent — worse than Italy.
The moral of the story, then, is to beware of ideologues who are trying to hijack the European crisis on behalf of their agendas. If we listen to those ideologues, all we’ll end up doing is making our own problems — which are different from Europe’s, but arguably just as severe — even worse.
Should the government be able to collect information related to your Internet use without a warrant? According to a U.S. District Court opinion in the case of three WikiLeaks associates, it should.
Judge Liam O’Grady ruled Thursday that the associates had no reasonable expectation of privacy when they used Twitter services, even if the information in question was known only to Twitter and not publicly disclosed. The government is seeking data from their accounts including their devices’ Internet protocol (IP) addresses, which can reveal information about location, and data on people with whom they communicated.
The WikiLeaks associates – Jacob Appelbaum, Birgitta Jonsdottir and Rop Gonggrijp – “voluntarily chose to use Internet technology to communicate with Twitter and thereby consented to whatever disclosures would be necessary to complete their communications,” Judge O’Grady wrote.
Judge O’Grady also denied the trio’s petition to unseal the parts of the government’s secret requests to Twitter and other service providers.
The ruling represents a setback for the WikiLeaks associates, who have not been charged with wrongdoing. The Wall Street Journal reported earlier this year that the government also has made requests to other Internet companies for information on Mr. Appelbaum, a computer developer for a nonprofit that provides free tools that help people maintain their anonymity online.
The Boston Phoenix says it’s time voters got to know who Mitt Romney really is. They lambast him for his end run around campaign-finance laws to bankroll state GOP candidates, calling it “an unprecedented intrusion of special-interest money into local political races that are normally decided on local issues.” Read on:
Last week Romney vetoed $32 million in retroactive salary increases for 13,000 higher-education employees — including some 2000 or so UMass employees who mostly perform low-paid, underappreciated work such as maintenance, groundskeeping, and clerical support. On the Boston campus, where incomes are the lowest, these blue- and pink-collar workers earn, on average, between $31,000 and $32,000 a year. Some make as little as $24,000. The back pay — to which they are entitled by contract, but which Romney refuses to pay — would mean an average of $1600 apiece for these workers.
With the state currently running a surplus of some $700 million, Romney would rather score cheap political points by cutting the state income tax from 5.3 percent to five percent than fulfill his obligations to those employees. Never mind that cutting the income tax would blow a hole in the state budget, which is just beginning to recover from a fiscal crisis of several years’ standing.
The symbolism is as bad as the substance. UMass is an institution that educates the children of the poor — working and otherwise — as well the lower rungs of the middle class, who are either hard-pressed or unable to afford the much-higher tuitions at private schools. Romney is sticking it to the workers who make it possible for UMass to function in a very concrete and even physical way, thereby showing his indifference not just to the workers themselves, but his lack of sympathy — even outright hostility — to the broader public UMass is designed to serve. Continue Reading »
But Americans continue to rely heavily on safety net programs to stay afloat, according to a new report from the Center on Budget and Policy Priorities (CBPP). Without the permanent safety net programs (including Social Security, Medicare, Medicaid, and various assistance programs) and temporary programs included in the 2009 American Recovery and Reinvestment Act (which Republicans have falsely claimed didn’t work), more than a quarter of the country’s population would have fallen beneath the poverty line in 2010, CBPP says:
Our report also shows that if the government safety net as a whole — these temporary initiatives (all were featured in the 2009 Recovery Act) plus safety-net policies already in place when the recession hit — hadn’t existed in 2010, the poverty rate would have been 28.6 percent, nearly twice the actual 15.5 percent.