Posts like this, questioning the corporate media, are why KELO dropped Dr. Newquist and other freethinkers from its blogroll.
The inimitable Dr. Newquist beats the living daylight out of Premier Bankcard's effort to blame its layoffs on government regulations. Newquist finds support for my argument that "Premier Buncocard" is failing because it offers a rotten product, the kind of bone-headed business move that is supposed to cost you in the free market. Newquist finds Premier Bankcard (and the lazy press aping its corporate-speak) ignoring other alternative causes for their woes:
Another aspect of the credit business is that with the coming of the Great Recession in 2008, consumers greatly reduced their use of credit. Some were thrown out of work and had no means to pay bills, let alone use credit. Others saw that it was prudent to curtail their use of credit. Premier Bankcard gives no information on the role the recession played in what appear to be declining fortunes. It, rather, blames the government for the performance of its shoddy, inferior product in the marketplace [David Newquist, "Premier Buncocard: The Fleecing of America," Northern Valley Beacon, 2011.05.23].
Dr. Newquist and I both stand accused of hating the poor for wanting to deny them access to credit cards, even really bad credit cards. Dr. Newquist responds by citing a provision of the new credit card regulation and posing a very sensible business question:
Given the logic of today's business models, it is probably impertinent to ask why a company would give a person credit when it determines the person has no ability to pay it back. But the stated regulation still gives the company discretion in the matter [Newquist, 2011.05.23].
Call me old-fashioned, but I still believe the word credit should mean something. Credit comes from the Latin root -cred-, meaning belief or faith. In financial affairs, extending someone credit means you believe that person can pay. Premier Bankcard issues its cards on the assumption that it will make much of its money on people who can't pay.
That's not extending credit. That's more like loan sharking. And we should have no problem putting loan sharks out of business.
p.s.: Some defenders of Premier Bankcard seem to find it awful that the credit card regulations could prevent some people from getting a credit card. The same people who tell me people don't have a right to health care seem to think people do have a right to high-interest credit cards.
Thanks for pointing this out! Couldn't believe some of the reader comments in the Argus Leader when the layoff story ran. Basic Superman boiler plate about "Truth, Justice and the 'murican Way," but no admission that catching people up in revolving debt is no better than curbside card hustling. (Don't know if you caught it, but the anguished Mayor of Spearfish was identified as an employee of Premier Bankcard!)
Tim! I didn't hear that the mayor was an employee. Fascinating! "Premier employee for ten years." It makes an interesting angle to the story that a big business would lay off a town mayor.
What kind of regs have been placed on PayDay Loan firms? If you borrow $250 for two weeks, you write a check to them for $250 and they give you $200 in cash. In two weeks they cash your check and $50 is what you paid in interest on the $200 for two weeks. Do the math. 20% every two weeks with 26 weeks equals 520% interest over the course of a year if they get caught up in the cycle, which most probably do. 520% interest and nobody is looking at that as being harmful to consumers?
I'd take a 70% annual interest credit card anyday over 520% interest. You have a valid point about unfairness of the fees and upfront costs taking up 80% of the credit limit available to the borrower. If someone needs the money, it is unfair to make them feel they will receive open credit, when in fact, they receive almost nothing upfront.
High interest credit cards and PayDay Loan services do serve a purpose for those with sketchy credit history or someone who simply needs a short term loan, and maybe it seems predatory (some of the previous fees were), but these businesses also keep crime rates lower because those who need cash will get it one way or another, whether legally or through theft or burglary.
Cory,
This is my opinion and hard held belief: as I have stated before on your blog over this subject and I will go out on limb on this one because I have heavy suspicions that some media companies in this state are covering and helping out a particular individual in all news coverage that pertains to him. Why? Many reasons and they all revolve around money. Some of it was given from a pure heart, but, much of it was given for ulterior motives to influence the influential in our state. When one truly gives from the heart, they do so without fanfare, much publicity, and expecting nothing in return. If anything, remember this: the media is one of the influential and they are business making money off advertising and other influential pay for that advertising. True journalism died when tv stations began requiring their news departments to make a profit. During the Cronkite Era of news, news departments did not bring in much ad revenue when that changed, advertisers began to have an indirect and bad influence on journalism as a public service.
Rod-
Along those lines, you should check out Rent-a-Center type offers. Thousands of percent interest over the duration of the rent to own offers. Since it's rent to own and not a loan there is zero oversight.
What a disgraceful business practice...
Tony,
I agree on the rent to own stuff. My cousin a few years ago did the rent to own thing with her house and it looked great but it wasn't a great deal for her and in the end I don't think she owned anything when she moved.
RGoeman gives a choice of death by hanging or by electrocution of an innocent man. Defending the indefensible by finding something even more indefensible.
Anyway, take a look at
http://dakotatoday.typepad.com/dakotatoday/2006/01/new_jersey_blog.html
Daugarrd supposedly has his finger on the pulse of jobs in SD and knows what is going on. We can't even keep what we have because he doens't have the inside story on jobs in this state. Midcontinent goes to Fargo...why didn't they check with our fine Governor and find out there were 300 people available to work out in Spearfish, rather than moving their new second operations center to Fargo, ND.
Mary D...I'd ask why didn't they move to Madison? Were they ever approached? Have these types of firms all been approached by our LAIC to assist them with their expansions? Call Centers and Fulfullment Centers (rebates, insurance claims, etc) are flourishing and growing yet we don't have anything in Madison that can work with DSU Students and our 4.9% unemployed in Lake County. Madison needs to stop elephant hunting and start recognizing that we can be a strong regional employment provider for growing firms within 100 miles of Madison. In this market, you don't want all your eggs in one large basket...too risky.