Tag / working poor

by Edward Champion

Robert Carroll: Brooklyn’s Scumbag Scrooge

State Assemblyman Robert Carroll has proposed one of the most unjust tax schemes that New York State has seen in sometime. A $3 delivery surcharge would needlessly penalize struggling families, the disabled, the elderly, and anybody else in New York who is hanging on by a thread.

I’ve spent the last two days trying to tame a great rage I have towards an entitled millennial New York State Assemblyman named Robert Carroll — or “Bobby4Brooklyn,” as this clueless asshat likes to call himself on Twitter. (Sorry, Bobby, but styling your handle like the title of a Prince song doesn’t make you any less whiter.) But I cannot find it within my heart to stifle my indignation towards a remarkably insensitive and entitled dickhead who clearly does not recognize the struggles of people with disabilities, economically disadvantaged New Yorkers who are hanging by a thread for dear life, and the elderly, who are often barely getting by on social security and pensions. Carroll has proposed one of the cruelest and most poorly devised bills I’ve observed in some time. And this dimwitted weasel has the effrontery to call himself a Working Families Party candidate!

In the middle of a pandemic, as many people have been forced to stay indoors and remain socially isolated and thus order packages to get what they need, Carroll has had the audacity to propose a $3 surcharge for any delivery in New York City. The bill — specifically, A06078 — does provide an exception for “essential medical supplies, food deliveries and for those using supplemental nutrition assistance program, special supplemental nutrition for women, infants and children and any other successor program,” but this still leaves a woefully gargantuan set of essential items that will still cause the underprivileged to pay up. Got a deal on a winter coat? Pay $3. Or how about some household goods you need to keep your home in tidy shape? Pay $3. Need a specialized tool for your job that you can’t get elsewhere? Pay $3. Your landlord won’t fix the radiator and you need a heater to stay warm in the winter? Pay $3.

You may be thinking, “Well, $3. That’s not that big of a deal.” Well, how many times have you been forced to order something online when it isn’t available in the store? Or when you’ve feared braving the teeming throngs of people crowding a supermarket? Moreover, if Amazon decides to split up your delivery across multiple packages, would you have to pay $3 for each separate delivery? That would seem to be the case based on the language of the bill. You could easily pay $12 if the algorithm decided to split up a bulk purchase into four separate deliveries. And for many people struggling in New York, $12 could mean the difference between paying this month’s electricity bill or playing Russian roulette with Con Ed, hoping that they won’t shut the lights off after months of falling behind on the payments.

This bill is also a slap in the face to small businesses, who are often forced to shell out for UPS and FedEx in an effort to keep their customers happy and fend off the big online behemoths. Amazon has succeeded in undercutting small businesses by pricing down goods at a reduced profit margin. The cash-strapped New Yorker is often forced to go with the cheaper deal. But what if that $3 surcharge — theoretically on every item — is simply too much for someone looking for loose change under the couch to stay alive? Well, they may go to the retail stores. They could clog the parking lots, creating the very congestion that Carroll, in his infinite imperiousness, claims to be fighting.

Our fundamental goal here in New York is to prevent people from socially congregating as much as possible. According to the Washington Post, social gatherings are leading the COVID spread. The spread has been so disastrous that Governor Cuomo was forced to cap social gatherings at ten people. Moreover, in an age in which three dollars is the new thirty dollars, Carroll’s bill is a repugnant war on the working class. All the funds generated by this would go to bailing out the MTA — which, not to put too fine a point on it, hasn’t exactly been known for its financial scrupulousness. Disabled people — who rely on deliveries in order to survive and who cannot use the subway easily due to the fact that only 77% of stations are accessible — are now being asked to bear the financial brunt of a public transportation service that has declared itself enemy to their mobility. And what about the immunocompromised? Surely, it’s an unfair financial burden on them as well.

Carroll clearly hasn’t thought out these obvious drawbacks to his bill. The $300 million he hopes to generate annually from a bill aimed at regular people would be a drop in the bucket for Amazon, which Carroll hasn’t targeted and which made $96.1 billion in revenue during the third quarter of 2020. If you asked Amazon to pick up the $30 million tab, that would be .3% of just one quarter of revenue. For the struggling New Yorker who has only $90 to buy an $89 winter coat, that would mean a $92 bill that he could not pay.

Robert Carroll is, in short, a heartless Scrooge for even considering this punitive scheme. He has received righteous pushback on Twitter and is too much of a cowardly Jacob Frey type to man up and address the criticism and walk back the bill. Since social media opened up a glorious can of whoop-ass on Carroll and his foolish and unjust bill, Carroll has tried to mask his assault on the working class by aligning himself with a “tax the rich” campaign and hypocritically stumping against state pension dollars divested to gas an doil.

Well, it won’t work, Bobby. We now know that you’re an enemy of the people. We know that you’re a Scrooge and that you’re actively contributing to undermining public health during a pandemic.

If Carroll manages to pass this bill, here is my promise. I will put my energies into supporting any 44th District candidate who will primary him. I will knock on doors to expose this charlatan and tilt votes. I will do everything in my power to ensure that Carroll loses his seat.

Asking the people — especially disabled people who cannot use the subway — to take a tax hit for a corrupt and bloated agency that requires significant reform is an unconscionable and morally unjust act. You surrender any right to call yourself a defender of the people when this bill is your “big idea.”

So what’s it going to be, Bobby? Are you going to walk this vile bill back and admit that you did not think this thing through? As a man of Brooklyn, I will be the first person to defend you if you do so.

Or will you continue to remain smug and stubborn? Will you continue to believe that you know what’s best for the people of Brooklyn? If that’s the case, I’ll be happy to volunteer my time and energy to become a significant factor to ending your political career with a sizable turnout in the next election.

The choice, Bobby, is yours.

by Edward Champion

The Bat Segundo Show: Gary Rivlin

Rivlin: One in every five customers is taking twenty or more payday loans a year. So suddenly this effective interest rate of 400% becomes the actual interest rate. I mean, if you’re taking out twenty payday loans a year, that’s pretty much a loan every two weeks. And so you’ve got a couple million people a year in this country who are essentially paying 400% for their money to put it into dollars and cents. For that $500 loan, they’re paying $2,000 in fees for the year. So it’s the trap that a payday loan becomes, that I focus in on.

Gary Rivlin appeared on The Bat Segundo Show #340. Mr. Rivlin is most recently the author of Broke USA: From Pawnshop to Poverty, Inc. — How the Working Poor Became Big Business.

Listen: Play in new window | Download

Condition of Mr. Segundo: Considering the advances of a seductive loan shark.

Author: Gary Rivlin

Subjects Discussed: [List forthcoming]

EXCERPT FROM SHOW:

Rivlin: One in every five customers is taking twenty or more payday loans a year. So suddenly this effective interest rate of 400% becomes the actual interest rate. I mean, if you’re taking out twenty payday loans a year, that’s pretty much a loan every two weeks. And so you’ve got a couple million people a year in this country who are essentially paying 400% for their money to put it into dollars and cents. For that $500 loan, they’re paying $2,000 in fees for the year. So it’s the trap that a payday loan becomes, that I focus in on.

Correspondent: I wanted to talk about Martin Eakes, the man behind Self-Help and the Center for Responsible Lending. He offers a more reasonable APR through his credit union. His crusading has helped to initiate reform in numerous states. High-interest loans. Mortgage premium penalties. He’s been on it. His opponents, they point to his self-interest in creating caps that are uniquely beneficial to Self-Help. I want to address this. I mean, what of a credit union’s interest fees on overdrafts? Just to give you an example, if a consumer gets a hit, the median overdraft fee is about $27 on a $20 debit card transaction. They repay the charge in two weeks. And, according to the FDIC, that’s a 3,250% APR. That far outshines that $33 per $100 cap in Indiana. That works out to 858% on a two week loan. So I’m wondering if credit unions are, in some way, just as problematic. Or perhaps even more problematic on the overdraft charge than payday lenders, when we consider this?

Rivlin: Right. You’re giving the argument that the payday lenders make that I was starting to make myself before. That you could look at our 400% interest rate. But go start doing the math. As you just did. On bounced checks or late credit card fees. And again, that’s a legitimate point. Martin Eakes is one of the main characters in my book. He’s just a really interesting, quirky fellow. A few fun facts. He claims he’s never had a sip of alcohol in his life. He testifies all the time before Congress. Gives speeches. He owns a single suit to save money. His wife cuts his hair. My favorite quote from him is “Half the people I know would take a bullet for me and the other half would fire the pistol.” And that’s accurate. He’s really been out there as a leading crusader, not the leading crusader, against subprime mortgage abuse. Against the payday lenders. Against some of the more abusive policies.

Correspondent: And the people who work for him have salary caps as well. It’s not exactly a lucrative prospect to work for him.

Rivlin: The payday lenders and others try to tar Martin Eakes. But he’s a little bit Ralph Naderish in that way. He’s hard to tar. There’s a rule within his credit union that no one can be paid more than three times more than the lowest paid employee. And that means that this guy, who runs essentially a billion dollar operation — they’ve done a lot of home loans — is getting paid $69,000 a year. I guess everybody roots for the receptionist to get a raise.

Correspondent: Yeah. Well, hopefully the MacArthur money was disseminated around. But you do have to make some kind of money. And as we’ve determined with this overdraft situation, that’s quite an interest.

Rivlin: Well, a few things. One way you misspoke was that his credit union doesn’t offer payday loans. His colleagues in North Carolina. The big North Carolina credit union for teachers and state employees. They offer a payday loan with an effective annual interest rate of 12%. 12% versus the 400%. And I met with the fellow who runs that credit union. And he called it the single most profitable loan that they offer. But getting back to the criticism that they level at Martin Eakes — that isn’t he just a competitor? Isn’t he just fighting the payday loan industry because he’s looking out for the bottom line of his own credit union? Well, one problem with that is — it was in 2001 that Martin Eakes and others in North Carolina kicked the payday lenders out of the state. Martin Eakes’s credit union — you’re only eligible to participate if you live in North Carolina. So he won the fight in 2001. Why is he still fighting the payday lenders across the country given that his bottom line is only affected in North Carolina? I find the argument — I heard it from every payday lender I met with — that Martin Eakes is just a competitor; it’s just very specious. He’s a crusader. He might see the world in black and white, where these things should be outlawed period. But I think he’s genuine in his criticism. I don’t think it has anything to do with his credit union. His credit union doesn’t even offer credit cards to rack up the late fees.

Correspondent: But how much does he charge for overdraft fees?

Rivlin: Twenty bucks.

Correspondent: Twenty bucks.

Rivlin: I was really curious about that question too.

Correspondent: I mean, that’s just — you’re still dealing with a pretty substantial APR. When does that $20 kick in?

Rivlin: Yeah. Well, you know, the problem with APRs on a bounced check is that it depends upon how long it takes for you to become whole again. I mean, there’s that $20 fee. But then there’s interest and other penalties when you’re late. But we can just say it’s enormous. It’s typically higher than 400% for the payday.

Correspondent: It’s below the median rate. That’s for sure.

Rivlin: Martin Eakes runs a not-for-profit credit union. He charges a bounced check fee like everybody charges a bounced check fee. It’s lower than the average, but still high. You know, I don’t know what to say about that. But I do think, as long as we’re talking about Martin Eakes, that this credit union he started, dating back to the 1980s, they’re a subprime mortgage lender. I mean, I hasten to add, given the association people have that he’s a different kind of subprime mortgage lender and started charging four or five or six or seven percent above the conventional rate. He charges 1%. You know, his loans didn’t have huge up-front fees. He made sure that you could pay it back. That if you make $25,000 a year, that you’re buying a house for $50,000, let’s say, rather than a $300,000 house that you’re never going to be able to afford. But this credit union is specifically for those of modest means. About half his customers are single moms. About half the people who bought homes using loans from him are people of color. He’s making loans in rural communities. People who live in trailers who can move into a modest-sized house and have, as he would put it, a bricks-and-mortar savings account. A home. He is doing a lot of good. Thousands and thousands of North Carolinans are living in a home who wouldn’t otherwise.

The Bat Segundo Show #340: Gary Rivlin (Download MP3)

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by Edward Champion

Obama, the Medicare “Doughnut Hole,” and the Working Poor

Last night, on Twitter, I got into a lively exchange relating to last night’s Obama infomercial. I had initially watched ten minutes of this broadcast, and I grew increasingly upset by the manner in which basic realities about health care and the working poor have been severely overlooked in this presidential race. Upon being pressed, I watched the whole thing from the beginning. “Those weren’t the working poor in that video? The 72 year old guy working at WalMart not poor enough?” argued Seth Harwood. While retired railroad man Larry Stewart putting on his Wal-Mart badge and taking out a loan on his house to help his ailing wife is indeed a crushing story (beginning at 7:30 in the Obama video), at least the Stuarts have a house to take a loan on. What of the doughnut hole created by a Republican-led Congress through the Medicare Modernization Act of 2003? What of those trapped in Medicare with chronic conditions who skip out on vital medications because they don’t have the money? The situation is this: Under the Medicare Part D prescription drug program, if a senior has more than $2,250, but less than $5,100 in annual drug costs, the senior is required to pay these costs out of pocket.

Now consider the case of 65-year-old Frances Acanfora. Thanks to the MMA, this retired school lunchroom aide saw her drug costs jump up from $58 to $1,294 courtesy of the doughnut hole. She even had to temporarily stop taking her drugs after talking with her doctor. Did Acanfora have a partner or a home to fall back on? We know that she had a credit card. But is she still alive? One wishes that the Washington Post would conduct a followup story. Meanwhile, other seniors have stopped taking their drugs altogether. They couldn’t afford it.

While it is true that Obama advocates the federal government negotiating with the drug companies to reduce prices under the Medicare Part D drug program (similar to what the Department of Veteran Affairs now gets), permitting citizens to purchase prescription drugs from outside of the United States, and closing the doughnut hole, let’s consider why this policy was effected in the first place. The MMA came into being because of rising costs in prescription drugs and the inability of the federal government to allocate enough funds to pay for it. What we have here is a scenario in which the pharmaceutical companies hold all the cards. The companies set the prices. The generic drugs that were supposed to save people money have proven to be more costly thanks to the MMA. The companies claim that the drug prices are high because the companies need to spend this money on R&D. And, of course, the drug companies have lobbyists.

And if the drug companies hold such power, how can there possibly be negotiation? I can see the conversation going something like this:

Government: We need you to lower the costs of drugs. Now we’ll be happy to take them all off your hands, guaranteeing X number of drugs over the next five years, if you’ll lower the prices.

Drug Companies: You’re already going to be getting X number of drugs over the next five years from us. With all due respect, what’s changing here? We’re your supplier. And wait a minute. I thought we agreed back in 2003 that we wouldn’t be negotiating.

Or as Robert Laszewski put it, “If you go to a car dealer and tell him you’re going to buy his car no matter what, and then try to negotiate, you’re not going to get a very good deal.”

Which puts the government in the awkward position of going overseas to import its drugs for Medicare. But if Medicare’s chief drug source comes from another country, how then can the FDA provide the essential oversight for the drugs? This leaves the government coming back to the pharmaceutical companies with its tail between its legs. I’ve looked around numerous places, but Obama has not specified how he can “negotiate” with these draconian realities in place. But to his credit, he did issue a press release last year condemning the Senate’s failure to consider legislation permitting Medicare negotiation.

Let’s return to the issue of Larry Stewart and Frances Acanfora. The rhetoric in this presidential race has involved speaking to Main Street and the middle-class, who we are told increasingly are having to “tighten their belts” to make ends meet. But what is not really being talked about by either camp are the 29.4 million Americans — up 4.7 million from 2002 to 2006 — living below the national poverty line. Tayari helpfully directed me to this Democracy Now! segment from a few days ago, which goes into this issue at some length. And indeed why should either candidate talk about low-wage workers when Obama leads 2 to 1 over McCain? (Incidentally, a majority of low-wage workers polled in this article indicated that their personal finances were unlikely to change — even with an Obama presidency.)

When you consider Medicare’s reliance upon pharmaceutical companies and this regrettable framing emphasis away from the working poor, what Obama essentially presented to us last night was comfort food for the middle-class. (So flexible is the term “middle-class” that one can make a six figure salary and still remain lodged within an income bracket that likewise includes someone making $20,000 a year.) But none of this takes away from the fact that nearly 30 million Americans are impoverished, and that 47 million Americans are without health care. What this nation needs more than “hope” is a concrete and realistic plan. We need something more than promises to “negotiate” in nonnegotiable situations. Something that returns us to the dialogue kickstarted by John Edwards last year. Something that ensures that the dread P word spelling out our poverty will return to our national dialogue with neither shame nor flash, but with the maturity and grace that Obama has built his campaign image upon.