Sunday, January 11, 2009
Thursday, January 1, 2009
Saturday, December 13, 2008
Jimmy V and the Closed Wallet
Faded photographs,
Covered now with lines and creases
-Dennis Yost and the Classics IV
Former ESPN announcer and basketball coach Jim (Jimmy V) Valvano set up a foundation for cancer research after he was diagnosed with terminal cancer in June of 1992.
June, 1992 was when my father found out he, too, had terminal cancer. He and Jimmy V were of similar age, personality and outlook on life.
From the time they were diagnosed, dad and Jimmy V both fought against cancer like they were an entry at the race track. They never met, but when dad was doing better, it seemed like Jimmy V was improving, too.
Dad took strength from Valvano's motivational presence. I'm convinced that Valvano's emotional February 21, 1993 speech at North Carolina State inspired dad to live for another week. That speech fired dad up from his deathbed.
We buried my dad on March 4, 1993. I came home that night to watch the ESPY awards where Valvano gave one of the most extraordinary, inspiring and heart-touching speeches ever given.
Recently, ESPN devoted a week to raise money for cancer research. ESPN called it the "Jimmy V" week and they kicked it off by replaying Valvano's 1993 ESPY speech.
I was watching the speech and suddenly tears started running from my eyes.
I'm one of those guys who cries about once a decade. Yet I can't stop crying as I watch a 15 year old replay of Jim Valvano.
He was still raising money for cancer, a disease that directly impacted my family. It brings back every emotion of connecting with my father. I reached for my wallet.
Then I stopped.
Like a lot of people, I've cut back significantly this year. I've been generous in the past, but now a tougher nut to crack.
I don't know what the future is going to be like. Even though I am better off than most people, I want to be careful. Just like many other people.
I realized that if I hesitated on a cause so personal, it must be hell for the other charities raising money.
I'm not the only person thinking twice about giving money to charity. Or about spending money.
Most people have the same kind of hesitation that I have. And this compounds the financial crisis problem.
People are afraid to spend money, so retailers sell less and lay people off. Retailers are selling less, so factories and manufacturers quit making goods and lay people off. People quit buying houses and cars, and those sectors lay people off.
Fearful people stop giving money to charity, so those charitable organizations cut services and lay people off. With fewer people paying taxes, government starts cutting services and laying people off.
Then people get more scared because they see all their neighbors getting laid off. They tighten their belts even further and the cycle goes into another round. Then they get laid off.
It all comes down to confidence. A year ago, Jimmy V's foundation would have had my money before they cut to commercial. A year from now, it might be the same story.
Right now, there is little chance. I want to see if we have hit bottom.
It often takes something monumental to shift the spiral. The Great Depression really didn't end until World War II. In previous recessions, gimmicks like wage and price controls, tax cuts and stimulus plans were used to try to halt economic slowdowns. They rarely worked.
We need for the markets to run their natural course. Things will bottom out and people will get their confidence back.
We stalled the bottoming out by throwing billions of tax dollars at Wall Street.
The public is smarter than Washington gives them credit for. They saw through the $700 billion bailout as a gift from Washington insiders to Wall Street insiders. People on Main Street realized that none of the $700 billion would be helping them.
Thus, we have a crisis in confidence. I'm hoping that new presidential leadership helps. But people have to get this recent crisis behind us. We need to find out what mistakes were made and make sure they don't happen again.
To paraphrase Jim Valvano, we must never, ever, ever give up until we fix the problems that got us in this mess.
Someday, we will get our confidence back. When that happens, the Jimmy V foundation will be getting my donation.
Don McNay, CLU, ChFC, MSFS, CSSC, is the Founder of the McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler. You can write to him at don@donmcnay.com or read his award winning, syndicated financial column at www.donmcnay.com
Covered now with lines and creases
-Dennis Yost and the Classics IV
Former ESPN announcer and basketball coach Jim (Jimmy V) Valvano set up a foundation for cancer research after he was diagnosed with terminal cancer in June of 1992.
June, 1992 was when my father found out he, too, had terminal cancer. He and Jimmy V were of similar age, personality and outlook on life.
From the time they were diagnosed, dad and Jimmy V both fought against cancer like they were an entry at the race track. They never met, but when dad was doing better, it seemed like Jimmy V was improving, too.
Dad took strength from Valvano's motivational presence. I'm convinced that Valvano's emotional February 21, 1993 speech at North Carolina State inspired dad to live for another week. That speech fired dad up from his deathbed.
We buried my dad on March 4, 1993. I came home that night to watch the ESPY awards where Valvano gave one of the most extraordinary, inspiring and heart-touching speeches ever given.
Recently, ESPN devoted a week to raise money for cancer research. ESPN called it the "Jimmy V" week and they kicked it off by replaying Valvano's 1993 ESPY speech.
I was watching the speech and suddenly tears started running from my eyes.
I'm one of those guys who cries about once a decade. Yet I can't stop crying as I watch a 15 year old replay of Jim Valvano.
He was still raising money for cancer, a disease that directly impacted my family. It brings back every emotion of connecting with my father. I reached for my wallet.
Then I stopped.
Like a lot of people, I've cut back significantly this year. I've been generous in the past, but now a tougher nut to crack.
I don't know what the future is going to be like. Even though I am better off than most people, I want to be careful. Just like many other people.
I realized that if I hesitated on a cause so personal, it must be hell for the other charities raising money.
I'm not the only person thinking twice about giving money to charity. Or about spending money.
Most people have the same kind of hesitation that I have. And this compounds the financial crisis problem.
People are afraid to spend money, so retailers sell less and lay people off. Retailers are selling less, so factories and manufacturers quit making goods and lay people off. People quit buying houses and cars, and those sectors lay people off.
Fearful people stop giving money to charity, so those charitable organizations cut services and lay people off. With fewer people paying taxes, government starts cutting services and laying people off.
Then people get more scared because they see all their neighbors getting laid off. They tighten their belts even further and the cycle goes into another round. Then they get laid off.
It all comes down to confidence. A year ago, Jimmy V's foundation would have had my money before they cut to commercial. A year from now, it might be the same story.
Right now, there is little chance. I want to see if we have hit bottom.
It often takes something monumental to shift the spiral. The Great Depression really didn't end until World War II. In previous recessions, gimmicks like wage and price controls, tax cuts and stimulus plans were used to try to halt economic slowdowns. They rarely worked.
We need for the markets to run their natural course. Things will bottom out and people will get their confidence back.
We stalled the bottoming out by throwing billions of tax dollars at Wall Street.
The public is smarter than Washington gives them credit for. They saw through the $700 billion bailout as a gift from Washington insiders to Wall Street insiders. People on Main Street realized that none of the $700 billion would be helping them.
Thus, we have a crisis in confidence. I'm hoping that new presidential leadership helps. But people have to get this recent crisis behind us. We need to find out what mistakes were made and make sure they don't happen again.
To paraphrase Jim Valvano, we must never, ever, ever give up until we fix the problems that got us in this mess.
Someday, we will get our confidence back. When that happens, the Jimmy V foundation will be getting my donation.
Don McNay, CLU, ChFC, MSFS, CSSC, is the Founder of the McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler. You can write to him at don@donmcnay.com or read his award winning, syndicated financial column at www.donmcnay.com
Thursday, November 27, 2008
Son of a Gambler's Guide to Holiday Books
Son of a Gambler’s Guide to Holiday Books
It’s a lesson to me, the ablers and the beggars and the thieves
-The Grateful Dead
If you read my book, Son of a Son of a Gambler, you’ll know that my childhood was filled with beggars, thieves and other unusual characters.
But not nearly as unusual as the characters Ed McClanahan has encountered in his life.
Ed was one of the “Merry Pranksters,” a group typified by author Ken Kesey and other legends of the 1960’s counter-culture. Ed novel, The Natural Man, is a literary classic and, like Son of a Son of a Gambler, based in my old stomping ground of Northern Kentucky.
Ed recently released O The Clear Moment, and it is a great read. It is nine autobiographical short stories from a guy who has led a really interesting life. It is funny, insightful and one you won’t put down.
Another book that I didn’t put down was Sniper Bid, Rick Robinson’s follow-up to his hit novel, The Maximum Contribution. Both of the novels are based on Rick’s insights as a former Congressional aide and Congressional candidate. If you have someone who likes political thrillers, this is one to put in his stocking.
There are good guys and bad guys in the world of business, and Joe Nocera writes about both. I wrote about Good Guys and Bad Guys when the book was released earlier, but the book has received wide notice lately as Joe, a business columnist for the New York Times, has been the voice of reason and common sense during the financial crisis.
Joe’s been on highbrow shows like Bill Moyers Journal, and less than highbrow shows, like The Colbert Report. No matter the venue, Joe has interesting things to say.
I mentioned recently on Facebook that I wished Joe had been Treasury Secretary instead of our current Secretary, Hank Paulsen. Someone noted that would make him, “Joe the Treasurer.”
“Joe the Writer” is as good as they come.
Although I read hundreds of books a year (I really do), business books are at the top of my charts.
I previously reviewed the hardback version of The Success Effect by John Eckberg. The paperback edition is updated and is out in time for the holidays. John interviewed a number of business leaders, such as Donald Trump. He asked the people he interviewed what books they had on their nightstand and what music they listen to.
I once used John’s idea in one of my columns. I asked the question to a number of well-known Kentuckians. It told me a lot about each of them.
I’ve been catching a lot of new business book releases recently and one I really like is The Snowball: Warren Buffett and the Business of Life. There are about 50 biographies of Buffett and I have read almost all of them. This is the best. It gives a lot of detail about Warren Buffett the man, not just Warren the money-making machine. It’s 976 pages, but they go by quickly.
Ted Turner is another hero of mine. But I don’t recommend his recently released autobiography. Ted has lived a fascinating life, but he is not an introspective guy. A better book about him is Ted Turner: It Ain't As Easy as It Looks, which came out in 1997.
I did a chapter in Son of a Son of A Gambler about my father’s friendship with Larry Flynt. And Dad also knew Hugh Heffner.
Mr. Playboy: Hugh Hefner and the American Dream, by Steven Watts, is a stunningly great biography of Hefner. Watts is a history professor at the University of Missouri. He has written excellent biographies of Henry Ford and Walt Disney. As in his previous books, Watts views Hefner from a biographical perspective but also notes Hefner’s impact on popular culture and history.
It is only proper that the son of a gambler and daughter of a gambler be on the same wavelength. I read Martha Frankel’s highly acclaimed, Hats & Eyeglasses: A Family Love Affair with Gambling, when it was released earlier this year. This riveting story is about her childhood as the daughter of a gambler and her addiction to poker playing.
About a month ago I connected with Frankel via Facebook. She had just purchased a copy of Son of a Son of a Gambler and, to answer the John Eckberg question, she had it on her nightstand.
The hardback copy of Hats and Eyeglasses is available for the holidays and paperback is coming soon. You might want to get both. Martha has known a few ablers, beggars and thieves in her lifetime, too.
Don McNay, CLU, ChFC, MSFS, CSSC is the founder of McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery. You can read other things he has written at www.donmcnay.com or write to him at don@mcnay.com
Monday, November 10, 2008
John Daly, Wall Street Bailout and Bottoming Out
John Daly, Wall Street Bailout and Bottoming Out
One little problem that confronts you,
got a monkey on your back.
Just one more fix, Lord, might do the trick.
-Lynyrd Skynyrd
I saw a pathetic story about golfer John Daly and how he continues to screw up his life. He has blown through millions of dollars, drinking problems, multiple wives and a potentially great golfing career. He is signing autographs at Hooters to make a few bucks.
People in the addiction world say that before an addict can get help, they have to “bottom out.” They have to reach their lowest point. Then they can get help and turn their lives around
John was never able to hit bottom. There has always been another corporate sponsor or another fan to buy him a drink. Hooters is his latest enabler.
It’s hard to come up with a more inappropriate sponsor for John Daly than Hooters. They need to cut John loose and let him bottom out. Or be ready for when he drops over dead in one of their bars. He needs help, but Hooters is not the place to get it.
When I think about John, I also think about the Wall Street Bailout.
We made a mistake in not letting Wall Street hit bottom, too.
I was a fervent opponent of the bailout. Someone called into a radio show I was on and asked me what would happen if we didn’t do the bailout. I said some companies would fail and the S&P 500 would drop by about 50%.
Once we hit that bottom, we could start the process of repairing and climbing back up the ladder.
Just like addicts do. They hit the bottom and reassess their lives. Many go on to productive and wonderful lives.
They just needed to hit the bottom first.
The quicker Wall Street bottomed out, the quicker we could have started the recovery. Instead, we enabled it to the tune of $700 billion.
There was no particular strategy to the enabling. We propped up some companies and let others fail. Instead of letting the stock market drop hugely overnight, it has been dropping over time, with no signs of hitting a bottom. Bad companies with bad management are allowed to make the same mistakes that got them into trouble in the first place.
No one on Wall Street is getting it. Instead of taking the $700 billion and making sure that it trickles down to Main Street, they are using it to buy other banks. They spend a lot of time talking about bonuses for their bigwigs.
A company getting taxpayer bailout money should not be handing out bonuses. A company getting taxpayer bailout money shouldn’t be buying other companies or paying dividends to stockholders.
There is a word for companies that need a government handout: Broke. Why should people get bonuses for managing a broke company? Or for managing a company broke?
If my business in Richmond, Kentucky goes broke, no one gives me a bonus. They tell me to find another job. Creditors take my house, car and cash. It’s the small business version of bottoming out. Very painful, but sobering.
Most of us in smaller businesses have bottomed out several times. Once we hit bottom, we figure out what we did wrong. We don’t make the same mistakes, and we often come back stronger than ever.
Both Wall Street and John Daly need to go through that period of bottoming out and self-examination. Neither one has. If we keep enabling them, neither one will.
At least Daly recognizes that he screwed up. Wall Street doesn’t seem to get it. Many businesses remind me of addicts who think one last fix can cure their problems. More companies, from many industries, are trying to get a piece of the bailout money or get a bailout of their own.
We have to let some companies bottom out. We need to let them truly examine how they got in trouble in the first place. We need for them to shed their bad habits and replace them with good ones.
The alternative is to have the economic equivalent of John Daly - Years of resources being wasted while we hope for a turn around that never happens.
We’ve learned lessons by watching addicts. We’ve learned lessons by watching countries, like Japan, prop up their economies. We know what to do. We just need leaders with the guts to do it.
Its time to let Wall Street bottom out. It is the only way it will truly bounce and rebound.
Don McNay, CLU, ChFC, MSFS, CSSC, is the founder of McNay Settlement Group in Richmond, Ky and an award winning, syndicated, financial columnist. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists and the author of Son of Son of a Gamblers: Winners, Losers and What to Do When You Win The Lottery.
One little problem that confronts you,
got a monkey on your back.
Just one more fix, Lord, might do the trick.
-Lynyrd Skynyrd
I saw a pathetic story about golfer John Daly and how he continues to screw up his life. He has blown through millions of dollars, drinking problems, multiple wives and a potentially great golfing career. He is signing autographs at Hooters to make a few bucks.
People in the addiction world say that before an addict can get help, they have to “bottom out.” They have to reach their lowest point. Then they can get help and turn their lives around
John was never able to hit bottom. There has always been another corporate sponsor or another fan to buy him a drink. Hooters is his latest enabler.
It’s hard to come up with a more inappropriate sponsor for John Daly than Hooters. They need to cut John loose and let him bottom out. Or be ready for when he drops over dead in one of their bars. He needs help, but Hooters is not the place to get it.
When I think about John, I also think about the Wall Street Bailout.
We made a mistake in not letting Wall Street hit bottom, too.
I was a fervent opponent of the bailout. Someone called into a radio show I was on and asked me what would happen if we didn’t do the bailout. I said some companies would fail and the S&P 500 would drop by about 50%.
Once we hit that bottom, we could start the process of repairing and climbing back up the ladder.
Just like addicts do. They hit the bottom and reassess their lives. Many go on to productive and wonderful lives.
They just needed to hit the bottom first.
The quicker Wall Street bottomed out, the quicker we could have started the recovery. Instead, we enabled it to the tune of $700 billion.
There was no particular strategy to the enabling. We propped up some companies and let others fail. Instead of letting the stock market drop hugely overnight, it has been dropping over time, with no signs of hitting a bottom. Bad companies with bad management are allowed to make the same mistakes that got them into trouble in the first place.
No one on Wall Street is getting it. Instead of taking the $700 billion and making sure that it trickles down to Main Street, they are using it to buy other banks. They spend a lot of time talking about bonuses for their bigwigs.
A company getting taxpayer bailout money should not be handing out bonuses. A company getting taxpayer bailout money shouldn’t be buying other companies or paying dividends to stockholders.
There is a word for companies that need a government handout: Broke. Why should people get bonuses for managing a broke company? Or for managing a company broke?
If my business in Richmond, Kentucky goes broke, no one gives me a bonus. They tell me to find another job. Creditors take my house, car and cash. It’s the small business version of bottoming out. Very painful, but sobering.
Most of us in smaller businesses have bottomed out several times. Once we hit bottom, we figure out what we did wrong. We don’t make the same mistakes, and we often come back stronger than ever.
Both Wall Street and John Daly need to go through that period of bottoming out and self-examination. Neither one has. If we keep enabling them, neither one will.
At least Daly recognizes that he screwed up. Wall Street doesn’t seem to get it. Many businesses remind me of addicts who think one last fix can cure their problems. More companies, from many industries, are trying to get a piece of the bailout money or get a bailout of their own.
We have to let some companies bottom out. We need to let them truly examine how they got in trouble in the first place. We need for them to shed their bad habits and replace them with good ones.
The alternative is to have the economic equivalent of John Daly - Years of resources being wasted while we hope for a turn around that never happens.
We’ve learned lessons by watching addicts. We’ve learned lessons by watching countries, like Japan, prop up their economies. We know what to do. We just need leaders with the guts to do it.
Its time to let Wall Street bottom out. It is the only way it will truly bounce and rebound.
Don McNay, CLU, ChFC, MSFS, CSSC, is the founder of McNay Settlement Group in Richmond, Ky and an award winning, syndicated, financial columnist. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists and the author of Son of Son of a Gamblers: Winners, Losers and What to Do When You Win The Lottery.
Saturday, November 8, 2008
Max Cleland's Chance for Revenge
Max Cleland’s Chance for Revenge
“Maybe next time he'll think before he cheats”
-Carrie Underwood
It’s certain now. Georgia Senator Saxby Chambliss did not get a majority for re-election.
If he wants to hold on to his Senate seat, he will have to defeat challenger Jim Martin in a run off election on December 2.
It will be a day for patriotic Americans to even the score. Chambliss does not deserve to sit in the United States Senate.
The Senate seat previously belonged to Max Cleland. Six years ago, Chambliss got in the gutter to steal it from him.
I’m stunned to see that John McCain is planning to campaign for Chambliss. Cleland ,
(ironically, like John McCain) is a bona fide American hero. His valor during the Vietnam war resulted in his becoming a triple amputee. After a life in public service, he was elected a United States Senator from Georgia.
In the Senate, Cleland served honorably and well. And in 2002, Max was the victim one of the most disgusting smear campaigns in American history.
When the country was recovering from the 2001 attack on the World Trade Center,
Saxby Chambliss ran a campaign that claimed that Max Cleland was somehow helping Osama Bin Laden. He based his convoluted “evidence” on some Senate procedural vote that wasn’t the slightest bit relevant.
In the 2002 climate of fear, Chambliss’s lies and distortion worked. Now it is 2008, it is time for Chambliss to face the music.
I want to hear Chambliss’s explanation now. What he did in 2002 doesn’t work six years later.
It is time for Chambliss to atone for his sins.
One of the biblical 10 commandants is not to bear false witness. Chambliss will have to answer to God someday but on December 2nd, he needs to answer to the people of Georgia.
I’m hoping the rest of the country pitches in to defeat Chambliss. I also hope that John McCain starts to act like the John McCain of 2000 instead of the one we saw this year and puts patriotism over party.
Having a Vietnam War hero like McCain campaign against the man who smeared Max Cleland is an outrage.
I don’t know much about the challenger Martin. I really don’t need to. I would vote for Larry the Cable Guy or Homer Simpson if they were running against Saxby Chambliss.
Chambliss got in the Senate with a dirty trick and he needs to go home.
Cleland’s loss was a low point in American politics. How you can question the patriotism of a man who left several body parts in Southeast Asia? Why did voters go for it?
It inspired candidates in other states to pick out phony charges and run negative ads. If you can get away with smearing Max Cleland’s patriotism, you could get away with anything.
2008 is the time to make it stop. Once and for all.
Cleland is a real hero, with real accomplishments, who dedicated his life to serving his country. He was brought down by a guy who smudged the truth.
Actually he wasn’t brought down, he just had to leave the Senate. It takes more than Saxby Chambliss to bring Max Cleland down. I met Cleland after his Senate career, when he was traveling the country, helping like minded candidates. It can't be easy for a triple amputee to be barnstorming the country. It would be simple for Max Cleland to sit home and let others lead the charge.
That is not Max Cleland’s style.
Chambliss cheated to get his Senate seat.
I want Chambliss, and every other politician, to think before the next time they cheat.
Don McNay is the founder of McNay Settlement Group in Richmond, Ky. He is the author of the Unbridled World of Ernie Fletcher. You can read his award winning column at www.donmcnay.com or write to him at don@mcnay.com. He is Treasurer of the National Society of Newspaper Columnists.
“Maybe next time he'll think before he cheats”
-Carrie Underwood
It’s certain now. Georgia Senator Saxby Chambliss did not get a majority for re-election.
If he wants to hold on to his Senate seat, he will have to defeat challenger Jim Martin in a run off election on December 2.
It will be a day for patriotic Americans to even the score. Chambliss does not deserve to sit in the United States Senate.
The Senate seat previously belonged to Max Cleland. Six years ago, Chambliss got in the gutter to steal it from him.
I’m stunned to see that John McCain is planning to campaign for Chambliss. Cleland ,
(ironically, like John McCain) is a bona fide American hero. His valor during the Vietnam war resulted in his becoming a triple amputee. After a life in public service, he was elected a United States Senator from Georgia.
In the Senate, Cleland served honorably and well. And in 2002, Max was the victim one of the most disgusting smear campaigns in American history.
When the country was recovering from the 2001 attack on the World Trade Center,
Saxby Chambliss ran a campaign that claimed that Max Cleland was somehow helping Osama Bin Laden. He based his convoluted “evidence” on some Senate procedural vote that wasn’t the slightest bit relevant.
In the 2002 climate of fear, Chambliss’s lies and distortion worked. Now it is 2008, it is time for Chambliss to face the music.
I want to hear Chambliss’s explanation now. What he did in 2002 doesn’t work six years later.
It is time for Chambliss to atone for his sins.
One of the biblical 10 commandants is not to bear false witness. Chambliss will have to answer to God someday but on December 2nd, he needs to answer to the people of Georgia.
I’m hoping the rest of the country pitches in to defeat Chambliss. I also hope that John McCain starts to act like the John McCain of 2000 instead of the one we saw this year and puts patriotism over party.
Having a Vietnam War hero like McCain campaign against the man who smeared Max Cleland is an outrage.
I don’t know much about the challenger Martin. I really don’t need to. I would vote for Larry the Cable Guy or Homer Simpson if they were running against Saxby Chambliss.
Chambliss got in the Senate with a dirty trick and he needs to go home.
Cleland’s loss was a low point in American politics. How you can question the patriotism of a man who left several body parts in Southeast Asia? Why did voters go for it?
It inspired candidates in other states to pick out phony charges and run negative ads. If you can get away with smearing Max Cleland’s patriotism, you could get away with anything.
2008 is the time to make it stop. Once and for all.
Cleland is a real hero, with real accomplishments, who dedicated his life to serving his country. He was brought down by a guy who smudged the truth.
Actually he wasn’t brought down, he just had to leave the Senate. It takes more than Saxby Chambliss to bring Max Cleland down. I met Cleland after his Senate career, when he was traveling the country, helping like minded candidates. It can't be easy for a triple amputee to be barnstorming the country. It would be simple for Max Cleland to sit home and let others lead the charge.
That is not Max Cleland’s style.
Chambliss cheated to get his Senate seat.
I want Chambliss, and every other politician, to think before the next time they cheat.
Don McNay is the founder of McNay Settlement Group in Richmond, Ky. He is the author of the Unbridled World of Ernie Fletcher. You can read his award winning column at www.donmcnay.com or write to him at don@mcnay.com. He is Treasurer of the National Society of Newspaper Columnists.
Sunday, November 2, 2008
Credit Cards in the world of taxpayer-owned banks
“meet the new boss. Same as the old boss.
-The Who
The American people ponied up $700 billion to supposedly bail out some big banks on Wall Street. So far, we have not seen the banks what banks are supposed to do, lend people money. Instead they are doing the thing that Wall Street raiders do, take over other companies.
Bush and Paulsen encouraged bad behavior in their bailout bill. They gave big banks money and tax incentives to gobble up small banks. They made sure that their buddies on Wall Street were taken care of.
Most big banks didn’t need bad behavior encouragement. They’ve been able to do harmful things long before the government started subsiding them.
Some of the biggest abuses come in the way that banks have handed out credit cards. Now that I, like every other American taxpayer, indirectly owns part of the Wall Street banks, I want to talk to them about how they have been acting.
I want to do is to throw credit card companies off every college campus. Is it any wonder that the banks needed a $700 billion bailout? What kind of business gives huge lines of credit to students who don’t have jobs?
I always thought that you had to have a job to get credit. Not anymore. I have a college student in my household. He has minimal income, no assets and big student loans. However, the credit card companies love him. He gets ten times more mail than I do. All of them “pre approved” credit cards. All go straight in the trash.
Its bad for the college students to run up debt before they have jobs. Its bad for the nation to have a generation of college graduates paying off high interest credit cards instead of saving money to buy houses and cars.
Giving cards to college students couldn’t have been that great of a business or the banks wouldn’t have needed a bailout.
I saw an article in the New York Times that said that credit cards were the next problem area for the banks.
DUH!
We’ve had years of students, people coming out of bankruptcy and people with no income getting tons of credit cards. Usually with interest rates and fees that would make a loan shark blush.
Since they are getting multi million dollars bonuses, executives at Wall Street banks should have figured out what most of us know. Broke people don’t pay loans back.
You can charge them all the interest and fees that you want. If they don’t have any money, they are not going to give any to you. Especially if you are an unsecured debtor like a credit card.
People will make an extra effort to hang on to secured debts, like their houses and cars. The credit cards will be last in line.
We are now in an economy where a lot of people who were barely hanging on will get closer to the edge. You see people losing their jobs or going from high paying jobs to minimum wages. You see people who counted on the value of their house or 401k plan being suddenly disappointed.
We see a lot of people worried about feeding their families and keeping a roof over their heads.
When it comes to feeding your family or paying your credit card, the family is going to win every time.
I hope the banks factored that reality in before the came up with the $700 billion figure. They might want to hang on to some of that taxpayer cash instead of using it to buy other banks.
As bad as people are projecting, it will get worse. Recent events will change how people feel about debt.
People who got stuck with high interest credit cards aren’t going to be in a hurry to pay them off. Even if they can.
Banks had two things going for them in collecting credit card debts. They could shame people by embarrassing them in front of their neighbors and they could threaten to hurt their credit scores.
Its going to be hard for a bank that was bailed out by taxpayers to shame anyone into anything. Since people with good credit can’t get loans, there is no incentive for someone with bad credit to even bother. They can default on their debt and make the banks come after them.
I’ve tried to collect from someone who was determined not to pay me. It was expensive, time consuming and I never did get all my money. Try multiplying that by a few million people. That is what the big banks are going to be dealing with.
From a moral standpoint, I want banks to clean up their act in the credit card department. Since many of the bankers work for me, and the rest of the American taxpayers, I’d like to protect my investment by making sure the credit card issuers get out of the stupidity game.
I can’t afford to give them another $700 billion.
Don McNay is the founder of McNay Settlement Group and the author of the book Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com . McNay is a cotributor to the Huffington Post and Treasurer of the National Society of Newspaper Columnists.
.
“meet the new boss. Same as the old boss.
-The Who
The American people ponied up $700 billion to supposedly bail out some big banks on Wall Street. So far, we have not seen the banks what banks are supposed to do, lend people money. Instead they are doing the thing that Wall Street raiders do, take over other companies.
Bush and Paulsen encouraged bad behavior in their bailout bill. They gave big banks money and tax incentives to gobble up small banks. They made sure that their buddies on Wall Street were taken care of.
Most big banks didn’t need bad behavior encouragement. They’ve been able to do harmful things long before the government started subsiding them.
Some of the biggest abuses come in the way that banks have handed out credit cards. Now that I, like every other American taxpayer, indirectly owns part of the Wall Street banks, I want to talk to them about how they have been acting.
I want to do is to throw credit card companies off every college campus. Is it any wonder that the banks needed a $700 billion bailout? What kind of business gives huge lines of credit to students who don’t have jobs?
I always thought that you had to have a job to get credit. Not anymore. I have a college student in my household. He has minimal income, no assets and big student loans. However, the credit card companies love him. He gets ten times more mail than I do. All of them “pre approved” credit cards. All go straight in the trash.
Its bad for the college students to run up debt before they have jobs. Its bad for the nation to have a generation of college graduates paying off high interest credit cards instead of saving money to buy houses and cars.
Giving cards to college students couldn’t have been that great of a business or the banks wouldn’t have needed a bailout.
I saw an article in the New York Times that said that credit cards were the next problem area for the banks.
DUH!
We’ve had years of students, people coming out of bankruptcy and people with no income getting tons of credit cards. Usually with interest rates and fees that would make a loan shark blush.
Since they are getting multi million dollars bonuses, executives at Wall Street banks should have figured out what most of us know. Broke people don’t pay loans back.
You can charge them all the interest and fees that you want. If they don’t have any money, they are not going to give any to you. Especially if you are an unsecured debtor like a credit card.
People will make an extra effort to hang on to secured debts, like their houses and cars. The credit cards will be last in line.
We are now in an economy where a lot of people who were barely hanging on will get closer to the edge. You see people losing their jobs or going from high paying jobs to minimum wages. You see people who counted on the value of their house or 401k plan being suddenly disappointed.
We see a lot of people worried about feeding their families and keeping a roof over their heads.
When it comes to feeding your family or paying your credit card, the family is going to win every time.
I hope the banks factored that reality in before the came up with the $700 billion figure. They might want to hang on to some of that taxpayer cash instead of using it to buy other banks.
As bad as people are projecting, it will get worse. Recent events will change how people feel about debt.
People who got stuck with high interest credit cards aren’t going to be in a hurry to pay them off. Even if they can.
Banks had two things going for them in collecting credit card debts. They could shame people by embarrassing them in front of their neighbors and they could threaten to hurt their credit scores.
Its going to be hard for a bank that was bailed out by taxpayers to shame anyone into anything. Since people with good credit can’t get loans, there is no incentive for someone with bad credit to even bother. They can default on their debt and make the banks come after them.
I’ve tried to collect from someone who was determined not to pay me. It was expensive, time consuming and I never did get all my money. Try multiplying that by a few million people. That is what the big banks are going to be dealing with.
From a moral standpoint, I want banks to clean up their act in the credit card department. Since many of the bankers work for me, and the rest of the American taxpayers, I’d like to protect my investment by making sure the credit card issuers get out of the stupidity game.
I can’t afford to give them another $700 billion.
Don McNay is the founder of McNay Settlement Group and the author of the book Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com . McNay is a cotributor to the Huffington Post and Treasurer of the National Society of Newspaper Columnists.
.
Subscribe to:
Posts (Atom)
