This kind of wild eyed exaggeration of an opponent's position is like saying that McCain favors lynching blacks because he supports flying the confederate battle flag over the state house and doesn't support a holiday for MLK.

Both statements may be or have been true but they don't support the conclusion proffered.

Do you think that the Obama organization could take these colorful images and do a 'mocking ad' with a trailer that says... I'm Barack Obama and I do not support this message or style of message.

Posted at October 2, 2008 1:51 PM in response to Pro-Life Group Preparing Big Ad Assault Charging Obama Allowed Babies To Die

I think that Obama should make the observation that a leader whose first impulse in times of crisis is to open his mouth and act is not demonstrating strength. S/he needs to sit still, keep their own council and listen to all sides of the complicated issues before deciding on a course of action. The days when the warrior king led from the tip of the phalanx are long past.

This is not one of the leadership qualities that the Navy looks for in their admirals and it is not something that we should seek in our civilian leaders either.

Posted at September 26, 2008 2:41 PM in response to Obama Optimistic About Bailout; Moderates Criticism Of McCain

I think that the other people with their hands on the levers of power in Alaska should really be worried. It must be occurring to some of them that no matter how the presidential election goes the world as they know it is going to change for the worse at the beginning of the new year. The one sure thing that the must be aware of is that the new congress is going to be a much more Democratic (big D) body. They must conclude that the powers that be in Washington have been paying attention while the prime spokesman for the state of Alaska has been systematically demonizing federal dollars that have been sent to Alaska. It would be logical to assume that all things being equal... things will get more equal and Alaska will get less.

From what I am reading... Alaska is about to be introduced to the 'reality based' economy. The state is going to have to start paying for a bigger share of its own infrastructure. The days of Uncle Sucker picking up the tab are numbered. The players that rose to the top under the old paradigm need to update their play book or get out of the game. This is going to lead to a realignment of the power centers in the state.

And... since the Alaska constitution specifically and explicitly allows for a electoral recall... the good people of Alaska don't need to wait two years to start re-balancing the ship.

She should remember... All politics is local.

Posted at September 21, 2008 12:15 PM in response to Confirmed: Despite Claim, Palin's Pay As Mayor Of Wasilla Went Up

I think that to take away the argument Mr. Obama needs to tackle the argument head on.

It is obvious by now that Mr. McCain will attempt to use the POW gambit as a trump card to attempt to deflect any attack. It is a pattern. It dates back to the early days of his political career. He famously used it with devastating effect to parry the carpet bagger charge in his first campaign. In that instance it was a righteous retort. Since that time he has used the argument with increasing frequency under ever more trivial circumstances.

Mr. Obama needs to deflate the impact of this argument. The trick will be to do so with respect and dignity so as to avoid any blowback.

It occurs to me that one approach might be to use Mr. McCain’s own video clips against him. I am thinking that a Comedy Central/TPM style video montage might be effective. Then… cut to the scene from the Outlaw Josey Wales where Fletcher says… “Senator: Don’t piss down my back and tell me it is raining.” And finally… the message on the screen will say… “there used to be a time when the ‘straight talk express’ gave us straight answers. What happened, Senator McCain?”

Posted at August 24, 2008 10:06 PM in response to McCain Himself Invokes POW Past To Deflect Criticism Of Houses Gaffe

I think that this would be a great opening for a bit of pointed satire... Soemthing like:

This is a great example of how the strategists in the upper level of the GOP think. When presented with a problem the first reaction is to change the subject. For example: Oops... No WMD... no problem. Saddam was a bad man.

Then equate this pitch to the 'get rich quick' schemes that are the advertizers on right wing radio. It all points to the fact that the GOP does not have a very high opinion of their base. They believe that their base will believe anything. We give them much more credit than that. We will stay on point, deliver the facts and let them decide on the merits.

Posted at August 21, 2008 6:28 PM in response to McCain Camp Responds On Houses Gaffe: He Was A POW!

Senator Levin,

First of all... I would like to thank you for your good works in this area. It is sorely needed.

However I would like to suggest a more traditional approach to this problem that goes back to at least the 16th century. I am speaking of a Usury Law. To my knowledge there is no federal Usury Statute and our courts have pretty much made the enforcement of state usury laws impossible by allowing the lending institutions to forum shop among the various states and by forcing any usury action to made in federal court.

It occurs to me that if we had an enforceable usury statute that dictated a ceiling interest rate and/or require that the lenders state a maximum effective interest rate (ala a after the fact, after the fees APR) it would greatly level the playing field and allow the consumers to enter into such contracts with a better understanding of their worst case scenario.

Under the scenario that I have outlined the lender would calculate interest on the unpaid balance at whatever the nominal (base) rate was on the contract and they could add late fees or overdraft fees or whatever under the terms of the contract but periodically the lender would be required to calculate the effective 'APR' associated with the contract and the APR calculation would include any fees that were in fact related to the time value of money. If the effective APR was higher than the APR in the statute or stated to be the max in the contract then the lender would recalculate the effective finance charge at the APR and refund to the lender the difference.

Posted at April 17, 2008 12:47 PM in response to Testifying on Abuses by Credit Card Companies

It occurs to me as I read these tales of woe that there used to be a regulatory/statutory structure in place that was designed to reign in just this kind of excess by lenders. These laws/regulations I am referring to are collectively called the usury laws. Unfortunately, there is no federal usury law and the federal courts have eviscerated any meaningful enforcement as it applies to national institutions by allowing them to forum shop and declaring that any and all state usury suits must be brought in federal court.

Perhaps the nature of the solution to this problem is to enact a Federal Usury Law that applies to consumer contracts. This would differ from the ‘pre-signing’ reg Z disclosure requirements by focusing on the ‘back end’ calculation of the actual interest rate. If the payment stream made by the consumer exceeds a interest cap set in the contract or by law then the institution would reimburse the card holder for the overcharge. For the purpose of this discussion fees such as ‘late-fees’ or ‘over-balance’ fees are in fact fees related to the time value of money and could be subject to the usury cap. Fees such as ‘NSF’ charges which derive from other bad acts of the consumer would not be subject to the cap.

2¢

Posted at April 6, 2008 11:26 AM in response to “Fee-based company” targets “scum of the earth”: one credit card company’s business model

I'm not a lawyer but it occurs to me that we really need to closely examine the wording of any immunity granted. It is my understanding that the specific cause of action threatened against the telcos was civil not criminal. Specifically, was it not a breach of contract that was alleged? This is not a criminal act for which classical immunity would apply. On the contrary... if this is a simple immunity bill then I am thinking that it could actually help the civil case. Consider: if a plaintiff seeks testimony from a telco employee then the telco guy cannot plead the fifth and refuse to answer. Immunity means he is not in any personal jeopardy so his knowledge can be used against his employer to make the civil case.

So... is it really immunity here? Or... is this 'immunity' really some sort of rifle shot that seeks to explicitly enrich the telcos by modifying the contract between the telcos and their customers to explicitly allow the breach. And I know that I am piling supposition upon supposition here but... would not such a 'immunity' be considered ex post facto and contrary to Article I, section 9, clause 3?

Posted at February 12, 2008 8:30 PM in response to Senate Passes Surveillance Bill

Professor Warren,

Thanks for doing the credit card show in NPR’s Fresh Air. It was truly compelling radio. Unfortunately, I didn’t hear it real time but thanks to the magic of podcasting and MP3 players it accompanied me on my walk the next morning.

In an earlier career I was a computer analyst that designed algorithms that helped people in the consumer lending industry stay in compliance with Regulation Z. As I am sure that you are aware, Reg Z dictates the disclosure requirements for both the closed end loan contracts as well as open end credit card contracts. One of the major disclosure requirements promulgated by Reg Z on the closed end side was the requirement that the lender disclose to the consumer an Annual Percentage Rate that reflected both the interest component of the contract as well as any fees that the lender required that the borrower pay. This gave the consumer a simple, uncomplicated number that the consumer could use to shop and compare one lender’s contract to another. It was the ‘sunshine’ that went a long way towards cleaning up the hype and false promises that characterized the consumer lending industry in 1969 when the enabling legislation was first passed.

We need to have a similar mechanism that can bring ‘sunshine’ to the open-end credit industry as well. We need a realistic APR that can be used by credit card lenders that can reasonably predict and measure the total cost of credit (fees and interest) using a credit card.

I know this is mathematically difficult given the ‘voluntary’ nature of the fees involved. However, I do not believe that it is impossible. As evidence of this we need look no further than the Credit Card Industry itself. The same MBAs that you talked about in your radio piece are also are also in the business of calculating Internal Rates of Return (IRR) for their parent companies. These IRRs are used to predict, based on probability models, the earnings that a rate or fee change will have on the profitability of a card contract. The calculation of the IRR and the calculation of the APR are two sides of the same coin. Granted, the probability models used by the various card companies are all different and are rightly considered proprietary trade secrets. But, the fact that the transactions can be modeled means that regulation can be modified to provide a predictive means of calculating a realistic APR that takes into account both the fees and the interest charges. The resulting regulation will be complicated. It will be math intense. It will not be obvious to the casual reader (or lawyer ?). But, I would argue, so is life and more importantly so are the contracts that are being pushed by the credit card industry.

Keep up the good fight and thank you.

Posted at April 15, 2007 9:14 AM in response to No Need to Read

I don’t think that it was one thing nor could it have been just one thing… All of these minor fubars in series contributed to their slide. There is a military strategy (a term that I can’t remember at the moment) that strives to make significant events happen to an enemy at a pace that is faster than the enemy’s ability to successfully react. I believe that that is what happened to this administration. Part of it was external, part of it was internal and part of it was bad luck. But, I think that the biggest problem was that they created a communication structure that fed upon itself without adequate input from the ‘reality based’ world. This had the effect of delaying and therefore weakening their ability to control the story. Then once they had spun up a response to the first crisis the next crisis was on their doorstep. Combine this scenario with the increase in the efficiency of their opponents in the ‘reality based’ world (bloggers et al) and you have the makings of a perfect storm.

Posted at December 26, 2006 4:14 PM in response to Event of the (Two) Year (Cycle)?