Most states had some such law on the books that capped the interest rates banks could charge on loans and credit cards, but in 1981 South Dakota completely eliminated its Usury Law — with CitiBank being the first credit card company to relocate its operations to that state. The stage was set for out-of-this-world interest rates when the Supreme Court ruled in 1978 (Marquette vs. First Omaha Service Corp.) that financial institutions could export the interest rates they established in their home state to other states. Ever wonder why so many credit card companies are based in South Dakota?

As a consequence, much of the Fed’s lowering of the Prime Lending rate, to bolster the economy, never trickled down to individual borrowers. The only state that keeps interest rates low for all banks based in its territory is Arkansas, which has a 128-year old constitutional cap on interest rates; which in 1982 was set at 5% above the federal discount lending rate. Ever wonder why there aren’t any credit card companies based out of Arkansas?

But in 1999, a federal law was passed that permitted banks in any state (Arkansas included) to match the rates charged by any other bank doing business in that state (regardless of which state that other bank is based). This trumped Arkansas’ constitution, but few Arkansas banks have taken advantage of the opportunity — they just feel it would be bad for the local economy.

Guess who wrote and sponsored that federal law… Phil Gramm.

Yes, the same genius who is now advising John McCain on the nation’s economy. This federal law is called the Gramm-Leach-Bliley Financial Modernization Act, which struck down the Glass-Steagall Act of 1933 — put into place by FDR as a safety measure to prohibit competition between banks and forbid banks from consolidating with insurance companies, commercial lenders and brokerage services. Not surprisingly, we now find ourselves on the verge of another Great Depression.

Now, John McCain will be the first to say that he never voted for the GLB Act — which is technically correct, he didn’t vote on it at all (no ‘abstain’, no ‘present’ — just, no vote). I wonder how his fellow Arizonan’s feel about his Senatorial leadership today.

For a hoot, Congress asked the Congressional Research Service to compile reasons for & against banking deregulation — here’s a list of reason’s why it wasn’t considered a good idea:

1. Conflicts of interest characterize the granting of credit (lending) and the use of credit (investing) by the same entity, which led to abuses that originally produced the Glass-Steagall Act

2. Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.

3. Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.

4. Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).

Looks like most of these concerns have come to fruition. Yet, John McCain appears not to have an opinion on the matter (though his economic advisor sure does).

– Dean

P.S. I have so little patience for debates over subjects like gay marriage or abortion (based off of supposed concerns about quality of life), when actual families today are faced with the loss of their ability to feed, clothe, and shelter themselves due to the inept cronyism of elected leaders like Phil Gramm, John McCain, and their ilk. What will it matter to anyone if a candidate is Pro-Life and for a Constitutional Amendment banning gay marriage, if his leadership will directly lead most Americans to the poor house — how’s that for a quality of life argument.

P.P.S. “It’s the economy, stupid” Bill Clinton, 1992

So, the feds provide the soldiers (plus “borrowing” the state National Guard) to stop the bad guys. The feds build the Interstates and other U.S. highways, and heavily subsidize state highways. The feds subsidize airports and airlines.

Of course you’re right that we need good buses. But saying that by itself is like saying we need more dams to provide electricity.

Just as we need a combination of hydro, solar, wind, fuel-fired etc. electrical plants (until perhaps someday some total panacea is invented or discovered), we need a mixture of buses, trains, planes, cars, trucks, etc. to keep us moving the way we want to go.

EDITOR NOTE–
Thanks for the compliment. I can usually work in GROWTHOPHOBIA or GROWTHOPHOBE too! By the way, you left out NUKE in the electricity mix.

Why don’t the morons out there screaming about socialisim, demand an end to FDIC, Social Security, Medicaid and Medicare, Federal farm and industry subsidies, local government tax subsidies, the military( the most socialist part of our government), basic human rights, environmental laws?

Now let’s see. We have a $441 or $449 million backlog in Ada County, we need $100 million to build a new bridge, we have to maintain over 2000 miles of roads and now we need to build 150 miles more of new arterials. Ha – like any of this is realistic even before the economy tanked. But if we pass the registration fee, we’ll get $4million more to spend!

Here’s a thought. Let’s have both government and people live within their means. Maybe we can’t have all these new projects. Maybe we can’t have all these far flung new housing developments. Maybe we should try some new things like toll roads or here’s an even better idea for those new far flung development – Have the developers build the arterials to their property instead of the taxpayers. Don’t collect impact fees on the houses, that won’t create any new roads for decades. But if developers knew they were on the hook for the roads to get to their far flung developments one of two things would happen. 1- they’d build the roads and the public wouldn’t have to or 2 – they wouldn’t build their developments and the public still wouldn’t have to build the roads.

ACHD definitely needs new thinking, as does all government. The same old ideas will beget the same old problems.

Uninspiring Leadership “elected” by a complacent bourgeoisie.

http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking

The Bush administration prior to 9/11 presented itself as compassionate social conservatives. Now they end as conservative socialists.

For those who are so damn excited about living in such “historic” times:
“History is a nightmare from which I am trying to awake” — James Joyce

When elected officials “throw us a bone” at election time, we must say “not good enough”! Whether it is Kempthorne touting the multi-million dollar Tamarack and all it will do for Idaho, or Simpson announcing the 400 jobs he is bring to INEL, or Bieter going from one neighborhood to another and “giving” them a new entrance to a park, or a wider sidewalk, we need to realize that we are being treated no different than a $20.00 hooker on the street!

When CCDC aggressively courts “bistro” type restaurants in the downtown core, even though the population couldn’t possibly support the numbers, and the mayor’s response is “restaurants come and go”, that should be unacceptable to the citizens! When the “hole in the ground” looks like it will fail for the 4th. time in 20 years, and the mayor’s response is “that’s Ok, because we have 2 or 3 other developers ready to step in”. We must say to him, OK hotshot, just where are those developers you spoke about. When we call, and the mayor agreed, for an audit of the CCDC within 90 days, and nearly 18 MONTHS later, we have zero, zip, nada! That is unacceptable!

But as long as they throw us that little bone once in awhile, we are OK and continue to get the shaft!

As long as we can’t get more than 40%of the citizens to even get off their butts to vote, we will continue to get screwed! My Lord, they have a 75% voter turn out in Iraq and they SHOOT people for voting over there!

I can’t, with any level of logical thought, actually think things will be better in the short term. I just wish we, as citizens of Treasure Valley, would start thinking of ourselves as
“penthouse call-girls” instead of street hookers. Let’s look at thinking of ouselves as being better than the politician’s believe we are! If most citizens realized how the vast majority of politician’s talk about us during “inside” conversations, we would be looking for a stout tree and a thick rope!

I agree that parts of the world are over-populated. Yet I firmly believe the earth could support 100 times the current population if people were more self-sufficient and if resources were managed better. Corrupt governments are to blame for most of the world poverty, not the population.

Of course if we eliminate inefficient government welfare and medicare programs, perhaps we would increase the mortality rate and thus reduce the population A little thinning of the weakest among us…Darwin would approve!

Converve? Sure, why not. Live within our means? You bet. But the reality is, things could be a lot worse. I remember the 80’s when Carter was president and nearly every contractor in Idaho had to take out bankruptcy because of the interest rates on loans.

What we all REALLY should be focusing on for the next decade is making sure our politicians are held MORE ACCOUNTABLE from the city level on up. That is exactly what got us into this mess in the first place-giving elected officials free rein. When you have 100% corrupt people in Congress like Barney Frank, Chris Dodd, Richard Shelby, Michael Oxley, Paul Sarbanes – who ALL knew about Fanny/Freddy anywhere from two to five years ago, THESE ARE PEOPLE THAT SHOULD BE FORCED OUT. When you have Nancy Pelosi funneling money out of her PAC and earmarking bills to benefit her husbands leasing and real estate firms, that is the kind of corruption that we the people can no longer stand for. When you have a mayor wanting to put an unwanted, unneeded, electric train set in downtown Boise just to build a monument to HIMSELF, he needs to be called out for it and in no uncertain terms be held accountable. I have spent countless hours contacting every elected official including Bieter, Otter, his nitwit pal Gwartney, my state house reps and senators, our state senators and reps on every single issue that I feel is wasting taxpayers time and money. YOU SHOULD BE DOING THE SAME. Otherwise, we are just going to get what they give us. If you don’t take the time to try and right the wrongs of our elected officials, DON’T COMPLAIN ABOUT WHAT THEY DO.