What is Occupy Wall Street?

I've been trying to wrap my head around what's going on in the Occupy Wall Street movement. It's gotten a lot of attention from the press, yet there seems to be very little understanding about what is really going on. Some of the bloggers I read have published stories about crime in the Occupy movement, stories that have seem limited airtime on national news. But my goal has been to avidly read every story I could find, to determine what it's all about. These people are exerting a lot of time and in some cases money, I'd like to find out why. In this post, I'll try to explain what I've learned. In a later post, I'll give my thoughts and opinion on that information.

Two of the best stories I've read come from Bloomberg Businessweek, both available online here and here. While there are more stories out there, these stories do a better job of explaining the movement than most. I encourage reading them. I also plan on reading a book described in the article titled "Debt: The First 5,000 years" by David Graeber, the so-called "Man behind the mask."

The article says that Graeber "as been an anarchist since the age of 16." What's unique is that Graeber would not mind being an anarchist. He admits that "most people don’t think anarchism is (just) a bad idea. They think it’s insane." But unlike most people, "Graeber’s father, (has) seen it work."

The Occupy movement is made of a lot of other individuals, each with their own view of what is going on. As a group, they are still trying to define what all of this means. But there are groups within the movement that have similarities and they attract people sympathetic to their views (I doubt we see many Reagan conservatives at these rallies). They are against money in politics and the crushing effect of "debt: mortgages, credit-card debt, student loans, and the difference in how the debts of large financial companies and those of individual borrowers" get settled.

If there is one defining trait of the Occupiers - it's that. It's the "where's MY bailout" story. Where's the bailout for the middle-aged man, who took out first and second mortgages, credit cards and bought the American Dream on payments, then lost his job in the 2008 fiasco and saw his interest rates skyrocket, while the Bank paid executives huge salaries? Where's the bailout for the college graduate who took out student loans, now can't find a job to pay them back?

The timing of the movement, amidst this overwhelming debt by individuals, bail-outs and unemployment has been the triggering action to bring these people together. Top that off with a conservative movement that wants to cut all forms of aid because they think it's the only way to recover and they hate big government and the movement ignites. The Occupiers "oppose cutbacks and austerity of any kind." (Wikipedia defines austerity as budget cutting, lower spending, reduction of benefits). This comes from the anarchy that Graeber's father saw in Spain after the IMF mandated spending cuts, austerity that is now being imposed on Greece, other nations and even individuals in the US.

What bothers me the most about watching the movement from the sidelines is the similarities between this movement and some movements I've watched from afar in Egypt, Libya and France. Movements in those countries started not as political movements, but as movements by unemployed. When large numbers of people become unemployed and can't find work to pay for basic necessities, they look for answers and frequently rise up against the government. Instead of answers, they see the government keeping them down. I've read other articles that compared debt to slavery, this idea feeds the movement as well.

At the end of the article, reference is made to a policy recommendation in Graeber's book calling for "jubilee" - a forgiveness of all international and consumer debt. I understand the term and have even written about it (although I referred to a city of refuge). I thought it was uniquely Judeo-Christian in concept, but the article says that jubilees occurred "in ancient Babylon, Assyria, and Egypt." The article goes on to say that the "alternative, ... was rioting and chaos in years when poor crop yields left lots of peasants in debt."

Is that where we're headed? Rioting and chaos (which we've already seen)? Is anarchy, or small democracy the answer? Must banks be run as non-profit organizations? Should all debt be wiped clean every seven years? I'm not sure I have the answers, but I'll give my opinion in my next post.

Debt collectors calling your cell phone? * Updated *

Not many people know it, but debt collectors are not supposed to call your cell phone. That's part of the Fair Debt Collection Practices Act, but it may change soon due to the proposed deficit reduction plan. Certainly many people don't have landlines any more and this is the only way to contact them, however, it's not been widely publicized.

Everyone hates debt collectors, I suspect even debt collectors hate other debt collectors. They tend to make lawyers look good. But unfortunately, their job is essential and one way to avoid them is to pay your bills. I know, that's easy for me to say and a little bit callous. To protect the collectee, there are rules that collectors must follow. A lot don't and the FTC says there were 140,000 complaints against debt collectors last year alone. I suspect there were a lot more issues that never got reported. Many people won't register a complaint because they know they legitimately owe the debt.


Bankrate.com does a good job of explaining this change and lists some of the guidelines debt collectors are supposed to follow in this posting.

According to this report from Fox News, "apply only to cases in which money is owed the government." I guess we'll know more as the details come out

VITA/TCE Certified

Ok, my long term readers are probably thinking, hey, I've read this post before. True, last year about this same time I did post an article with this same title (see here). They may remember that I volunteered (that's the "V") to provide Income Tax Assistance to low-middle income people as well as Tax Care for the Elderly (see how I snuck the acronym in there?). I reported last year (here) that I did taxes for about 100 people.

Well, I'm back at it this year. I passed the basic exam one day earlier this year (simple coincidence) and have decided to step up a notch and took the intermediate exam. I passed that one too, so I will be allowed to do slightly more complicated exams this year. We start doing taxes on January 30 and continue until that magic day in April (which my family knows the reason for the magic). I will do taxes on Friday and Saturday afternoons (assuming I get the slots I requested).

This year there are a few changes. There's a new $400 ($800 for joint taxpayers) credit called Making Work Pay. It requires a new form, but it's relatively simple. (Special note to my son - you don't get it because you're my dependent.) And of course there's the first time home-buyers credit, but few of my expected clients are likely to qualify for that (likewise the follow-up home-buyers credit). I'm prepared just in case as I helped out one tax payer after the tax crush last year with their form 5405 and I'm expecting to help another in May of this year.

As usual, one of the most complicated forms is for Earned Income Credit. Sadly, the people who need the credit the most are the least likely to understand. I never even try to explain Advanced EIC. And I spent a lot of time this year trying to make sure I understand the tuition tax credits. Did you know there are FOUR different ways to claim tuition credits? And the law has changed (for the positive) on what you can claim. This credit helps those who are in school (or paying for someone in school). I think it's great because in theory, this will result in a future big income and support for me when I'm collecting Social inSecurity.

I did my own taxes on paper for a number of years. For most people, it's not that hard. You don't have to go to some store-front tax location (that will be gone after 4/15) and pay a few hundred dollars to get your taxes done. If they are that complicated, it's worth paying a REAL professional to have it done. If you need help, look for a VITA site near you (search on VITA on the IRS website). Avoid those Refund Anticipation Loans (see here for another reason to avoid them).

I'll report back here in April with a final comment.

Debtor's Revolt

It seems that Ann Minch of Red Bluff, Ca. has a problem with her bank - Bank of America. The Huffington Post (source) found her YouTube video declaring war on the bank. They have raised the interest rate on her credit card all the way to 30%. According to the article, she's made the minimum monthly payments for "several years" and never missed a payment. She even paid extra from time to time, sometimes $50, sometimes $100. And they raised her rates in reward for the loyalty.

So, Ann is getting even. She went down to her branch and closed her account and moved the money to local community banks. And now she's refusing to pay the balance on the card until they lower her rate. She's upset that the bank got a government bailout and now won't help her.

Well, I'm not sure she's following the right track (even though she has gotten her rate reduced). I'm not fan of BofA, but you have to admit they have ATMs everywhere. If Ann decides to use an ATM and her local community bank doesn't have one handy, she's likely to pay a $3 fee (or more) to get the money she moved. And refusing to pay a balance she legitimately owes can wind up trashing her credit report and causing her to owe more than she started with.

I did a little simple math to find out what her credit card has been costing her. According to the article, her current balance is $5,943.34. At her rate of 12.99%, that's about $772 in interest she's been paying every year. Wouldn't she be better off buying things with cash, instead of charging them? I'm sure she bought some stuff on sale, but did she save $772 each year on sales?

I was curious as I read this, what is my interest rate? See, I don't even know (or care). I pay off my balance each month and don't pay interest. Well, a couple of times in the last few years I have. I slipped up and made a late payment and was charged interest. Net fees & interest over the last 5 years has been under $200. I don't want to pass this off as minor, that's $200 that I could have used for something else. It's a penalty I've paid for my mistakes. Ann Minch's penalty is $772 a year. (turns out my rate is 7.9% for purchases - from Capital One).

Small bills

Back in June, I posted a note about past due bills. In it, I mentioned a bill I got several years ago for 6cents. Last week, I had another such bill come in.

Up until a few years ago, I had a Delta Sky Miles American Express card. I thought I was getting ahead by gaining Sky Miles every time I used my card. But then I had to pay an annual fee. So, when renewal time came around, I called and asked them to waive the charge. They offered me other American Express cards, but wouldn't waive the fees on the Sky Miles card. So I cancelled and went for a better deal.

That's been at least two years ago, if not three or more. Then last week I got a bill from them for 10cents. Yep, they spent 42cents to mail me a bill for 10cents. So, I called and spoke to a very nice man who looked at my account. He could only look at one year's worth of history and he could see my account had been closed all that time. And he could see the 10cents was on the bill for the entire time.

With a chuckle, he waived the 10cents charge and made it go away. I explained that this was the first bill I had received on this account and wondered where the 10cents came from. He said he didn't know and I decided to leave well enough alone.

Now, I wonder, how long should I keep the bill for 10cents? I wrote the name and date of the person I spoke to. Do you think American Express would sue my over a late bill for that small amount?

Past Due Bills

My kids will be horrified at this post. But it's confession time and they need to realize that even dear old dad was once young and foolish. Time takes care of the first, it's debatable whether the second has changed.

When I was in college, the only bill I received was for long distance phone calls. We had something like a calling card, you'd dial the phone number then enter your "secret" code and the call would go through. At the end of the month, you'd get a bill. In the days before the break-up of AT&T, long distance was expensive. A typical five minute call might cost $2.06 (or $7.33 in today's terms). So a short call home once a week could result in a $30 (in 2008 dollars) phone bill. Remember that I was working in a below-minimum wage job and wanted to spend my hard earned dollars on things of value (mostly beer and comic books).

The bills were delivered at the post office on campus in my box. Truth was, that was about the only mail I received. But seeing that phone bill made me cringe as I often didn't have the money to pay the bill.

When money was short, I'd simply push the bill back through the other side of the box. My theory was, if I didn't have the bill, it wasn't due. (Of course AT&T didn't see it that way). Some nice person in the post office would see it on their side of the wall on the floor and put it back in my box. One month was especially tight, so I pushed it back through a second day. And a third. Maybe even a fourth.

Some nice person in the post office would put it back each day. However, as nice as this person was, their tolerance wore thin and their creativity won out. On the fourth or fifth day with no money, I went to push it back through and found they had taped cardboard over the back of the box. No amount of pushing would get the letter through and my I couldn't reach to push it out manually (I tried). I could have gotten a stick to push the cardboard out, but by then I had learned my lesson. Well maybe. But that's for another day.

What I SHOULD have done was to call the phone company and explained my financial situation and worked out a payment plan. Of course this would have meant living within my means, something that is hard for all of us. Eventually I did catch up and I made less calls to home (sorry mom). But I wanted to explain that I do know some of the problems with past due bills.

Now a word about the picture. It may be hard to see, but this is a past due water bill from 1982. Seems I wrote the check for the wrong amount. The letter says I owed them 6 cents and I would have to pay the past due amount plus a $2.25 delinquent charge (a whopping 3,750%). Had they turned off my water, I would have had to pay a $10 fee to restore service.

Trouble was, I received this letter about 5:30pm (after the office closed) and was supposed to have it paid the next morning before the office opened at 8:30. I made an irate phone call and found a very busy woman who told me "no one is getting their water cut off today". Seems a glitch in their system caused all these letters to go out late and she was fielding numerous calls. Next month I paid the late 6 cents and everyone was happy.

When is a rebate not a rebate

Currently, congress and the president are clamoring all over each other to give a rebate to the American people. The current plan is $600 per individual, $1200 per couple and $300 per child. A family of four could get a check for $1800.

I'm not holding my breath. In fact, I cringe every time I hear the news.

The first thing that bothers me is that it is NOT A REBATE!! (Pardon the shouting, it's really not good for my blood pressure). I checked and dictionary.com has 12 definitions for rebate, the first being "a return of part of the original payment for some service or merchandise; partial refund." Many of the people targeted by this so-called-rebate actually never paid anything in taxes. So a partial refund to them would be $0. Actually, that's a complete refund.

The next thing that bothers me is the reason for the so-called-rebate. It's so people will spend it. Hmm. with the push towards digital TV's, that would make a nice down payment. I can see the ads now "We will cash your so-called-rebate check for you and use it as a down payment." Mark my words and when the ads come out, come back and show me (or maybe I'll show you).

Yes, some economic stimulus might be needed, but I'm not sure this is the prescription. How about a national economic education plan that says you can't spend yourself out of debt?