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How to bring down the System
There are a lot of angry people out there. I see it every day in my
writing. All you have to do is look at the comments at a site like Zero
Hedge to realize that fact. To some extent you saw this in the last
election. Those who vote (less than half the population) sent a message
and as a result there has been a significant change in the political
landscape.
But what do the voters get for sending the message? A slap in the face.
A few weeks later we get a monster tax break for high end earners, a
roll over of the tax treatment for hedge fund mangers (just obscene),
another $120 billion “stimulus” that won’t do a damn thing but add to
the debt and an extension of unemployment payment for yet another year
(now three years!)
If you pay bills (who doesn’t) you know that all banks, credit card
companies, utilities, insurance companies and all the others are just
nickel and diming us to death. Every month I am nicked for some damn
thing or the other. I think the FinReg rules that were supposed to
protect the average Jane or Joe actually just codified what the bastards
could charge. As a result we get hit with new fees, charges and higher
costs.
The very frustrating part of all this is that there is not a thing you
can do about it. Go write you congressperson, you’re lucky to get a form
response. Get on the phone to your CC provider and bitch over a $25
late charge on a $15 balance? Good luck.
I have been doing something for the past few months that might send a
message. If I continued for the next hundred years it would not make a
dent. If a hundred thousand did as I am doing it would be noticed but
still wouldn’t mean a thing. But if the number got into the millions it
would start to make a difference.
I have been sending 1 cent more than what is due on every bill that I
get. Citi sends a CC balance of $134.82? I send them $134.83.
I have a small sample of about 30 bills that I have been doing this
with. Well more than half get it right. On the next month CC bill you
get the Prior Balance as (-0.01). What this means is that a real person
actually got the bill and the check (or electronic payment) and made the
correct entry and gives you the once cent credit you deserve. This
result should not be surprising as people make incorrect payment amounts
all the time. What I am trying to do is force more human intervention.
That is time and money.
I paid a six-month insurance bill and added a penny to what was owed. So
far I have two letters that show the credit. How much does two computer
generated letters cost? At least a dollar a pop. There is no better
measure of success of my approach than to get a letter like this.
More exciting are the bills that do not pick up the one-cent variance.
When this happens your penny is lost. It will show up in an Exception
Report. Some computer recognizes that there is a penny that is not
properly accounted for. I assume that this happens (accidentally)
thousands of times a day. But what would happen if the number of
Exceptions all of sudden exploded to 20-50 million a month? Once again,
this would force humans to get involved.
The cost of this social protest is very minimal. Say you get 4 bills a
month. 48 pennies a year is the maximum cost. Based on my experience the
net cost would only be 20 cents or so. But the rewards on the 20 cents
just keep on giving. Every month after you can see the results. Either
they do it right or wrong. Either way there is an incremental cost. Your
penny is gumming up the system.
What if 10mm people did this on a regular basis? That would be a half
billion one-penny exceptions a year. If just one in ten resulted in an
“exception” it would mean that there would be an incremental cost
someplace of at least $50 million. In my dream world 25mm people would
do this and get just two letters a year as a result. Cost of that? Who
knows? It would imply 1.2 billion exceptions a year. That would be
noticed. (It would blow their collective minds if this started to
happen)
So if you’re mad at the system and want some revenge send an extra penny
to your friends at the gas-company, electric company, insurer, bank, CC
company, etc. I highly recommend it. The cost is negligible. Yes, it is
true that this form of protest will accomplish very little unless it
catches on like a fad. But should you get (as have I) some evidence that
your lousy penny is in fact causing someone someplace to spend time and
money trying to figure it all out you will beam with happiness at your
success. I am.
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Two things...
1) I pay my bills online, and their systems won't let you overpay. There's no way I'm going back to the old way of paying either, which costs me postage, checks, and the time and hassle of dealing with those fuckers when my payment is late or gets "lost in the mail".
2) Don't you think the end result of all this is just going to be more/higher fees? I don't see the banks sitting around and eating the extra costs.
Minimalism is a movement with legs.
I say that because everyone I know who has gotten exposed to it has not turned back. No t one person has reverted to their pre-simplification and pre-accumulation ways.
I am no hippie or preacher. I simply realize that there is a lot of truth in the saying that "whatever you own owns you."
Many people I've come across seemingly go out of their way trying to cultivate the need to develop more hobbies which requires more 'stuff,' in some sort of odd quest to find fulfillment, even when they clearly don't enjoy the underlying activity. I don't understand that.
Most people probably have 2 to 5 deep passions in their lives, max. The deeper the passion for something, the more time and money (if it's even required, depending) they are gladly willing to devote to it, as they enjoy it, and it brings them real satisfaction.
If people focused on their core passions, filtering the noise out, they could save themselves time and money otherwise expended on non-satisfying things, and they would reap more time and money to expend on satisfying things.
It amuses me when I heard some traders at large institutions bitch and moan about talk of compensation/bonus cuts when there was talk of doing so in the wake of the meltdown, because they were claiming that it is so much more expensive to live in New York City.
I know it's more expensive to live in NYC than many parts of the U.S. The irony is that many of these people are deeply unhappy, and they're trapped in a vicious circle of working at a job with long hours that they hate (not all, but many), so that they can afford to live in a setting that isn't particularly rewarding for them or their families, and they are paying a large premium on everything they purchase and consume, and the kicker is that they don't even get to spend that much time with their kids.
Many of these people would be better off in a job they actually enjoyed, maybe centered around one of their passions, in a lower cost (and maybe cleaner, more rewarding?) area, even if they made less. In fact, by doing so, they might end up with more financial resources by the time all was said and done, and not less, while enjoying their lives far more.
++1 on the whole thing, TIS. we escaped last year from NY after 39 years and fled to Houston, a place we had never been. my family and I feel like we are on vacation every day now and have way more time, freedom, money and energy. I still get the NY Post delivered and I am still saddened by the nonsense that I read about in Albany and NYC and that I used to have to endure but at least I'm not paying for it anymore. NY used to be so bad-ass and cocksure but now wallows in full-on sissification. I love the fact that our earnings are no longer used so overtly to put food on the table for some welfare mother of 8 kids. Not to sound harsh but I had it up to here with that nonsense. You don't have to go "Galt", just relocate your services to a more free place in the States. My wife and I even kept our same jobs, it is definitely possible.
Tru 'dat
(+1)
Good call. Don't forget the classic, "my kid has to go to a $35,000 per year private school"....."be on the critical path"....etc. bullshit that nails these poor saps to the wall time and time again. Most people are, as you said, "stuck" in these jobs, in these lives, which have no meaning whatsoever. A horrible way to exist really.
It's amazing how many people are caught up in the formal education paradigm. Granted, it works well in a robust economy. But we're heading into a decade-long depression where a $100k - $200k formal education won't pay off.
+ 100
Being a country boy at heart, but living in a medium size city, I agree with your premise.
I don't understand how anyone can stand to live in big cities like NYC.
The country would be much better off is people abandoned urban areas for the countryside and went back to farming or some other activity that actually produced something of value.
+1
Hey, I like the tax cuts.
Somebody in small business who just broke through to make $250K isn't rich and needs incentive to grow their business. And tax rates and tax revenues are two different things, Krugman willfully forgets this, too.
70% top tax rate under Carter = top tier paid only 19% all tax revenues
35% top tax rate = top tier paid 40% of all tax revenues
Idea: make Ivy League multi-billion endowments pay a tax, any tax, instead of operating as tax free hedge funds. They talk the talk, but don't walk the walk.
Harvard? Yale? Princeton? Columbia? Stanford? About $75 billion in endowments and MA, CT, NJ, NY, and CA could use a little coin. They average healthy double digit returns in 2010, and while still under-admitting African-Americans -- only 4.5% average all.
Bruce,
I'm a fan of your writing, but have to disagree with you on this one.
As long as the financial institutions are in control, they will pass the added costs back to us. You're cutting off your nose to spite your face.
Better to starve the beast instead. Move your money to a local credit union and buy physical precious metals. Ditch the credit card and use cash. Drop unnecessary services.
We vote with our wallets, not at the ballot box. The only way to break the vise grip of the oligarchs is to opt out.
Agreed to all.
Does anybody else think that this would just get rolled into their cost of business, which ultimately, goes back into the prices they charge you for good/services?
I don't see this working at all.
I can't believe Bruce Krasting wrote a post called "How to Bring Down the System." I always thought of Bruce as a pretty mainstream guy. By the way, the voters put the tax-cutters in Congress. Maybe voters don't want a tax hike on top of their existing problems? Makes sense to me. The whining about the "tax cut" (it wasn't a tax cut, but a tax-hike-avoidance) in the press is really the bureaucratic elite complaining that they can't squeeze you for more.
What get upset about is not nickles and dimes but huge dollars with the Property tax increases. This is in Baltimore City, Md. Their tax rate is $2.38 per $100. Because I rent the propertys they can raise the Taxes as much as they want. With the Housing Bubble they raised my taxes on 2 properties. One from $3,000. per year to $7,100. the other from $3,300. to $8,500. That was a $9,300. increase per year. The one property I paid $70,000. (the one with the $8,500. taxes). I now will rebuy my property back from the City in aprox. 8 years. That is not nickles and dimes but thousands.
In Baltimore City now they have a flush tax. So, everytime you flush your toilet, take a shower or wash your dishes, etc. you are taxed.
They also have increased what I call the Trash Patrol. They are the Zoning and Code Violation Officers. If the lid on your trash can is off the can they fine you $100. per day per violation. It is considered a Criminal Offence and you can go to Jail for the lid of your trash can not being there. You end up having to go to a Kangaroo Court that says you are guilty. Although, they usually reduce your fine to $50. But, the fine becomes a lein on your property. Mutiple infractions cause higher fines. Now they sell tons of chains and locks at Home Depot to chain and lock the lid on your trash can.
In Baltimore County I had a property that had a dripping foset. My water bills went from $38. per quater to $250. per quater and they add the sewage costs onto your tax bill. So, I had $1,000. in water bills and another $1,000. in sewage tax. That was $2,000. for the year, just for water and sewer.
Where does it stop?
It won't stop. Get out of that county. Only thing you can do.
If you can't get out, stay there and suck it up. It's going to get worse too. Municipal govts are getting desparate, raising taxes and fees everywhere they can.
I'd like to see city govts dissolved. County govts can do the job. it would eliminate a whole layer of taxation.
County govts are constitutional. City govts aren't. They're military martial law jurisdictions. Totally unconstitutional.
A flush tax? And a trash patrol? Good God. Like Bruce said, we will be nickel & dimed to death.
Sounds good but unfortunately, any extra costs to the institutiuon will just be passed on the consumer in higher costs/fees. I just pay-off the debt early so as to rob them of their interest. I also look for the XXX-Days same as cash offers and pay them off before the expiration date. That really pisses them off. Once again, robbing them of the interest they hope to recieve by lazy people who forget to pay it off on time.....
Hoser
That is a good thing. Maybe it will induce those people to default on their unpayable debt and sink those banks once and for all.
Yes! I have 3c in a Chase account, but I refuse to close it out. The monthly paper statements keep coming and the letters for 2 years straight now... It is rather satisfying.
I had a 50 cent credit on my shittibank card, due to them correcting their error. Great, I'll just let them waste their postage sending me statements. That worked for ninety days, then they took it as abandoned property, or forfeited balance or some such wording.
Thieves!
My record is 3 years on $0.27 wamu then Chase.
shit, that's a great idea. I'm closing out a chase account too and will follow your lead
I went in yesterday to close a Regions Bank account and they asked me to wait for 20 minutes until the branch manager got back from .... somewhere. This is 2 PM. I ain't waiting for anyone/thing. I'm going to leave a dollar in the account until they close it. The reason for closing it is the newly implemented $8/month service charge for a simple checking account. I've been doing business with the same organization when it was a local bank back in the late 1970s. It has gone thru several purchases to end up as Regions. I'm done. Gone. Buh-bye.
perfect. Those statements cost chase 25-30 bucks. You're getting your moneys worth. Ask them to send you a check. That will cost them another 5-10 bucks.
A little gentle..$40 a person over the whole year, paperwork.. subtle though. I'm for regulating the television... use it for two or so hours a day. If the adverts stop getting in your face, you can no longer be influenced.
cut up your cedit card, kill your tv, vote any/all incumbents out..............
The unemp extension DOES NOT MEAN THREE YEARS. It was an extension of the previous program....thus the max is still 99 weeks.
That is correct. It extended the amount of time that allows for a person to receive benefits, not an extension of the benefits themselves.
Thus, if you are unemployed and have 99 weeks worth of unemployment benefit that is the maximum amount you can receive. Say you draw unemployment for 50 weeks, stop collecting and your remaining benefit (49 weeks) runs out 1 Jan 2010. With the extension you can now receive the 49 week benefit for an additional 99 weeks, or approximately 1 Jan 2012.
That's how a family friend explained it to me- assuming I understood him correctly. He worked for 30+ years in the MD unemployment office. Like Bruce's article, he said most people don't understand the distinction and the unemployment office becomes overburdened with people looking for the extra 99 weeks of benefits.
Bruce,
You're a smart guy and I usually enjoy your articles, but I find this one to be absurd. Besides wasting resources (trees/paper/energy), you're promoting something that will surely be passed back to the consumer, in the form of ever increasing prices and fees. I believe it's more efficient to just pay your bills on time.
Furthermore, you're advocating an approach (laziness) that is the crux of the problem in America. So, we'll start our great protest by sending an extra penny? Somehow, I doubt that any CEOs/CFOs are scared of this tactic (I think I hear them laughing).
America's problem is that we're all too damn lazy. We sit around and bitch on the internet or send extra pennies in protest. This will get us no where. Until we get off our collective asses and protest in public, nothing will change.
If 20-30 mm were doing this a month those CFO you're talking about would not be laughing.
You think the answer is public protest. Maybe you're on to something there. I don't see it happening. As you say, we are too compacent.
But this one is easy. Doable. If it did happen (I doubt it will in a big enough way) then it would make a statement that needs to made.
If you're a sheep send the right amount. If you're not, send an extra penny and tell someone else to do the same.
this really won't bother them since it is all automated...
one thing you can do to mess with some of these cockroaches is to always send back some semi-heavy junk in their self-addressed stamped envelopes that nag you for anything.
even empty ones since that would be less taxing on the postal system
Also, dump the credit cards and use your debit card with PIN.. that takes VISA and Mastercard out to the woodshed
If you hate your trash company - double up with your neighbor and cancel one of your accounts (I don't mind mine, and they are great with all my bags of lawn crap)
for electric - this might be the year solar shingles hit the mainstream
for water - try to trap as much rain as you can.. i still need get some roof gutter tanks
AND GO JOIN YOUR LOCAL TIME BANK
Hilarious and a good idea! I did this by accident to T-Mobile when closing an account the notices went on for at least 4 months that I had a one cent credit lol eventually I asked for a refund and they sent me a check.
I think that T-mobile policy is to hold any credit balance for six months and then they send a check to the billing address.... If t-mobile and others have this action as policy, then I don't see it hurting them... Perhaps on a large scale it might as mr b.k. suggests.
Somewhere I heard once that checks for less than $1 (one) where not quite up to snuff.
But why send their own paper back in the return (postage paid) envelope. Mix and match, and send them the solicitation for the last worthless offer from some other merchant.
Problem though. Even if you think you scrubbed all visible evidence on the return paper garbage, it is probable individually 'targeted' printed with enough embedded 'innoccuous' identifiers to take it back to the zip+4 code. Like tagems in powder.
New Year's regards to Mr. Krasting ..... a ray of hope & sunshine.
They can and will punish customers who dare to create exceptions. If you strike at the King, you must kill him.
Just pay off the card and cut it up. Never use it again....
Shop locally and cut all you're consumption in half....
That will crash the system.. and enrich yourself..
just reminded again, no Christmas presents, except for the kids still at home. No credit cards ever, I lived without a refrigerator for over a year to live on rice and vegetables. It saved me a huge electricity bill and also broke my dependence on a meat based diet. I missed out on getting into PM though. I'm afraid it is too late.
I think it would be a terrific protest if it went viral. I overpaid my Dell credit card by 25 cents and got 14 statements. Finally they sent me a check for 25 cents. Imagine all of them sending out billions of statements with a 1 cent credit each month. Of course new fees would come out after they caught on. But for awhile, it would be incredibly satisfying along with sending back any solicitations in the prepaid enevelope with you dogs information.
I think your result says it all. You totally gummed up they system. The letters and checks cost Dell AT LEAST $20. It didn't cost you a dime. A complete win.
Multiply that by 50 million.
While you know that I'm not a fan of your posts on Social Security, I think this is a terrific idea. Like you, I usually don't pay the amount billed. Instead of $26.37, I'll just round it up to $27. It makes my bookkeeping easier for me than dealing with the pennies. And, you'll occasionally get the crazy responses like that above. Well done.
Good idea but, the bankster lobbyists will buy a new "Ditch The Penny" Law, letting firms keep your penny, not reported as profit of course.
In business, there is the concept of non-substantial amount. The fine print of any contract may in fact specify what that amount is between you and the company. This is a commonly-accepted business practice. The non-substantial amount, either positive or negative, will not be balanced by the company. Business don't need a new law to keep your penny. Note that the term non-substantial amount may be different, depending on the company, but the concept is the same.
One step at a time. Let's do this now, and think about countering the countermeasures later. I'm on it. In fact, I I am on it since 2009 when I added a dollar to a speeding fine.
That's pretty funny. They're nipping you for $150 - $200 and you think you're annoying them adding a friekin dollar? Pretty hilarious. They probably chuckle as they add your check to the bank deposit. Then the insurance company chuckles as the raise your rates.
Ever tried not getting any speeding tickets?
I would love to see them try that. You think our pal Elizabeth Warren would just sit back and let that happen? Fireworks will come if 'they' tried this. Exactly what I want.
Would it be even more effective a protest if you quit using your credit cards entirely? The merchants you buy from would appreciate it, as they 'get nicked' every time someone uses the plastic. I'm not really upset with my power company--just the banksters.
that would do it, want to buy something on the internet, send them a check, wow, they hate checks, they're time consuming, they bounce, the handling costs are enormous. This is what Bruce is really getting at, if you want to gum up the system, write checks. (although that is going to put a burden on Nonprofits more than big banks. Goldman does no retail banking or CCs?)
I think the point is that it's not about the 50 million the industry looses(they can make it up with fees) but that it slows them down and a person who would be processing a mortgage default will have to do those other 'useless' things, if we swamped them with Exceptions like this is could actually grind things to a screeching halt
I think youre a genius :)