A Typical American

May 13, 2009

Jamie Dimon is Gunna’ Buy Me A Pony

Recently Elizabeth Warren,

Were only all lying to ourselves this much
Were only all lying to ourselves this much

Chair of the Congressional Oversight Panel for the TARP Program, sat down with Charlie Rose to discuss amongst other things the Treasury Stress Testing of Banks, and Credit Card Agreements.  I didn’t get to see the entire interview but if you’re curious please feel free to view a clip http://www.charlierose.com/view/clip/10296.

Despite everything that was said in the 20 minute interview, what struck me the most was Ms. Warren’s incredulous comments about “having a place at the table for the American family”.  The table being the discussion between banks, and what responsibilities they owe to the American people as a result of the massive amounts of bailout funds they have received over the past 18 months.   Now I’m not saying Ms. Warren is lying, or even being disingenuous herself, she could truly believe the lie she is telling. Two books, “The Two Income Trap” and “All Your Worth” would suggest her idealism is genuine.

It’s no mystery that in the 21st century, finance has dominated the lives of almost every American.  It is near impossible to live your life without borrowing some money, from somewhere, at some point in time, whether it is to buy a home or a car, finance your education, pay for medical expenses, or simply bridge the gap from paycheck to paycheck and keep the lights on.

Saying however, that banks “owe “the American people and should adapt their policies and profiteering to better the average persons economic life is disingenuous.   Sure it’s a wonderful idea, but it’s about as plausible as Angelina Jolie or Brad Pitt showing up to your front door in their underwear, professing their undying love for you, or most people under the age of 25 paying of their student loans by the time they are 30.

True, over the coming months, we will hear the same hyperbole from elected  and appointed officials, yelling to the media that oversight and accountability will rue the day, and they will make sure that financial products are developed in fair and equitable ways, but that would be ignoring the view of the banks, which will not change.

Make no mistake that banks do not and will not give two hoots about the American family. Make no mistake that the polyglot of debt instruments created over the past 40 years is specifically designed to keep people in debt for eternity. If you don’t believe me, take out a 500 dollar credit card, buy something, pay it off the same month, close the account, and watch your credit score drop.  Banks have no interest in people actually fulfilling their debt obligations.

How much money, how many donations, and how many promises of favors, will it take for them to simply side with the banks?   It is true, that we elect representatives to have our best interest in mind when they develop and execute their policies, but it doesn’t take a genius to realize that like everything else, there will be a fair amount of window dressing that’s proposed, and adopted, that will simply glaze over the underlying fact that everyone will still be paying their lives away to bank x, y, or z, until the day they die.


May 12, 2009

Journalism 2.1

I was originally going to call this post Journalism 2.0, but decided that a) most major media outlets have already embraced new means of delivering content to its audience and b) someone else probably already used that title, because let’s face it, most people aren’t very original.

To be honest, I’m pretty slow at coming around to blogging, Facebook,  Twitter, videos, audio pod-casts,  providing a sample of my DNA, disclosing my sexual orientation, and providing written directions to my home and how the psycho Internet stalker out there  should proceed to kill me(gunshot directly to head please!).

The idea of utilizing  micro-payments for internet newspapers is nothing new.  I remember watching Walter Isssacson propose the idea months ago on Charlie Rose, and since then, many people have thrown out their ideas on how paying for Internet editions of newspapers should work. I could post links from all sorts of publications on the issue, but frankly, I’m too lazy to do that, and you know how to use a search engine.

While a micro payment system for newspaper content is a great idea , I would think credit card processing fees may be  a practical  problem. The way it has been described so far is on its face: you want to see an article online, you have pay 1 cent, or 5 cents, or whatever.  But  say for example you have individual transactions at 1 cent or 5 cents each. Well, if you tried to charge a credit card for 1 cent, that one cent would go right in the pocket of the credit card processor.  Merchant agreements between processors have fee schedules and 1 cent transactions will cost them 1 cent to process. So simply speaking, that doesn’t work.

What the newspaper will have to do instead, is have an internal credit system, where say you buy packs of 100 article credits for x dollars, are charged x dollars for that credit, and then the credits are deducted as you view articles.   I’d also suggest charging different rates for printing or emailing an article, and simply viewing an article. You always could charge different rates for video or audio content.

Convincing Consumers of all of this: paying for tokens, for something used to be free, is going to be, well, next to impossible.  Newspapers and others, will have to provide enough value added services to make this proposistion digestable for the average consumer.  Something tells me no matter how many newspapers go the micropayment route, at least one or two will push the idea of staying free to compete with the others.

Of course, a payment system is  going to cause a great deal of trouble for the blogging world, which relies on linking to content from newspapers and other journalism outlets.  How will payments affect them?  Depending on context and purpose, people have certain rights to reproduce copyrighted material of course, but how will blogging be affected by having to pay for the the content its linking to, and what steps will newspapers take to protect their property rights that(in the world of mircopayments) now have a more concrete, and specific, value?

I would not be suprised to see this paradigm shift require legislative action. Perhaps not in the short term, as most of the first of things goes uncontested, but when enough of the market goes to a payment model, legal intervention will follow with the possibility of  trips to the supreme court before any new model can really become established and a societal afterthought

What do you think? Please let me know by commenting.

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