I didn't write this blog entry.
About two weeks ago one of my most favoritist people asked if he wrote an article about capitalism would I post it on my blog for him. That person was my brother. Knowing my brother as I do I figured it would be something worthwhile and I couldn't wait to read it. At long last, last night he sent me the article.
My brother lives in Joplin, Missouri with his wife and son. He also has a daughter, son-in-law and two grandchildren who love their grandpa to make movies of them. I am on the receiving end of many of these short movies.
Anyway, with no further "ado," my brother's blog article on capitalism (oh, and by the way, he said I could use his name but I was afraid if I did the Editorial Page Editor of the News-Leader would have a glory fit or something, we can't have that!):
What's happened to fairness???
According to Answers.com, capitalism is:
"An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists."
"In such a system, individuals and firms have the right to own and use wealth to earn income and to sell and purchase labor for wages with little or no government control. The function of regulating the economy is then achieved mainly through the operation of market forces where prices and profit dictate where and how resources are used and allocated. The U.S. is a capitalistic system."
...and it's a good system, the greatest in the world. I have always supported it, and I suppose I still do, but, here lately it seems to me that, for this system to work properly, there needs to exist a certain amount of "fairness." It also seems to me that the term "dirty tricks" would more accurately describe the situation today. It seems to me that nowadays the only basic concern of any business is to do whatever it takes to separate the average consumer from as much of his money as possible and as quickly as possible. Often this can and does involve "dirty tricks."
Are too many of us too gullible and easily manipulated by these money hungry conglomerates??? I'm certainly afraid that may be the case for a larger than should be percentage of our population. Has business decided it is easier to prey on the weak and ignorant in society than to make a fair and reasonable profit from fair and reasonable people???
Now, I'm sure that many reading this will think maybe they are too smart to be taken in by these "dirty tricks," and that may well be the case, but I fear that if the percentage of those who "don't get it" grows too large, then we all pay. In fact, I think we are all paying now.
Have we all lost our sense of value? Do we question things that don't seem to make sense? Do we demand an answer to obviously ridiculous charges? Or, do we all simply "shrug it off" and go about our daily lives?
Just what am I getting at anyway? Lets start with some "stupid tricks"
Burger King... and "Stackers"
For quite some time the Burger Kings in our area were running their double cheese burgers as a "manager's special" for 99 cents. I noticed, while that was going on, (full disclosure, I love Burger King double cheese burgers) they had a new ad campaign for their new menu item, the Stacker.
Turns out that a Quad Stacker (4 meat patties) ran $4.49 for the sandwich only, so I was trying to figure out why I should pay $4.49 for a Quad Stacker when I could buy 4 double cheese burgers (8 meat patties) for the same amount? I think in the end I decided I should do it to help them pay for the cute advertising they did for the Stackers... (the cute, rough, little bitty guy) but then I came to my senses and ate a bunch of 99 cent double cheese burgers (one vice I can't seem to shake).
Something else in the realm of burgers that has been bothering me is the super deluxe, ultimately cool burgers we can buy.
Take a Ruby Tuesday's, for example, or pretty much any nationally recognized "fun," casual eatery that offers great burgers. These great burgers generally run about $6 to $8 a piece (for generally about a 1/3 pound burger). So, I did a little math, the problem being how much would it cost "me" to make the same burger?
No doubt, they have a nice large selection of very delicious sounding burgers. Let's take a simple one, like, maybe, a bacon cheese burger. I don't know about anyone else but we usually have some cheese and bacon on hand, but if not, the cost would run about $2.50 for the bacon and about $1.75 or so for American cheese slices. Now, "we" catch cheap, greasy ground beef on sale often at 99 cents a pound, but let's go all out and get some nice, ground chuck on sale for say $1.69 a pound. That's a total of $5.94 and the good part, I can make not one, but three 1/3 pound Bacon cheese burgers now! I'll even have cheese and bacon left over for tomorrow!
But that's too simple maybe...
Let's look at one of their tricks that's actually a pretty good one. Take that gorgeous TRIPLE PRIME BURGER (their caps not mine). What they tell us is it's fresh (that's a good thing) USDA prime (also a good thing) ground beef... hmmm... isn't that what I catch on sale for 99 cents a pound??? (not Prime of course...). BUT! It also contains prime tenderloin, prime ribeye and prime sirloin, "blended" (my quotes) and it's grilled to make the "finest premium burger".
What is it that they do not tell us???
Wouldn't it be interesting to have the percentages at hand??? I'm guessing this baby will set you back about $12, if not more, so I'd kinda like to know what percentage of the burger is prime ground beef and what percentage is made up by those other wonderful (and wonderfully expensive) cuts of beef. That's all I want to know.
Of course burgers are silliness maybe, but I think there is much more going on than over-priced burgers...
Being a news and market watcher myself, I have seen and heard plenty about the sub-prime lending market and its current "problems," but it took me a little while to ask myself, "What is it?" "Who does it affect?" I guess it turns out that it, it being mainly predatory lending for the purposes of this article, effects many of the most venerable members of our society. Those who may genuinely want to participate in our economy at a higher level but for whatever reason may not be blessed with a large income.
From what I have read myself, some lenders intentionally lead many people into higher interest loans than they should be paying, due only to their ignorance of the market. They intentionally over charge both interest and as many fees as they can tack on without ever caring a whit about what the eventual outcome may be to the borrower. On the contrary, it seems many of these loans are made with the hope that the borrower will default so the lender can pick up the property for a song.
Not everyone in the world spends alot of time understanding the difference in a fixed APR and an adjustable APR. I think nowadays, when it comes to business, the word adjustable should get your attention quickly because it seems the adjustment will usually go in their favor, not yours.
At any rate, this isn't a book, it's a blog entry, so I'll just say I think predatory lending is much worse than what we will ever see reported on the TV or hear on the news. It is business intentionally stealing from customers. Does that make sense? I have a hard time understanding it myself. I guess maybe it's more like business stealing from customers who allow them to, through ignorance or otherwise.
So, burgers are silliness, and hopefully, most of us are too smart to be taken on bad loans.
What about something that affects all of us???
Ever looked at your gas bill? Of course you look at the part that tells how much you owe this month. But I mean have you ever really looked at your gas bill???
Mine is kinda "funny" looking.
Take this month as an example. We have an electric water heater and a gas stove (range) in the kitchen. We also have a gas furnace which of course, we are not using currently.
I, (apparently being a person with too much time on my hands) began to wonder just what a "Customer Charge" was. I mean, I understand that I pay for the gas I use and I understand that I pay more for it than the gas company does. That is capitalism, after all. A fair profit on products and/or services rendered.
What I was wondering is, if the gas company is selling their gas to me at a higher price than they paid for it, thereby making a "profit" then what exactly is a "Customer Charge"???
So, we called (actually my wife called, she's great on the phone :)
"What exactly IS a "Customer Charge?" she asked. I, personally, was a little confused by the answer:
"It's a charge that the federal government allows us to charge."
So, my wife says, "Oh... Well what is it? I mean what is it for?" The answer???
"It's a charge that the federal government says is ok to charge our customers."
OKAY... As it turns out, coincidentally, I suppose, an explanation of this "Customer Charge" now appears on the back of our statement. What does it say, you ask???
"Same fixed charge every month designed to allow (company name) to recover a portion of its costs associated with maintaining customer accounts."
That IS a quote off my bill, but to me that sounds more like, "padding our profits at your expense."
I always kinda understood that the way it worked was that those costs came out of the profit you made in selling your product and that if you could not make enough profit to cover your expenses and still have some profit left over then maybe you should close the doors... must just be me...
AND... if you'll look hard you can find this same, somewhat mysterious charge on your electric bill and water bill, as well (TWICE on MY water bill! No kidding!)
But what really gets me is the percentage of the total bill that this "Customer Charge" represents!
On my latest gas bill the $24.62 "Customer Charge" represents a whopping 62% of my $39.61 bill! 62% !!!
Electric bill??? "Customer Charge" = 11%, plus they add in the "Franchise Fee." Doesn't that sound like something they should be paying???
Water bill??? "Customer Charge" 31% of the total "water" bill. Waste water charges. Customer charge??? You bet! Separately... representing more than 68% of the total waste water charge!
What gives here?! I'm ready to scream!
Which leads me to the cable company... lol.
Once again a simple question, or actually more like a simple answer for us. Let me explain...
Our cable bill runs like $105 a month (makes me feel like an idiot but we pay it). That $105 a month covers a package deal that includes 3 components, basic cable, digital cable and high speed internet access.
So, I was thinking... What is this Digital Cable part of the package that we are paying $30 a month for??? It's our extended channels. We have some channels in the 300 to, like, 394 (even though there are actually about 32 channels there...) so, we talked and we thought and we decided that, out of those 32 channels we occasionally actually watched about 5 of them. So, we thought, we'll just drop the digital part of our package because we felt like $30 a month was a bit much for 5 channels.
We called the cable company (my wife called, actually, as I said before...). Yes, sure they could drop the digital portion of our package but it would only lower our bill by $5 a month... WHAT?! You mean I pay $30 for it but you're going to charge me $25 a month to drop it?!
Yep... That's the way it works.
Credit card companies???
Did most of you know that a few years ago there was no such thing as an "Over limit fee"? Do most people understand that if you pay the minimum payment on a $2,000 credit card balance that it'll take you, like, 20 years to pay it off?!
Do most people understand that it's a bad idea period to carry any credit card balance at all? We all know someone who got themselves in a little trouble with their credit card(s) so they refinanced their house and paid them all off. Only problem is, we also know someone who then ran their credit card(s) back up again... So now they have the same trouble they started with plus a second mortgage to pay. Brother...
My wife and I had an epiphany a few years ago, about money and the way it works for and against you. We try to make it work for us now and do a pretty good job of it. We owe no one. In fact, we may have swung too far to the other extreme now. Example: I tear all of our paper towels off the roll, cut them in half, fold them once and put them in the napkin holder. It saves us 50% per year on paper towels, ridiculous??? Maybe. I also cut our bounce dryer sheets in half, same deal. Oh well..
So am I a conspiracy nut? Am I an alarmist? Am I just naive? I don't know... Am I???
Should we all ask more questions and complain more loudly about being victimized by those who pretend to "serve" us??? I think so...Until then, being a capitalist, I think I'll invest in utility companies. Now, that's capitalism...
(by Scott Phillips, shhhhhh!)