aTypical Joe: a gay New Yorker living in the rural South

Sunday, March 06, 2005

How credit card companies make money

Kevin Drum points to this Washington Post story on credit card penalities and concludes:

Credit card companies now make half their profits from penalties and late fees. They actively seek out customers who are likely to miss payments and end up in a penalty fee spiral, and they make a fortune from them. In a normally functioning market there’s at least a small incentive to limit loans to these high-risk customers, namely the possibility that they might go bankrupt, and the bankruptcy bill before Congress is a brazen attempt to remove even that small but annoying incentive to act responsibly.

Credit card companies want the ability to make risky loans, but they also want federal protection that protects them from bearing the risk that goes along with making those loans. That’s a pretty cushy setup, as long as you can buy yourself enough politicians to make it happen. Apparently they can.

Here’s my take on the bankruptcy bill. The Senate could vote on it this week.

The Sunday Times

I’m in Athens this morning. At Jittery Joe’s, the “legendary coffee shop” (photo), I read the Sunday New York Times.

• Frank Rich on Hunter Thompson:

Read “Fear and Loathing: On the Campaign Trail ‘72” - the chronicle of his Rolling Stone election coverage - and you find that his diagnosis of journalistic dysfunction hasn’t aged a day: “The most consistent and ultimately damaging failure of political journalism in America has its roots in the clubby/cocktail personal relationships that inevitably develop between politicians and journalists.”

• I distrust a life lived meticulously and constantly within the strictest mores of society:

Mr. Rader and his wife of 34 years went to church each Sunday. Sometimes when he left an after-work bar outing to hurry home, his colleagues would privately breathe a sigh of relief; with him gone, they could drink up and tell off-color jokes. As far back as the eighth grade, Mr. Rader was picked for the prestigious school patrol, who carried big red Stop signs and told classmates and drivers when to go and when not to.

• People here seem to look forward to retirement more than those I knew in New York. I find the idea of conventional retirement unsatisfying.

The baby boomers are also shunning the golden-years notion of retirement as an endless vacation. Surveys by AARP and other organizations are finding that up to 80 percent of boomers plan to do some sort of paid work into their 70’s. They see continued participation in the work force as a way to help them stay mentally sharp and socially engaged, as well as financially more secure.

• A film school graduate myself, I agree that studying film is a way to learn about power structures and how individuals influence each other. But more important, I learned then and believe now still that…

...filmic skills are too valuable to be confined to movie world professionals. “The greatest digital divide is between those who can read and write with media, and those who can’t,” Ms. Daley said. “Our core knowledge needs to belong to everybody.” In fact, even some who first enrolled in U.S.C.’s film school to take advantage of its widely acknowledged position as a prime portal to Hollywood have begun to view their cinematic skills as a new form of literacy.

• I still don’t know what I think about the FEC consideration of Internet politicking:

Anyone who decides to “set up a blog, send out mass e-mails, any kind of activity that can be done on the Internet” could be subject to Federal Election Commission regulation, Bradley A. Smith, a Republican commissioner, said in an interview posted Thursday on the technology news site Cnet.com.

“It becomes a really complex issue that would strike deep into the heart of the Internet and the bloggers who are writing out there today,” said Mr. Smith, who opposed regulating Internet activity when the commission originally addressed it in 2002.

The commenter on my post last night makes good sense to me. I’m going to have to read much more on this before I figure out what I really think.