Voting made easy: thumbs up!

The upcoming November 6th, 2012 presidential election, is one of the most anticipated events of 2012.  Both, Barack Obama and Mitt Romney, try to lure the undecided voters with speeches, dinners, celebrity supporters, promises, and paint.  Yes, paint.  Painting the other candidate in bad light. 

But the hottest topic of the year is the boomerang issue of the state voter ID laws.  Like the hanging chads - remember 2000 presidential election? - the voter ID laws are being reviewed and decided by the United States courts.  93-years old Viviette Applewhite, suing Commonwealth of Pennsylvania, leads the pack.

Chad, by the way, is #121 out of 1220 of the most popular names in the U.S.  Not to shabby.

Naturally, online state-by-state voter ID maps present the current law information tailored to their political or financial interests.  Whatever your political views are, the maps can give you some idea on the law at each state: National Conference of State Legislatures, Lawyers' Committee For Civil Rights, Rock The Vote.

The race card is being played heavily in this debate, since the government officials finger minorities as the largest group with lack of or non-valid IDs.  Disenfranchised voters push back with lawsuits, and the vicious circle continuous. 

Those who demand national or federal identification card, mostly to prove citizenship status, overlook the obvious - passports and passport cards.  Although, state residence and address are omitted from those documents, the IDs provide a solid proof of citizenship.  If federal voting system would ever come to existence, I'm being sarcastic here, we would have an official federal ID available through the USPS.  Bonus: saving mail carriers careers.

Source: http://travel.state.gov

Placing the political or racially driven motives on the back burner, how can an average person manage all the government, business, school, and work requirements for a valid form of ID, without one?  Sooner or later, one must present or use an ID to accomplish some of the basic tasks in life.  Even the Illinois Department of Natural Resources, lists a driver's license/state ID as one of the choices to apply for the fishing license.

Top 10 list when the state photo ID is required:

10. Taking a state exam - that would include medical one

9. Taking commercial flight - pat down search included

8. Enrolling at college - not the electoral one

7. Being pulled over for speeding - is that less dangerous than texting?

6. Closing on the house - there is a reason banks call it mortgage

5. Filing taxes using e-file - thank you TurboTax!

4. Opening a bank account - not sure about the offshore one

3. Paying by check at the grocery store

2. Entering the nightclub - don't confuse with strip club

1. Getting served at the bar - use with caution Mario: Kapitanska Vodka

So where do we go from here?  It might sound simplistic but I vote for a voter registration card and a bucket of electoral ink.  What's the better way of announcing your accomplished civic duty than flipping your inked finger saying, yes, I voted today!

The bittersweet fruit of the hard LIBOR

Courtesy of Bubbels @ SXC

We've heard it all: free trade, free markets, market transparency, less regulations, self-policing, and choice for the customer.  With an endless supply of the catchy slogans describing the most favorable environment for thriving business, recent hot guano scandal with London interbank offered rate, aka LIBOR, strips the financial institutions from their exclusive image of Yoda-like knowledge and informed decision making.  

After reading several articles on this latest issue, I found the CNN Money article to be the most comprehensive, explaining how the LIBOR rate manipulation would affect the average folks.  

What is LIBOR?

In short: it's an interbank rate at which banks lend each other money. It's published every day by Thompson Reuters news conglomerate after British Bankers' Association collects the rates from up to 18 major banks.

Should we care?

Yes.  Because, according to the previously mentioned CNN Money article:

Libor is the world's most important benchmark for interest rates. Roughly $10 trillion in loans -- including some credit card rates, car loans, student loans and adjustable-rate mortgages -- as well as some $350 trillion in derivatives are tied to Libor.

How is LIBOR different from US Prime Rate?

The U.S. Prime Interest Rate is used by many banks to set rates on many consumer loan products, such as student loans, home equity lines of credit, car loans and credit cards. If you read or hear about a change to the U.S. Prime Rate, then any loan product that is tied to the Prime Rate will also change, like variable-rate credit cards or certain adjustable-rate mortgages.

                    U.S. Prime Rate = (The Fed Funds Target Rate + 3)

                   The Current Wall Street Journal Prime Rate is: 3.25%

Any surprises for us?

Short answer: yes.  If your credit card or a loan is tied to LIBOR instead of US Prime Rate, you could save some money.  But if your hard earned cash is invested in derivatives or some other overcomplicated investment products, you most likely lost some money.  

Now for the big guns.  
If your municipality invested in one of those LIBOR-tied products, guess who lost money?  Your state or local government pension and possibly real estate taxes would be impacted.  Why the taxes?  Someone has to make up for the losses.

Gordon Gekko once said: "Greed is good".  Yes, but is the whole worldwide banking system rigged against the uninitiated?  Is the unhealthy greed becoming new low of the financial sector?  The newest dangers of global banks are floating to the surface.  Hopefully, people can still swallow the taste of the bittersweet fruit of the hard LIBOR.

Cashless society reality

With the recent introduction of yet another form of an electronic payment, Google Wallet, one must wonder about the inevitable transformation to a worldwide cashless society.  Not surprisingly, question of cashless transactions is a very popular topic recently.  One of the more comprehensive posts in the blogosphere, lists several great points.

Photo by penywise at SXC

As an exchange student in Denmark, I watched Danish students paying for their beer with debit cards at several credit card terminals mounted right at the bar.  No cash, no tips.  That was in 1999.

Coincidentally, as an IT student, I had a chance to visit one of the two major bank and credit card processing centers in Denmark.  In the underground bunker, with an exact redundant mirror site couple doors down, racks and racks of servers tracked every transaction in the country.  For a land of 5.5 million people, how easy it is to keep a detailed financial profile on every citizen? 

The history of credit cards and the evolution of electronic transactions is not completed yet.  Smartphones are just the next step to strip the society of the anonymity of cash.  All in the name of convenience and lower costs.  At the same time, access to cash is becoming more and more expensive to regular customers.  We all used out-of-the-network ATMs at 2:00AM with scalper surcharge fees of $2, $3, or $5, nice try Chase, just to be smacked with another fee from your own bank.  So much for cutting the cost. 

The convenience of paying by debit card, phone or a chip implanted in your body, brings up many security and privacy questions.  To avoid lawsuits and loss of customers, large corporations rarely disclose hacking attacks only to be caught with their pants down after a major security breach.  Sadly, the web security technology just cannot keep up with the black hats out there.

Putting aside all the conspiracy theories and corporate secrets, who would benefit the most from all virtual financial transactions? 

The short answer: banks and governments.

Bruno S. Fray and Friedrich Schneider cite these numbers from some countries:

The South European countries (Greece, Italy) have an underground economy almost one third as large as the officially measured GNP: followed by Spain, Portugal and Belgium having a shadow economy between 20-24 % (of official) GNP. According to these estimates, the Scandinavian countries also have a sizable unofficial economy (between 18-20 % of GNP), which is attributed mainly to the high fiscal burden. The “central” European countries (Ireland, the Netherlands, France, Germany and Great Britain) have a smaller underground economy (between 13-16 % of GNP) probably due to a lower fiscal burden and moderate regulatory restrictions.

The shadow economy in the United States is estimated to be between 8 and 10% of GNP.
That is a nice chuck of extra taxes when we realize that the U.S. economy is valued at $15.17 trillion.  And since the U.S. debt is now equal to economy, any increase in government coffers is welcomed with a grim. 

Tax that, IRS:                  

8% of 15.7 trillion = $1,256,000,000,000 

10% of 15.7 trillion = $1,570,000,000,000

With the total control of financial records, the governments can basically control, read: manipulate, the private assets of all human population.  I know, I know.  They would never dare, the financial records need to be disclosed anyway, it's all for the protection of the good citizens, so on, so forth.  The fact is, who controls the controllers?  What about our right to privacy?  Combined data from Facebook, toll road transmitters, banks, credit card companies, and medical records, leaves nothing out for the ever wondering eye of the government.  That would be the Treasury Department.  Or your hacker neighbor, if you are (un)fortunate to meet one.

The banks, of course, have a different intention in the cashless society.  Having all your finances on the platter, banks can ruthlessly rule your private life.  Credit sore would become irrelevant overnight if the bank would know all your spending habits (ha, it already does!), bill your have to pay (it does already!), and account balances (yet again) without the wiggle room of stash of cash.  But the most concerning issue with the banks is the administration of the fees and access to your own money.

Without cash, there would no cash-only revolt against a bank with surprising new debit card fees.  What about access to an alternative form of payment during extended periods of blackouts or major disasters?  And the cash gifts to your loved ones?  People who work for tips?  Endless fees and taxes. 

Today, I dare to say, we are just not ready for the all in virtual cash society.  So, cut your plastic, live fantastic.  Now, where's my debit card?  I need to pay for my grande vanilla skim latte.

Privatization of public services

We all have read the headlines about the recession, unemployment rates, lack of public funds, and the struggling local governments trying to come up with creative ways to patch up the limping budgets.  What public services can be utilized to earn some mas dineros?  Quite a few.

For starters, how about fire trucks?  Baltimore City Council member William "Pete" Welch, is willing to allow advertisements on fire trucks to inject some cash into failing fire stations.  The money would be used at the discretion of firefighters at each station.

Photo by andrewmalone via Flickr CC

The full article can be read on the Public Radio International website:

Cities across the country are considering the question of paid sponsorship — selling advertisements to raise money.
During the recession, KFC has placed ads on manhole covers and fire hydrants in Indiana, Kentucky and Tennessee in exchange for paying for cities' infrastructure costs.
In Philadelphia, McDonald's has put ads on transit fare cards, and in Utah, pizza chains are now advertising on some school buses.

What ever happened to the tax revenue money that city collects?  Will Pizza Hut or Subway vehicle decals or uniform badges pay for the firefighter pensions as well?  Would Home Depot receive quicker service because fire trucks are covered in orange stickers?  Can local news report that today's apartment building fire is brought to you by Starbucks?  

Not so fast.  Below are some ideas on how to handle this hot potato of a burning subject.  

1. Privatize the Fire Departments - cities would sign a three year contract for emergency services based on affordability and quality.  Added bonus: community would be free of any future pensions.  

2. Let insurance companies run Fire Departments - you still would receive the service but the cost would be included in the home insurance (homeowners) or emergency fee (renters).  Added bonus: customers could shop around and change their providers.  Competition would lower the costs.

3. Trim the costs - since average household needs to cut down on spending and look for savings, why not run that fire truck for couple more years?

4. Have a tax referendum - allow more spending transparency so the general public is well informed where the money is going.  People do not like waste but they will understand a need.

The bottom line is, well, the bottom line.  If you can't afford something, separate your wants from your needs and then make a decision.  Firefighters job is saving people's lives and protecting property.  Running advertising campaigns and selling fire truck space is simply wacky.