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Congress' Rescue Package Should Be Tied to Reforms (10/12/2008)

    The Bush Administration proposed to Congress a $700 billion bailout of American financial sector. Congress voted to fund $25 billion in guaranteed loans for auto industry. Uncle Sam is playing the role of good Samaritan again. However, the distribution of the pork barrel is usually determined by who cries most rather than who needs most. Business' future rely on the quality of the product and service. For bank loans or credit card services, the government should cap the maximum interest rate at 15 %. Greed, rip-offs, and the practice of usury are not services and should not be encouraged in the banking industry. If a credit card company charges a 25% interest rate, loosens its security measures by allowing criminals to use other people's identities to get loans, and then employs debt collectors or debt relief agencies to harass innocent people to pay for their losses, then I do not think tax payers should rescue a business engaging in rip-offs and harassment. A debt collector had yelled and screamed for half a year on my answering machine. I do not give my personal information over the phone. I only respond to written letters because I can keep the records. The credit card lender or debt collector may not have my mailing address, so I never receive their letters. One day I answer the phone, a debt relief agency falsely told me that I owed a credit card lender $6000. In fact, I did not owe any credit card company a penny. Then he transferred me to a representative and asked me to wait on the line. I had to leave, so I hung up. The debt collector and debt relief agencies called me every day. Sometimes they called three times a day. Sundays would not even stop their calls. A single debt relief agency would not cause much trouble, but there are scores of them cooperating with each other and taking turns to harass people. Therefore, they will never lose their patience. The barrage of harassing phone calls causes a great turmoil to innocent people in our otherwise peaceful society especially during these bad economic times. I wonder why the Department of Homeland Security has not done something about it and why banks have such power to harass innocent people. A bank, debt collector, or debt relief agency that wrongly assigns debt to innocent should be prosecuted, or fined, or should have its business license revoked. If a credit report company allows criminals to ruin the records of innocent people, then we should not allow the credit report company to exist.

    In February 2001, I bought a new Chevy Cavalier. In less than six months, I drove the car one evening and hit a pothole. It damaged the pan holding transmission fluid. When the fluid was gone, the car could not move. I sent my car to the dealer for repair. The dealer told me, "You need to replace the transmission, but the warranty will not cover the repair cost because the pan was hit by something." A car has only two costly parts. One is the engine and the other is the transmission. In less than half a year, my car's value dropped to half. We purchase cars for use, not as decorations. This was obviously Chevy's fault: the car was designed with insufficient road clearance. In order to protect the interests of consumers, I suggest every car model be able to pass a test on a road full of 7-inch potholes. I called GM and said, "I paid extra to have the comprehensive warranty." They said that warranty would not cover either and that I had to call my insurance. The insurance company asked me to report the incident. The accident happened in a dark drizzling evening. I had to drive a couple of blocks to find a suitable place to pull over as soon as possible before I lost all the transmission fluid, so I did not have time to check the road condition at the spot of incident. After I sent my car to the shop, I did not have a car and could not go to the spot to investigate the pothole. I was anxious to get my car fixed, so I told the representative that when I passed a dip, the dip damaged the transmission fluid pan. That was the best information I could give to the representative of the insurance company at that moment. What the insurance company did was to replace the damaged transmission with a used transmission that had less mileage than mine had. That transmission might be five years old. Why did I have to pay a new car's price for a five-year-old car? Why didn't I just use the tax I paid to Kansas Revenue Department for my new car to purchase a five-year-old car? Then it would be much cheaper and simpler. I would not have to pay the premium for the full coverage and I would not need to file a claim for repair. After a week for the negotiation between the dealer and the insurance company, I finally got my car back. I went to the spot where the incident had occurred and located the 4-inch pothole. I went to the mayor's office (Manhattan, KS) and asked for the compensation for my $500 deductible. I aid, "In Chicago, if a car was damaged by a pothole, the city will pay the damage." The clerk told me that in Manhattan I had to prove that it was the city's fault. I filed the complaint. Later, the city's attorney wrote me a letter, saying that he completed the investigation by calling the insurance company. He concluded that my car was damaged by a dip instead of a pothole. How could an attorney complete an investigation without calling the victim? The pothole was fixed but my request for compensation was denied by the city. After I fixed my transmission, I immediately canceled my purchased comprehensive warranty. After the factory warranty ended, GM asked me to join the extended warranty program by bombarding me with phone calls and mailings and e-mails. After I said no to a GM's representative, GM still sent me at least 30 final notices for the extended warranty. I was fooled once, not the second time.

    We should learn a lesson from this economic crisis. Time Magazine says that the economic crisis is due to greed and ignorance [1]. Alan Greenspan, a former financial guru, has been blamed for his laisser-faire policies, and thus down graded to a loser by the media [1]. Nouriel Roubini, a NYU economist, says that the business model of our financial institution is fundamentally flawed. It should be corrected as follows: our business model is morally flawed and our school system is seriously in jeopardy. Nowadays schools only teach students how to get rich quickly rather than how to become a good citizen. The unworthy behavior of graduates should be attributed to the lack of ethical training in school. Newsweek reports that JPMorgan hired graduates from MIT and Cambridge to create a financial monster, the credit default swap, that ate Wall Street [2]. Briefly speaking, CDS means "find a loophole in the law; take the money and run; burden others with risks and consequences." Newsweek's approach to finance is similar to Readers' Digest's to literature. It details speculators' devices just like Readers' Digest describes the crimes that a serial killer committed in great detail. The magazines arouse the readers' curiosity to read the articles, but after they have finished, they wish they hadn't. Who wants to put a criminal design into one's own head. All our magazines care about is sales. They do not consider whether the consequence of unhealthy thinking may corrupt our society. Now it is clear to us that the United States does not need more greedy speculators to ruin our economy. All we need is industry developers with a long term vision for growth. Money can provide relief only temporarily. For a long term solution to solving economic problems, we must resort to virtues and integrity. My solution to resolve this economic disaster is to read Anthology of Chinese Literary Essays (visit Every essay in that collection promotes virtue and is worth reading again and again. Our society worships the dollars sign too much instead of virtue. This economic crisis should awaken Congress. It is time for Congress to think about free higher education for young Americans. European taxpayers' money is spent on free higher education so that their young people can learn job skills to compete in the world market. Their retirees can enjoy a good social security program. American taxpayers' money is spent on building jails to accommodate an excess of criminals and filling bottomless financial holes. Most of our people have to juggle two or three jobs to make ends meet. Our retirees' retirement capital can barely earn any interest if they put it in a bank or may shrink to half if they invest it in stocks. It is obvious to tell whose investment is wiser. I hope Congress' rescue plan will not be interpreted as the welfare program for the rich. That would be too costly for American taxpayers.


1. "The Price of Greed", Time (September 29, 2008), pp.32-37.

2. "The Monster That Ate Wall Street", Newsweek (October 6, 2008), pp. 46-47.