Thursday, March 28, 2024
Writing Common Sense to Power
D. R. ZUKERMAN, proprietor
The Old Economic Squeeze

MAY 1, 2005 --

LPR turned, the other day, to a credit card
statement -- noting that the interest rate is 29.740%. Additionally the sum of $39 is requested for being late. That is an annual rate. Not a monthly rate -- at least not yet.

Interest rates like that could send one into bankruptcy, except Congress apparently just gave usury protection from bankruptcy filing.

Over at the Fed, The Wall Street Journal warned, April 29, that another upward turn of the interest rate screw is likely because of concern about inflation.

LPR thinks it would be terrific if Fedchair Alan Greenspan took action against inflationary -- make that usurious -- interest rates charged to credit card customers.

Or, if Mr. Greenspan wanted to say something about inflation in terms of prices (didn't the very wise Milton Friedman instruct that inflationn is a function of printing greenbacks?), could he mention the GPI? (Gas Price Inflation.)

In the past couple of months, LPR has shown prices at several gas stations,
including an Amoco station in The Bronx (Riverdale Avenue near West 230th Street). Here are the latest prices at that station as of April 30 (the photo was
taken earlier in the week). Prices have gone up at this Amoco more than ten percent, lately, and at that rate would go up more than 50% for the year. (Not even the credit card companies are ready to do that to us -- or will they follow oil's lead?)

[Note to LPR clicksters: there are gas stations in the Bronx with even higher prices.]

LPR would ask Chairman Greenspan, is the answer to the all-around squeeze on the middle-class (and let's not forget the parking violations squeeze on motorists --certainly not Mayor Bloomberg's squeeze on drivers) higher interest rates to send the stock market and housing market plummeting?

 

The gas price at the Amoco that has been shown previously -- here up 26 cents as indicated by previous photo -- more than ten percent increase over the past couple of months.


(Between Big Oil and Big PVB, will drivers have anything left?)

Is there no one to tell Alan Greenspan of the counsel from our Founding Fathers that our leaders should stand with the people, not squeeze them. To be squeezed, we didn't need to have the American Revolution, LPR thinks.

If only Chairman Greenspan, when he next appears before a congressional committee, would state, in his hushed, soft-spoken tone, "In my view the economy will do admirably if our political and business leaders follow the counsel of Federalist No. 57 and act 'in the common good of the society,' and hold 'communion
of interests and sympathy of sentiments' with the people. The use of the economic squeeze, by executives and officials in the private and public sector, cannot promote the common good and in my view, is detrimental to the general prosperity of the
country -- and, therefore, to the nation's well-being."