Ed Wallace

Populism

Merriam-Webster defines “populist” as a member of a political party claiming to represent the common people. On the other hand, as columnist H.L. Mencken wrote almost a century ago, “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

It is important to remind everyone that those who have run for the presidency have often done the exact opposite of what they promised once in office. In the elections I remember well, starting in 1964, LBJ promised he would not send American boys to do what Vietnamese boys should do for themselves. In 1968 Richard Nixon had two campaign promises: First, he had a secret plan to end the war. Second, he would be the law and order president. Jimmy Carter promised to bring integrity back to Washington, while Ronald Reagan said he would slash the size of government, taxes, and the deficit. George H.W. Bush said, “Read my lips. No new taxes.” Bill Clinton promised never to cheat on his wife again. George W. Bush said America would quit throwing its weight around in the world and be a humbler nation. Barack Obama promised us Change You Can Believe In. And Donald Trump wrapped himself in the flag of populism to a degree not seen since presidential candidate William Jennings Bryan delivered his “Cross of Gold” speech in 1896.

My point: Every president in my lifetime proceeded to break his primary campaign promise almost immediately once in office. Yes, even Reagan; he did cut taxes early, but raised them numerous times. The deficit went from under $1 trillion to $3.7 trillion, and the size of government actually grew slightly, after his inauguration.

Worse, regardless which person or party comes into power, an unspoken concept continues to grow and move forward. It’s a very anti-populist idea of public-private partnerships for roads and other infrastructure. It’s always sold under the two-pronged idea that 1) people hate taxes and 2) private industry is much more efficient than government anyhow. Sounds great, but it’s completely misleading.

True, your gas taxes don’t go up (or maybe they do), but you — and generations to come — wind up paying far more in tolls than you would with any possible gasoline tax increase. Worse is that even now in Dallas/Fort Worth, those tolls don’t deliver the promised lessening of congestion.

To be fair, however, a growing metro area like Dallas/Fort Worth may never be able to build enough roads to handle the growth in its population.

How is that Populism?

Adding to the fun, think of this as the start of a toll road to space: This week we found out that the current administration would like to turn the International Space Station into a commercially run venture. I’m thinking Disney would be perfect for this one.

Mick Mulvaney, acting head of the Consumer Finance Protection Bureau, had to deal with a lawsuit against Golden Valley Lending, which was considered one of the most egregious lending predators online; it charged interest rates as high as 950 percent. Legal staff at the CFPB took years to create the case, and the basis of their legal action was violation of both state and federal laws. But in today’s self-proclaimed populist government the slogan has again become “let the buyer beware” — which is in the process of defanging this agency. The lawsuit against Golden Valley is gone.

The Wall Street Journal stated that the Department of Transportation has asked the airlines to “suggest changes or cuts to regulations,” which they took to mean the possible ending of some consumer protections, both recent and longstanding.

A Politico column last Monday claimed that the president is going to demand slashing expenditures on domestic programs. Turns out they were right, but even they couldn’t foresee Trump’s proposed budget would slash it by 40 percent. Because that’s what the common folks who elected him want.

And our Interior Department is threatening to undo protections for migratory birds, possibly to the point that it might actually invalidate both federal laws and international treaties.

The question is, does any of this really improve things for most people? That rarely asked question falls in with the other forgotten question of the day: Why do we not write legislation that is both pro-business and pro-consumer? Because in the end, those two simple questions are all that matter. It’s also the reason people feel the government doesn’t listen to them or address their needs.

When people go to a dealership to purchase a car, they will see locks on the doors of all finance and sales manager’s offices. This is because years ago it was determined that someone, somewhere, some time, might walk into a dealership, grab a customer’s file folder, and steal their personal information. But, despite the fact that this has never once happened, it’s still a huge fine if a regulator walks into a dealership and finds a finance office door open and customer’s file folder out on any desk.

Recently, though, hackers got into Equifax and stole critical data on 140 million or so Americans. That theft of sensitive private data is about the same as if people walked into showrooms across America every hour of every day, went into offices and stole the financial data of every new car buyer — for the next nine years. Dealers would have to pay thousands in a fine for each folder left out, but some have already written that the feds may not do much to Equifax at all.

That’s not the only crazy thing happening, either. Many dealers finance cars with J.P. Morgan Chase. Now that bank, along with others and credit unions that buy loans from new car dealers, look at the overall loan portfolio of individual dealers and may send the dealer notices that they may be charging a specific group, say minorities or the elderly, a little too much in interest. This is the same J.P. Morgan Chase that last month sent a letter to credit card holders, including myself, raising interest rates on our Visa cards 5 percent across the board, to over 13 percent. What’s really crazy about this is that this bank, and the others, could put a dealer on notice for charging senior citizens a half point too much interest, because that’s deemed out of line. But if the bank raises its own credit card interest rates on everybody, that’s just prudent business.

Here’s another “uncommonly” crazy thing. If a new car dealer puts a used car online at a lower selling price than someone simply walking onto their lot could get it for, it’s against the law to call that a special “Internet Price” or an “E” Price. But most of us have been on websites for national retailers that use those exact terms.

As it turns out, critical government laws and regulations protecting consumers have been in place for decades. Every retail installment contract that an automotive customer signs was written to protect them, not the lender or the dealer. Back in the 1990s, American Honda Finance had to rebate money to a large number of customers simply because one line of its retail installment contract was printed in 9-point bold font, and the law stipulated 10-point bold font.

Around that same time, a local Ford dealership was seized and closed, and its management arrested for fraud in its finance operations. But recently some of our area’s most respected car dealers had to ask government officials why they weren’t enforcing Texas state laws covering misleading claims for new car sales. (Other than stopping dealers from using the term “Internet price” online when it fact it might actually be a special Internet price.)

And we must not forget that our nation’s new car dealers have to run every name of a car buyer through a database to prove they are not on a terrorist watch list. So far, and it’s only been 16 years, apparently terrorists have wised up to this one. As of today - no new car dealer has found a terrorist or foiled an attack.

Unequal Protection under the Laws

It would be nice if laws governing consumer protection were more organized and fairly enforced, but apparently that’s not going to be in the cards. Allowing huge computers to be hacked, exposing all of our sensitive consumer data to the world’s computer thieves, is apparently too big a problem to handle in America. But leaving a single folder out with a customer’s information at a local dealership? It’s a wonder the punishment isn’t a lifetime sentence with no possibility of parole.

Offer an “Internet Price” on a used car on the Internet? Baby, that’s going to cost you. But offer customers eight grand off a new car online just to lure them into the dealership, where they find out that offer isn’t real and there’s thousands and thousands of dollars’ worth of “dealer adds” on the cars they have? Not a problem in the State of Texas.

Americans shouldn’t be battling between left and right, but over what’s right and wrong. As it stands a car dealer who might be charging a group of customers slightly too much interest is a problem, but the online predatory lender charging 950 percent interest is just fine as is. One can easily see how far out of balance things are.

Pointing fingers and assigning blame won’t fix anything. But doing the wrong thing on a regular basis, does seem to have wide bipartisan support.

© Ed Wallace 2018; Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. Email: edwallace570@gmail.com

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