Charleston Man Receives $525 Federal Fine for Failing to Pay for a $0.89 Refill

Some of you may wonder why of all the stories out there today I decided to focus on the $525 fine a construction worker in South Carolina received a for refilling his drink without paying. The reason is to highlight the difference between what happens when a peasant breaks the law versus when a banker does it.

In this case, citizen Christopher Lewis refilled his drink without paying at the VA Medical Center in downtown Charleston. For this horrific offense (a refill costs $0.89), he was hauled into a room by the Federal Police Force and given a ticket for $525. Even worse, he was told not to ever come back to the premises, so he ended up losing his job as well.

So for this undoubtably minor offense, Mr. Lewis received a fine almost 600x greater than the cost of the crime and lost his ability to support himself. Compare that to the slap on the wrist banks receive when they are caught engaging in criminal behavior that leads to the theft of billions of dollars. At the worst, they pay a fine that is only a fraction of the profits and no one goes to jail, so the law actually incentivizes major financial crime. Meanwhile, if a peasant steps out of line, even for the most minor offense, the full brute force of federal law comes down like a ton of bricks. This is one of the main reasons why the social fabric of society is being torn apart, and unfortunately, there will be a hefty price to pay for it in the future.

This is a theme I have written about time and time again, most recently in a two part series, which I suggest reading:

Some Money Launderers are “More Equal” than Others

Some Money Launderers are More Equal than Others Part 2 – CEO of BitInstant is Arrested

From WCSC News we learn that:

CHARLESTON COUNTY, SC (WCSC) - A North Charleston man was hit with a federal fine for refilling his drink without paying. The on-site construction worker says he didn’t know refills at the VA Medical Center in downtown Charleston came at a price, and Wednesday, during his lunch hour, he was slapped with federal charges.

The ticket was issued by the Federal Police Force at the VA Medical Center in downtown Charleston after Christopher Lewis refilled his soda without paying the $0.89. A hospital spokesperson called it a “theft of government property.”

“Every time I look at the ticket, it’s unbelievable to me,” says Lewis, who works construction. “I can’t fathom the fact that I made a $0.89 mistake that cost me $525.”

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The Debt Bubble Expands as Auto Loan Amounts Hit a New Record

Is anyone surprised that the poorest and least credit worthy of Americans are being saddled with piles of debt in order to buy new cars? It’s not enough that a generation of our citizens will toil pointlessly to pay off more than $1 trillion of student loans, we may as well add some other form of debt burden on top of it.

It’s hard to even imagine this is happening so shortly after the last credit bubble train wreck, but happening it is. Creative ways for people to purchase cars they can’t afford have been on my radar screen for some time now, and if you recall, I posted an article last April titled: Just Keep Dancing: Introducing the 97-Month Auto Loan.

Well the dancing has continued, and now we have Americans borrowing at all-time record levels to buy cars. USA! USA!

From CNBC:

A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.

According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.

According to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974.

Those with non-prime credit ratings—or credit scores between 620 and 679—had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.

Not surprisingly, those with subprime credit ratings—credit scores between 550 and 619—had the highest average monthly payment, of $499.

Yep, no doubt this will turn out just peachy.

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How Debtors’ Prisons are Making a Comeback in America

Apparently having 5% of the world’s population, but 25% of its prisoners simply isn’t good enough for neo-feudal America. No, we need to find more creative and archaic ways to wastefully, immorally and seemingly unconstitutionally incarcerate poor people. Welcome to the latest trend in the penal colony formerly known as America. Debtors’ prisons. A practice I thought had long since been deemed outdated (indeed it has been largely eradicated in the Western world with the exception of about 1/3 of U.S. states as well as Greece).

From Fox News:

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new “debtors’ prison” — referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

Reforms eventually outlawed the practice. But groups like the Brennan Center for Justice and the American Civil Liberties Union say it’s been reborn in local courts which may not be aware it’s against the law to send indigent people to jail over unpaid fines and fees — or they just haven’t been called on it until now.

The Brennan Center for Justice at New York University’s School of Law released a “Tool Kit for Action” in 2012 that broke down the cost to municipalities to jail debtors in comparison with the amount of old debt it was collecting. It doesn’t look like a bargain. For example, according to the report, Mecklenburg County, N.C., collected $33,476 in debts in 2009, but spent $40,000 jailing 246 debtors — a loss of $6,524.

Don’t worry, I’m sure private prisons for debtors will soon spring up to make this practice a pillar of GDP growth.

Many jurisdictions have taken to hiring private collection/probation companies to go after debtors, giving them the authority to revoke probation and incarcerate if they can’t pay. Research into the practice has found that private companies impose their own additional surcharges. Some 15 private companies have emerged to run these services in the South, including the popular Judicial Correction Services (JCS).

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McDonalds’ Latest Advice to its Peasant Employees: “Quit Complaining” and “Sing a Song”

Back in July, I highlighted a ridiculous and insulting campaign that McDonalds ran with Visa in which the company tried to help its impoverished employees plan a budget. The only thing the campaign did was embarrass the company by proving that you can’t survive working there.

Well the company is right back at it in time for the holidays, with several pieces of advice for its legions of serf employees through its ”McResource” website. Three of the more insulting pieces of wisdom include:

“Sing away stress: Singing along to your favorite songs can lower your blood pressure.”

“Break it up: Breaking food into pieces often results in eating less and still feeling full.”

I saved the best for last…

“Quit complaining: Stress hormone levels rise by 15% after ten minutes of complaining.”

Are you “lovin’ it” yet? Video below:

 

Colorado Rejects State Tax Increase Supported by Former NYC Mayor Michael Bloomberg

One of the measures on the ballot in the state of Colorado on Tuesday was Amendment 66, which would have raised the state income tax in order to provide more funds for public education. I voted against it for two main reasons.

First, it seems any time politicians want to take money out of your pocket they now scream “public education” as if like some pavlovian dogs we will all immediately say yes. It has become increasingly clear to me, as well as many other Americans, that a lack of money is clearly not the problem. Not in public education and not in a lot of things. Certainly it wasn’t hard to come up with trillions out of thin air when the bankers needed it. So give me a fucking break.

Second, the measure would have taxed certain communities disproportionately to others. This is precisely the problem with centralization. When one community gets taxed to provide for another there will almost always be zero accountability.

The measure failed by a wide majority, and what makes it failure even sweeter is the fact that nanny-state former NYC mayor Michael Bloomberg was a strong supporter. This is the second time this year (that I know of) where Bloomberg tried to influence local Colorado politics and the second time his efforts have failed. The first instance was his support for pro-gun control candidates that faced a recall election.

As I said at the time, I hope the oligarch wastes all his billions on his pet causes no one cares about.

More from the WSJ:

A ballot measure to raise income taxes to fund education in Colorado failed by a wide margin Tuesday, two years after state voters rejected a similar plan to increase taxes for schools.

Roughly 66% of voters had rejected the tax proposal, with 85% of Colorado precincts reporting, according to the Associated Press. The measure, known as Amendment 66, would have raised close to $1 billion a year for schools and overhauled the way the state assigns money to school districts.

The measure had attracted national attention from political observers who saw it as a test of whether tax increases tied to education reform had a better chance of passing.

“Coloradans recognize that now is not the time to raise taxes,” said Kelly Maher, a member of Coloradans for Real Education Reform, a group that opposed the new tax. “We need real education reform before Coloradans are going to reach into their pocketbook and give any more money.”

Supporters said the tax, backed by a coalition that included teachers unions and charter-school proponents as well as New York Mayor Michael Bloomberg and philanthropist Melinda Gates, was necessary to ensure that all Colorado children get a quality education. The funds would be used to improve art and sports programs, as well as provide more support to poor students. Money would also be used to extend classroom time for preschoolers and kindergartners.

You’ve done enough damage to my hometown of NYC, we don’t need your meddling here Bloomie.

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The Carlyle Group’s Latest Investment…Trailer Parks

Earlier this month, I highlighted the fact that the Carlyle Group was the latest in a series of “smart money” private equity firms to decide it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate trade. At the time I noted that:

As it sells apartments, Carlyle is focusing investments in areas such as senior housing, self-storage units and manufactured homes, where demand tends to be driven by life changes such as retirement or marriages, and isn’t so closely tied to changes in employment and gross domestic product, Stuckey said.

Well it appears Carlyle has already started to make its move. As the Wall Street Journal reported on Tuesday: Carlyle Jumps Into Niche Space - Private-Equity Firm Adds Trailer Parks to Its Diverse Portfolio. In case you can’t figure out what appears to be the key logic behind the shift in focus, try this line on for size: 

Because the cost of relocating a home is expensive, residents are less likely to move away. “Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better,” Mr. Rolfe said. “They never leave the park they are in, and the revenues are unbelievably stable as a result.”

In neo-feudalistic America, always, always go long serfdom.

More from the WSJ:

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Meet the Big Banks’ Latest Slave Product: “Payroll Debit Cards”

I firmly believe that the biggest domestic policy error over the past generation has been the no-strings-attached bail out of the mega banks in these United States, and their subsequent designation as “too big to fail” and “too big to jail.”  This has given the sociopaths that run these crony organizations a license to steal, and they are doing a great job of it.

So in the latest bank theft product, employers of low income workers are being persuaded to pay their employees via “prepaid payroll cards.”  Not only are these cards typically associated with high fees, but they also discourage employees from using credit unions for their banking needs.

While companies try to defend themselves by saying they are providing a cheaper method for employees that do not have bank accounts to gain access to their funds, in many cases using these “prepaid cards” isn’t simply an option, but a requirement.  Oh, and take a guess why the mega banks are pushing into this line of business?  Prepaid cards are essentially exempt from financial regulation.  Serfs up boy and girls.  From the New York Times:

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

Anyone surprised that “the morgue” is at the center of this?

“It’s pretty bad,” he said. “There’s a fee for literally everything you do.”

Many employees say they have no choice but to use the cards: some companies no longer offer common payroll options like ordinary checks or direct deposit.

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Darden Restaurants to Slash Worker Hours Due to ObamaCare

Darden Restaurants is a huge company.  It owns Olive Garden and Red Lobster amongst many others, so when this company decides it will start cutting hours due to the imminent implementation of ObamaCare, you had better listen.  From the Orlando Sentinel:

Darden, the world’s largest casual-dining company and one of the nation’s 30 largest employers, said it offers health insurance to all its approximately 185,000 employees. Many are offered a limited-benefit plan. That type of coverage is being phased out under health-care changes, which will ban annual limits for most plans.

In an experiment apparently aimed at keeping down the cost of health-care reform, Orlando-based Darden Restaurants has stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.

Analysts say many other companies, including the White Castle hamburger chain, are considering employing fewer full-timers because of key features of the Affordable Care Act scheduled to go into effect in 2014. Under that law, large companies must provide affordable health insurance to employees working an average of at least 30 hours per week.

This is just more evidence of America’s decline into neo-feudalistic serfdom.  Everyone is going to be working part-time, living with their parents and buying food with EBT cards.  I’m sure this is great for the housing market!  All these investors buying will have no one to rent to.  On the positive front, the unemployment rate might go down as more people work less hours and everyone loses!

Full article here.

In Liberty,
Mike

Where Food Stamps Go to Die

Anyone who has the power to make you believe absurdities has the power to make you commit injustices.

No snowflake in an avalanche ever feels responsible.

Common sense is not so common.

I have never made but one prayer to God, a very short one: “O Lord make my enemies ridiculous.” And God granted it.

In general, the art of government consists of taking as much money as possible from one class of citizens to give to another.

The sovereign is called a tyrant who knows no laws but his caprice.

All murderers are punished unless they kill in large numbers and to the sound of trumpets.

- All Quotes by Voltaire

Where Food Stamps Go to Die
We all know the economy sucks.  We all know we are headed in the wrong direction.  We all know our leaders are corrupt, immoral, greedy and violent.  You don’t need me to tell you that.  One thing that I have noticed recently while watching the financial markets is that despite the fact most stocks charts I pull up look awful, the major indices continue to hang in or grind higher.  While it is not new news that a few large cap stocks are holding the major averages up, I want to focus on one in particular.  Wal-Mart.  Yes we all know Wal-Mart.  Everyone has an opinion; whether you love it or hate it.  In this instance, I’m not so much interested in the company itself, the stores or disturbing images of some of the people seen shopping there.  No, in this case I want to take a look at the stock and ponder what it tells us about the state of affairs in both the U.S. and the global economy as a whole.

Wal-Mart’s stock is up 14% YTD, which is triple the return of the S&P 500.  The stock also packs a dividend yield of 2.3%, so the total return is even better.  In the last month or so the stock has become a real powerhouse as you can see in the chart below.  Crushing any and all shorts under the weight of its rapid appreciation.

Wal-Mart Three Year Chart

I think the above chart, in particular the move in the past month or so, speaks volumes to what is happening on a macro level.  First, from a purely flow of capital perspective, the U.S. economy was the last one to hit recession (most money managers still have no idea).  With Europe in a situation where monetary and political chaos appears likely here and now (and inevitable ultimately) and the BRICs in total free-fall, we have seen a rush into perceived safe havens.  We all know about treasuries and bunds, but at some point people don’t want to continue to funnel money to instruments yielding negative real returns.  So what has apparently happened is global money managers have been allocating more dollars to very large cap U.S. shares as an alternative to treasuries and bunds.

There’s more to it of course.  Nothing exemplifies the ghetto status of the U.S. economy more than the success of Wal-Mart in the face of the ongoing destruction of what was once a vibrant and strong middle class.  In case you missed it, Marion Nestle, Professor in the Department of Nutrition, Food Studies, and Public Health at NYU, came out with some interesting tidbits regarding the food stamp program.  One of them is extraordinarily disturbing.  She shows that Wal-Mart’s gets as much as 25% to 40% of revenue at some stores from food stamp dollars.  This says it all folks.  Food stamps are or course the perfect business for Wal-Mart and JP Morgan, which as I pointed out previously makes a lot of money running the program and keeping the populace in perpetual serfdom.  Meanwhile, guess what another of the best performing stocks this year is?  Corrections Corp of America, ticker CXW, up 41% YTD!  Guess what they do?  Yep, you guess it.  They lock up the serfs that get out of line.  This is the Bloomberg description of CXW.

Corrections Corporation of America provides detention and corrections services to governmental agencies.  The Company owns correctional and detention facilities in the United States and the United Kingdom. Services include design, construction, ownership, renovation, and management of new or existing jails  and prisons, as well as long distance inmate transportation services.

There you have it folks.  What sectors are leading the American economy in the “recovery”: Food stamps and Prisons.  They are actually perfectly complimentary.  If the food stamps don’t work the prisons will.

Meanwhile, in the real economy we have the latest earnings blowup.  Ryder System, a company involved in the leasing, rental and logistical business of trucking lowered its forecast and the shares were smashed.  Too bad you can’t lease a truck with an EBT card, although who knows, that might be in the next stimulus package.

Ryder Three Year Chart.  Thanks for Playing!

The global economy is currently staring into a cyclical recession in the midst of the biggest structural debt and derivatives ponzi scheme that mankind has ever witnessed.  The desperation to keep things looking decent into the election continues at a frantic pace and now there are only four more months left.  As I have said before, if they do not allow pressure to be released until after the elections the comeuppance is going to be way more awful than I care to think about.  Prepare accordingly.

Peace and wisdom,

Mike

Martin Feldstein Suggests Spain Should Force Citizens and Companies to Buy Government Debt

My Take:  Martin Feldstein’s article in the FT from a couple of days ago is so frightening I feel compelled to turn everyone’s attention to it if they have not read it yet.  The focus of the piece is Spain and he spends much of it talking about how “confidence” is the key (one of the 10 Commandments of the Keynesian religion).  While that is to be expected, he then goes on to state that the Spanish government should consider forcing its citizens and corporations to buy sovereign debt.  Here are the key paragraphs:

An alternative emergency approach would be to mandate, on a temporary basis, bond purchases by Spanish households and businesses. Here is how such a plan might work.


The Spanish government could use the income tax system to levy a temporary “lending surcharge” on individual incomes. In exchange for those surcharge payments, the households would receive an interest-bearing government bond with a maturity of five to 10 years. A similar surcharge could be levied on businesses based on corporate profits or the businesses’ value added.

If that doesn’t scare you I don’t know what will.  So let me get this straight.  Banks and governments took on massive debt and leverage.  Then they blow up the entire global financial system. Then the Central Banks bail them both out.  Washington D.C. is now the wealthiest area in America yet they produce nothing and take everything.  Now what is this genius’ solution to it all?  Force the citizenry and companies “based on corporate profits” to fund the government, which of course is just another backdoor bankster bailout.  This is plain and simple financial serfdom, brought to you by a Professor of Economics at Harvard (supposedly one of the best educations in America) and an adviser to Reagan (sounds more like he advised Stalin).  Just remember your money is not your money according to these guys…

The full article is here although you may not be able to read it without a subscription.  It’s titled “Time for householders to buy bonds and save Spain” from April 30, 2012 if you want to try to find it another way.