We the Fee

I couldn’t find any comment from the Republican presidential candidates on one of the most compelling financial events of the last week: Verizon’s virtually instant reversal of its $2 fee on people who pay their wireless bills over the phone or online.

Nor apparently did the White House have anything to say, even though the Federal Communication Commission’s announcement that it was “concerned” about the fee no doubt factored into Verizon’s decision. The FCC, once the cell phone industry’s best friend in Washington, D.C., has morphed into something actually looking like a consumer protection agency under Obama. It also killed the AT&T – T-Mobil merger that would have destroyed competition in the wireless marketplace and led to vastly higher prices and much worse service. The President certainly deserves a victory lap – and could use one – but remained incommunicado during his vacation in Hawaii.

Nothing from the Tea Party or Occupy Wall Street either.

Fees have become the bane of the American consumer. Airlines make more money from fees than from air fares. Banks replaced tellers with machines and now force their customers to pay $3-$5 for the privilege of accessing their own money. Hotels apply “resort fees” for using the typically impoverished gym. And then there is the coup de grace: the fee you have to pay for getting a bill in the mail – a favorite of the cell phone and health insurance companies.

Undisclosed, or at best hidden in the fine print, these fees cripple consumers’ ability to compare prices. Which becomes a nightmare if you realize you are paying too much and decide to take your business elsewhere: many of these companies require you to stay with them for two years or pay an early termination fee in the hundreds of dollars.

Verizon’s retreat from the fee was a major victory for consumers, who organized a massive internet/Twitter/Facebook protest worthy of Zuccotti Park or Tahrir Square. In November, Bank of America tried to institute a $5 fee for using a debit card – it too was forced to back down in the face of national outrage.

How then to explain the silence of political candidates and public officials? The simple answer harkens back to the Occupy metaphor. The political class doesn’t sweat the small stuff like a $2 fee – they can afford not to. But most Americans can’t afford to throw away two bucks.

Of, By and For

I wrote this about the Tea Party a year ago:

I’m not one of those people who is offended by the eruption of angry Tea Party organizations around the country. To the contrary, the TPʼrs are raising questions, pointing out problems and demanding answers from elected officials – just what an active citizenry is supposed to do.

But I disagree with their premise, which is that government is responsible for all that is wrong with our country, and that the solution therefore is a castrated federal government or no federal government at all.

A recent post by a Tea Party supporter framed the split this way:

The key difference between the left and right is that the left sees government as the answer to its dreams while the right sees government as the problem, not the solution.

Take away the hyperbole and that’s pretty much the debate that’s underway today in our country.

I believe that government of, by and for the People is one of the great inventions of humankind in history– along with the rule of law: We need police. We need the military. We also need a cop on the corporate beat in the executive suites of Wall Street. And we need rules and regulations to prevent health insurance companies from ripping us off or condemning us to death.

But a series of catastrophic failures by the U.S. government –  the failure to detect and prevent 9/11, the U.S. Supreme Court’s decision to award the 2000 election to George Bush, and especially the financial debacle that Washington suborned (PDF) – has deeply shaken public confidence in the basic institutions of our democracy.

During the Summer of Our Discontent two years ago, I traced the Town Hall confrontations over health care to displaced rage over the bailout. But let’s consider what happened to health reform, probably the single most urgently needed big government fix since Social Security nearly eighty years ago. President Obama did what Presidents Truman, Nixon and Clinton were unable to do: create a national health program under which all Americans will receive care, and several of the most unfair practices in the private marketplace will end. All Americans will be required to buy coverage. But in a compromise to win the support of the insurance industry – and its beholden members of Congress – Obama failed to include any controls on the price Americans will have to pay  the private insurance companies.

What happened in California when lawmakers in 1984 required people to buy auto insurance, but failed to regulate industry prices or practices? A way of protecting innocent people against bad drivers became a license to steal for the insurance industry, and led to a revolt that I took part in.

A viral New York Times oped on President Obama put a fine point on the administration’s failures:

To the average American, who was still staring into the abyss, the half-stimulus did nothing but prove that Ronald Reagan was right, that government is the problem. In fact, the average American had no idea what Democrats were trying to accomplish by deficit spending because no one bothered to explain it to them with the repetition and evocative imagery that our brains require to make an idea, particularly a paradoxical one, “stick.” Nor did anyone explain what health care reform was supposed to accomplish (other than the unbelievable and even more uninspiring claim that it would “bend the cost curve”), or why “credit card reform” had led to an increase in the interest rates they were already struggling to pay. Nor did anyone explain why saving the banks was such a priority, when saving the homes the banks were foreclosing didn’t seem to be. All Americans knew, and all they know today, is that they’re still unemployed, they’re still worried about how they’re going to pay their bills at the end of the month and their kids still can’t get a job.

This is not merely a “messaging” problem, however. If government can’t protect average people’s wallets from thievery; if instead, all government can do is protect the interests of the wealthy and big corporations at the expense of vast numbers of the rest of us who sink into economic oblivion; if the United States Supreme Court is right that corporate power, won through campaign contributions and lobbying, is protected by the First Amendment… then those who say government is too big and costs too much are going to find an increasingly receptive audience.

Not in my lifetime has the ideological divide been so stark as it is today. But the debate was just as intense when our Founders, constructing a new nation based on a constitution backed by a Bill of Rights, contended with competing visions of the role that the federal government would play in the new nation.

In the midst of economic and political chaos, I am reassured by that.