The Fine Print

The Fine Print - David Cay JohnstonEarlier this year, David Cay Johnston published a new book, The Fine Print. After reading his last book, Free Lunch, I just couldn’t take 300 more pages about how the corporations game the system.

I did, however, scan the book, reading some parts of it in depth. It’s a good book, of course, Johnston has rightly become a liberal hero to many of us. He is someone I always want to read and hear, because he has keen and well-informed insights about everything that is going on.

He starts the book by showing how AT&T manages to make more from us than it ever did, even though the cost of their primary services have plummeted. They do it by charging extra for things that most people never use, and in many cases cannot use. But it isn’t just AT&T. I was struck by the case of Bank of America over-charging for bounced checks. Currently, they change $47 for the first bounced check:

What does it cost banks to deal with a bounced check? Back in the late 1970s, when checks were still processed by a person and a machine rather than digitally, Crocker Bank (now part of Wells Fargo) was forced to reveal in a California court case that its cost was thirty cents. At that time, the bank was charging customers $6 for bounced checks, a markup of 2,000 percent. The California Supreme Court held that charging twenty times cost was not necessarily unconscionable. Adjusted for inflation, that $6 fee would now be $21, less than half what BofA charges.

What are today’s bank costs for processing a bounced check? BofA won’t tell customers, but research papers on costs in the digital era suggest it could be less than a penny, making the market by BofA in the neighborhood of 470,000 percent. But corporate values now so infuse our society that price gouging is easily brushed off as a function of competition, regardless of whether that’s the truth or an ideological fantasy.

At the end of the book, in discussing “What it All Means,” he talks about “Faux Free Trade.” I’m not in favor of free trade agreements; they are like most things that everyone in the Beltway think are good ideas: another way to make the powerful more powerful. Johnston provides more evidence. This quote strikes me as a little slippery, though (I’ll let you know if I find out more):

One crucial fact is often left unsaid: our trade with countries where we do not have so-called free trade agreements is growing faster than with countries with which we have such agreements.

Of course, when someone agrees with me about one of my favorite rant subjects, I know he must be brilliant. On the subject of the stimulus, Johnston write:

If Obama becomes a one-term president, historians will note his failure to insist on a bigger stimulus, to spend the money fast and that business tax cuts do nothing for companies that pay little or no tax. Besides, no one hires workers to get a tax cut. Businesses hire more workers when they have customers who want their goods and services, not when someone dangles a tax cut in front of them.

In Obama’s defense, the tax cuts were there to get Republicans to vote for it. The fact that almost none of them did does tarnish the argument a bit.

One can never go wrong spending some hours meditating with David Cay Johnston. The Fine Print is a good book that deserves your (and after the election, maybe my) full attention.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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