(Photo: STAR MAX/IPx via AP)
Many of the economic problems Americans face are hard to fix. Working-class incomes have stagnated for 20 years. Mortality rates are rising among non-college-educated, non-Latino whites. Inequality of income and wealth are increasing fractally, as each slice of the distribution pulls away from the slice below it: the upper half from the lower half, the top quintile from the other 80 percent, the 1 percent from the 99 percent, the top tenth of a percent from the other 99.9 percent, the billionaires from the mere millionaires. Effective responses-changes in the tax code, changes in spending programs, reinvigorating unions and anti-trust enforcement-are complicated and hard to communicate in TV-friendly soundbites. That gives an edge to candidates peddling hatred and snake oil in place of sound policies.
But there's another aspect of economic fairness that's far easier to grasp. Everyone hates being cheated.
As workers, consumers, and investors, ordinary Americans get short-changed in many ways, while firms seem to be getting cleverer about how to cheat people without facing any consequences.
- Employers cheat workers out of wages, by misclassifying them as non-overtime-eligible "managers," by starting the clock after employees are required to appear, or by stopping the clock before they're allowed to leave-or just by refusing to pay wages after they've been earned.
- Merchants hide "non-disparagement" clauses in the fine print of boilerplate contracts to prevent consumers from going public with complaints about bad products or service, and then sometimes sue them for posting negative comments on Yelp.
- Banks hit account-holders and credit-card customers with an array of penalty fees.
- Auto dealers overcharge on loans.
- Mortgage services routinely submit false documents to courts hearing foreclosures.
- Stockbrokers and other financial advisers systematically give advice that makes them richer and their customers poorer.
- Pension funds, public and private alike, get rooked by high management fees.
- Cell phone and cable companies exploit limited competition to gouge customers, sending bills of impenetrable complexity. The cable industry, for example, continues to insist on charging customers rent for completely unnecessary set-top boxes, and is fighting FCC rules that would put a stop to that practice.
- Companies that cheerfully and quickly sell you services online require you to go through infinite-loop call centers to cancel those services.
- Some builders and general contractors systematically stiff their small-business vendors, using the costs of litigation to deter them from suing.
- Pharmaceutical companies jack up prices on drugs of which they're the sole supplier.
- For-profit universities and trade schools stick their students-especially including veterans-with mountains of debt without providing any skills that actually lead to jobs; the students wind up broke, and the taxpayers take a hit.
- To add insult to injury, "binding arbitration" clauses ensure that many of the victims of all these rip-offs can't sue. Instead, they have to complain to arbitration panels notoriously stacked in favor of firms against individuals.
Some of these problems are relatively easy to fix, and the solutions are relatively easy to explain.
For example, it would be simple to require providers of financial services either to abide by a fiduciary standard-as lawyers and doctors are supposed to do, putting the interests of the client ahead of those of the professional-or to make it explicit that they do not abide by any such standard. The FCC could get rid of set-top boxes. Pharmaceutical gouging could be controlled by loosening up on generic imports when prices jump. The Consumer Finance Protection Bureau (CFPB) has led the way on reining in binding arbitration in financial services, but much more could be done by legislation. Congress could make systematic wage theft a crime.
By and large, fixing these problems won't do much about inequalities of income and power. But it would do something. Some of the numbers aren't small: CFPB claims more than $10 billion so far in direct recoveries from enforcement actions, not counting whatever gains might have accrued from preventing cheating rather than remediating it after it has occurred. Moreover, a systematic attack on the ways ordinary folks get cheated would would help give voters the sense that at least some politicians are on their side.
Part of the problem is that each individual form of rip-off has a limited number of victims, so the struggles tend to be not only technically complex but also politically obscure: a sure formula for maximizing the power of special interests. Rolling a dozen anti-cheating measures together into a "consumer-worker-investor-saver-small-business-owner bill of rights" could make rip-offs a voting issue. In terms of this year's campaign, the political message should be clear: "You're being cheated, and we're going to protect you from the cheaters."
In partisan terms, this should be a big winner for the Democrats, catching the Republicans between their donors and the outraged voters. (Of course, some of the cheaters are Democratic donors, too; this seems like a good year to prefer, at the margin, issue-making over fundraising.) At the presidential level, considering all the victims of the Trump University swindle, the buyers of condos that were never built, and those contractors who never got paid, the case against the Cheater-in-Chief pretty much makes itself.
