To be fair, illustrating the personal finance page is a difficult and thankless job. Being asked, week after week, to draw a picture of abstract ideas like “the importance of maximizing your 401(k) contribution” — on deadline — is not an easy task. There are only so many giant piggy banks, ladders and staircases one can get away with.
So I’m not trying to pick on hj, our paper’s talented illustrator, for coming up with the drawing to the right to accompany a year-end article that carried a headline of something like “Keeping your nest-egg safe from Uncle Sam.”
On the other hand, though, just look at that picture. Uncle Sam is terrifying. The bear markets carrying off the family’s retirement savings are smiling and almost cuddly, but the usually patriotic symbol of American government looks cruel and demented.
Removed from the context of the accompanying article, this could easily be mistaken for a piece of anti-American propaganda whipped up by an uncharacteristically whimsical member of al-Qaida.*
This article had very little to do with al-Qaida, of course. If it had then this depiction of Uncle Sam would have created a massive outcry. Subscriptions would have been canceled, front-page apologies would have been published and people would have gotten fired. As a general rule, any portrayal of Uncle Sam accompanying an article about terrorists or Iraq or Afghanistan or Grenada must show him as powerful and benevolent. It’s only when the subject is taxes, as it was with this drawing, that he is allowed to be portrayed as a cruelly perverse predator menacing innocent families. When the subject is taxes, it is not only expected but required that Uncle Sam be drawn as the malevolent figure shown here.
One wonders how the powerful and benevolent Uncle Sam of the war drawings is supposed to acquire the money he needs to remain so powerful if taxes and therefore government itself are to be universally despised as cruel, destructive and illegitimate.
But hold that thought, for a moment.
* * *
The ‘vixen and I are currently in a billing dispute with PECO Energy, our regional electric utility. My wife moved into our new home one month before the lease on her old apartment expired. That was nice at the time, allowing for a more relaxed approach to moving all of her and the girls’ stuff out of the old place. For the last month of her lease at the apartment, then, she still had an active PECO account there.
The average monthly electric bill in that smallish apartment was $60 or $70, but we figured the bill for that final month would be a bit less than that. All the appliances were gone except for the refrigerator. The heat and air conditioning and all the lights were off.
PECO sent us a bill for that final month for $220.
That’s right: The bill for an empty apartment in which no electricity was being used was three times the usual bill for an occupied apartment.
I spent a great deal of time on the phone with various PECO representatives but wasn’t able to reach any resolution. I told them that until they explained to me, in writing, how it was possible that not using energy should cost $150 more than using energy did, they shouldn’t expect to get any money from me. I have never received any such explanation, so that’s where things seemed to sit.
Until last month. Last month, here in our new home with our new PECO account, we were charged a late fee. We paid the previous bill in full and on time, but it seems that PECO had subtracted from that payment the $220 they claimed was owed to the previous account — meaning the new bill was no longer paid in full and thus incurring the late fee.
Mah. Thur. Fah. Curse.
This kind of billing horror story is par for the course here in the U.S. of A. Reading the above account, it’s quite likely you were thinking, “That’s nothing — you should hear about the stunt our utility pulled …” So there’s no point in my providing the details of our household’s similar encounters with Comcast (the cable/Internet provider whose monthly bill has always exceeded the guaranteed price stated in our two-year “contract”) or Verizon (“unlimited texting doesn’t mean there’s no limit …”).
These companies do this because they can.
Dubious billing practices, mysterious hidden fees, billing “errors” that they correct only for that small percentage of customers who pore over the fine print and call to complain — these things have all become not just their standard operating procedure, but their primary business model. PECO is not an energy company, it is a company that generates and distributes energy as a pretext for its main business of creative monthly billing. Comcast is not a cable and Internet company, it is a company that incidentally provides those services in order to pursue its primary business of creative billing. Verizon is a billing company that levies a monthly fee from a quarter of American households, occasionally also providing some of them with wireless and long distance service.
They do this because they can.
It used to be that these companies didn’t do this because they couldn’t. They used to be regulated because they were monopolies. Monopolies — unchecked by competition or other market forces — have to be regulated to prevent them from exploiting their customers.
Over the past three decades, however, electric utilities and phone companies and cable providers have all been deregulated. The theory was that competition would arise that would keep down prices and prevent the exploitative and dishonest billing practices once outlawed and restrained by regulation.
The theory didn’t work.
“It doesn’t matter,” the PECO representative said.
I had just informed her that if our billing dispute was not resolved, quickly, we would be canceling our PECO account and switching to one of the other providers under Pennsylvania’s “electricity competition” scheme.
“It doesn’t matter,” the PECO official said — out loud, knowing that our conversation was being recorded (“for training purposes”) and not in the least fearing any repercussions for admitting such a thing publicly — “You can change electricity suppliers, but you’ll still have to deal with us as your distributor. So you’re going to end up paying what we say.”
She’s evil and a thief, but she has a point. It doesn’t matter that PECO is charging us $220 for services they never provided. It doesn’t matter that the utility is, essentially, stealing this money by fraud. The bottom line is they’re big and we’re small and so like all of their customers we have no recourse when hit with false charges, dubious fees and phantom surcharges. All we can do is say, “Thank you, sir, may I have another,” and pay whatever they tell us to pay as quickly as possible lest we incur a late fee on top of it.
That’s how this corrupt little system works now that we’ve decided to pretend that our monopolies are not really monopolies and that therefore their monopolistic exploitation of their customers isn’t really exploitation. You will pay them whatever they say you owe, whether or not there is any legitimate basis for this billing, and there is next to nothing you can do about it. And because they know there is next to nothing you can do about it, they will continue to increase and to pad what they say you owe. They will add surcharges and fees for additional services you have not ordered and have never used, or for additional services that are purely abstract and hypothetical (“identity-theft protection”?).
They do this because they can.
* * *
So the illustration above isn’t wholly inaccurate. The menacing, finger-waggling predator it portrays is a recognizable figure to most American households. But for most households that figure usually isn’t the “tax man.” It isn’t Uncle Sam who is looming over terrified families and destroying their houses. It’s the monopolistic monthly billing compa
nies,** unregulated and unrestraine
d, who play this role for most Americans.
Back in the first Robber Baron age, these large monopolistic entities were called “trusts.” The name still seems apt, since trust is exactly what we have yielded to them — our naive, unreserved and undeserved trust.
We have placed our trust in such entities — in the utilities and monopolies and corporations large and very large — because we have been following an ideology that tells us we must not and cannot trust our own government. We have nothing to fear from unregulated monopolies, this ideology tells us, only from the regulator itself. It is the government, the star-spangled menace in the first drawing above, whom we must fear, not the good and benevolent and eminently trustworthy monopolies.
It is because of that sort of image of Uncle Sam that we have ended up with images like this second one, a sadly accurate satire from 1911. The larger figure there, the one in charge, is J.P. Morgan (via this site). Substitute the institution — JPMorgan Chase — for the man and the satire still seems apt.
Now of course I don’t believe the citizens of a democratic country should blindly trust their government. I don’t even believe that the citizens of a democratic country should blindly trust in their own ability to control their government. But I do believe that such citizens can control — and restrain, and direct — that government. That is, by definition, what it means to be the citizens of a democratic country.
Democracy isn’t automatic, and it’s usually not easy, but it is possible. And if we have a government of the people and by the people, then we have the power to ensure that it is also a government for the people.
In other words, we — we the people — are Uncle Sam. Uncle Sam is US.***
We need the FTC and the FCC and the various state public service commissions to follow this example — to roll up their sleeves, flex their muscles and defend their country, defend their people from exploitations large and small. We need an SEC that can stay awake long enough to prevent people like Bernard Madoff from bankrupting charities and we need an FCC that can hold Internet and wireless companies to the terms they claim to guarantee in their supposed “contracts.”
The latter might seem unworthy of this level of attention. The stupid billing tricks and petty frauds I’ve complained about here — the ones routinely practiced by the various utilities, wireless companies and Internet/cable monopolies — might seem like they’re too nickel-and-dime to get very worked up about. But those nickels and dimes can be unrelenting, inescapable and cumulatively devastating.
My family could afford to pay PECO money that they didn’t earn and that we didn’t owe, but not all families are as fortunate as we are. What was for us a (substantial) inconvenience could be, for many families, the difference between making ends meet and not. For many families, a $150 bogus overcharge from the utility company will mean a cash advance on a credit card or a payday loan, either of which could eventually wind up costing them hundreds or even thousands of dollars more — money they do not have.
Right now, most such families have no recourse. That has real consequences for real people. (And — as Tom Geoghegan points out here — it has larger, corrosive pedagogical consequences for all of us.) Those families need help.
Those families need Uncle Sam on their side.
– – – – – – – – – – – –
* The members of al-Qaida, of course, believe that any visual depiction of human beings is a form of idolatry and is therefore prohibited. This is one of the seven main reasons that no one associated with al-Qaida will ever become a great editorial cartoonist. The other six are too obvious to bother spelling out here.
** I haven’t even mentioned here the creative billing practices of the credit card lenders. Unlike the energy/phone/Internet monopolies, I have managed to keep my own dealings with these debt merchants to a minimum, but they’re really the pioneers and the industry leaders in the burgeoning field of creatively bogus billing. The average American household carries a credit-card balance of something like $8,000. In addition to the usurious interest rates they charge, the debt merchants have a whole host of lucrative revenue-generating fees and charges that all but ensure these families will stay in debt in perpetuity. They do this because they can.
*** Those of you who didn’t fail Fifth-grade Social Studies are now saying, “No duh.” But you’d be surprised how many are surprised to think of it this way. Reflexive or visceral anti-government sentiment, in a democracy, is strangely popular given that it is both a form of self-loathing and a self-fulfilling prophecy. Right now, for instance, there’s a pseudo-libertarian reading this very paragraph and shouting, “How naive! The government isn’t of, by or for the people — the government is against the people!” He’s wrong, of course, but if everyone believed that, then his nightmare could become reality. If all the citizens of a democracy abandon any belief in government as the servant of the people for the common good, and if they oppose every attempt to make it so, then they’re not going to remain the citizens of a democracy for very long.