The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Big Business Wins At Consumers’ Expense

On May 16th, 2011, posted in: Uncategorized by

Why is it that so many people are up in arms over the zillions of dollars in salaries being given to CEOs of major corporations?  After all, they earned them right?

Americans are capitalists.  The companies are for-profit.  If we don’t own stock in the company, some might even suggest it is none of our business.  Why then are we pre-occupied and opine so vehemently against what the big bosses are making?  Making as much money as you can is the American way.  Work hard and reap the benefits is the foundation by which we became the greatest economy and country on the planet.

I have an idea as to why we don’t like the fact that the head of Viacom got a 150% raise over last year’s salary.  And he’s just one of many big cheeses whose cupboard will be far from bare this upcoming year.  Based on the headlines alone for the past three years, it has everything to do with a poorly performing economy; and an unemployment rate that is somewhere between bad and worse.  The “little guy” is hurting, and the perception is that these “fat cats” are piling on.  While that’s true, I think it goes much deeper.

Society has conditioned us through sports that when someone wins there has to be a corresponding loser.  And if big business is winning and passing the wealth to the guy or gal in the corner office, then the loser must be the consumer.  And we don’t like the idea that the “little guy” is getting toasted.  If Mr. or Ms. “Big” is getting rich, you and I have to be paying more.  Here’s our intuitive thought process: whatever the current cost of our favorite “widget,” it would surely cost less if the “head widget guy” made less money.  Well, that’s not always true.

Think Bank of America.  I don’t know (nor do I care) what the head of BOA makes, but I bet you he didn’t get a 1700% salary increase over last year.  But that’s how much they just increased the fee to make an early withdrawal of a 12-month, $10,000 CD that is currently paying a whopping 0.3% annual yield.  The penalty used to be about $7 if you took out the entire amount earlier than the renewal date.  Now it costs you about $125.  Really!  Are you mad yet?  Hang on.  Read further if you really want to get peeved…

The B of A spokesperson said that the new policy for early CD withdrawals was intended to simplify things for the customer.  Apparently, so many of us had trouble calculating what a penalty of 90 days interest would cost us that they went ahead and just increased it 1700% — it’s easier to understand.  Thanks for the favor; you guys are the best!

It is worth repeating: 1700% early withdrawal penalty on CDs at B of A.  If you want a better deal, please bring all of your business to St. Louis Community Credit Union.  Tell friends, family, neighbors, enemies, and anyone else that come to mind – the credit union is a better deal.  We pay more on deposits and charge less fees.  Most importantly, we never win at your expense.  We believe we can all win together.

Oh yeah…my raise last year was around 2.75% — same as most everyone else.

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