If you watched the events in Congress on Thursday and Friday – there is a lesson here. They play Hardball – and play to keeps. On Thursday, the President, in trying to push the Repeal and Replace bill forward, proclaimed, he was done negotiating, vote on the bill.
The White House played that card in an effort to force the Republican hold-outs to capitulate – by emphasizing to all of them that they run the risk of losing re-election if they fail to deliver on the party’s banner promise from the election. This is what is known in negotiating tactics – as a “play.” In the tough game – you take a position, state it as an irrefutable position and bolster it with whatever might you have. But It does not mean – it’s cast in stone!
As we saw on Friday, once the leadership knew they did not have the votes to pass – they pulled the vote rather than endure the consequences of a vote. This is known as “cutting your losses!” It also demonstrates these guys play “hardball.”
While this was playing out, I was meeting with a friend who happens to be in the health insurance business and we were engaged in a discussion focusing on how I counsel people to use whatever legal means are at their disposal to shed debt and preserve future income. My friend was hung up on the notion of – but you borrowed the money – so shouldn’t you pay it back? I explained it to him this way – it’s a tough world out there. Wall Street, Banks, the Government, including the IRS, Congress and the President – they all play for keeps.
They say whatever they need to say that works for them – and they do whatever they need to do – to further their agenda. Banks don’t mind charging $35.00 three times to cover a $1.00 overdraft at Starbucks, followed by a $2.50 overdraft at McDonald’s with a $1.75 final overdraft at Dairy Queen. So what if the total amount the account is overdrawn is $5.25 – banks are fine charging their customer $105.00 for 3 overdrafts.
Worse yet, in 2009, when Congress made “overdraft protection” an option that people would have to affirmatively elect “overdraft protection” with their bank (rather than including it as an automatic feature) in order to avoid this hardship from playing out – the banks responded by making their website offerings designed to confuse the user to sign up for the service without realizing they were doing so. That’s hardball.
This week, the Consumer Financial Protection Bureau fined Experian $3 million for fraudulently deceiving its consumers on its Credit score product because they lead consumers to believe they were buying a product with a Credit Score that is like the lenders use in making their decisions – when the product didn’t do that.
“Experian deceived consumers over how the credit scores it marketed and sold were used by lenders,” said CFPB Director Richard Cordray. “Consumers deserve and should expect honest and accurate information about their credit scores, which are central to their financial lives.”
I explained to my friend – “I don’t make the rules – but I play by them.” I said it’s naive to think you can do justice to your own future when you abide by a set of rules that are not the same as are being played out against you. Would you agree to only be allowed 2 strikes when the other team gets 3? My friend said to me – “You treat it like a business transaction, don’t you.” I told him – that is precisely what I do. Is it harsh? Maybe – but it’s a harsh world. If you’re playing hardball, my advice is to wear a helmet when batting, use a bat designed to hit the hardball, and if you can steal second, third and home – and not get caught – so long as it is part of the rules of the game – do that and play to win.
Have a great week – and if you want to learn more about hardball – join us for our next FREE Seminar on April 12th – Debt Elimination is the Grand Slam of Finance – sign up below.