In a recent article about the negative effect Swiss banking secrecy and hypocrisy have on the rest of the world, we suggested the creation of a revamped banking community, in which member nations would share information about bank accounts held by foreign nationals with their respective governments and member banks would require that identifiable individuals be behind every account (even corporate accounts). These rules – defiance of which would result in economic ostracism – would help prevent tax evasion, money laundering, drug trafficking, and other criminal activities. In formulating this idea, we did not specifically consider the effect such a system could have in curbing terrorism, but recent sanctions levied by United States against Iran as well as banking institutions doing business with the country have indeed made this utility clear.

The U.S., together with Britain and Canada, announced on Monday Nov. 22, 2011, new sanctions against Iran – targeted to the country’s petrochemical sector and organizations with terrorist ties – that are designed to put increased pressure on the Iranian economy and thereby limit nuclear development as well as funding and training for terrorist groups around the world. The Obama administration hopes that by designating Iran as a “primary money-laundering concern,” companies will break off ties with Iran in order to remain in good standing with countries like the U.S. that are opposed to its practices.

Whether you are well-versed in international economics or not, you’re probably aware that Europe is having substantial problems. You’re also likely familiar with the resulting worldwide ripple effects: uncertainty amongst investors, fears of a global double-dip recession, and widespread political upheaval, just to name a few. Of course, there are a number of prominent theories for how to solve Europe’s debt crisis, but given the depth and complexity of the problem, none is perfect and each requires tough choices to be made. People – not just in Europe, but around the world – need hope, however. We need a plan, a sense that these economic issues are finite and not permanently debilitating. So, with that being said, what say we take a quick look at four different courses of action that Eurozone governments can take, the pros and cons of each, and which will provide the most long-term benefit without causing short-term chaos.

Option 1: Economically sound European countries pay down southern debt
This plan would involve countries like Germany, the Netherlands, and Finland using savings, tax revenue, and export surpluses to help pay down the debts of southern neighbors like Greece, Portugal and Italy until they are at manageable levels. Such an approach is logical in the sense that the economies of European Union (EU) nations are interconnected, and the default of one or more countries would have negative repercussions for others.

Unions are inextricably tied to the U.S. economy. Since the industrial revolution, they have served an important purpose, ensuring that there is a balance of power between management and labor. But what if things have gone too far? Could unions actually be costing Americans jobs by forcing companies to outsource? And, if so, what’s the solution?

To understand the role of labor unions today and how they could be jeopardizing your wallet, we must circle back to their origins. When most of the U.S. labor force was concentrated in mills and factories in small towns and growing industrial epicenters, connected only by a limited railway network, unions played the dual role of watchdog and agent. They ensured that management could not subject workers to inhumane conditions or force them to accept unfair compensation by giving workers bargaining power borne from unity, organization and educated leadership. For many of us, the noble role unions played during this time, righting wrongs like those explored in Upton Sinclair’s famous novel about the U.S. meatpacking industry, The Jungle, created a romanticized image that unfortunately does not match up with current realities.

When you think of Switzerland, the first few things that likely come to mind are bank accounts, chocolate, and neutrality, and there’s a reason for that. The Swiss love to portray themselves as mild mannered people who eschew crime, make delicious candy and run perhaps the most unique banking industry in the world. But hidden behind this façade are layers of hypocrisy and implicit criminal involvement, which allow illicit operations to flourish around the world and provide safe haven for tax evaders. Lost in the aura and tradition of Swiss banking isolationism is the negative effect the Swiss system often has on citizens of other countries. The bottom line is that economies around the world are now more interconnected than ever, and if we want the world to become a safer place or all U.S. citizens to be held accountable for the same tax laws, then Switzerland will need to adjust or risk expulsion from the Western financial network.

Swiss Banking’s Murky Past
Swiss banking secrecy officially took effect in 1934 with the passage of the Swiss Banking Act—which effectively made it illegal to share bank account information with third-parties, including Swiss authorities and foreign governments—and even the circumstances of these origins are enough to raise eyebrows. Switzerland has long justified its banking secrecy laws by harping on the merits of personal privacy, and while this is likely a large part of the equation, scholars seem to agree that the aforementioned 1934 law was passed in reaction to a French scandal, which involved France’s Prime Minister accusing distinguished French citizens from various walks of life of stashing money away in Swiss banks and thereby funding the Nazi regime.

We’ve all heard about the statistics that show that people with college degrees earn more than people who only have a high school education or who dropped out of high school without receiving their diploma. But, does having a framed piece of paper on your wall necessarily mean you are destined for a bigger payday? Why don’t we take a closer look at what exactly these oft-quoted stats reveal?

Income rises and unemployment falls
First, information from the U.S. Bureau of Labor Statistics clearly shows that median income does indeed rise in accordance with education level.

An interesting new trend in the healthcare industry is primary care that patients buy directly from physicians, thereby removing insurance companies from the process and lowering costs for both the doctor and the patient.

Built upon the idea of concierge medical practices, doctors using this innovative model provide day-to-day care to patients who pay a monthly fee for the service. For $49-$130 a month patients receive preventive care, basic tests, treatment for chronic conditions, and non-life-threatening emergency services like X-rays and stitches. Patients are also able to get advice from doctors via e-mail, phone or video messaging, thereby saving both parties time and reducing the number of unnecessary office visits.

American consumers paid down 26% less credit card debt during the first quarter of 2011 than they did in the same period last year, according to a recent credit card debt study conducted by Card Hub – a fact which portends a significant rise in debt throughout the remainder of the year as well as the possibility of dangerous consumer overleveraging.

While one might consider any debt pay down to be a positive one, context is needed to explain why the Q1 2011 data is so concerning. During the first quarter of each year, consumers inevitably pay down a portion of their debt thanks to holiday bonuses, tax returns and a desire to rid themselves of balances remaining from holiday shopping. It’s normal.

When deciding where to keep your money, it is a good idea to consider the health of your bank. There was a time, not too long ago, that it seemed as though banks were failing left and right. While the rate of bank closures has slowed, you still need to think about what it could mean if your bank were to fail. It’s true that, if your bank is protected by the FDIC, you will get your deposit back, up to certain limits. However, just getting your deposit back isn’t always enough.

Issues Associated with Bank Closures

Back in 2009, Wallet Blog broke the story that Chase had reneged on a promise it made to certain customers not to increase the interest rates on balances transferred to the company’s credit cards. While Chase did not increase interest rates per se, the company did begin assessing $10 monthly fees that increased the cost of consumer debt nonetheless. Working together with the New York Times, Wallet Blog made the story national news, causing then-New York Attorney General Andrew Cuomo to threaten legal intervention against the financial giant. As a result, Chase repealed the monthly fees and even provided refunds to the customers it had already charged.

Such actions were taken because, from a regulatory standpoint, there is no practical difference between interest rates and fees. Both are considered finance charges. In its Federal Truth in Lending Act (Regulation Z), the Federal Deposit Insurance Corporation defines finance charges as:

There has recently been a great deal of talk about rules proposed by the Federal Reserve that seek to require credit card companies to consider the merits of applicants based on individual rather than household income. These rules, critics contend, stand to significantly affect stay-at-home mothers by preventing them from establishing credit history in their own names, which would be extremely important to garnering a loan, renting or buying a property, and/or landing a job in the case of divorce or the death of a spouse.

Given that 2010 Census figures show men to be the sole breadwinners in 28.2% of couples with children under the age of 18 and women to be the only earners in about 4% of such families, roughly 7.3 million women and 963,000 men would face a difficult time garnering access to credit if the claims made by the rules’ detractors prove to have merit.

Two common complaints about the new credit card law, which celebrated its one-year anniversary on Feb. 22, 2011, are that it led to the extinction of 0% balance transfer credit cards with no fee and that it caused increased interest rates. One of these complaints is rooted in fact, but neither serves as a valid criticism of the law.

Yes, the CARD Act’s passage effectively signaled the beginning of the end for credit cards that offered 0% APR on balance transfers and had no fee for the service. However, no one really has the right to complain about this.

In the current economic climate, many of us know people who have lost their jobs. A couple of my good friends have unfortunately felt such ill-effects of the Great Recession, and as I was talking to one of them the other day, I asked about his job search. He explained to me how he was going through the interview process and was optimistic about a few opportunities.

I congratulated him and quipped, “The one good thing about not having a job right now is that you don’t have to file taxes. No forms, no giving back some of your unemployment check; there’s a bright side to that.”

Coming out of the Great Recession, the last thing anyone wants is for financial history to repeat itself. However, when it comes to consumer debt, that is exactly what’s happening. Many people think that overall credit card debt is decreasing just because consumers paid down over $43 billion in debt during the first quarter of 2010. However, this is merely a reflection of what occurred in the same quarter last year. Numbers from the second and third quarters of 2010 show that—like in 2009—consumer debt is actually rising and is on track to wipe out most of the reduction observed in Q1.

According to the Q3 2010 Credit Card Debt Study conducted by CardHub.com, consumer credit card debt increased by almost $6.5 billion in the third quarter of 2010 alone.

Here at Wallet Blog we strive to give you the best financial tips and suggestions possible. While we like to think we do a pretty good job of it ourselves, we are constantly inspired by our colleagues in the financial blogging world. So, in the spirit of camaraderie, today is the first of our links roundup, where we will periodically feature some of the best from our blogging buddies.

For our first roundup we’ve focused on the short and sweet – perfect for the financially curious seeking advice without the long-winded explanation. We’ve rounded up some great articles with tips for your financial future, all nicely packaged into pretty little lists. Now, if only finances were as easy as 1,2,3…

The recent financial collapse was enough for us to know that we never want it to happen again. But how can we ensure that future generations will learn from our mistakes? A sensible place to start is with our kids.

In an interview with personal finance expert Jean Chatzky, the author of Not Your Parents’ Money Book, she suggested that when it comes to talking to your kids about money, the sooner the better.

As we all know, the Great Recession has deeply affected consumers credit scores, and therefore, their access to credit. A recent study from FICO, the largest credit scoring company, shows that an increasing number of consumers fall into the bad credit category. The most recent count shows that a whopping 25.5 percent of consumers have FICO credit scores below 599 – that’s nearly 43.4 million people who are considered high-risk customers for lenders.

What makes these numbers worse is that they are likely to grow in coming months, as financial missteps may not be reflected in credit scores for several months. With 26 million people out of work or underemployed according to the Department of Labor, there are a lot of people struggling to make payments without an income.

In an uncertain economy, securing your financial future may seem harder and more important than ever. As anyone who has struggled with their finances knows, there is no magic formula to solving your financial woes. I recently spoke to Laura Rowley, Yahoo! Finance personal finance expert, who says that everything to do with money ultimately comes down to trade-offs.

“If you’re trying to get a handle on your finances, keep in mind that you’re paying for the things you buy with your life’s energy,” Rowley said. If you want a $500 Prada handbag, for example, how long and how hard do you have to work in order to get it?

The storyline in recent months has been that we are in better financial shape than we were this time last year. While that may be true by some measures, CardHub.com released the Q1 2010 Credit Card Debt Study this week, which revealed that consumers are on track to end up with more debt at the end of 2010 than 2009, despite positive signals in the economy.

The CardHub.com study focused on consumer debt data from the Federal Reserve’s G19 report in conjunction with quarterly charge off data to determine how much of the decline in consumer credit card debt is actually due to consumers paying down their debt versus bad debt being written off. The study also made projections on how much debt consumers will accumulate in subsequent quarters of 2010.

I remember reading a profile of the now-dearly-departed Fred Rogers in Esquire magazine about 12 years ago. Mr. Rogers was looking up at a clock and commenting on how big it was, and wouldn’t it be nice if we would all wake up one morning and concentrate on doing something small, not big. Quiet, not loud.

Shortly after that, I heard the first rumors of a new-wave of cooking, called “slow food.” Italians had a festival celebrating the time-consuming recipes of their grandmothers; they held the festival outside a McDonald’s, as I recollect.

There has been some talk about a ‘Cash for Caulkers’ program that would refund homeowners 50% of their costs to renovate their properties in order to make them more energy efficient.  The program,officially called Home Star,  is unofficially being dubbed ‘Cash for Caulkers,’ and represents another effort in getting us out of the recession.

The program is obviously trying to emulate the Cash for Clunkers program, which helped stimulate the auto industry.  While I agree that Cash for Clunkers was a great idea, it was not without its faults.  Most notably, though it put people into new cars, it did nothing at all to make America more competitive on the global market.  What Cash for Clunkers did, essentially, was to tell the American people, “don’t worry about the recession; buy a new car!”  The day after buying their new car, however, Americans saw more unemployment, more banks failing, and more homes going into foreclosure.  It didn’t solve the real problem.  The money set aside for the Cash for Caulkers program will likely have the same effect:  it will make Americans spend money, but it won’t do anything to really end the recession we’re in.

In a recent Market Watch article, David Weidner commented that Citibank is attempting to create a new product, the CLX, which acts as insurance against financial collapse.  The product sounds, as Weidner deftly points out, a lot like the Credit Default Swaps that helped cause our current recession.  It involves the same risks and is being endorsed using the same shaky justifications.

The problem with financial products like the CDS or the CLX is, first and foremost, that it is unclear who covers the ‘bet.’ If financial collapse does happen, and Citibank is to make good on their CLXs, what guarantee is there that Citibank will be in a position, post-collapse, to honor its obligations?  And if it isn’t in a position to honor those obligations, who does?  What’s clear after the fallout of the CDS scandal is that the responsibility of paying off the debts of ‘too big to fail’ financial institutions inevitably falls on the American tax payer.

The current Job Bill being debated on Capitol Hill, in its most recent form, holds at its core an incentive to hire people who have gone more than sixty days without a job.  Businesses that hire these workers are allowed to forgo paying their social security taxes throughout 2010.  The extent of this benefit depends both on the employee’s rate of pay and on the length of their employment.  The hope is that this will provide employers incentives to create new jobs.

Whether the bill passes or not, it’s unlikely to do much by way of solving the unemployment problem in this country because it’s built upon a faulty premise: that the reason employers aren’t hiring is because they can’t afford to pay social security taxes—which only amounts to about 6.2% of the employees paycheck.  The truth is that employers hire people because they need the help.  If there is no demand for their products, then they certainly don’t need more people to help them manage their dwindling operations.  To put it plainly, an incentive of 6.2% simply doesn’t address the problem of dried up demand.

Nobel Prize-winning economist and Columbia Business School professor, Joseph Stiglitz argues in this interview that we are headed for another collapse.  His arguments are sound and should be listened to.

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It is frustrating that American banks, post bailout, are paying out record bonuses given that many of those banks would not be in business if they hadn’t received a handout at the tax payers’ expense.  In response, President Obama is now threatening to heavily tax these bonuses to send the banking industry the message that the American people will not stand for such behavior.  The depiction of these banks in the media and by the government, however, is far too simplified.  Not all banks are the same.  Some banks simply didn’t need the bailout and other banks received aid indirectly when the government bailed out their debtors.

For a company like AIG, the issue is quite clear.  They would have failed had we not bailed them out.  As a result, we now own most of their company.  AIG clearly shouldn’t give their executives a bonus.  Moreover, as shareholders, we have every right to demand that those executives don’t get a bonus.  On the other hand, some banks didn’t need a bailout.  Capital One, for instance, was forced to take the government’s money so as to help stabilize the economic disaster.  Their cooperation helped conceal the real problem areas (i.e. Citibank and Bank of America), thus preventing investors from cutting and running on companies that desperately required the bailout to stay afloat.  Those banks which didn’t need the bailout repaid that money almost immediately and they shouldn’t be penalized.  If anything, they should be rewarded for helping the American economy stay afloat and for having a sustainable business model when, all around them, other giants of their industry were toppling.

More and more American families these days are learning to live within their means.  They’re making trade offs about what they want, what they need, and what they can afford.  They’re trying, during these hard times, to make their dollar stretch as far as possible.  You’ll notice that what they aren’t doing, or at least not in great multitudes, is borrowing against their future so as to maintain their lifestyles.  Sure, the draw to live as one has become accustomed is strong, and likewise, the ability to buy on credit is still a possibility.  Were there no repercussions, were it simply a case of someone saying, “here take this, no strings attached,” we wouldn’t need to make sacrifices so that we can live within our means.  However, when we know that there will be repercussions for our spending, that the credit card bill will come or that the bank will want their money back, we also know that we are going to have to do more with less.

Note, this is not a post about family budgets, but a post about national budgets.  America, like America’s households, needs to learn to get more done on less money.  Just as with those households, it is easy for the country to buy on credit, on the assumption that we can repay at some later date… far too easy in fact.  Very little will stand in the way of our nation going deeper into debt, but just as with a normal household, someone has to eventually pay the bill.  That money is not given to us—it comes with repercussions.  Our President seems to be operating in the same mode as his predecessor:  putting our nation into deeper and deeper debt so as to pay for all the projects that he wants to start or maintain.  Congress raised the federal deficit cap in February of 09, they raised it again this month, and are poised to raise it again next month as part of a larger economic bill, currently before the Senate.  Simply raising the amount of debt the federal government allows itself to accrue is easy enough to do.