Wall Street Journal

UT students will be participating in Bank Transfer Day Saturday, where they will close their accounts at commercial banks and open new ones at local credit unions.

While Bank Transfer Day is not officially affiliated with Occupy Wall Street, its goal has garnered support from the movement and the protesters in its satellite occupancies.

The planned event comes after commercial banks announced new and increased service fees for their customers. Kristen Christian, a Los Angeles-based art gallery owner, created the Bank Transfer Day event on Facebook in response to imposed fees and poor customer service from Bank of America.

Credit unions, like the University Federal Credit Union, are usually smaller and locally based. Commercial banks like the Bank of America are financial corporations with branches across the world.

Bank of America announced plans in September to start charging customers $5 a month when they use debit cards to make a purchase. Within days, Citi Bank raised the monthly maintenance fee on its mid-level checking account to $15 a month from $7.50 a month and upped the required minimum balance of linked accounts from $6,000 to $15,000.

After a month of public outcry over the new fee, Bank of America dropped proposed plans to charge debit usage fees Tuesday.

These debit fees are in response to legislation passed earlier this year that imposed a federal cap on debit card “swipe fees,” or the fees charged to retailers by major banks every time a customer pays with a debit card. The legislation capped those fees to 21 cents per transaction from a previous average of 44 cents.

Last year, congressional legislation also required banks to give customers the option to have transactions declined instead of being charged overdraft fees.

To recoup those lost revenue streams, the Wall Street Journal predicted earlier this year, banks would start charging for services.

UT’s own Occupy satellite will be participating in Bank Transfer Day. Headed by rhetoric and writing assistant instructor Trevor Hoag, the group consisting of 35 Facebook-confirmed participants will be walking down Guadalupe to the Bank of America, Wells Fargo and Chase branches to close their accounts Saturday morning.

Hoag said he transferred to the University Federal Credit Union, which is based in Austin, two weeks ago after learning that they offered the comparable services to what he was receiving at Chase. He also said that UFCU was the more ethical banking option for himself.

“Credit unions weren’t complicit in the bailout and they weren’t complicit in the predatory lending,” Hoag said.

The past month has seen bank transfers similar to Hoag’s. According to a poll conducted by Independent Community Bankers of America, 60 percent of responding independent banks saw an increase in new account openings.

That movement of consumers is happening in Austin as well.

UFCU spokeswoman Sheila Wojcik said at the three branches in the central Austin area, the number of new accounts opened in October was twice their original projection.

“People directly said in many instances that they were transferring from a big national bank like Bank of America,” Wojcik said. “We have seen an impact.”

Senior finance lecturer Regina Hughes said the primary difference between credit unions and commercial banks is the ownership.

Hughes said commercial banks, like Bank of America and Wells Fargo, are for-profit entities owned by shareholders. Credit unions are controlled by its members, who directly make policies for other members and are not necessarily looking to make a huge profit. They also do not provide the same variety of services, such as types of investments, offered by major commercial banks. Commercial banks, she said, are corporations that invite people to become customers, but their goals can be different and separate from those customers.

The services offered by credit unions are enough for architectural engineering and philosophy sophomore Kathleen Hetrick, who said she will be participating in Bank Transfer Day.

“This doesn’t have anything to do with capitalism. It has to do with companies not functioning right and stealing from people. It’s a morality issue almost,” Hetrick said. “I can’t really do too much about the bank structure itself, but I can take my money out of their bank.”

Published on Friday, November 4, 2011 as: Students to switch accounts on first Bank Transfer Day

The meteoric rise of pizza executive turned presidential candidate Herman Cain is one of the most perplexing developments in the Republican Party’s pursuit for the White House. Virtually unknown a few months ago, Cain has gone from “flavor of the week” to front-runner in a lackluster field of GOP candidates. The former Godfather’s Pizza CEO can trace his newfound popularity to the 9-9-9 plan he crafted as his ultimate fix for our federal tax code.

Cain’s 9-9-9 plan would replace our current federal tax system with a business tax, flat income tax and a national sales tax at 9 percent each. Though the 9-9-9 plan is eerily similar to the tax structure in the video game SimCity, it is far from a joke. Disturbingly, the 9-9-9 plan is exactly the opposite of what most Americans want, as it provides a regressive structure that cuts taxes for the wealthy while raising taxes for the poor- and middle-classes.

While the Occupy Wall Street movement makes a statement about the inherent inequality in American economics, Cain is pursuing a path to tax reform that ignores this growing trend. The arrangement has even been labeled a “distributional monstrosity” by Bruce Bartlett, former adviser to Ronald Reagan, according to The New York Times.

Cain’s national sales tax is characterized as regressive because it does not itemize any exceptions for necessities that low-income brackets spend proportionally more on, such as food and clothing. Students are another group that would be disproportionately affected by his tax proposal. For example, students who were previously issued exemptions as dependents would be forced to pay income taxes.

The flat income tax proposed by Cain has also been almost universally acknowledged as regressive, despite new plans for a 9-0-9 alteration for those at or below the poverty line.

At last week’s GOP debate, Cain nonchalantly and repeatedly deflected opponents’ criticism of the plan by simply claiming their attacks were wrong. In his defense, he invited “every American to do their own math.” However, others have done math repeatedly and have come up with negative results. A former chief of staff of nonpartisan Joint Committee on Taxation has labeled 9-9-9 as “fiscal hocus-pocus.” Similarly, nonprofit organizations Factcheck.org and Politifact.com have called Cain’s plan “murky” and his promises “false”.

With the kind of self-assured cadence that engenders absolute trust, Cain pitches his signature plan with this gem: “When you expand the base, we can arrive at the lowest possible rate, which is 9-9-9.” Audience members at debates have delivered zealous applause time and time again to this line, but his message is far from populist. Cain’s expansion of the “base” clearly indicates that the burden of taxation would be shifted to the low- and middle-income brackets. This new “base” of revenue would include college students, as well.

Moreover, the 9-9-9 plan billed as a simple solution is actually a misleading distraction. Cain talks about his plan as if it is the end game, but it is really just an intermediate step toward his larger goal: “The Fair Tax.” The Fair Tax would replace all other federal taxes with a sales tax on goods and services ranging anywhere from 23 to 30 percent. For students, this would exacerbate the pain of gas or textbook costs with a combined federal-state sales tax of more than 30 percent. Such a large sales tax is hugely regressive because people in lower-income brackets spend a much larger proportion of their earnings than do those in upper brackets, who tend to invest more. Feasibility aside, neither the 9-9-9 nor the Fair Tax plans benefits Americans who are not in the upper echelons of wealth.

Cain’s transformation from long-shot dark horse to top-tier candidate is intriguing. If Cain’s popularity is not based on his economic know-how, it has to be based on something else. Almost every post on Cain’s Twitter account uses gratuitous exclamation marks, and it is hard not to be infected with his enthusiasm. His affability and optimism are often cited as reasons why Americans identify with him.

Though certainly jovial, Cain’s campaign is plagued with cringe-inducing gaffes that make even Joe Biden’s worst lines seem tame by comparison. Cain recently proposed that an electric fence be built along the Mexico-US border, according to USA Today, and he once said that he neither knew nor cared who the “president of Ubeki-beki-beki-beki-stan-stan” was, according to CNN. Both statements were later claimed to be “jokes.”

Herman Cain, though probably unelectable, is mostly being lauded for his bold and unique approach to campaigning.

Cain recently told the Wall Street Journal, “If you don’t have a job and you’re not rich, blame yourself.” Cain and his forceful aphorisms may be changing the way the GOP approaches its base, but 9-9-9 is an injurious proposal that is out of touch with the current political climate.

Katsounas is a finance and government sophomore.

A day to remember

While most of the UT community was in shock as they saw the 9/11 attacks, one UT alumnus scrambled to write an article about aviation security that would go on to win the Pulitzer Prize.

At the time of the attacks, Lynn Lunsford worked as an aerospace reporter for The Wall Street Journal’s Los Angeles bureau. Lunsford contributed to one of the stories produced on 9/11 that won the paper a Pulitzer Prize for breaking news in 2002. Lunsford’s bureau chief called to tell him to turn on the TV to see what he then thought was a small plane that had hit the World Trade Center.

“I could instantly tell that it wasn’t a small airplane. The hole was too big,” Lunsford said.

Lunsford reported on every major plane crash from 1986 to 2009, which gave him the insight to see that the first impact wasn’t an accident.

“It was a beautiful, clear day, so it made no sense that a big jetliner would slam into a building,” Lunsford said.

He said his coworkers in the Los Angeles office didn’t know what to think as they watched the news.

“Everyone saw it as an aviation disaster until the second plane hit,” Lunsford said.

He and the other reporters who contributed to his article made phone calls to the contacts they’d made throughout their careers as aviation journalists.

“We got the best information we could to explain the situation in the context of what was clearly a new reality,” Lunsford said.

Lunsford called the Federal Aviation Administration’s former associate administrator for aviation security. He said the administration’s retired official had been worried about security on jetliners.

Lunsford contributed foresights to the article about increases in passenger searches, weapon scanning improvements and tighter airport access.

“People who make decisions are going to be reading what you wrote, so what we tried to do was set the agenda and make sure the debate was focused in the right direction,” Lunsford said.

He said it was a thrill to receive the Pulitzer Prize, one of journalism’s top honors, but never forgets the approximately 3,000 people who died that day.

Before taking a job at The Wall Street Journal, Lunsford worked as a reporter at the Dallas Morning News, where a fellow aerospace reporter from the Washington Post took him under his wing. This friend and competitor, Don Phillips, covered Sept. 11 from Washington, D.C. that day.

“It was such a jumble,” Phillips said. “It was keeping ahead of the game as best you could.”

Phillips said at the time, Wall Street Journal reporters didn’t cover breaking news as much as they covered stories’ big pictures.

“The Journal was a newspaper that wanted to sit back and get the background,” Phillips said. “This was so big that they had to go full tilt and that’s where Lynn [Lunsford] would come in handy.”

Lunsford said his editors knew he could think on his feet and didn’t get rattled by breaking news stories.

“An experienced reporter sort of goes into an out-of-body experience,” Phillips said. “So the emotion just doesn’t hit you.”

Jonathan Friedland, the former LA bureau chief, said The Wall Street Journal bureau chiefs around the country had to divvy up the work for the next day’s issue because the New York headquarters were destroyed by debris from the towers. He said it was clear Lunsford and the other aviation journalists would be central to the reporting that day.

“He and the rest of the team pulled out all of the stops to provide Pulitzer-level reporting in a day marked by confusion, misinformation and in our case, the loss of our [headquarter] operation,” Friedland said. “I remain enormously proud of the work we collectively did that day. It was spot reporting at its very best.”

Printed on September 9, 2011 as: Tragedy leads to Pulitzer for journalist alumnus

Thirsty Thursday

Summer heat calls for summer beer. The lighter, crisp taste is a favorite among drinkers in search of a good time in the hotter months.

Photo Credit: Jamaal Felix | Daily Texan Staff

Summertime means “beer-time” in Texas. Anytime is “beer:30” when it’s this hot outside.

Aside from your usual cold Miller High Life or a Lonestar, a hefeweizen is also a traditional, iconic Texas summer beer with hints of banana and clove. You can probably even find me on a thirsty Thursday sipping a hefe with a lemon slice at Hole in the Wall.

Hefeweizen means “yeast wheat”: It’s a wheat beer and brewers keep the yeast used to ferment the drink floating around. Some people don’t prefer it so cloudy, though, so another popular cousin would be kristallweizen, meaning the brewery has filtered all that out to leave it as clear as a crystal.

Regardless of all the German, both are wheat ales from Bavaria that get their flavor from the regional strain of yeast. As many brewers say, yeast is an organism that eats the sugary starches, burps up carbon dioxide and farts alcohol. If that’s got you concerned, keep in mind it’s the same process for wine, as well as sodas such as root beer or kombucha.

“Yeast was only discovered when they invented the microscope,” explained Yan Matysiak, a quality control technologist who studies yeast for Live Oak Brewery. “They just called it ‘stuff’ before then. Of course they knew that when they added it, they had a pretty tasty drink. But when they isolated the yeast, they got certain flavors and over time it developed sub-flavors as they made purer strains.”

Specifically, we’re talking about a top-fermenting yeast usually associated with ales.

According to the beer enthusiast publication BeerAdvocate, ales ferment within a week and thrive in Bavarian summers. Lagers, the other major category for beers, are usually stored after fermentation and use yeast that lives in colder weather.

German monks who were brewing in the Middle Ages developed a rhythm to match the seasons, which carried over to German immigrants. As they moved into Texas in the 19th century, before the glorious days of air conditioning, they brought these seasonal styles and continued to brew hefeweizens in the summer.

Nowadays, it’s not necessary to have this Bavarian yeast to make a hefe, but it’s more traditional to do so. The bottom line is that yeast produces a mild alcohol content, around five percent by volume.

“[High alcohol drinks] just weigh me down,” said Teresa Uelschey, office manager over at Live Oak Brewery in Austin. “Our bodies are having to do a whole lot more processing when it’s super hot and humid, like right now.”

However, with all this German history, where do the lemon or orange slices come from?

Even though it’s not a hefeweizen or kristallweizen, Blue Moon is still an American wheat beer that clearly plays on this citrus note. Nevertheless, it’s a Belgian witbier that’s already spiced with oranges and the addition of a bright orange slice was just a marketing scheme.

“When people saw a beer with an orange slice in it, it piqued their interest,” said Jim Doney, president of Chicago Beverage Systems LLC, in a 2006 Wall Street Journal article. “They said, ‘Hey, let me try one of those.’”

The orange and beer mix doesn’t taste half-bad, either. Citrus fruits, such as lemons and oranges, add sweetness to balance out some of the yeast and grain flavors of any wheat beer — something maybe a bit too weird if you’re used to a six-pack of Buds.

Keep in mind that Live Oak and BeerAdvocate both say that citrus slices in your beer are uniquely American. Meaning you might get a couple of weird glances and hear some guttural phrases muttered if you try to pull that stunt at a traditional German draught house. 


Originally printed on 6/9/2011 as: German beer alleviates summer heat