Sugar contents in popular cereals not so sweet

By Sally Greenberg, NCL Executive Director

Hats off to the Environmental Working Group (EWG) for its unmasking of the atrocious amounts of sugar that cereal makers are putting into their products. EWG found that servings of three cereals—Kellogg’s Honey Smacks, Post Golden Crisp, and Wheaties Fuel—contain more sugar than a Hostess Twinkie! Another 44 contain more sugar than three Chips Ahoy cookies. Sugar is more than a third of cereal by weight in more than 36 types.

This is particularly galling since the industry came down like gangbusters on a mere voluntary series of guidelines proffered by four federal agencies (FTC, CDC, USDA, and FDA) in a report that suggested reducing levels of sugar in cereal would be a healthy move by the manufacturers. The guidelines are, in fact, pretty moderate. They would allow 13 grams of added sugar per 50 grams of cereal, amounting to one-quarter of the sugar by weight. Two in three of the cereals EWG tested exceed that level. The cereal industry hired lobbyists galore, and the authors of the report were forced to revise it.

Industry’s response to the EWG report? Once again, manufacturers cry that the report is unfair because only two of the 10 worst cereals are marketed to children. So their argument is that eight of the 10 are marketed to adults—2/3 of whom are overweight as it is? (Obesity rates have doubled for children age 2-11 and more than tripled for teens 12-19.) By industry reckoning, I guess its okay to throw the whole bowl of sugar into cereal as long as it’s being marketed to those of us who should know better. No, we Americans need to be weaned from our expectation that everything we eat needs to be extra sweet or extra salty (see NCL’s recent comments on FDA’s proposal for sodium reductions). Excessive amounts of sugar and salt contribute to obesity, high blood pressure, heart disease, and stroke and industry clearly won’t reduce those levels on its own.

Thanks to EWG for its report, and shame on the cereal industry for pandering—indeed helping to create—the American sugar addiction. I hope this study serves as a further wake up call to an industry needs to reform its ways.

Food stamp program crucial in times of need

By Sally Greenberg, NCL Executive Director

It’s a mark of the terrible economy that more people are using food stamps, but the good news is that more than half of those newly benefiting are children. NCL’s founders would have said “hurrah” that the program is available at really tough economic times just like these, especially for kids.

When you look at the numbers—46.3 million people received food stamps—they represent a huge percentage of Americans: one in six, with a jump in the food stamp rolls of 8 percent over the past year. The Obama Administration says the program is more efficient than previously since benefits are provided electronically to recipients.

The Administration has cracked down on abuses, as it should. Benefits like these should be reserved for those who truly need them. We should have no patience for those who use a federal program to put money in their own pockets—including retailers who sell the prohibited cigarettes or alcohol using food stamps and take a commission for themselves. The Administration should throw the book at these folks, and they have—disqualifying 8,300 retailers from taking food stamps. And those who sell the food stamp benefits in exchange for cash on Craigslist should lose their access to the program permanently.

But these abuses shouldn’t diminish the critical importance of the program, which puts food on the plates of millions of the Americans in greatest need. Indeed, the food stamp program is one of the most successful of any of our government benefits. Our friends at the Food Action and Research Center, who work with hungry families and kids, note that “in the midst of one of the worst recessions this country has ever seen, food stamps kept very large numbers of families from going hungry. The program performed as it was intended to—it expanded to meet rising need, and the increased benefits helped millions afford enough nutrition for their households.”

Florence Kelley and Frances Perkins would be saddened by the fragile financial state of so many families, but they would be cheering the availability of this essential safety net for the poor.

What’s next for mine safety standards?

By Sally Greenberg, NCL Executive Director

The sad aftermath of the tragic and terrible explosion that killed 29 miners in April 2010 at the Upper Big Branch Mine (UBB) in West Virginia came down recently in the form of a  $209 million fine. Federal prosecutors settled with Alpha Natural Resources – the company that bought Massey Energy, the owner of the mine at the time of the explosion.  UBB was the worst mine disaster in 40 years and the fine is 40 times the size of any previous one. But, of course, nothing can bring back the 29 miners–they had families, were part of their community, they worked grueling jobs each and every day, and they were fathers, husbands, brothers, uncles and sons.

Dean Jones, one of the miners who died, had warned the company of the dangerous conditions before the disaster and was told to get back to work or he and the other miners would be fired. The owners refused to allow the United Mine Workers to organize UBB, thus removing any leverage the workers had to negotiate for safer conditions.

Under the settlement, Alpha will pay $1.5 million each to of the 29 families; the company has also agreed to spend at least $80 million on prevention reforms that will help to avert another disaster, including better air monitors in their mines and new devices to prevent suffocation.

The same week federal prosecutors announced the fine, the Mine Safety and Health Administration (MSHA) released a 1,000+ page report that described UBB as lacking the basic modern safety measures: coal dust and poor ventilation is what caused this explosion, the same conditions that killed coal miners 100 years ago. The UBB mine’s ventilation system wasn’t working properly, causing a build up of flammable coal dust and the hazardous conditions that lead to the explosion. $34 million of the fine is for Massey’s violations of safety requirements.

Don Blankenship, the arrogant former Massey Energy owner who was sent packing after the disaster, was notorious for flouting safety requirements. Massey kept two sets of books – one for regulators, and one for internal purposes. Blankenship was preoccupied with how much money the mines were making, sometimes checking production every few hours, and always at the expense of safety.

This historic $290 million fine and report certainly brings some closure to the Upper Big Branch Mine disaster. The question is – will safety in the mines finally become a true priority, will mine owners finally see the value in having their workforce represented by the United Mine Workers which puts safety and health at the top of its demands, and will the lives of coal miners begin to be truly valued after this sad chapter in coal mining and labor history? We certainly hope so, but only time will tell.

 

Tuition hikes, college president salaries, and student debt. Oh my!

By NCL Executive Director Sally Greenberg

One recent piece of news suggests that college students and their parents are getting rolled. College students are borrowing like never before, while finding it harder than ever to land jobs.

College seniors who graduated in 2009 owed an average of $24,000 in student loan debt, up 6% from the year before, according to a report from the Project on Student Debt. At the same time, unemployment for recent college graduates jumped from 5.8% in 2008 to 8.7% in 2009—the highest annual rate on record.

In the meantime, the salaries of college presidents have soared to levels that are  – in a word – unconscionable. The Washington Post reported recently that three college presidents in the Washington area earn more than $1 million, and three more earn more than $750,000. Johns Hopkins president William Brody actually received a $3.8 million retirement package!  Kevin Manning of Stevenson University earned $1.5 million. The salary boom of these college presidents is in line with national trends: 36 college presidents nationwide earned $1 million or more in 2009.

Who pays for these outsized salaries? Sadly, college students and their parents. In the past decade, tuition for state students public four- year colleges and universities rose 54 percent in inflation-adjusted dollars — an average of 4.4 percent per year. Similarly, over the past decade, tuition for full-time students at private four-year colleges and universities rose 33 percent in inflation-adjusted dollars — an average of 2.9 percent per year.

I know many young people who have had to take out six figure loans to pay these high tuition costs; the ones who are lucky enough to have a job in today’s economy often don’t have a lot left over for student loans payments after covering their rent, food and utilities. There’s something just fundamentally wrong with the fact that today’s graduates are swimming in debt while college presidents are taking million dollar salaries out of the till.

I know, I know, there’s the familiar excuses – we have to pay this much for high quality presidents, they raise millions of dollars etc. I’m tired of these flaccid explanations – becoming a college President should be about dedication to the academy, to education, to learning and to turning out fine young men and women who have a strong academic—and hopefully liberal arts—grounding. Unfortunately, for people like William Brody of Johns Hopkins, greed has overtaken the higher principles. Being head of a college is now a path to lifelong riches and student and their families are paying the price. What a shame.

Caller ID spoofing threatening cell phone privacy

By Sally Greenberg, NCL Executive Director

Recently the New York Times reported on the explosion in spoofing caller ID’s by debt collectors or marketers. It turns out that anyone basically can get access to a consumer’s cell phone and spoof the caller ID number—pretend to be a friend, a relative, or a nonprofit like the Humane Society to get you to answer the call.

Ironically, after reading the Times story, I searched the paper’s Web site and found two sites that promise “legal spoofing” so that you can pretend to be someone else when make calls. Spoof Card sells credits—$4.95 is the cheapest—and anyone can buy the credits and use them to spoof any other number but their own.

The other site sounds more sinister, and its name is fitting. “Phone Gangster” makes the following claims and says its spoofing is legal in the USA and Canada:

Upon calling a person, you will get to choose what number you want to appear as. Best of all, there is no way the party can find out what phone number the call originated from because their phone records will display the altered number. Our service is not only fun and useful, but it is legal as well. We have tested and confirmed our caller id spoofing service works in the USA and Canada. Purchase an instant phone card from us today!

In September, the Federal Trade Commission received 140,000 complaints about pre-recorded robocalls, more than double the 61,000 complaints in the same month a year ago, the agency said.

Under the Truth in Caller ID Act, passed last year and enforced by the Federal Communications Commission, it is illegal to transmit inaccurate or misleading caller ID information “with the intent to defraud, cause harm or wrongfully obtain anything of value.”

In addition to potentially violating the law, what’s wrong with being able to call someone using a phony caller ID? Because this would be a heyday for telemarketers, debt collectors, and scammers who already prey on consumers using landlines. Cell phones are the last bastion of privacy, where friends, family, and business associates—in other words, only those you choose to share your number with—get access to your cell phone. If that falls victim to spoofers, consumers will lose the trust they have in their cell phones and their cell phone providers.

Enforcement of the FCC and FTC protections are important, but state attorneys general offices should also stay involved, and no legislation should preempt their ability to protect consumers from the mischief of the explosion of fake caller IDs.

With Wal-Mart’s move to DC, an opportunity to change its poor labor image

By Sally Greenberg, NCL Executive Director

DC officials are welcoming six Wal-Mart stores into the city. That would be an exciting development except that the biggest retailer in the world has a poor reputation – for wage theft (forcing employees to work off the clock), failing to promote women, keeping wages so low that employees can’t afford health insurance, busting efforts to unionize, signing their employees up for food stamps because they pay such bad wages, and squeezing their suppliers to reduce prices so severely they’ve driven some of them out of business. And yet, it’s hard for DC to turn its nose up at an offer to provide fresh grocery options in neighborhoods that currently have only fast food and convenience shops. It’s regrettable that the city’s two largest and longstanding unionized grocery chains – Giant and Safeway – haven’t moved into these neighborhoods.

So now we have Wal-Mart saying it will provide 1,800 jobs, offer fresh produce, and pay competitively; not surprisingly, DC locals are happy to have them. If this deal moves forward, the one thing DC Mayor Vincent Gray should do, given Wal-Mart’s sorry reputation, is to require as a condition of providing permits to open the stores, a community benefits agreement that would provide the city with important concessions. Wal-Mart has curried favor by making donations to charitable organizations, including $3 million to workforce development in DC, and over half a million for summer youth employment. That’s not enough. The city should get really creative, and require that the chain remain neutral to the UFCW’s organizing efforts, require payment of a livable wage for all workers, have a plan to promote women and minorities in the management chain, and establish training programs for the city’s youth.

Wal-Mart doesn’t have to live with a bad image among labor forever. The company will be coming to DC in force and has a great opportunity to start to make over that image.

 

 

Cautions on credit card points bonanza

By Sally Greenberg, NCL Executive Director

As a consumer advocate, I write a lot about tricks and traps that credit card companies and banks use to trip up customers and get them to pay all manner of penalties and fees. These techniques have enriched banks to the tune of many billions of dollars, and too often lower income Americans are paying fees they can ill afford.

But the flip-side of the banks’ clever machinations are consumers who figure out how to make the most of free mileage and gifts available by opening cards and getting mileage automatically, or by charging large enough amounts on their cards to earn mega-points. Brad Larney from San Diego, CA took a trip with his wife to Cape Town first class from the United States for $2,000—usually a $30,000 trip—on miles that he earned by buying coins from the Mint, charging the cost to his credit card, and paying the bill with the value of those coins. He was featured in a recent Wall Street Journal article, along with Rick Draper from Canton, MI, who has racked up hundreds of thousands of miles and bonuses, and carries five cards in his wallet and has 30-40 more at home.

I’m of two minds on this practice.  On the one hand, I like that clever consumers have figured out how to outsmart those evil geniuses who draft the fine print on 30-page credit card contracts. And what they are doing is totally legal.

On the other hand, this business isn’t for amateurs. You can get into real trouble by charging up cards and then losing track of who you owe money to. You’ll pay through the teeth in fines, penalties, and interest often compounded and set at least 18 percent. Moreover, holding this many cards can mess with your credit score, making it hard for you to buy a house or take out a loan. So this is truly for those who have perfected the art of tracking their credit cards, paying them off each month or—better yet—knowing when deals like just signing up for a card can earn you 75,000 miles, an offer Capital One Bank announced recently. Those seem pretty safe, as long as you don’t start charging up these accounts. But still, this business can be treacherous so consumers, if you decide to get into applying for multiple credit cards or charging on a card to rack up points, proceed with caution!

FDA insider sentenced for stock trades

By Sally Greenberg, NCL Executive Director

It’s sad when public servants violate the trust that has been placed on them, but it’s also fairly rare in this country. Cheng Yi Liang, a 57-year-old longtime FDA chemist, was recently convicted of using inside information he gained while working at the Food and Drug Administration, to invest in pharmaceutical companies with new drugs coming onto the market. Liang worked on new drug approvals for the FDA, and apparently made more than $3.7 million trading drug company stocks. He made a series of online trades using brokerage accounts in the names of his relatives.

What’s impressive is that federal investigators were able to spot the buying and selling of these stocks by an FDA insider and trace the deals to Liang. He’ll go to prison for his crime, as well he should. Prosecutors are asking for between 5 and 7 years’ incarceration.

Many federal workers like Liang have access to sensitive information that they could use for their own purposes and for their own profit, and—in countries where corruption is rampant, those who work for government do just that—and often with impunity. We’re fortunate to live in a place that expects our public servants to abide by a strict code of ethics for public servants. We will not permit them to abuse their positions for their own benefit. Liang’s case is a cautionary tale for anyone working for the federal government—or any government agency—who abuses the public trust for personal gain: you may well end up behind bars.

Politicians take note: Wall Street protests reflect popular sentiment

By Sally Greenberg, NCL Executive Director 

NCL has joined with consumer and labor groups over the last few years on measures to reign in the egregious executive compensation provided to heads of American corporations. Since the 1970’s, executive pay has more than quadrupled while the salaries earned by average workers has fallen by 10 percent. The Dodd-Frank Act passed in 2010 included provisions requiring companies to report the spread between the highest and lowest paid employees.

I’ve often been surprised at the lack of public outrage when CEO pay hits these ridiculous levels – rising well beyond $10 million in many companies. But now we are finally seeing public outrage in the form of the “Occupy Wall Street” protests about the excesses of too many banks and corporations – including getting bailed out with taxpayer funds, as they were several years ago, and then distributing generous bonuses and benefit packages to executives.

To their credit, the anti-Wall Street protests are going far beyond executive compensation and bailouts. They are tapping into what the Washington Post’s polling shows is widespread anger and mistrust of Wall Street: 68 percent of independents and 60 percent of Republicans have an unfavorable view of big financial institutions. Polls also show that 65 percent or so of Americans believe that millionaires should pay higher taxes – and the same number supports the President’s jobs plan.

I don’t know whether these anti-Wall Street demonstrators have begun a movement that will last – I hope they have – but I think the leadership in the House and the minority in the Senate, which has blocked the higher tax on millionaires and the Obama jobs plan, should take notice of this movement that is spreading to cities, not only in America, but across the globe. They ignore these protests at their peril.

Nixon-era consumer advocate dies

By Sally Greenberg, NCL Executive Director

This week a consumer advocate who I admired greatly and who often attended heavily Democratic consumer conferences—even though she had worked for Richard Nixon—died. Her name was Virginia Knauer, and I regarded her as a friend and colleague. She was appointed to the post of Office of Consumer Affairs under President Richard Nixon in 1969, filling in a slot created by Nixon’s predecessor Lyndon Johnson. I introduced her a few times when I was on panels at consumer conferences and few in the audience remembered her.

Knauer won over critics and advocated for things consumers support now but that, sadly, no Republican in Congress today would ever support: she wanted consumers to have the right to bring class-action suits, not just in state, but in federal courts; she argued for a comprehensive system of product safety standards and simpler language in product warranties.

Knauer spoke her mind with her more conservative colleagues. She insisted that the fat content of hot dogs not exceed 30 percent, rather than 33 percent. Nixon took her side because, as he told her, “I’m on a low-cholesterol diet myself!”

In her day she was regarded by Ralph Nader and Senator Abraham Ribicoff (D-CT) as without clout or power. They were right that she couldn’t make many of the legislative changes they sought, but her use of the bully pulpit on behalf of consumers in speeches around the country—including her common refrain that “the consumer is getting fed up with shoddy material, poor quality, unsafe products, bad service, weak warranties, lack of adequate information…” was very important; indeed, this is a voice that is sorely missing in today’s in political discourse.

Ginny Knauer helped to create the Federal Consumer Information Center to distribute low-cost consumer publications, a program that goes on today and that NCL uses to get our materials out.

Knauer called herself a “pipeline to the President for consumers.” We could use more of those people today. If only our own President Obama would appoint someone to the post Ginny Knauer held! The world would be a better place for consumers.