October 07, 2011
Protests

Along similar lines of yesterday's post about inequality: does anyone actually care about what these protestors think, besides themselves? We've already established I don't care about anyone else's feelings, and I mean that in a very specific way: you are entitled to feel however you like, and it doesn't -- nor do I think it should -- affect me one way or the other. So yeah, some lady on the front page of CNN is "87 and mad as hell," but so what? Why should that have anything to do with me?

I am looking for substance, people. If you just want to not feel bad, move to Haiti where everyone else is worse than you are, but people are more equal.

But there is no substance. They are mad that other people have bigger houses, and so they want to take them away. That's all this appears to be, to me, as I roll through Westlake Plaza.

Vice President Biden said the reason for the protests is that a "bargain has been breached with the American people." What bargain is that? I know of none, and, as usual, he doesn't say. He just wants us to tap into the emotions, like he does. It's the 21st century version of "I feel your pain."

Well, I don't feel their pain, because I see no substance to their complaints. Biden compares them to the Tea Party, but they are inverted: the Tea Party wants government to leave them alone, and the leftist protestors want a more activist government that will take more from everyone else and give it to themselves.

One of their most often-made complaints is something that I hestitate to even mention because almost everyone on the right agrees with it, and it's not really their point: they want to end "crony capitalism." Well a strong majority of the people on the right that I know think that we should end government subidies for businesses, including ethanol and other farming, health insurance for employees, and so on. These protestors don't care about ending "crony capitalism" any more than most of the rest of the country.

No, what they really want is to simply use government force against things they think are "unfair" to make them more "fair." That's at the root of this. When banks charge 44 cents per transaction, and the actual swipe cost is only four cents, why, that's unfair! So Senator Durbin and President Obama swoop in and cap the fees at half the average. The problem is that, aside from the fact that banks have more invested in the cost than the actual cost of the transaction (such as printing cards, providing customer service, development of the systems, and so on), it's not the job -- or even the right -- of the federal government to decide what is and isn't "fair" in the free marketplace.

(Of course, a more practical problem is that the banks always win anyway, and Durbin and Obama knew absolutely that the banks would pass on the lost revenue to the consumers through increased fees. Frankly, I wonder if the Democrats set a cap on swipe fees just so they could demonize the banks when the banks inevitably raised fees on consumers to compensate. Why have merchants upset with banks when you can have the consumers upset by banks?)

Look, people, if you don't like the banks, then avoid them. Same goes for any other business. You can do it. It just means you can't be lazy and you have to do more for youself. I know the thought of being independent scares you, but the thought of a government capable of forcing any person or business to do whatever the people want at the moment is far scarier. And leftists, of all people, should understand that.

Cross-posted on <pudge/*>.

Posted by pudge at October 07, 2011 08:42 AM | Email This
Comments
1. I am a bit surprised by the BOA reaction by consumers. BOA is correct that it should feel it needs to make a profit. Consumers need to realize they have choices and not choosing to bank with BOA since they raised fees is a choice they have. There are plenty of really good credit unions where they "own" a piece of the action. Why do they feel they NEED to bank with BOA?

Posted by: tc on October 7, 2011 10:10 AM
2. tc: they should be angry at Durbin, Obama, and the Democrats, who are 100% to blame for the increased fee. Again, they knew absolutely that this would happen, and they did it anyway.

Posted by: pudge on October 7, 2011 10:15 AM
3. Pudge,
I would agree that Durbin's bill raised this as a possibility. I would disagree that it "absolutely" would happen. If that is the case, why aren't all banks instituting the fee? There are plenty of other banks in the sea, along with bank alternatives, such as credit unions. Consumers need to educate themselves and not let the big banks like BOA stick it too them. It reminds me of the Southwest airlines commercials. I waiting for a BOA competitor to make a similar one.

The other end of the issue (i.e., not implementing Durbin's solution in the bill) puts the fees on businesses, where there isn't the consumer flexibility. It is my understanding (if you have other info, please correct) that BOA (and other big banks) were trying to raise Debit Card swipe fees on businesses and that Durbin's bill capped this practice. Businesses could chose not to accept VISA debit cards, but this affects consumers a lot more (and the businesses), than implementing Durbin's bill. If you know of a better alternative, then I am all ears.

Posted by: tc on October 7, 2011 10:39 AM
4. tc: you're wrong. There was no possibility that banks would not raise fees on consumers. I never said ALL banks would, but they knew SOME would. And BofA is only the first: many more will follow.

And yes, there should be consumer choice, but so what? Either the businesses don't want to raise prices to pass on those fees to consumers, or there's a law that won't allow them to. Either way, that's not the bank's fault, unless the bank itself prohibits the business from doing so ... in which case the business can choose to not do business with the bank.

If you let the market work, there's no need for intervention by government. I don't give a damn how much it "affects consumers." If it "affects consumers" a lot, because businesses stop accepting debit cards, then another company will figure out another way. This IS NOT A PROBLEM, until the government makes it a problem, which is what happened. We don't need an alternative to doing nothing. We need to JUST DO NOTHING.

And no, Durbin and Obama and the Democrats did not "cap" the increases, they cut BY HALF the fees that they were charging.

Posted by: pudge on October 7, 2011 10:51 AM
5. It's funny how when reporter ask the radical "occupiers" what they want to see happen and why they're mad they don't really know. They just know they "hate" people like Steve Jobs, big bad coporate execs....
Silly, silly, confused folks they are.

Posted by: Michele on October 7, 2011 11:03 AM
6. They are more than silly and confused. They are self-realized anarchists, some of which are part of rent-a-mob by the public sector unions (i.e. AFL-CIO, SEIU, etc.) and useful idiots.

This a larger scale of the WTO protests in Seattle in 1999, but they are not like the Tea Party. Also noticed that the mobs are almost all white people - tsk, tsk - they should be called racist for their monochromatic makeup.

Posted by: KDS on October 7, 2011 11:14 AM
7. What was the purpose of the Durbin amendment anyway? Was this merchant fee causing goods to be more expensive, and are they correspondingly lower since they've been capped? I don't think so. If the purpose was to shift the cost from merchants to consumers, I think it succeeded, in which case Durbin should be the one labeled anti-consumer, not BofA.

Personally, I've used a credit union for years, and while BECU didn't increase fees for its debit cards, it did shed its rewards program as a result of this law. So, in that way, the Durbin amendment was also anti-consumer.

Posted by: Palouse on October 7, 2011 11:24 AM
8. Pudge,
I am not going to disagree with your response. Thanks for your views.

I do have a question based on your second paragraph. Does BOA control all Visa Debit license fees, such as swipe fees, or is it now up to the individual institution (bank/cu that implements a Visa Debit card) that the business works with? I don't know the answer to this, so just asking.

Posted by: tc on October 7, 2011 11:43 AM
9. tc: as far as I know, it is up to the bank, but the bank has to pay a fee to VISA as well.

Posted by: pudge on October 7, 2011 11:48 AM
10. Here is Durbin's response. He quotes some studies, like ones by Fed Reserve, that it only costs 7 cents to process a debit transaction with signature. The new upper limit is now 24 cents per transaction, which appears to provide plenty of profit for BOA.

All I can say is I didn't do my personal banking business with BOA in the past, and don't intend to in the future. My opinion, regardless of whether the Durbin amendment is good or bad, is BOA always wants to nickel and dime its customers to death. There are other alternatives for personal banking. BOA consumers stop bitching and switch banks, Durbin amendment or no Durbin amendment.

Posted by: tc on October 7, 2011 01:11 PM
11. tc, sometimes you drive me nuts.

First, and most importantly, it is none of the government's damned business how much profit anyone should earn.

Second, as I already said, Durbin's caculation from the Fed didn't include anything by the cost of the transaction itself. Period. It does not include the costs of R&D, the card itself, customer service, marketing, or anything else but the actual cost of processing the transaction. To say the rest is profit is just a lie on Durbin's part. He knows it, too.

But again, even if it were all profit, the government has no business, no RIGHT, to tell any company what it may charge for a good or service. Durbin asks B of A to justify the fee: they should tell him to get bent. It's none of his damned business, unless he's a customer, in which case he can call the phone or write a letter like any other customer, or unless he's a shareholder, in which case he has a conflict of interest.

Finally, Durbin knew all along that the fees would be passed on to the consumer somehow. This is really indisputable, unless you think Durbin is a drooling moron ... which is not unreasonable, I suppose.

Posted by: pudge on October 7, 2011 01:19 PM
12. er, "anything but" the cost of the transaction itself.

Posted by: pudge on October 7, 2011 01:21 PM
13. BOA's finances are public record. In each of Q1 and Q2 2011, they turned profits of approximately $2 billion each quarter.

This debit card fee just adds to their bottom line.

Posted by: Joe Szilagyi on October 7, 2011 01:57 PM
14. Joe: so what? You didn't actually make a case for anything.

Posted by: pudge on October 7, 2011 01:58 PM
15. Just a note that no, all banks won't increase fees. But all banks aren't affected. I think the threshold was banks of 10 Billion in assets. So all the big banks will be taking action.

They knew what would happen. This was a move to redistribute the customer base to smaller institutions. That big banks would add fees wasn't an unforseen consequence, it was a benefit.

Posted by: Cecil on October 7, 2011 02:10 PM
16. Pudge,

Sorry if I drive you nuts. I really don't mean to. I am just trying to understand both sides of the argument.

You state that it is "none of the governments ... business...." In general, I would agree with you, but not when it comes to banking, which is a regulated federally (or state) charted business entity.

I don't know your stance on anti-trust laws. For me, market comes first except in markets where there isn't a competition (i.e., industries where the government charters licensees allowed to operate within the industry). Therefore, to me the government should have some say in regulating its use of the granted charter.

I take it from your response that the government should not set any limit on credit swipe fees, or are you arguing that they set the limit too low?

I would fully agree with your stand in a non-regulated industry. To me, however, banking is not one of those industries. Maybe you feel it should be, which is a separate discussion.

Posted by: tc on October 7, 2011 02:10 PM
17. tc: Sorry if I drive you nuts. I really don't mean to. I am just trying to understand both sides of the argument.

Try harder. I already answered those claims in my original post, and my followup comments.


You state that it is "none of the governments ... business...." In general, I would agree with you, but not when it comes to banking

Why not? What makes it different? And then why not just have government run all the banks? What would make THAT different?


I don't know your stance on anti-trust laws.

Since there no issue with antitrust here, I don't see the relevance.


For me, market comes first except in markets where there isn't a competition (i.e., industries where the government charters licensees allowed to operate within the industry).

Nonsense. First, there is TONS of copmpetition in banking. Second, the fact that government controls banks to some degree does not give them carte blanche to control ever minute detail of what banks do.


Therefore, to me the government should have some say in regulating its use of the granted charter.

Irrelevant. I never said no regulation is allowed. I said regulations explicitly to limit profits should not be allowed.


I take it from your response that the government should not set any limit on credit swipe fees

Absolutely. Not only is there no right of government to limit profits, but there's no practical reason for doing so except to manipulate the market for social or political reasons. It is very clear that the market can take care of itself here: business can revolt against debit card fees, another provider can come along, whatever. There's no reason government needs to "solve" this problem, if there is one. Durbin / Obama / Democrats are doing it, as Cecil said, intentionally to shift the fees directly to the consumer.

The dumb thing -- and perhaps I am playing right into their hands -- is that because they knew the banks would raise fees, this isn't even about controlling profits, it's just about manipulating the market and the voters.


I would fully agree with your stand in a non-regulated industry. To me, however, banking is not one of those industries

Almost every industry is regulated. This is an nonsensical stance. You need to make a case that THIS TYPE of regulation warrants THIS TYPE of price control.

Posted by: pudge on October 7, 2011 02:23 PM
18. tc, that's retarded.

Almost everything is regulated. You can't cut hair in this state without a license! Maybe we shouls set the price of a haircut?

That the government requires certain reporting, licensing and security as base measures in certain industries has zero to do with pricing.

Are you claiming there's no competition between banks? Really, then why is the mortgage rate different everywhere? Why different access and service fees? Why different minimum balance req's?

Because they are each deciding how and in what ways to compete for the customer. Banks have no monopoly.

To conclude that because you require government OK to conduct certain business types means that there's some inherrent right, even benefit to price fixing is idiotic. Price controls fail everywhere they are tried. Money always flows away from ineficiency. If people are unhappy with their bank's charge for swipe fees they can leave. The purpose of the fee cap wasn't to benefit consumers, it was to punish the big banks and redistribute many of their customers.

In the end the consumer is not a dolt. He is capable of deciding when he is satisfied with the value proposition of his bank.

Posted by: Cecil on October 7, 2011 02:27 PM
19. "...which appears to provide plenty of profit for BOA."

What business is it of ANYONE's what level of profit a company want to make? The consumers will decide that, and they always do a better job of knowing who to reward than government socialists do.

tc, your mindset is completely out of whack. You need to change your thinking from being bureaucrat-based to real true consumer-based.

Posted by: Michele on October 7, 2011 02:38 PM
20. Michele,
What business is it then of government to tell utilities what prices they can set?

The reason has to do with the fact that these are government charted entities that are given a restricted market to play in. Other competitors can't break into the market place often because of the government enforced charter process.

The reason, in the case of utilities for the limitation on competition, was due to the high cost of establishment of the market, like running power lines. Another reason for the limitation is so there isn't excess duplication of infrastructure.

I understand the debate on banking goes back to the beginning of the Republic. I for one do agree with more of the Hamilton viewpoint of the need for national banking infrastructure, along with state banking. You may not agree with this, which is fine. I can't envision a world without regulation. Whose banknote would be accepted where, for example? They had that in many states in the 1800's and it was chaotic.

In the case of VISA, BOA is the sole licensee. While there is some competition (Mastercard, Discover, AMEX), it still is very much an oligopoly, where a few can set the rules that others have to abide by. BOA is a federally chartered bank. Their right to do banking across the country is due to this charter. In my mind, this allows the government right to control what they can and can't do.

If you want to go to back to the wild and open 1800's model, that might be fine for you. It isn't for me. Look at the mess the banks created just a few years ago with all their "innovative" loan and debt vehicles. To me, history provides plenty of examples where unregulated banking has wrecked havoc on the marketplace. I just don't buy the argument that it shouldn't be regulated, including setting of what the maximum fees it should be able to charge businesses that use its limited vehicles of business (like the VISA processing system owned and licensed by BOA).

Posted by: tc on October 7, 2011 03:35 PM
21. tc: Utilities are actual monopolies, out of necessity. Banks are not monopolies in theory, principle, or practice. BE RATIONAL PLEASE.


In my mind, this allows the government right to control what they can and can't do.

So, according to you -- keep in mind I've asked you to establish the limits of your view already, and you've not, so basing this on what you say -- there is no limit to what the government may tell the bank to do, or not do, simply because they are in a "restricted market."

That's messed up.


Look at the mess the banks created just a few years ago with all their "innovative" loan and debt vehicles.

... which were created to fit into government regulation, which were overseen by and approved of by government regulators in some cases, and which were applauded and pushed by government officials.

And you think it was the result of a LACK of regulation? On what planet?


To me, history provides plenty of examples where unregulated banking has wrecked havoc on the marketplace.

Name ONE. I seriously doubt you can.


I just don't buy the argument that it shouldn't be regulated

NO ONE MADE THAT ARGUMENT. Seriously, STOP BEING STUPID. The question is not whether they should be regulation, but whether THIS regulation is the right of government to enact, and further, whether it makes ANY sense to enact it.

You have not given ANY argument for this.

Posted by: pudge on October 7, 2011 03:42 PM
22. Pudge:

Banks are highly regulated because they hold your money. It is not possible for the average citizen to full investigate the financial stability of a bank, so the government has to step in. Please see the bank runs of the 30s or the collapse of Lehman Brothers under Bush to see what happens when you do not regulate banks well.

Speaking of which, banks are under much less regulation today then they were just 15 years ago. We got rid of the wall between merchant and investment banking, the various federal regulators have had their budgets cut, while banks are figuring out more and more creative ways to make more and more money.

(Actually, this whole Conservative meme that we are being regulated to death is just silly. Go back to the 50s through 70s if you want to see a ton of regulations. We are nothing compared to that. If the pendulum needs to swing, it is toward more regulation, not less.)

Finally, to answer you question: Of course the government has the right to pass a law like this, and it does make sense. First of all, the Federal Government has the right to regulate commerce between the States. Read your Constitution. As tc pointed out, bank regulations have been argued over since the beginning of the republic, but no one doubts that the federal government has a right to regulate banks.

Second, swipe fees were hidden and monopolistic. If anything, as a Conservative, you should be happy that the law forced this practice out into the open and that people can freely choose which bank to go to. You can stay with BOA if you want, even though they put a premium on profit over customer service (which does seem a bit wrong, given that the only reason they are still afloat was a government bailout, but be that as it may), or you can go to a bank or credit union that realizes the bottom line is not the best measure of everything. Or, as the Ghost of Marley put it:

Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!


Shame conservatives have forgotten such important lessons.

Now go ahead and call me stupid or whatever you have to do to make yourself feel better when you have lost an argument.

Posted by: LionelHutzEsq on October 7, 2011 04:05 PM
23. Hutz: Banks are highly regulated because they hold your money. It is not possible for the average citizen to full investigate the financial stability of a bank, so the government has to step in.

Your conclusion is not backed up by your assertions. You can't think that's a rational argument. It's not possible for me to do a full investigation of good restaurants, yet there's many ways I can find out which ones are good, and which aren't. In fact, there's many private institutions who already investigate and judge banks: there's literally no need for government to do this for us.


Please see the bank runs of the 30s or the collapse of Lehman Brothers under Bush to see what happens when you do not regulate banks well.

You really don't know what you are talking about. First, what government regulation could've prevented the collapse of Lehman? Please, enlighten us. If such a thing could exist, the Democrats haven't put it in place. Lehman was heavily leveraged against bad mortgages, which were heavily encouraged by the government through regulations. To pretend that the collapse of Lehman -- and the financial sector in general -- wasn't in significant part caused by government regulation is willful ignorance.


Speaking of which, banks are under much less regulation today then they were just 15 years ago.

False.


We got rid of the wall between merchant and investment banking, the various federal regulators have had their budgets cut

And we have Dodd-Frank and this new bullshit consumer department and the credit bill that caused our new $5 fees from Bank of America.


... while banks are figuring out more and more creative ways to make more and more money.

Yes, thankfully the banks are still figuring out how to work around the idiotic government intervention.

Or did you mean that as a bad thing? It's amazing to me that people think profit is bad. Absolutely bizarre.


(Actually, this whole Conservative meme that we are being regulated to death is just silly. Go back to the 50s through 70s if you want to see a ton of regulations. We are nothing compared to that. If the pendulum needs to swing, it is toward more regulation, not less.)

Again, your conclusion isn't backed up by your assertions. If I say "I am being bludgeoned to death" because 50 people are, literally, bludgeoning me to death, and then half of them stop, would you say it is "silly" for me to say I am still being bludgeoned to death? That's your actual argument: you are looking (incorrectly, but that's beside the point) at the relative amount, and saying that less is good, when, in fact, less very well could still be very bad.


Finally, to answer you question: Of course the government has the right to pass a law like this

Back it up.


and it does make sense

Back it up. You didn't say ONE WORD that even ATTEMPTS to show this regulation makes sense.


First of all, the Federal Government has the right to regulate commerce between the States. Read your Constitution.

"Regulate" does not mean "total control." I know how to read. You don't. Your argument means that, literally, the government can tell Bank of America to do anything. With no limitations, except for particular exceptions (i.e., free speech and so on). That's nonsense. There's no possible way to look at the history of this nation and read the Constitution to say that.

As tc pointed out, bank regulations have been argued over since the beginning of the republic, but no one doubts that the federal government has a right to regulate banks.

And as I pointed out multiple times, this is an idiotic thing to say, because no one is saying the federal government does not have a right to regulate banks. I am saying that they don't have the right to regulate banks in this particular way. Your only argument, which is self-evidently stupid, is that there is no limit on what the government can tell banks to do.


Second, swipe fees were hidden and monopolistic.

False on both counts. Hidden to consumers, yes, but not to the people paying the fees: the business operators. And no, there's nothing remotely monopolistic about them. Please stay honest.


If anything, as a Conservative, you should be happy that the law forced this practice out into the open and that people can freely choose which bank to go to.

That's another stupid argument. You might as well say I should be happy if I lived in Singapore, with few civil rights, because at least the streets are clean. I am not opposed to charging fees to consumers in lieu of fees to businesses: but that is a decision to be made by the market, not the government.


Or, as the Ghost of Marley put it:

Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!

I wonder why you think that has a damned thing to do with this discussion. It doesn't.


Shame conservatives have forgotten such important lessons.

You're lying. Just because we don't agree with government intervention doesn't mean we don't care about others. That is one of the biggest lie leftists thugs tell, and I'll be damned if I will let you continue to tell it here. We simply believe the best way to care for others is not through government. And you cannot reasonably argue we are wrong.


Now go ahead and call me stupid or whatever you have to do to make yourself feel better when you have lost an argument.

Right. I "lost" the argument. You didn't back up any of your claims. You did cite the Constitution, but you misinterpreted it, pretending it says that government's power is unlimited over interstate commerce, when it does not say any such thing, and was never, ever, imagined to mean such a thing by the people who wrote it. Other than that, you didn't even ATTEMPT to back up any of your claims. You think just by saying "Lehman Brothers!" you are making a point, but you're not.

Posted by: pudge on October 7, 2011 05:59 PM
24. The irony is that nobody has done more for crony capitalism than Obama.

Posted by: LesLein on October 9, 2011 05:53 AM
25. RE: Bank of Americas "Billions in Profit."

I get so tired of seeing the "how dare they make billions" thing.

Given the size of Bank of Americas shareholder base, that's not a big number.

People need to remember that it's not the size of the profit, it's the number of ways it's distributed.

If you're a 401K holder, pension holder, or stockholder, you should learn to understand this. Big companies need to earn big money or they lose their stockholder base and have financial problems. It's not like someone is taking those billions and putting them in a wallet, than money goes to the stockholders and pension plans and pension investment groups,etc.

Posted by: johnny on October 9, 2011 10:07 AM
26. These people are protesting against Obama, even. Therefore (according to liberal logic), they must be racist!

Alfonzo Rachel takes it to 'em:

http://www.pjtv.com/?cmd=mpg&mpid=84&load=6135

This is just awesome. ...

Posted by: Michele on October 9, 2011 02:50 PM
27. If these protesters had some time (and probably guidance) in connecting the dots, they would see that they should be directing their anger at Obama, Pelosi, Reid and Barney Frank just as much as at the Wall Street bankers. Some of the smarter ones may have figured this out already.

The Occupy movements are really protesting against greed - like Gordon Gecko. Some CEO's are good even though they are wealthy. They should be protesting against the Government, who has continuously lied to them and others about the economy. I protest against greed also, but my solutions are different than theirs (like repeal the avalanche of regulations under Mr. Obama's watch and dismantle Dodd-Frank). The folks demonstrating need a time-out to regroup and come up with some viable solutions that are civilized - that is probably a stretch out the comfort zone for the leftists in this crowd.

The White House is using the Wall Street Bankers and attaching them to the Republicans as their straw man, to deflect blame from themselves who merely out to force those out of work to be dependent on the Government - kinda like they have been doing in Venezuela recently - notice ?

Posted by: KDS on October 9, 2011 08:43 PM
28. johnny: not just that, but even if they made TRILLIONS in profit, that is a GOOD thing, not a bad thing, in any way whatsoever.

It's absolutely insane to think that profit is bad.

KDS: yes, they are protesting against greed, because they don't understand anything. They think greed is a problem, when it self-evidently isn't. The problem is a government that enables greed to be used as a motivation to violate the rights of others. Some simple examples: corporations taking our money through government subsidies, getting special waivers of regulations meant to protect us, and -- as with the collapse of the financial industry -- regulators in bed with the companies they are supposed to be regulating, letting them do things they aren't supposed to be doing.

It's government that is at the root of all these problems. If government protected our rights, first and foremost -- as many conservatives and libertarians would have it -- then we would recognize that people can be as greedy as they like, as it doesn't hurt anyone.

Posted by: pudge on October 10, 2011 06:13 AM
29. Pudge,
You asked "So, according to you -- keep in mind I've asked you to establish the limits of your view already, and you've not, so basing this on what you say -- there is no limit to what the government may tell the bank to do, or not do, simply because they are in a "restricted market."

I didn't see this question before, sorry for not answering. I will try to answer now.

Yes, I do see limits in what government can ask of banks. I view government as being the consumer and small business advocate in the banking market. If there was broader competition, like there used to be, then government would have less of a role. However, if you look at the banking consolidation that has happened over the last 20 years, there are too few of players left in the banking game to have a fair market. Because of this fact, and because certain aspects, like credit/debit payment systems are monopolistic in nature, I view government's role is to set some rules on how the game should be played that would balance the game so neither consumers, small businesses, or big banks have an advantage. I have no problem with banks making a profit. What I have a problem with is when they basically can control the market because of their size and lack of competition and establishing unfair policies that hurt consumers and small businesses. The credit swipe fee limit was needed because BOA's share of the market and its impact on businesses. It was hurting businesses that in turn hurts consumers. Add to the fact that BOA had to ask the government to help it stay in business because of its poor business decision to buy Countrywide, I think we as consumers have a right to demand BOA play by certain rules for a while.

The issue of government involvement is due to the non-free market atmosphere in today's Banking world. I am not sure of the exact figures, but it is widely report that four banks own over 80% (if not more) of the U.S's banking assets (BOA, Chase, Citi, and Wells Farge). Here is a breakdown by assets. As you can see those four, control the game. Now if there was a "Moneyball" situation where the small banks could get back in the game, I would side to less regulation. However, that isn't the case, the only growth right now in banking is consolidation, which leads further to an oligopoly business environment.

Two questions for you: (1) In an oligopoly environment, do you still abide by no or few government oversight, and (2) in the movie "It's a Wonderful Life" are you a Potter fan or a George Bailey fan?

Posted by: tc on October 10, 2011 10:06 AM
30. tc: Yes, I do see limits in what government can ask of banks.

Such as? You said a bunch of things to justify the limits you do see, but you didn't say one word about what limits you see, and, more importantly, on what basis those limits can exist in the first place. If your argument is that government can limit fees, how does that same argument not mean that government can force a bank to change its logo, serve only decaf coffee to customers, open branches in certain locations but not in others ... virtually anything else, including forcing them to shut their doors entirely?

Perhaps your implication is that you only would grant government certain powers because of certain conditions, which does not imply unlimited government authority. But you still provided not even a hint of where you would draw the line.

I won't even read your two questions for me, as you haven't answered mine.

Posted by: pudge on October 10, 2011 10:17 AM
31. Pudge,

You state "how does that same argument not mean that government can force a bank to change its logo, serve only decaf coffee to customers, open branches in certain locations but not in others ..."

To me, you are bordering on the ridiculous here, I stated plainly about leveling playing field. This means setting regulations that apply to all in the specific market and not a specific player. What you are stating would be like the NFL stating that Chad Johnson couldn't change his last name Ochicinco. It has nothing to do with the play of the game. The credit swipe fees is a "play of the game" rule that is within scope. (NOTE: By use of NFL example, I by no means endorse some of the current NFL rules that do go beyond the play of the game and rules that actually restrict the play of the game).

Where I draw the line, is where the rules go beyond the "play of the game" or target a specific company. For example, in Healthcare, say the government established a rule that logos couldn't contain the color blue. This would be out-of-bounds. Even a rule that states specific non-community operating principles, can go beyond the "rules of the game" principle I am putting forth. For example, in Healthcare, a rule that requires CNA's to have a specific certification would be community-consumer appropriate. Whereas, a rule that states that CNA's must have no tattoo's would be inappropriate.

If you fail to understand the concept of "rules of play," then I can't help you. It is common to sport, but is also applicable in business. For the latter, think of game theory and its application to business, such as prisoner's dilemma or stag hunt scenario's. When the number of players that controls the game is small, certain game theory aspects influence the game and need to be accounted for. It is no longer a "free market" due to barriers of entry and other factors.

Posted by: tc on October 10, 2011 12:12 PM
32. tc: To me, you are bordering on the ridiculous here

If so, then that is your fault. My very point is that your argument, literally, provides NO LIMITS for the exercise of government power over the operations of a bank.


I stated plainly about leveling playing field. This means setting regulations that apply to all in the specific market and not a specific player.

Fine, then they are going to make all banks have pink logos with bunnies in them.


What you are stating would be like the NFL stating that Chad Johnson couldn't change his last name Ochicinco. It has nothing to do with the play of the game.

You're committing the question-begging fallacy. I think that how much a bank charges a retailer for a debit card transaction has nothing whatsoever to do with the government's interest in regulating banks, just like you think that Chad Johnson's name has nothing to do with how professional football is played. Some people think that whether Ricky Williams smokes pot has nothing to do with how the game is played, yet they regulate it anyway, and I guarantee you if somehow Chad Johnson changed his name to something profane, the league would've stepped in somehow.

The very question here is whether this regulation has anything significant to do with the government's legitimate interests, and I say it doesn't.


The credit swipe fees is a "play of the game" rule that is within scope. (NOTE: By use of NFL example, I by no means endorse some of the current NFL rules that do go beyond the play of the game and rules that actually restrict the play of the game).

Of course, but the use of the example highlights the problem of your view: someone, somewhere, with government power, can easily argue that ANY regulation has to do "with the play of the game." I can do it for everything I mentioned. Logos and caffeine affect consumer decisions, so we need tight regulations on them, the regulators would say. It's too easy to come up with an excuse to justify ANY regulation, if you don't have a specific and limited framework, which you don't. It's completely open-ended, with literally no limits.


If you fail to understand the concept of "rules of play," then I can't help you.

I understand it far better than you: you are apparently open to making up any rules you wish whenever they suit you.


And you still have failed to mention a single limit on government power, let alone provide a reasonable framework for how that power would be limited.

Posted by: pudge on October 10, 2011 12:49 PM
33. You wrote "I know the thought of being independent scares you, but the thought of a government capable of forcing any person or business to do whatever the people want at the moment is far scarier."

That's rather bizarre. Protesting and requesting government intercession to solve a problem is a founding principle of the American republic. You seem to have issues with the concept.


Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The founders of this nation and the writers of the Bill of Rights were certainly not scared of being independent. They did not form a union out of fear.

Maybe instead of accusing others of being scared you should take a look in the mirror and understand what scares you about government of the people, by the people and for the people.

Posted by: ProtestSupporter on October 10, 2011 01:35 PM
34. ProtestSupporter: That's rather bizarre.

Not really, no.


Protesting and requesting government intercession to solve a problem is a founding principle of the American republic. You seem to have issues with the concept.

No, I do not. You simply don't understand what I wrote. I never implied protest and petitioning is wrong in any way. What I said is that it is scary to want government to be able to -- and I quote, now, with added emphasis -- "[force] any person or business to do whatever the people want."

Y'all want the government to fix all your problems, but the Constitution doesn't allow that. A government without limits, that can do anything the people want, is completely opposite of the principles this republic was founded on. James Madison spoke volumes about the importance of having a central government that was very limited, without the ability to do whatever the Constitution didn't enable it to do. Hence, the laundry list of enumerated powers in Article I Section 8, and the Tenth Amendment.


The founders of this nation and the writers of the Bill of Rights were certainly not scared of being independent. They did not form a union out of fear.

You mean the Bill of Rights that explicitly states that the federal government cannot do anything that the Constitution doesn't give it the power to do?


Maybe instead of accusing others of being scared you should take a look in the mirror and understand what scares you about government of the people, by the people and for the people.

Just read Federalist 10. I share the same "fear" of the people that James Madison -- father of the Constitution, author of the Bill of Rights -- does; that, as he wrote, a pure democracy unlimited in what powers it may exercise is "incompatible with personal security or the rights of property."

The whole point of the Bill of Rights -- including the Tenth Amendment, which almost all leftists despise, and apparently you do as well -- is to limit the power of government. Just as the government may not take away your right to protest (Amendment I), so it may not take away my life, liberty, or property without due process (Amendment V), so it may not regulate anything it wishes to just because a group of people ask it to (Amendment X).

If you truly believe in a "government of the people, by the people and for the people" that is not limited and is able to "[force] any person or business to do whatever the people want," then it is you who don't give a damn about the Constitution or the Bill of Rights.

Posted by: pudge on October 10, 2011 02:06 PM
35. Behold the New Pee Party..an astroturfing progressive terrorist group.

Posted by: Hellpig on October 10, 2011 06:30 PM
36. Well, don't use the banks, yes, but you don't have to give up banking services.

You simply switch to a credit union. BECU takes everybody these days, and they don't charge ATM fees, nor do they charge a monthly debit card fee.

Posted by: crakma on October 10, 2011 09:17 PM
37. Mr. pudge,

I am completely familiar with the Federalist Papers. Furthermore, from your writing it would appear I understand them a whole lot better than you do.

It is very hard to understand exactly what you are actually against. Regulation of financial institutions by the government IS "due process". Is there any responsible person in the Obama administration or Congress pushing the case to regulate banks and financial institutions outside of the constitution? Who? Where?

Wanting more government regulation of financial instituitions is a reasonable request.
Wanting to limit the charges and fees banks impose is absolutely within the purview of our Constitution (commerce clause), and regulation of interstate banks has been on going for nearly 200 years.

Regulation of banks is not a threat to our liberty. Financial institutions the size of BOA, Goldman, CitiCorp, etc, running amok are not only a danger to our financial economy, but ARE a clear and present danger to our property and our liberty.


Before you come back to refute everything I have said, find $0.99 and go read 46 pages.
http://www.amazon.com/gp/product/B0050D2EZQ/

Regulation of interstate banks and restricting their actions to the will of the people (whatever we want) by our government and beyond simply the power of the market is needed more in the 21st century than the 20th.

Posted by: ProtestSupporter on October 10, 2011 09:42 PM
38. ProtestSupporter: I am completely familiar with the Federalist Papers

False. If that were true, you would not have falsely claimed the founders of this nation believed in unlimited government power. It was precisely the opposite. No one can understand even the most basic views of our founders, and think that they believed "whatever we want" was, in any way, a reasonable or lawful way to make policy. They took great pains to prevent "whatever we want," and they said so explicitly. I could give you many Madison quotes, within and without the Federalist, showing how he believed that the federal government had few and defined powers, not the unlimited authority you desire it to have.


It is very hard to understand exactly what you are actually against.

False. It's quite simple, actually, as I've stated it very clearly, and quoted it back to you when you falsely asserted that I was against protesting and any government intercession. I am against the absurd and explicitly unconstitutional notion that government can do whatever the people wish it to do.


Regulation of financial institutions by the government IS "due process".

False. You don't know what "due process" means. If "due process" were whatever the Congress legislated, then the Bill of Rights would not provide explicitly for it, because the Congress could simply bypass the Bill of Rights through legislation. The whole point of the Bill of Rights is that it is above any legislation.


Is there any responsible person in the Obama administration or Congress pushing the case to regulate banks and financial institutions outside of the constitution? Who? Where?

Yes, many of them. Me, Ron Paul, everyone at Cato and Reason and National Review ... and if you say "they aren't responsible" then you are committing the question-begging fallacy. You want a link? Sure. Here and here and here, for example.


Wanting more government regulation of financial instituitions is a reasonable request.

False. Only a request for specific regulation is reasonable. A blanket request for "more regulation" is patently unreasonable, as it contains no substance of any kind, and doesn't address any actual problems with any actual solutions.


Wanting to limit the charges and fees banks impose is absolutely within the purview of our Constitution (commerce clause)

False. The "commerce clause" is not a blanket provision allowing the government to do anything it wishes to, without limit, in areas of interstate commerce. That's stupid. The fundamental problem with your view -- which you would know, if you'd ever read the Federalist Papers -- is that "regulate interstate commerce" does not mean "control any part of any industry which happens to cross state lines." There is no serious doubt that the meaning of the words is to allow the federal government to act where single states are incapable of acting -- which is only in those areas where exchange of goods happens across state lines -- not to take total control over entire industries.


and regulation of interstate banks has been on going for nearly 200 years.

False. Federally setting fees banks may charge has not been going on for nearly 200 years. Please do not lie.

And yes, you are lying, by implying that this type of regulation has been going on for nearly 200 years. NO ONE is talking about getting rid of or resisting all regulation. It's only particular regulations, and types of regulation, that are being criticized.


Regulation of banks is not a threat to our liberty.

False, of course. Everything the government does, by definition, is a threat to our liberty. And most things the government does -- including every piece of regulation it passes -- directly restrict our liberty, because that is what all regulations do. Regulation restricts our liberty, and the threat of more regulation is a de facto threat to our liberty.

That's why the Constitution created a limited government that would be accountable to both the people (through the House) and the States (through the Senate), to help minimize those threats.

It's so bizarre that you can't see something so clearly and self-evidently true. Regulations that do not take away our liberty cannot exist ... it's a nonsensical proposition.


Financial institutions the size of BOA, Goldman, CitiCorp, etc, running amok are not only a danger to our financial economy, but ARE a clear and present danger to our property and our liberty.

Far less so than government. This is clearly true, if for no other reason but that every single thing you complain about those institutions doing, was the direct fault of the federal government.


Before you come back to refute everything I have said

I'll tell you what: put a single cogent argument together and I will consider caring about your demands.


Regulation of interstate banks and restricting their actions to the will of the people (whatever we want) by our government and beyond simply the power of the market is needed more in the 21st century than the 20th.

The government doing "whatever we want" is a patently unconstitutional concept, subverting the very nature of the limited government established by the Constitution.

And you would know that if you had ever read the Federalist Papers.

Posted by: pudge on October 10, 2011 10:15 PM
39. Mr pudge,

I apologize. I had mistakenly assumed that your post and your comments were intended for a dialogue.

"If that were true, you would not have falsely claimed the founders of this nation believed in unlimited government power."

Tell me sir, where exactly @33 or @37 did I claim the founders belived in "unlimited government power"?

I did not.

That you need to introdue a straw man to make whatever point you are trying to make shows that, you sir, are not only foolish, but are a disingenuous scoundrel.

Posted by: ProtestSupporter on October 10, 2011 10:31 PM
40. ProtestSupporter: I apologize. I had mistakenly assumed that your post and your comments were intended for a dialogue.

Then why didn't you actually say anything of substance? You started off lying about what I said, pretending that I in any way spoke out against protesting, or against government activity in response to protesting, when I only spoke out against certain government activity.

And almost everything you said was just patently false: that the Founders believed the people should get "whatever they want," that regulation is due process, that few if any responsible people believe the government is pushing unconstitutional regulations, and that regulations are not a threat to liberty.

I do have little patience for people who lie about me, and then who pretend to be knowledgable (you even directly claimed to understand the Federalist Papers, which I exposed as an obvious lie) while demonstrating extreme ignorance.

You are the one who needs to look in the mirror.


Tell me sir, where exactly @33 or @37 did I claim the founders belived in "unlimited government power"?

From -- literally -- beginning to end. Your first sentence, @33:: You wrote "I know the thought of being independent scares you, but the thought of a government capable of forcing any person or business to do whatever the people want at the moment is far scarier."
That's rather bizarre. Protesting and requesting government intercession to solve a problem is a founding principle of the American republic. You seem to have issues with the concept.

You were explicitly disagreeing with my assertion that government should not be capable of forcing any person or business to do whatever the people want, which necessarily means you think government should be able to do whatever the people want.

You then said so in those actual words, in your last sentence @37: Regulation of interstate banks and restricting their actions to the will of the people (whatever we want) by our government and beyond simply the power of the market is needed more in the 21st century than the 20th.


I did not.

You're a terrible liar.

Posted by: pudge on October 10, 2011 11:02 PM
41. "the leftist protestors want a more activist government that will take more from everyone else and give it to themselves."

Hmm... Tulsa Oklahoma and West Plains Missouri never seemed like leftist places to me and they have protests going on.

Posted by: MIchaelfromHA on October 11, 2011 11:13 AM
42. MIchaelfromHA: you didn't actually present an argument, or even any idea to think about. That you don't understand other places very well is not interesting.

Posted by: pudge on October 11, 2011 11:55 AM
43. Yeah, didn't think you'd get it. But, you can't blame a guy for trying.

Posted by: MichaelfromHA on October 11, 2011 12:53 PM
44. I knew you would incorrectly think I didn't get it.

Posted by: pudge on October 11, 2011 01:11 PM
45. NEED A JOB? The Pee Party Progressives are hiring to occupy wall street

Posted by: Hellpig on October 12, 2011 05:27 AM
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