Do they not know the philosophical underpinnings of Free Market Capitalism? If an individual thinks that they might be able to demand a higher salary from their employer, they do. And they can consider taking their service to another employer if they don't get what they want, if they can. Likewise a business or corporation will charge as much as the market will bear for their goods or services. The flip-side of this formula is that any individual or business or corporation might make more money by underpricing their competition and therefore getting more and better job offers or customers. A corporation who is taxed more, can try to recoup that loss and raise prices on their customers, but if their competitor chooses to accept a smaller profit margin and thereby gains a higher volume of the market. then they can actually make more money by charging less than the competition.
Here is the perfect test-tube example of what I'm talking about...Last year after the Dodd-Frank bill was set to limit the predatory fees banks charged at ATMs this was briefly the news of the day...
The changes come at a time of big upheaval in the banking industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress last year, imposes new compliance requirements that could be costly for banks. It included the Durbin amendment, which would limit banks’ income from debit card fees.
Source: Credit.com (http://s.tt/15DKH)
Banks Jack Up ATM Fees, Blame RegulationsThis story explained how the big banks were going to show the government that they were untouchable. The only thing is, it turned out to be wrong, because this is what actually happened...The changes come at a time of big upheaval in the banking industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress last year, imposes new compliance requirements that could be costly for banks. It included the Durbin amendment, which would limit banks’ income from debit card fees.http://www.credit.com/blog/2011/03/banks-jack-up-atm-fees-blame-regulations/Source: Credit.com (http://s.tt/15DKH)
Bank of America dumps debit card feesBank of America has abandoned a monthly $5 debit card fee, which was scheduled to begin in early 2012.The announcement came after competitors, namely Wells Fargo and JPMorgan Chase, announced they were no longer going to exact similar fees.The bank cited customer feedback and a changing competitive marketplace as the reason for the bank’s “change of heart,” according to a Nov. 1 statement.“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer, said in the statement. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
http://sundial.csun.edu/2011/11/bank-of-america-dumps-debit-card-fees/
It's called Free Market Capitalism in a Democratic Republic...BABY!
The changes come at a time of big upheaval in the banking industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress last year, imposes new compliance requirements that could be costly for banks. It included the Durbin amendment, which would limit banks’ income from debit card fees.
Source: Credit.com (http://s.tt/15DKH)http://www.credit.com/blog/2011/03/banks-jack-up-atm-fees-blame-regulations/
Hi Chip.
ReplyDelete"It's as if they are saying, 'Corporations are more powerful than our democratic system of government, they are above us and can't be touched and can do whatever they want.'"
Yes, exactly. That bothers me, too.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer, said in the statement. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
No, I don't buy that at all. I don't trust 'em that much.
Thanks Art. The way I see it, it's all ebb and flow. I agree that the big banks will not let up on this issue and eventually some will recoup the fees elsewhere. It's hard to imagine that some competitors won't choose to use that in an ad though "They charge you fees we don't". They will certainly try to pass on to the customer some of the large fines being passed our by regulators. So the point is that we can never be complacent. Lack of regulation on capitalism run amock was at the root of the Great Depression and this financial meltdown. But, in between the two we had some very good decades, with far better regulations in place than we have now. That's our goal, it's a never ending battle and no, we cannot trust the better angels of the rich to help the people, even though thankfully some of the most powerful do have such angels, FDR, Warren Buffet....But the first battle, which inspired this essay, is to remind everybody, we can win, it is not impossible to control capitalism and corporations and if they succeed in making pap like 'corporations don't pay taxes their customers do' into a truism, then we will have truly lost.
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