Legislators, and much of the American public, are swinging clenched fists at Bank of America for daring to charge a $5 fee on debit card transactions. Congress must rectify this and quickly! Something must be done today. The heinous crime must be thwarted. Yet another corrupt U.S. company tries to pillage the common man’s back pocket. Senators rail in Washington about the proposed unfairness of debit card fees while mandating these same banks (and all employers) pay employees a federal minimum wage whether they make a profit or not. Apparently the irony of restricting revenue while mandating payroll expense is lost on these purveyors of fairness and justice.
These “swipe fees” are the latest hobby horse in the left’s crusade against U.S. corporations and their supposed swindling of the American public. Unbeknownst to most people legislators caused this new fee as an outcome of the previously passed Dodd-Frank law. The 2010 law aimed to cap what financial institutions can charge merchants to process electronic transactions. Since the government went after merchant fees, some banks are electing to re-coupe their lost income streams by going straight to the end consumer. And here you have another fine example of a consumer protection bill that, in practice, ends up hurting the consumer. The Left rarely considers cause and effect when crafting their social engineering legislation. Many well meaning people step in to legislate the assistance to one person while making life more difficult for three others.
Why does government need to do anything about electronic transaction fees in the first place? What happened to individual choice? Where did our free market principles go? If a person doesn’t want to pay $5 per transaction, then bank somewhere else. If enough people make this decision eventually Bank of America won’t charge $5 anymore otherwise their business will dry up. If nobody makes this decision, not only will Bank of America continue charging the fee, but other banks will follow along. Why? Because the market has determined that, while complaining about it, most people are flat out willing to pay the fee. This is market based economics. The government cannot better this system no matter how “unfair” some legislator believes it to be.
While unemployment remains at 9% and our yearly deficit tacks on $1.5 trillion a year, senators are out to punish Bank of America for charging a $5 fee. The Left, in my opinion, is pretty much unhinged. The answer to every problem is more government and less individual freedom. You never hear them praising the decades’ long results of their liberal agenda in almost all our major metro areas where Democratic politicians have largely ruled for over forty years. You never hear them saying we’ve raised enough tax revenue. You never hear them thanking the millions of small business owners who work long hours and create job opportunities for the rest of us. You just hear them denigrating Bank of America for charging $5 on a debit card transaction.
The free market is not perfect but it is the greatest wealth creation machine the world has ever known. If the American public doesn’t get this contrast after the past three years we are on a sinking ship filled with entitlements but no actual freedom. We must get it right in 2012, as we did in 1980 when Jimmy Carter was busy tanking our economy. There might not be time to recover if we don’t.