The vote was uncomfortably close—with 54 senators voting to delay implementation of much-needed rules limiting the fees. Banks and major credit-card lenders, the same people helping drive college kids to suicide for years with unbridled credit-card marketing to young people untrained in handling debt, lobbied intensely against the bill. The fees pull in an estimated $20 billion a year for the industry, for debit-card services that cost lenders little to provide. You might remember that more people than ever are using debit rather than credit, part of the current trend toward less consumption and more saving that the public is engaged in that so threatens the GOP.
Some of the lobbying was done by Dick Armey of ‘FreedomWorks,’ a former Houston congressman who spends considerable time and energy trying to rally Tea Partiers in support of measures protecting the financial services industry. FreedomWorks gives every sign of considering the Tea Party gullible. Protecting abusive mortgage lenders, credit card lenders and other members of the financial sector from shouldering some of the burden of their own abuses is not in the public interest.
That doesn’t keep them from trying to claim it is, though. The D.C. Metro system has had large advertising signs posted for the past few weeks, urging the public not to let “big retailers” defeat our beloved credit card companies. You’d think VISA was Winnie Churchill. Following the Senate vote, banks pronounced yesterday a “dark day.” Here’s the darkness: Starting in July, swipe fees will be set at a flat rate of 12 cents per transaction. Multiply that 12 cents by billions of transactions, and the lenders still take away something that, to most people, looks like real money.
Meanwhile, Armey of FreedomWorks sent around a mass email under the subject line, “Stop Government Price Controls on Debit Cards.” More of that finish-off-the-public-once-and-for-all renaming (previously written about), but this one carries considerably less punch than renaming teachers and police ‘government jobs.’ ‘Price controls’ do not strike the same fear in a grass-roots movement with a populist tinge—too little populism, admittedly, but still it flashes out intermittently—that they strike among insurance companies, and anyway the accusation that the Obama administration or congressional Democrats are trying to implement price and wage controls the way Richard Nixon did is a bit much for anyone to swallow.
In fact, the white-collar goon squads slipped up big-time on this one. “TAKE ACTION!” Armey says in bold caps:
“Unless the law is changed, new Federal Reserve regulations will impose price controls on “interchange fees,” the price retailers pay for the ability to use debit cards. These price controls are yet another example of unnecessary government intervention that will likely result in higher fees and new restrictions on debit cards to include the end of banks issuing free debit cards and debit card reward programs.
Government bureaucrats should never be in the business of trying to set prices. The market should be allowed to operate free from government intervention in setting interchange fees.”
For one thing, this looks like an admission that swipe fees do add to consumers’ costs—“prices.” For another, this is another of those threats by the financial sector, like the insurance companies’ threat to raise their rates if health reform were implemented. Insurance companies raise their rates every year. There has not been one year in the past three decades when insurance rates did not go up. This time, the threat is that the public will lose free debit cards and debit card reward programs.
That last one is really a seriously hollow threat, as anyone who bothers to check the details of those ‘reward points’ programs can tell you. The customer has to rack up about half a million ‘reward points’ to purchase even a small item for ‘free.’ To get a ‘free’ round-trip flight to anywhere, it’s more like half a billion ‘reward points.’ This is an exaggeration, but not by much. It still takes an almost unthinkable number of purchases to get one freebie.
Quick reminder of the bigger picture here: 1) The GOP in Congress and GOP White House hopefuls are weeping crocodile tears over a federal budget deficit that their party largely created, with trillions down the drain through two wars and wasteful tax cuts for the rich and for corporations; 2) the same public figures go around saying that the federal government should balance its budget ‘the way people have to balance their household budgets,’ knowing full well that most households are surviving, if at all, partly on their mortgages, auto loans and education loans if not on other credit; 3) regardless of the wishes of individual rank-and-file members, the top party apparatus of the GOP has prevented or at least opposed every measure that might improve employment in the U.S. in the long term; 4) regardless of the wishes of individual rank-and-file party members, the same GOP apparatus has opposed every attempt to rein in abuses by the financial sector; and 5) because of that opposition, not one top executive in the industry that created the multi-trillion-dollar meltdown of mortgage derivatives has gone to prison or made adequate financial restitution.
To call this picture ‘irony’ would be too weak a sentiment. It represents quite simply an organized effort to break the back of the middle class, generally well orchestrated (though not with regard to swipe fees) and always well funded–being given a pass by the political press, which is missing this story the way it missed the story of Bush-Cheney’s true objectives back in the 2000 election campaign, missed the story of the 2000 non-vote count in Florida, and missed the story of the lead-up to invading Iraq.
And now they’re doing it again.
The picture is by no means just Dick Armey. Armey is just unusually crude and up-front—“Join the Fight Against the Unions,” reads another of his message lines—and I am undoubtedly doing him a favor (unsolicited and uncompensated) by writing this. That said, the FreedomWorks messages are peculiarly blatant. The most recent message reads, “Do Not Raise the Debt Ceiling and Save Medicare!”
Uncle Sigmund, call your office.
Another message from spring 2011 read, “First Wisconsin, Now Ohio!”
More eagerness to get public sector workers fired.
Not to harp on the misfeasance of the entrenched know-it-all political press, but that FreedomWorks has not been laughed out of town—along with the GOP budget proposals–really is a measure of institutional feebleness. Right now the entrenched are focusing most of their energy on Rep. Weiner, at the expense even of other sex scandals: Last word is that there are more shoes to drop re Gov. Arnold Schwarzenegger. Btw In case anyone missed it, Schwarzenegger was propped up, not to say boosted, by the same know-it-alls for years.
to be continued