Bank of America and Citibank have been in the news this weekend for new fees. BofA has decided to charge people $5/month to use a debit card as a debit card unless they meet some high account balance minima. Citibank is charging $15/month for basic checking unless account holders meet unlikely criteria. I'm sure the kind of people rockin' previously free checking are the ones able to keep $15k in the bank. I read online a few months ago that most Americans would struggle to come up with $2k cash with one month's notice. I'm not sure I could do it, but it depends on the month.
I have no formal economics training so perhaps I'm misunderstanding the situation. Banks used to loan out money at 10-15% and pay <6% interest which gave a revenue margin of 4-9%. The actual profit margin would be smaller depending on defaults, operating costs, etc. 4-9% gross margin sounds decent to me and banks also had other revenue streams since they could invest money. So...what happened? Well, it seems banks went from making smart loans to loaning money to anyone who could sign his name. What happened then? Well, it turns out that poor people can't afford $1M mortgages so they defaulted and the banks took it on the chin. With the help of lobbyists and some dumbass Congressfolks, they were able to get a big ol' taxpayer bailout.
Then some banking regulation went through which limited how much the banks could charge merchants for processing debit card transactions (Durbin was gettin' a handy from retailers like WalMart). The banks decided to make up for that lost revenue by stickin' it to poor and working class folk (nearly one and the same now). I'm not sure I want the federal government regulating how much banks can charge merchants for card transactions. The merchants were passing those costs onto the consumers and the idea was the new savings will get passed down to us. Really? Is that in the bill? What's to stop WalMart from pocketing the difference?
What the hell has happened to this country? When did we become this greedy? I don't know what it's like elsewhere, but I'm worried we're headed for an implosion of epic proportions. You've got an ever-widening gap between the rich and everyone else, you've got Congress openly taking handouts from lobbyists and you've got rich people crying about class wars whenever someone mentions taxing the rich. The marginal rate on rich people used to be obscene, but it was ok because they could "get by" on what was left over. Now? You've got rich people making money at the expense of everyone else. I'm all for allowing people to make as much as they can, but that doesn't mean we can't tax the crap out of them to fund needed programs. If you own more than one house or a car that cost more than $100k, don't come crying to me about class warfare. You're just a greedy douchebag and little of that money will save you when crap hits the fan.
Gingrich was one of the key dudes to turn the Republican party from one of compromise to one of opposition. They now oppose nearly everything the Democrats do out of habit and stall bills just to say they can. Is that tactic really helping everyone out? Now you've got the Democrats retaliating with similar tactics which is making it tough for anything to get done. The Founders probably intended for slow deliberation, but not stalling just to score political points.
I wonder how many people actually see a bright future for this country.
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