Paper or plastic......or paper? - Granite Grok

Paper or plastic……or paper?

 

No, not the kind of question that one would normally get at the cashier’s area, except we all are going to get bagged there, all thanks to our Federal Government.  Specifically, we can blame US Senator Dick Durbin from (D-IL) who decided to monkey with the private sector yet again with his Durbin Amendment (attached to the massive financial regulatory "reform" Act, the monstrosity generally referred to as "Frank-Dodd" with the words “By requiring debit card fees to be reasonable … small businesses and their customers will be able to keep more of their own money.").  And with that, he may well have doomed the debit card to dinosaur status.

Once again, Democrats decided that they knew better than the free marketplace and believed that they could institute changes without any adverse effects – after all, they have better titles than we do! So, instead of letting banks charge the retailers the cost of actually servicing the use of debit cards, they arbitrarily decided that 1/2 the cost was "a fair price" to the banks and let the retailers off the hook – even as they were told that the cost to actually provide the service was higher than that.

So, what’s the result? Enter in The Law of Unintended Consequences.

Instead of the banks eating the cost differential, they are making the actual users of debit cards (er, that would be US!) absorb the cost directly.  People are howling that their banks are going to start charging them $4 or $5 / month to use that piece of plastic.

Such is the wisdom of our Political Class of nitwits who always seem to not understand that in such a complex marketplace like the US, where there are over 300 million actors, that they cannot make even a simple change without it backfiring somewhere else.  And why should they?  Unlike in the free marketplace, there is no feedback cycle for price signals, only political ones.  In the case of Durbin, there probably will never be one as his District is so slanted Democratic, he’ll be there until he decides to not be there.

No cost to him, and of course he’s bashing the banks as well for his malfeasance:

Retailers across America are finally going to get a break. They’ve been pushed by Bank of America and the biggest banks to pay swipe fees that are imposed on them, with no power of the retailer to even bargain. That has to come to an end.

He is right – the big box retailers DID lobby for this, figuring that it would pad THEIR pockets instead of the banks.  Just one more good example of not just Government distorting the marketplace but crony capitalism where those that are connected (retailers) get the force of Government to gain an advantage in that marketplace (the banks).

Of course, we all know who is going to get the shaft in the pocketbook – that be we!  The end result, however, will be more inefficiencies for us (typical). Debit cards are quick and efficient, even for the smallest purchases and have proven so handy that many of we peons walk around cashless and checkbookless.

That will soon change, as many will look at the $50 or more in charges and say "it’s not worth it".  ATMs will be have to be frequented more (taking up more of our time, gas money, and risk of getting robbed) or we will have to wait longer at the cashier as some old biddy who can hardly see (hmmm, that might be me in a few more years – no, not the biddy, just old and slower) fumbles for the checkbook, scribbles in it, tries to find ID, and then gets it processed by the cashier.

This is progress (that watchword of the Democrats)? Not quite, Oh Democrat socialist – just one more thing thing to prove that when as Government Gets Bigger, the citizen gets smaller.  For if we really had a more limited Government, we could let the retailers and bankers fight amongst themselves but WE could decided with our dollars who would win the fight.  Instead, big government decides for us, leaving us no choice but to pay who Government thinks "deserves fairness".

Always trying to move the country forward, Democrats?  Well, this is a big one BACKWARDS!

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