Is it any wonder why big corporations eventually warm to the idea of corporatism / fascism? Share the (people’s) wealth!
The Durbin amendment imposes a price control scheme on the fees oil companies and retailers pay when they accept payment by credit cards. The amendment was conceived and pushed for by lobbyists for big oil companies and big retailers like BP and Wal-Mart. Their goal is simple — shift the costs of accepting credit cards from their bottom line to the consumers.
Durbin admitted that he offered the amendment after detailed discussions with a big retailer CEO. The bottom line is that the Durbin amendment will put billions of dollars into the pockets of Wal-Mart, big oil companies like BP and other big box retailers who depend on consumers and their credit cards for revenue. It’s unfathomable that while the government has opened a criminal investigation into BP, the US Senate wants to hand them a massive check. Under the Durbin “BP Bailout” amendment, giant corporations will no longer be required to pay their fair share of the costs of receiving these services. Consumers will now pay those costs.
The Durbin amendment is a bailout for a new set of corporations looking to dine at the public trough. The Financial Reform bill gives bailouts to Wall Street and big banks and now others like BP and Wal-Mart have come asking for their piece of the pie.
These companies should pay for the services they choose to use and stop using lobbyists to rig the system and rob consumers.
Well, I agree that these companies should pay for the services they choose. But I can’t say that I blame them for using whatever system government imposes to their best advantage: after all, they owe such strategies to their shareholders — and as it is their business to turn a profit, they will look to turn a profit in the best way they can under the law.
Instead, we should be turning our attention to the kind of government that promotes such cozy cronyism. And we have that kind of government right now: a “progressive,” expansive federal government looking to solidify its ever-capacious reach into the private sector.
Again, Edward Bellamy’s Marxist “Nationalist” utopia, Looking Backward, predicted just this kind of arrangement: corporatism, of liberal fascism, is the step immediately preceding the eventual government takeover of all major industry.
We’re watching it happen right before our eyes, in plain sight. The problem is, it turns out roughly 45% of the population seems to believe the promises of socialism are the way forward for this country — a product of the institutionalization of many kernel assumptions of leftist ideology, beginning with language and spreading from there, having taken root in the very foundations of our epistemology. And like so much progressive bindweed, once it takes hold, getting rid of it for good often requires starting over from the soil upward.
And that’s the kind of work today’s Americans would rather just farm out to illegals, anyway.
(h/t Simon, via email)
Debit card it is, then!
This is depressing as hell. Strange that Durbin would continue pushing it, given BP’s current dilema in the Gulf of Mexico, but I suppose this this has been in the works for years. Durbin, Obama, and pals have bigger goals than worrying about some political backlash from a bunch of hick fisherman. Plus pelicans don’t vote.
Hey, maybe John Grisham and Scott Turow could team up for new legal thriller novel.
Is there any link or article that discusses how much of an increase we should expect?
The charge imposed on retailers by credit card companies is around 3%, JD.
It’s all part of the Democrats killing capitalism. The money is going to be paid by the consumer no matter what–whether BP or Wal-mart pays it and passes on the cost, or whether the consumer pays it with added charges to his bill. However, add charges to my bill, I’ll use the credit card less often and use cash more. If everyone cuts their credit card usage, then there’s less money for the credit card companies–which are owned by the big banks. Less money for the big banks, less money to lend, interest rates go up. High interest rates, less borrowing by small businesses, less expansion, no job growth. More welfare/unemployment payments, more government taxes, bigger government etc , etc, etc. Whats not to like for Demonrats?
We do almost every last penny of monthly spending on credit cards, including bills, mortgage, etc … and then pay them in full every month. This will be teh suck if our costs go up around 3% because Durbin is a cocksucking motherfucker.
I’d like to see the details of this. Being Durbin, I assume it’s slimey.
But, I’m not sure where the consumer gets hurt. Credit card fees are paid for by the consumer one way or the other. 1) If pushed onto the credit card companies, higher rates. 2) If pushed onto the retailer, higher prices. 3) If pushed directly at the consumer, a) higher prices or b) a transaction fee on credit card.
I suppose if you pay cash, you’re subsidizing the credit card users in scenarios 2 and 3a.
Seems to me there have been times when credit payment for gas was x and cash payment for the same gas was x – $0.0n
Dickie Durbin never met a deep pocket he didn’t like.
“there have been times”? I think I can count the number of gas stations around me that don’t post separate prices for cash and credit on one hand. The two are sometimes the same, but the fact remains that they see it as a benefit to maintain the option.
In some cases, people still discount for cash. Sometimes the convenience of using the card is worth the fee. Also, I agree with bh that people have to pay one way or the other, and perhaps credit card fees should be paid just by credit card users, as opposed to being spread across all customers. I say that as a too-heavy user of credit cards. Still, I think that should be decided by the owners of the businesses, and not the government.
Absolutely.
I think Pete @5 does a good job of connecting the dots.
Naturally, the consumer is always going to pay. But it’s how we get there that matters. As always.
The writer at BigGov unnecessarily confused the issue by talking about companies shifting credit card costs to consumers.
I really don’t have any problem at all with, for instance, tacking on the CC fee as part of the purchase, so as to make it visible to the consumer. If people can negotiate a lower price for cash, or debit, that’s fine with me.
But I thought big government was about spreading the pain around. This is all so confusing.
Found a good piece on this.*
Another.*
From the first link:
I just have a pet peeve about saying that some costs might now go to the consumer without the explicit statement that all costs always go to the consumer regardless.
It’s like the game the progressives play when they talk about going after big business with taxes. All they ever do is raise consumer prices.
I have no doubt that the customer pays it in the end. It just seems like with Durbin involved, the government will end up with more control, and I have no doubt that in the end, it will cost more to the consumer than prior to this legislation.
“…all costs always go to the consumer regardless.”
I think I follow you there bh. We can point to the phrase in the Berlau piece “Interchange fees … average about 1.75 percent” to indicate a differential charge among various merchants, and hence to the actual cost shifting going on here, anti-competitively from one group of merchants to another group, the first to benefit and the second to suffer harm. And on the costs of those anti-competitive harms will the consumers find their own entailed suffering in the loss of choice.
More rent seeking behavior? So it would seem.
If I had to guess, it’ll probably end up costing less but only because higher credit and debit fees will convince more people to pay with cash.
So, less cost but less convenience.
The obnoxious notion that the Fed should be setting fee rates between credit card companies and retailers is reason enough for me to oppose it. Soon they’ll be reviewing baseball card trades between young boys.
For gas purchases around here there is no difference in price for cash or credit. Since the retailers of gas now make most of their profit from items other than gas purchased, it seem to be to their benefit to encourage customers to go into the store to pay.
I started using a credit card for gas to not have to prepay at night or when using a pump that was away from the store. Faster and in bad weather less exposure to the wet or cold.
The control aspect that bh notes is one of the things that bugs me. Like their prior “fixes” for credit cards on late fees and interest rates, in the end, I am sure this will wind up costing me more. I think we will try to build our new place with cash at every available opportunity, and see if there are any potential savings.
It’s also quite silly to refer to this as a BP Bailout when it applies across the board. That sort of hysterical demogoguing belongs on the other side of the aisle. That said, Durbin should mind his own business and go home.
But, I’m not sure where the consumer gets hurt. Credit card fees are paid for by the consumer one way or the other. 1) If pushed onto the credit card companies, higher rates. 2) If pushed onto the retailer, higher prices. 3) If pushed directly at the consumer, a) higher prices or b) a transaction fee on credit card.
I think the way it works is this. All these companies started eating these fees when business was good because they were in competition, and it adds a huge convienance factor.
Now some (like, say, BP perhaps) are looking to cut costs and increase revenue during this downturn, and saying from now on, we’re going to charge you the extra 3% for the credit card because we need it.
The alternative, including it in everybody’s prices, would make them less cost competitive with 2-3% increase across the boards. So that’s not a good idea.
Of course, if BP says we’re going to charge you extra for credit cards, and Shell does not, people are going to go to Shell. The convienance of using the credit card is there without the perception of being hit with a fee, which people don’t like. Bad business again.
But if your force everybody to charge extra for credit card use, it’s a washout and everybody just pockets the extra 3% without touching their previous prices, blaiming it on the credit card law which everyone will have to accept.
They’re already charging for the credit/debit card cost. It’s reflected in the retailer’s prices. Just like their rent or inventory carrying cost. We’re not talking about a new, extra amount.
Having looked at what the amendment does now, it pursues option one, it pushes the cost back to the credit/debit card companies. Which means that margins at retailers will be slightly higher until the relentless competition brings them back to their normal bare minimums. The banks, having lost that revenue stream, will now make less and will begin to charge higher rates and/or usage fees on their customers.
The consumer pays either way. It will simply have been shifted from retail prices to banking fees.
That’s on the agenda for the fall.
Heh.
They’re already charging for the credit/debit card cost. It’s reflected in the retailer’s prices. Just like their rent or inventory carrying cost. We’re not talking about a new, extra amount.
I’m just looking for the motive.
Perception being reality? They’ll keep their listed prices the same but then tack on another 3% for credit cards.
That 3% use to already be in the price, sure. They’ll pocket the extra 3%, tacking the credit charge on top of it, while avoiding any appearance of raising prices.
Hence, everyone needs to play along via law, else certain retailers would seem to be stingy bastards who are no longer accomodating credit card purchases and pushing extra charges voluntarily, and consumers wouldn’t like that.
But if it’s across the board, what you gonna do? The appearance will be it’s not their fault you’re paying 3% more. By having it come down with force of law, and forcing every single business into it, it will appear to be a new charge, and one you can’t escape by going to competitors.
Why else lobby for a law? As opposed to just charging the damn amount as you please or not?
Having looked at what the amendment does now, it pursues option one, it pushes the cost back to the credit/debit card companies.
Well there you go.
I thought it was tacking on an extra charge to consumers who use credit cards, to be itemized out by law.
If it’s forcing the credit card companies to swallow it, it gives them a few percent on a purchase that remains the same price. So they’ll either have a higher margin, or they’ll cut the prices to be more competitive.
Of course the cost still exists and the consumer may wind up spending more in the end. But it won’t be their problem what credit card agencies do or charge for what. They’re getting a 3% cost decrease out of it.
Bah. This is one of those “no good guys” deals — the choice is which black hat to shoot first.
The actual transaction cost of handling credit cards appears to be somewhere in the neighborhood of 1.2 to 1.5%. Most anybody who takes credit cards is going to get more or less continual offers in that range. The “clearing” companies also provide the machines, and charge a flat monthly fee for renting/leasing the machine and providing the network access for doing the clearing. That total charge is usually under $100 a month; mine was $80 ($50 for machine lease, $30 for network access) when I was in business.
You can get a merchant account that charges only the transaction fee, and then, yes, the charge is around 3%. That covers the machine and the clearing network. It all depends on how you want to charge it out.
It’s also possible to buy the machine outright and pay only the net access charge plus the per-transaction fees. For a big company like Wal*Mart, the machine is part of the cash register; they pay only the network access fee (to a captive company) and the transaction fee (again, to a captive clearer, that is, to a company that’s part of the interlocking ownership system). In the end, the only thing they’re actually paying is the royalty to BofA (Visa) or IBC (MasterCard) for use of the name. The rest ends up on the bottom line somewhere, whether it’s the banking subsidiary, the credit clearing subsidiary, or the main company.
Small companies and individual retailers can’t do that, nor can they (usually) charge credit card customers more. Around here, gasoline is the same price cash or credit, but Diesel is 5-10 cents higher for credit than cash; that’s one of the few exceptions. Cash customers end up subsidizing credit card customers. The main effect of this would probably be to force small retailers to raise prices for credit card customers; big retailers would probably do that for a little while, then be forced to back off. Advantage, big retailers — that is, a further advance of corporatism.
Regards,
Ric
Thinking about their motive, the return ratios would get a small bump. If both revenues and costs are lower overall while retaining the same profit, this would make their numbers look slightly better to investors.
With credit charge: $103-$93=$10. 10/103=9.7%
Without credit charge: $100-$90=$10. 10/100=10%
I don’t follow your reasoning, Ric. This amendment will decrease the cost for retailers to accept credit cards, not increase them.
Bh – is it safe to assume that carholders should expect to see increases in their billing?
Yes, JD, when banks loose this revenue stream from retailers, they’ll look to recoup in higher rates/service charges/transaction fees from cardholders.
Unh huh. And all the costs involved will be paid in Skittles farted out by unicorns, as usual.
Figure out who pays. At the moment, it looks as if the intent [snark] of the law is to force the charges on the credit card holders. If that’s actually the case, the only real losers will be the clearing or “merchant account” companies. If it works the way most Government regulations actually work in practice, something entirely different is most likely.
Regards,
Ric
[who still wonders if he is cynical enough]
Not sure how I earned any of that snark.
The new American Creed. You prosper in life based on who you know, not what you know.
Ehhh, I’m probably being overly sensitive.
Time to have a beer and get ready for the basketball game.
Two innings under the young Mr. Walter Johnson reincarnated’s belt, result? Four strikeouts swinging, a lineout, a groundout, and a two out single stranded.
Step One: establish in the minds of the people that the government has the wisdom and foresight to regulate business.
See: the automobile industry.
Step Two: because government has neither wisdom nor foresight, nor even a basic understanding of business, the mountain of regulations produced by the bureaucracy destroys the business.
See: the automobile industry.
Step Three: establish in the minds of the people that the country could not possibly function without the industry and therefore government, being the sole repository of wisdom and foresight must take the company over.
See: General Motors.
Step Four: the resultant catastrophe should be laid at the feet of the workers and the executives within that industry who could not even be saved by the wisdom and foresight of the government.
See: British Leyland.
Step six: the government washes its hands of the entire sordid affair and releases the dead husk of the industry into the bankruptcy courts, where it should have gone after step two. Savvy investors snap up the undervalued assets and proceed to make fabulous products.
See: just about every formerly government-owned now privatized business ever in the history of the world.
I’m not sure exactly how someone could screw up an oil company, but I believe that that’s what they’re going to take a shot at next.
The dumbest people in America are running the country.
I always thought that was free around here.
Overwhelming fear of a Lakers win tonight has turned me into a soft little girl.
A twist here is that, according to most sources I’ve found now, this deals exclusively with debit cards.
Why are debit and credit cards treated differently at the point of sale? I did not understand that snark either, bh. I cannot stand the Lagadores or the Celts, so I am rooting for a natural disaster.
It’s got me drinking.
I do like Rondo and Ray Allen, which is 2 more than the number of Lakers I like. Kobe is awesome, but so very unlikeable.
The debut continues, currently at 6 1/3 innings, 12 strikeouts, 4 hits, 2 runs on a homerun, Wash leads 4-2.
13
14
Yeah, I’m having a fortifying beer or two myself, Pablo. I’m tempted to put in some green food coloring for luck.
Well, by the network it might not matter much but the main difference is just who’s involved as the party eventually releasing the funds, JD, your bank or your credit card company. With this dealing only with debit it means your credit card transactions shouldn’t be affected and you’ll see some form of increase on debit card transaction fees or some sort of checking account fee from your bank.
All the world seems in tune on a spring afternoon when we’re poisoning Durbins in the park.
Skittles it is, then.
Sdferr – he is the real deal, huh?
Would that be PIN transaction driven then, or a matter of the issuing institution?
That’s only answerable down the road but he sure as heck baffled some Pirates tonight. I’m looking forward to seeing some tape. His pitch count didn’t seem in the least excessive (no walks), so if I were a Nats fan, I’d be stoked.
Phantom foul on Rondo.
I’d think it would deal with both PIN and PINless debit as long as it’s connected to a checking account, Pablo.
I’m not sure, but I think PINless debit is already cheaper for merchants for some reason.
So, so, too, too perfect. Iran is getting the bomb and Brazil is helping. Our only two reliable allies are slip-slidin away. The Gulf is being changed for our lifetimes. The dollar is worth less that a third of what it was 5 years ago.
And Dick Dubin (aka rug-burn face) has taken time off from comparing American M.P.’s unfavorably to Nazi death camp guards to find
One More Area of Life
for the government to stick its nose into just so he can get a free knob job at a swanky cat house in some vacation wonderland.
Sdferr – I just watched the ESPN segment on it. He is filthy nasty. 95-99 on the fastball, mid to upper 80’s on his changeup, and mid to upper 70’s on the filthy breaking ball. He almost made Lastings Millege fall over at the plate.
Los Lagadores came to play. Fuckers.
Gasol looks like the world’s tallest homeless man and he has a junkie beard.
Bugger the Lakers.
Justified season finale tonight. I bought the Gangstgrass album on itunes today, great really interesting fusion.
Justified has slowly creeped up to Breaking Bad on the awesome scale.
(No spoilers please, I’ll probably watch it tomorrow.)
Bh – this is one of the best, and mostest non-gratuitous violence in the series.
Seems to me this is another Ponzi scheme. BP owes America Billions for this oil spill and clean up..so they charge 3% for using our credit cards to buy gas??? So who is really paying for the clean up?? Yup..WE THE PEOPLE. This is their way of skimming off the credit cards from US and using it to pay for the spill.. Another “let them eat cake” moment.
JD, I caught a little of the ESPN coverage and heard the change-up hit for the homerun was clocked at 91mph. Oy. His hook reminds me of Gregg Olson’s, snappy down and scary, up.
Lady Jedi, you’re probably three kinds of awesome but what you describe isn’t happening.
Btw, it’s hard to google this pitcher if you don’t say his name.
Stephen Strasburg, though he’ll be plastered all over any general sports page.
I still like Walter Johnson Jr though. We could call him “Skinny Train” or summat.
Justified was outstanding. And I’ll add Sons of Anarchy to the list. But Walt is the man. And Gus is a stone muthafucka.
BP doesn’t owe America shit. Not if you calculate the wealth they’ve created for this suicidal shit for brains little country heretofore.
Thanks, sdferr.
Yeah, Pablo, Sons of Anarchy is killer.
Would it were that anarchy was rather more fecund.
fecundyoufeet
A night of nothing but Justified and Sons of Anarchy would be a good good good good night. What was the body count tonight? Damn, that show is written well.
sdferr – That 75 mph breaking ball is the real killer. And the 99 mph high hard cheese. I cannot wait until he lights up triple digits in the bigs.
He hit 101 tonight they said. Which makes that yellowhammer coming out of the hand at the same arm angle kinda dicey for the poor batter I’m thinking.
I missed that, sdferr. Triple digits is remarkably rare. Most of the ones they showed on the highlights were 96 or 99. Regardless, he is filthy, and will be for a long time.
Agreed, at least I hope he lasts and lasts. And to his opponents: there is no shame in a buckling knee. It can’t be helped.
Though we’ll snigger anyhow.
Though we’ll snigger anyhow
“Bye-Bye, Fleury”
They should keep stats on the buckled knees.
Teh BK burggerers.
I blame netminders.
For everything.
Period.
There were times when I’d blame Billy Smith, and then Ron Hextall. Now it’s easier to just blame George Bush for everything. Heck, even his wife does.
i wish my momma looked like
salmya hayek cuz when
i was a littltle tyke we played
muppet soccer and she would rub my top after everytime
a futbol would touch my body
and say “cookies and milk?”
i blame ken dryden
This guy regularly threw triple digits. As a Tiger fan I hated seeing him come in with a passion.
my halloween mask next year/ this year will
be the
gump worsely
im a boston guy
and one time patrick roy had
an interview and the boston reporter asked patrick
“So/ what do u think of what harry sinden said?”
harry sinden is the general manager and cheif bottle washer of the boston bruins bye the way
and patrick roys response was
” i got two stanley cup rings in
my ears so i didn’t hear him”
now thats funny!!
Your comments about Edward Bellamy are on target. It is even worse than you stated.
The Pledge of Allegiance was the origin of the Nazi salute (and the swastika -although an ancient symbol- was used to represent crossed S-shapes for “socialism” under the National Socialist German Workers Party).
Francis Bellamy (cousin of author Edward Bellamy) was a socialist in the Nationalism movement and authored the Pledge of Allegiance (1892), the origin of the stiff-armed salute adopted much later by the National Socialist German Workers Party. See the work of the symbologist Dr. Rex Curry.
American national socialists (including Edward Bellamy), in cooperation with Madame Blavatsky and the Theosophical Society, popularized the use of the Swastika (an ancient symbol) as a modern symbol for socialism long before the symbol was adopted by the National Socialist German Workers Party (Nazis) and used on its flag.
The Bellamys influenced the National Socialist German Workers Party and its dogma, rituals and symbols (e.g. robotic collective chanting to flags; and the modern use of the swastika as crossed S-letters for “Socialism” under German National Socialism). Similar alphabetical symbolism was used under the NSDAP for the “SS” division, the “SA,” the “NSV,” et cetera and similar symbolism is visible today as the VW logo (the letters “V” and “W” joined for “Volkswagen”).
The Bellamys wanted the government to take over all food, clothing, shelter, goods and services and create an “industrial army” to impose their “military socialism.”
It is the same dogma that led to the socialist Wholecaust (of which the Holocaust was a part): ~60 million killed under the former Union of Soviet Socialist Republics; ~50 million under the Peoples’ Republic of China; ~20 million under the National Socialist German Workers’ Party.
Today, the flag symbolizes authoritarianism in the USA. The historical facts above explain the enormous size and scope of government today, and the USA’s police state, and why it is growing so rapidly. They are reasons for minarchy: massive reductions in government, taxation, spending and socialism.
“But, I’m not sure where the consumer gets hurt. Credit card fees are paid for by the consumer one way or the other. 1) If pushed onto the credit card companies, higher rates. 2) If pushed onto the retailer, higher prices. 3) If pushed directly at the consumer, a) higher prices or b) a transaction fee on credit card.”
It appears as if the consumer is better off if the fee is NOT passed to the retailer — everyone pays the same higher price when the fee is borne by the retailer, credit or cash. Forcing higher rates means the people using the cards are the ones paying, instead of other purchasers subsidizing the credit card industry.
Expressing his true feelings about the BP bailout?
H/T: Glenn Reynolds
And here all this time I thought the Roman salute was the origin of the Nazi salute. That whole “Third Reich” thing being about the Nazi regime being the successor to the Holy Roman Empire, which itself claimed to be the successor to the actual Roman Empire — just misled me, yanno?
Actually, before the rise of the Nazis, the pledge of allegiance was done using the “Nazi salute,” but when the Germans started using it, we changed to the “hand on the heart” version. I will go with ak4mc on the origin of the salute, though. I certainly doubt the Nazis were looking to the U.S. for inspiration in any case.
And as for tinnyray, I’m intrigued by your ideas and would like to subscribe to your newsletter.
I can only imagine what I would have thought of going all “Hail Caesar” at the American flag if I’d been a schoolkid back then.