The Republicans have recently made themselves even more laughable by calling the greatest capitalist who ever lived, Warren Buffett a socialist. Despite these claims that discredit the word, the president of the U.S., and his Senator crossed a dangerous line in the last week.
The government has for years regulated certain industries but take a look at some of these comments: This Monday Senator Dick Durbin gave a 14-minute speech on why customers should stop doing business with Charlotte-based BofA. Durbin called BofA's recent decision to charge debit card users a $5 monthly fee an "outrage" and "gouging their customers." He said customers should find a bank that didn't charge to have a debit card. "Bank of America customers," he pleaded. "Get the heck out of that bank."
The worst part is Obama echoed his view. Why are politicians voicing their displeasure against one bank, what a joke. The bank should be allowed to charge what ever fee it wants.
All banks are beginning to raise fees since the Durbin Amendment was passed. This reform takes money out of the banks pocket and gives it to retailers. Banks don't like this since they enjoy profit. And before people comment that they all ready make enough money. Lets remember Apple is going to make $30 billion this year. The government could force them to lower their prices by $100 per product. But how come banks do people get so upset with? Perhaps their service is more important than a Mac computer but its still a business which will try to balance profit and customer. The customers who think they should get a free ride are as stupid as Durbin and Obama who are telling customers to leave a public company. The customer is free to put their money at some crappy credit union and BAC knows that they can replenish its profit by hurting the consumer. People should be most mad at the government not the bank.
When the government interrupts the market it creates a dead weight loss. Now retailers will get more money banks will charge more money and less spending will take place in the economy.
This is why Republicans argue for less regulations. Sometimes these Republicans are wrong but here they are right. The Obama administration is a joke.
A bit too political Josh. I can't blame Durbin and Obama for telling people to leave. Credit Unions are good enough for the majority of consumers, the major banks don't make much money off their small-time depositors anyway.
ReplyDeleteThe powers-that-be bailed out these big banks and are now cutting away at their fees. The government giveth and the government taketh.
Not all the banks needed to be bailed out. And its unfair to put in measures that did not affect the ones that did.
ReplyDeleteSecond all the public has been paid back.
Lastly the public is also at fault for the banking collapse. There are 2 sides in every transaction. The bank loaned and you borrowed. The public should take 50% of the blame.
Ordinarily I say 100% for the person that took the loan but I am cutting them some slack. Its their fault they are the ones that defaulted not the bank.
So we split the blame 50-50. The homeowner defaults and he is punished by losing his home, his credit history, etc. There is a strong incentive for the homeowner NOT to default on his mortgage.
ReplyDeleteNow the other side of the coin. The bank loses the mortgage, has losses on its balance sheet and the government bails it out. The bank executives keep their jobs, their bonuses and their severance packages in case the $hit hits the fan. Where's the moral hazard here?
Blaming banks as a whole is kinda pointless, it's better to blame individuals that embody the worst about the system (there is a movement with the Wall Street protests about this). Just the other day, one of the protesters asked, "How about we follow China's example and start executing the worst of the financial bunch?" He then rattled off the names of the top executives he'd like to see hanging from the rafters. I was pretty shocked, but I know the public wants blood. They want to see people go to jail for what happened.
The homeowner should be punished more he is the one that promised the bank he could pay off his debt and did not. People are just so dumb these days and their problems are everyone elses. If you get denied a loan from the bank you're pissed. Its amazing people can speak out of both sides of their ass. Ya I want a loan but don't let me default!
ReplyDeleteSecond to just say the banks take some bailout and everyone keeps their job is wrong. One the bailouts a lot of the banks were forced to take them without wanting them like JPM and WFC. Second all the banks have paid back their bailouts the government has made a big profit on almost every institution who received a bailout. I don't know how people even investors like you don't see this. You mention bailout but leave out that the people profited on this. The government made lots of money when BAC redeemed its TARP. Not to say bailouts should happen but to leave out a point like that is critical. What brought down the economy was a bubble in housing which was fueled by the public and banks.
Not all banks did a bad job. There were a couple of bad apples, BAC, Citigroup which tarnished the great banks, JPM, USB, PNC, WFC. WFC and PNC, JPM really helped the economy by buying bad banks like Wachovia, National City and WAMU.
Also don't say the banks have not been punished. Look at these dumb regulations that are trying to be passed. Thats not to say I don't believe in more regulation but I don't believe in stupid regulation like SIFI buffers and this durbin Amendment on Debit cards. Stuff like this by raising capital to high limits loans and Durbin causes banks to raise fees a double whammy for consumers. But we blame the banks. The government made these regulations not the banks. How can you blame the banks when they are more the messenger the government. The government caused BAC to raise their fees. BAC didn't go let me hurt the consumer. And why did the government pass this regulation in the first place. On top of that the government is skirting blame and blaming companies when they did a horrible job regulating.
And there were tons of corporate firings in the bank world. The Wachovia CEO is gone, BAC gone, Citigroup they switched it before the crisis. Believe me banks were punished.
Lastly maybe the protestor should execute himself for defaulting on the loan. It seems like the public just wants to blame blame everyone but themselves.