Even inAmerica, where the free market has not been allowed in almost a century, we see glimpses of how it works. In a free market the public decides the fate of businesses, they decide the fate of fads and they decide what the best policies for businesses to have are. How does the public do this? With their wallets.
If you do not like the way Nike treats its workers, don’t buy their shoes. Unhappy with GE shipping jobs over seas, don’t buy their appliances. Disappointed with the coverage your insurance agency offers, go to a competitor. The free market is the only way you can have freedom of choice.
In a socialist Democracy, our progressive friends think it is better to have politicians step in and tell businesses what they can and can’t do. So how has that been working in the banking industry lately?
Most people have heard of the new debit card fee Bank of America was planning on charging their customers, I say was because yesterday they announced they where canceling their plans to implement the fee.
I would like to look at two questions. First, why did they consider charging the fee and secondly, why did they cancel.
The first part of the question is up for debate but I feel there is enough evidence to suggest that the fee was introduced to cover the loss of revenue when the Dodd-Frank bill limited the amount of money banks could charge merchants for the use of the debit card charging system. So government intervenes and we get left paying the bill.
The second question is much easier to answer, the free market dictated to the banks that the policy was not going to work. Customers of Bank of America told the bank that they rejected the new fee by pulling out their money and going to other banks and/or credit unions. BoA has since see the error of their policy and have made a change to benefit their customers, WITH OUT GOVERNMENT INTERVENTION. Of course there are politicians saying that “we need a law that restricts what fees banks can charge for debit card use”, but this is foolish. The free market can control those fees, we the people control those fees with out relinquishing power to a politician to do it for us.
I hope the junior socialists of the Democratic party and the progressives learn from this lesson. The free market is the only system that allows the people to have freedom.
WSJ: “The about-face represents a concession to customer sensitivities over fees. Banks have been adding charges in an attempt to make up for billions of dollars in revenue that is expected to vanish as a result of new restrictions on credit cards, debit cards and overdraft policies. A provision in last year’s Dodd-Frank financial-overhaul law halved the amount that banks can charge merchants for accepting debit cards.”