Bank of America is subject to Capitalism.

Bank of America announced yesterday that it would NOT be going ahead with its previously announced $5 debit card use fee. They say they listened to their customers. Damned rights they did. They listened and they watched a lot of them take their money elsewhere.

The news that BofA wasn’t going ahead with the new fee came after the nation’s largest bank JP Morgan Chase as well as Wells Fargo Banks announced last week that they would abandon plans for these fee add-ons. They saw the writing on the wall and didn’t want to further enrage the public (i.e. their customers).

In an Associated Press article from October 7 it was pointed out that Credit Unions were again reaping the benefits of these new bank fees. The country’s largest credit union, the Navy Federal Credit Union, said new account openings over the weekend  following BofA’s new fee announcement were 23 percent higher than normal. The Progressive Change Campaign Committee says roughly 51,000 people have signed up to move their money out of big banks on “National Bank Transfer Day” this Saturday. They also said 21k of those who have signed up will be moving their money from Bank of America.

Of course abandoning this $5 fee doesn’t mean BofA, or Wells or Chase for that matter, won’t be attempting to pick your pocket somewhere else. In fact BofA already raised its fee for its basic checking account from $8.95 to $12 last Spring. They’re hurting. They need the money. Bank of America’s stock price was down to $6.71 at the time of this writing. That’s from a high of $54.77 five years ago this month, and a post-recession high of over $18.00. Their January 2008 purchase of Countrywide Financial Corp looking increasingly like the wrong thing to do. Old Countrywide mortgage loans are STILL exploding on BofA and on our country.

But the obvious good news with this retraction of the proposed fee and for the time being no new replacement fee is that Capitalism works. This is exactly how it is supposed to happen. And guess what no Government intervention was necessary. 18th Century writer, philosopher and economist Adam Smith had it right in his seminal book The Wealth of Nations when he described the invisible hand that guides a country’s economy. Government needs to stay out and things will work out. It’s in each individual company’s and corporation’s best interest to serve the public, their clients, for to do otherwise will only hurt their bottom line. And growing the bottom line is most important of all.

Anyone with eyes wide open will see that Government interference in the form of the Dodd-Frank Banking Finance law forced banks to impose many of these new fees by restricting how much banks could charge merchants for the use of debit and credit cards (I bet a lot of you didn’t know that we, the business owners, also pay the banks every time plastic is used). Banks, as well as other companies will seek revenues and if government takes away one form of income, they’ll just go elsewhere. And the ones who will pay the real price is the consumer. Thank you again Democrats. Every time you try to protect us we get the shaft.

Nonetheless, take homage in the fact that your outrage moved big bad BofA, Chase, Wells Fargo and others from imposing THIS fee. You the consumer do have choices. You can go to a neighborhood bank or Credit Union you can spend your money elsewhere, or choose not to spend at all. Think of the Occupy Wall Street protesters and their claims of big corporations having way too much control. Let this be their lesson that the big corporations only have as much control as we give them. And the one, and possibly the only thing I’ll agree with OWS about, is that its long past time that we stop giving the big corporations so much power. But we don’t need government to do anything. We need to take responsibility for ourselves, our habits, and our spending.

But, of course, this comes from a guy who’s had his money in a credit union for some 15 years.

Thanks for visiting. Comments are welcome.

Envy will kill ya! Darned Sibling Rivalry.

Perhaps you’re like me. Perhaps you too have a sibling who is particularly high achieving. I do. I have a brother with whom I’ve always been compared and worse yet set against. I doubt my parents actually realize this.

I’m beset with high achievers with whom to be compared. All around me our family and friends who populate the 1% that so many Occupy Wall Street protesters claim to be greedy. For the record defines greedy as:

1.excessively or inordinately desirous of wealth, profit, etc.;avaricious: “the greedy owners of the company.”

Were I defining the word I would add the phrase “…for that which is not rightfully yours”. For I don’t think its greedy to want to possess and enjoy that which is yours, that which you’ve earned.
My brother is just one year my senior. He used to brag to me what his income was for years. It was quite juvenile, but synonymous with the sibling rivalry he and I seem forever engaged in. He stopped telling me his pay 12-15 years ago when it became clear he had reached 7 figures per year.  He remains a 7-8 figure-income-earner per year.
But if a world travelling millionaire brother isn’t bad enough, there are also my in-laws. My sister-in-law is a Cal-Berkley educated lawyer for Microsoft. Her Dad, my father in-law, is a former 20 year state Senator and college football hero for the local school, University of Washington. Heck, even my best friend makes over $100k yearly driving a bus for Metro.
The Occupy Wall Street protesters who defiantly cry that they’re “the 99%” have an envy problem. They resent the wealth distribution in the country. They hate that the upper earning 1%, in which my family is well represented, earn 17% of our nations income. They claim that 1% should share more of what they have. Never mind that the same 1% pay for 38% of ALL Federal income tax, that the upper 10% paid 70%, and that 51% paid 100%. 49% of Americans paid 0% of all collected Federal Income tax, courtesy of those evil George Bush tax cuts. Talk about “Things that make ya go, hmmm?
If anyone has a right to be envious its me! I was raised in the same house by the same single father as my millionaire brother. I met my wife when my professional attorney sister-in-law was 12 years old. And I met by best friend 25 years ago when he had just started his Government work, long before his seniority and good service pushed him into the upper income levels. I watched all these people grow from humble beginnings to good or great financial success.
My personal achievements have been comparatively humble. I’ve worked hard my whole life. Other than two short stints on unemployment I’ve never taken public assistance or a government hand out. I’ve never been in the upper 1% of income earners, though I was certainly in the upper 5%. I’m not complaining. I’m not poor. I’ve done well. I live well. But compared to some in my family…lets just say I’m a little lower on the food chain.
So am I like the OWS protesters desirous of more of my immediate family’s money? Do I feel ripped off? Absolutely not. In fact, sometimes I feel sorry for my wealthy family members. They are all tied to their jobs and the responsibilities therein. For six years I’ve been an independent small business owner answerable to no one. Before that I worked a sales job for thirteen years in which I seldom worked more than 30 hours per week.
My brother, sister-in-law, father-in-law and best friend worked long hard hours day after day, month after month, year after year to earn everything they have. So have I. But my wealth has yet to come. It will. But I’ve enjoyed a lot of freedom and independence in the meantime (…he laughs knowingly). I’m proud of my family.
For the most part the OWS protesters are young and seem to be experiencing a tough time. They come from a generation given everything, including trophies merely for participating on a sports team. They don’t have the experience of knowing what we know. Things get better. Work hard, don’t quit, overcome obstacles, don’t spend money frivolously, and always anticipate the dawn. So its my hope they will filter away in the increasingly cold days ahead and that their “movement” will be largely ignored. As it should be. Because its little more than entitlement and envy.
Thanks for visiting. Comments are welcome.