Monday, March 13, 2017

A government monopoly license on money

At the Hill we have  HENRY ARMOUR AND PETER J. LARKIN, talking about banks taking monopoly swipe fees from our debit cards. 

Note, the authors do not notice the banks have a government monopoly license. This is the common delusion from 'safe rate' to 'term debt;. There is an implied X axis on all the relationships, considered correct and supplied by some mid-west senators. An absurd assumption, but commonly accepted.
The perspective of the nation’s largest banks seems to be skewed like this – perhaps because it has been too long since they actually competed on debit- and credit-card fees.For years, rather than competing on these fees they charge merchants to process customers’ debit and credit card purchases, banks have simply let Visa and MasterCard set their prices.That way, the banks can all charge the same outlandish “swipe fees.” It has gone on so long that those banks have clearly forgotten how free markets actually operate. That seems to be the only explanation for their claim that the reforms that gave banks an incentive to compete don’t work.Without a shred of evidence and utter disregard for the facts, they claim merchants have hoarded the money saved after Congress brought modest competition to debit card fees six years ago.

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