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Banks are now instituting new fees because the last congress forced the industry to ratchet down on the predatory ways in which they made a large portion of their profits. For example, without the customers knowledge or consent, banks would cover purchases which would slightly overdraw an account instead of just forbidding the purchase, but what they would do is charge a $39.00 fee to the unwitting customer and thus any checks or purchases henceforth would also garner $39.00 overdraft fees. Customers sometimes would end up with an enormously over-drafted account to the tune of hundreds of dollars at a clip before they got home. All along, all the bank could have done was turn down the first overdraft that would have alerted the customer that there was a problem with the account. It was a horribly unethical practice.

But you see, now that all that money was made in the past, and is now subject to customer acceptance of the practice, which has resulted in reduced participation, bank profits are suffering, and stock market investors do not like any sort of reverse activity.

This is the main problem with today economy. Business practice correction cannot be achieved without investors fleeing for the door. Everything today is up, while down, even in ethical situations, is a disaster. This economic philosophy makes criminals of honest people.

Unfortunately, that is the nature of capitalism.

Left unchecked by regulation, a capital venture will work up a system that is maximum profit for minimum expenditure. The only thing that would regulate it would be customers.

The dream capitalistic venture is of course the monopoly, where you are the only one that has it, and the only one that can sell it, and if people want it, they have to pay your price, and jump through your hoops to get it.

Barring that, you only make money if you can meet the demand at the price the customer wants to pay.

The idea of the exorbitant fees for overdraft is not without justification, you know.

The pain factor is a great tool for training people to be more careful with their check writing. It certainly worked for me. I tend to keep my balance above $1000.

This, of course is the other hand. If everyone does the same as I do, then the bank has a lot of money sitting around for them to invest and make money off of.

Either way, they make money.

That is why they're in the business, after all.

A well regulated capitalism is probably the best economic design for society.

The problem is getting the balance between regulation and freedom in the market.

Of course the other option is to just bribe the regulators. That works in a lot of regulated industries.

Yeah, people are expendable. Drown a bunch to teach a few.

Good lad.

We'll make a capitalist out of you, yet.

I am a capitalist, and I'm pretty good at it, too. My criticism is from experience.

posted by Larsmac

Unfortunately, that is the nature of capitalism.

Left unchecked by regulation, a capital venture will work up a system that is maximum profit for minimum expenditure. The only thing that would regulate it would be customers.


It is the nature of businesses people with a short term view to behave like that, to let them away with that will destroy a capitalist economy.

posted by larsmac

The dream capitalistic venture is of course the monopoly, where you are the only one that has it, and the only one that can sell it, and if people want it, they have to pay your price, and jump through your hoops to get it.


Except of course when you have a monopoly or allow one to develop you no longer have a capitalist economy you have destroyed it. A company like microsoft, for instance, is a monopoly and anti capitalistic. Eventually they fail when they have to face competition they can't stop and expend their energy trying to prevent competition rather than match it.

posted by larsmac

A well regulated capitalism is probably the best economic design for society.

The problem is getting the balance between regulation and freedom in the market.


For once i wholeheartedly agree, the problem is the brainwashing that has convinced people regulation necessarily stifles business.

posted by ahso

But you see, now that all that money was made in the past, and is now subject to customer acceptance of the practice, which has resulted in reduced participation, bank profits are suffering, and stock market investors do not like any sort of reverse activity.

This is the main problem with today economy. Business practice correction cannot be achieved without investors fleeing for the door. Everything today is up, while down, even in ethical situations, is a disaster. This economic philosophy makes criminals of honest people.


The problem is IMO the banks have forgotten they are a SERVICE industry and suffer from the delusion they are the most important wealth generating part of the economy. At the heart of it is agriculture and manufacturing.

Monetarism has got to be one of the stupidest ideas in recent times. Inflation now is not due to controlling the money supply but good old supply and demand.

Banks should be reclassified as a utility.

I don't understand people that get upset when someone encounters a negative consequence for irresponsible behavior.

gmc;1349804 wrote: [QUOTE=LarsMac;1349725]A well regulated capitalism is probably the best economic design for society.

The problem is getting the balance between regulation and freedom in the market. For once i wholeheartedly agree, the problem is the brainwashing that has convinced people regulation necessarily stifles business. [/QUOTE]I agree with you two, but even if it were only the three of us, we'd have a tough time agreeing on where to strike that balance.

Ahso!;1349807 wrote: Banks should be reclassified as a utility.Why? They supply nothing truly necessary, certainly nothing that rises to the level of, say, electricity.

Accountable;1349814 wrote: I don't understand people that get upset when someone encounters a negative consequence for irresponsible behavior.The system is rigged and not everyone (in fact as time goes on, less and less) can navigate it, or want to bother doing so. This system is a scam that serves the minority while holding out an elusive carrot for the rest. It's called selling a dream, and is what multi-level marketing companies such as Amway and AL Williams are notorious for.....Oh yeah, Bernie Madoff, too.

If you apply monetarist logic to electricity supply then you can control the cost of electricity by controlling the availability of lampshades.

Ahso!;1349817 wrote: The system is rigged and not everyone (in fact as time goes on, less and less) can navigate it, or want to bother doing so. This system is a scam that serves the minority while holding out an elusive carrot for the rest. It's called selling a dream, and is what multi-level marketing companies such as Amway and AL Williams are notorious for.....Oh yeah, Bernie Madoff, too.It's great that some people would rather keep their money out of a system they don't understand. I only wish everyone was the same way. I don't know Al Williams but I get the picture. I certainly don't see how a checking account resembles a pyramid scheme. Nevertheless, If more people would take responsibility for their money and pull it out of programs they don't understand, then banks would be forced to simplify their processes.