It seems that your costs for banking may be rising soon — if they haven't already.
Why? In order to make up for revenue losses from price controls that our ever-helpful Congress slapped on debit card transaction fees late last year.
Remember the spat over the federal law that placed a 21-cent cap on how much retailers pay large banks to process purchases made with debit cards issued by the banks?
The law was an exercise in sheer economic stupidity by Washington. By now, Congress should know that government-imposed price controls simply do not work.
If you "control" prices in one area, you wind up raising prices in another. Or worse still, you create shortages of some good because the purchase of the good is not restrained as it would naturally be when prices rise to account for limited supply.
People of a certain age won't soon forget the gas lines of the 70's that were created when government price controls set fuel prices too low. Many teens who are having no luck finding summer employment can thank minimum wage laws -- another form of price control — for creating an artificially high cost for low-end labor.
Well, not surprisingly, price controls did for the debit card business what price controls do when they are imposed in other sectors of the economy: They failed.
Yes, banks are not allowed to charge retailers as much per debit card transaction, and some of those savings may be passed on to consumers.
Sounds great, right?
But retailers in some cases are simply pocketing the savings from the debit card fee reduction, a Cox Newspapers article noted recently.
And banks are having to find ways to make up for potentially billions of dollars of losses in fees paid by retailers.
"[B]anks are eliminating debit card rewards programs and charging for checking accounts that used to be free," Cox reported.
Congress has, in effect, rigged the game so that retailers will win — at the expense of consumers and banks.
Wouldn't it be better to let the market pick winners and losers?
Shouldn't individual consumers be allowed to vote with their hard-earned dollars for the retailers, banks or other providers of goods and services that meet their needs best — without government favoring one industry over another?
The debit card fiasco and other counterproductive intrusions in the market should give President Barack Obama pause before he makes comments such as one he uttered recently in a TV interview: "I haven't been able to change the atmosphere here in Washington to reflect the decency and common sense of ordinary people — Democrats, Republicans and independents — who I think just want to see their leadership solve problems."
Perhaps those Democrats, Republicans and independents have seen enough of Washington "problem-solving" that rapidly turns into "problem-causing."