Intended Consequences

Unintended Consequences is a phrase that is being heard more and more often.
The law of unintended consequences, often cited but rarely defined, is that actions of people—and especially of government—always have effects that are unanticipated or unintended. Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it.
The real danger of unintended consequences is that the affects of an action cannot be foretold with any degree of accuracy. The opinion of most is that unintended consequences are the result of carelessness, inattention and ignorance.  The definition of unintended consequences can be either positive or negative.  The negative occurrences are more visible because they often affect many beyond the original scope of the act. 
Let’s take a look at such an occurrence that is now being splashed across the internet—a last minute amendment added by Senator Dick Durbin (D-IL) to the Dodd-Frank Banking bill.

‘Durbin Fees’ are coming, thanks to ‘progressives’

By: Examiner Editorial | 10/01/11 8:05 PM
If we had a “Dim Bulb of the Year” award, we would give it to Sen. Dick Durbin, D-Ill. How better to honor someone who so ostentatiously proposes a policy with obvious unintended consequences, then gets angry when they predictably come to pass?
 
During the debate over the Dodd-Frank financial reform bill, when Democrats controlled Congress, Durbin insisted on including an amendment that had nothing to do with Dodd-Frank’s stated aims of stable banks and consumer protections. The Durbin amendment granted regulators the authority to establish price controls on what banks could charge merchants that accepted their customers’ debit cards as payment. The resulting regulations, which took effect Oct. 1, limit what banks can charge merchants to no more than 24 cents per debit card transaction.
Critics pointed out that banks, facing $6 billion annual losses from this change, would shift the costs of debit cards from merchants to bank customers. Sure enough, Bank of America and several of its largest competitors — including Wells Fargo, PNC, HSBC, SunTrust, TDBank, and Chase — will be imposing various new fees on their customers to make up for Durbin’s folly.
This provision was slipped into the bill at the last minute, and, as was the norm for the democrat controlled Congress at the time, had no review nor debate, a rubber-stamp addition made with no oversight.

When it became known, critics rightly pointed out that banks will pass along to their customers any addition cost of doing business.  Banks, like any commercial enterprise, MUST make a profit or go out of existence.

There are a variety of methods that could be used to recoup the added cost.  Bank of America chose levying a fee on debit card transactions.  “Dirty Dick” Durban, as he’s known in some areas, was outraged.
But Bank of America drew Durbin’s particular ire because its management directly blamed Durbin by name for the new $5 per month charge it is leveling at customers who make purchases with their debit cards. “Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” Durbin said in a petulant statement released this week. This might almost pass the laugh test, if not for the fact that every bank is adjusting to Durbin’s dumb law in nearly the same way.
It’s not that Durbin couldn’t have seen this coming. Visa, among others, blasted the Durbin amendment at the time, saying that the Senate “adopted [it] with no debate or review of facts.” The company warned that the law would “shift [retailers’] cost for accepting debit cards onto the backs of consumers.”
Durbin shrugged off such warnings, suggesting that those who disagreed with him were motivated by greed and “on the side of Wall Street banks and credit card companies.” He absurdly claimed that the debit card fee cut would help to prevent banks “up on Wall Street” from causing another financial crisis — a non sequitur so completely disingenuous that it can only be called a lie. Durbin acted to help the merchants who pay for the convenience of debit cards. But what he has actually done is made the lives of bank customers more difficult, as they will now be charged more to access their own money.
Welcome a return to the days of the check and when banks charged a fee for every check cashed.
 
On the other hand, let’s consider if this was not an unintended consequence.  What is gained by this provision?  Was it another attack on business by a so-called progressive?  Was it a move to impose more governmental control over the flow of money and transactions in the economy?  Or, was it intended to limit those nasty profits that enrich businesses?

One article, which I can no longer find, said the revenue from this charge was to protect customers from identity theft.  That’s a good concept but unnecessary.  Business forces are already forcing corporations and institutions to added multi-layers of protection on customer information. Identity protection doesn’t need any governmental incentives, the marketplace has enough all along.

I doubt Dirty Dick himself realized the potential consequences of his amendment.  He didn’t care.  More likely it was a pathological urge to stick his finger in the mix and stir things up.  And…being able to say he did something.

Well, if that’s the case, it did accomplish something.  He created another example why we can no longer allow any democrat, progressive,  or liberal, dictate federal policy to us.

Regardless of their intentions, they are destroying our country, our economy, our culture, and ultimately, our lives and that of our children.

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