A month ago I honestly had no idea what LIBOR was. When the scandal at Barclay’s broke, I had people asking for my opinion on the matter. When that happened, I did something the left should consider doing now and should probably have been doing since the beginning. Something that may seem completely out of the ordinary for them.
I calmly explained I was not the person to ask, that I did not know what LIBOR was or what specifically had taken place at Barclay’s and that they should ask someone who was qualified to do so. I did not run my mouth spurting abject nonsense about something I had no knowledge of.
This concept of not simply shouting out the first thing that passes through your frontal lobe, without any thought or semblance of rational analysis, seems to have gone unheeded by Kevin Drum, regular contributor over at Mother Jones, a liberal leaning American periodical. Whilst this is certainly not the first piece of questionable content to spew forth upon the world from this publication, Drum’s latest article stood out, making me genuinely question what the balance is in liberal media between simply delusional or intentionally deceptive content. In this case it’s genuinely hard to tell and I’m having trouble deciding which one I’d prefer it to be.
In an article entitled ‘Today’s Geeky Financial World Excitement‘, which should have been called ‘Today’s Bureaucratic Financial Regulation Misery’, Drum opens with:
yesterday we got a bit of deregulation in the financial world, and it’s a bit of deregulation that I’ve long wanted to see. So now I get to find out what happens.
When a liberal celebrates deregulation, I hear alarm bells ringing and can smell either fish or rat. As this article goes on, rat became more prominent.
So what was the deregulation that got Drum so excited?
In 2005 an anti trust suit was brought against MasterCard, Visa and a number of banks for contractually prohibiting merchants from charging swipe fees on card uses. On Friday, the banks and card companies settled to the tune of more than $6 billion and are no longer allowed to continue the practice.
No really, this is basically the entirety of what happened. According to Drum though, in a stunning case of Newspeak, deregulation here means the government telling companies that they cannot privately, contractually, voluntarily agree to how fees will be handled between the relevant parties. To anyone with sense this an INCREASE in regulation. Further, any rational being will also realise anti-trust and anti-competitive laws are utterly absurd to begin with.
So after listing the benefits of credit cards everyone over the age of 11 has long figured out, Drum then makes a sweeping general statement, something I consider the bastion of liberalism. Hey, it’s not an article by a liberal until they’re making subjective value judgements for other people without any knowledge of individual circumstances or desires.
Maybe a 2.5% fee is a reasonable price for those benefits.
How about we leave it to the individuals in the market to determine what is a reasonable swipe fee, rather then having the government dictate what is acceptable or in this case requiring Visa & Mastercard to declare their policy in a disputes settlement that is generally irrelevant to the average consumer?
It’s quite clear however that Drum doesn’t consider this for a second. Instead, he spends the next 2 paragraphs stating how wonderful it will be to let his Newspeak version of a market decide these things.
So after all this, he finishes up by making some predictions about how he expects his government intervened, more regulated market to respond to his latest decrees. In contrast to his rose tinted possibilities of things at worst staying the same, I’ll weigh in with some of my own, less positive but more realistic predictions.
Small business owners operating on already tight margins, who had sworn off using credit cards so as to offer their goods at a lower price to more fiscally tight consumers are unable to compete with the likes of Wal-mart who are now able to enter this surcharge free market as they are no longer contractually obligated to add the swipe fee across the board.
Competition in the credit card market will be reduced, further entrenching Visa and Mastercards regulatory monopoly. With the niche of not obligating companies to apply fees to cash transactions illegal, the state has removed one more opportunity for a competitor to emerge.
Was this intentional?
Aside from abusing the word ‘geeky’ like it was going out of fashion, I found this entire article disturbing. It feels perfectly designed to appeal to the left without actually saying anything of value.
Looking at the comments on Mother Jones, only a single person of the 50+ has pointed out that what Drum describes is not deregulation. The rest of the comments are largely by the kind of people you’d expect to find at the Occupy rallies, who are more then happy to weigh in, pondering the advancement of a state run scheme in one instance.
This article, to me, represents Liberalism today perfectly. Highly educated people who then feel they are qualified to go on and talk about that which they have absolutely no understanding of but then can’t understand why we mock them. Meanwhile, a flock of blind fools throw themselves on the issue as if there was nothing else to live for or questions to be considered beforehand.
Knowing this, is it too difficult to conceive that Drum could have intentionally mislead his audience? We regularly discuss how free markets are blamed for the acts of governments and this article seems to be the perfect set up for such an attack. Completely superfluous, logically and factually flawed, but with a film just thick enough to ensure that those who never stop to really ask what road they are currently travelling on will ever find their curiosity peaked to do so.
I would normally hope for a response from those I critiqued, but further feeding my feeling that there’s something off in the way Drum works, he has made clear in the past he feels people should not defend their positions.