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American-style socialism (Do you wish to continue this transaction?)

American-style socialism (Do you wish to continue this transaction?)

Last updated on: February 12, 2016 at 5:27 pm by Fred Clark

American-style socialism (Do you wish to continue this transaction?) 2016-02-12T17:27:05-05:00 Fred Clark

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Back in the early 1990s, you never knew what you were gonna get when you went to an ATM. Your bank might charge you a fee to withdraw cash — your own cash — from the machine. There might be an additional fee from the network, or from the host bank, or the vendor. You might not learn about any of those fees until after the machine spit out your little receipt, informing you that the $20 you withdrew, and an additional $1, or $2, or $4, had been subtracted from your account.

But that receipt might not mention the fee at all, in which case you wouldn’t learn about it until you got your monthly bank statement in the mail (there was no “online” yet, for most people), or until those hidden fees bumped your balance into the red, sending you into the cascading hell of overdraft charges followed by overdraft charges on those charges.

The 1977 first edition is the one to read.

Congress addressed this by amending the law regulating ATMs to require full disclosure of any such fees prior to the transaction. This disclosure requirement was a Good Thing.

Granted, it was a rather modest Good Thing. The change in the law didn’t set any caps or limits on such fees — so you might still be charged $2 or $4 for access to $20 of your own money, skimming a percentage that would make a loan shark blush. And while the change might help you to avoid overdraft hell, it did nothing else to limit banks’ ability to continue stealing the $30 billion or so they transfer from working people to themselves through that racket every year. But still, it was a small but positive step.

It was also an eminently capitalist step. It was a market-driven measure designed to allow free markets to function more efficiently by ensuring that consumers were informed about the costs of these transactions. Such information, the theory says, gives consumers a choice, empowering the invisible hand of competition. In practice, of course, such information might only tell consumers that they had no choice — that their only options for accessing their own money all charged such fees, and that even if they decided to walk all over town looking for a cheaper ATM they might never find one (I often did, and then usually didn’t). But over time, the theory said, the information would create the demand for other options, and that demand would eventually create a supply to meet it. In some places, that happened, sort of. In other places it didn’t. (Those other places, quite often, were less-white neighborhoods, because America.)

It would be churlish, though, to blame this positive piece of legislation for not transforming the entire world. What it did accomplish was limited and modest, but that limited and modest accomplishment was unambiguously positive.

Back when President Bill Clinton was signing laws like this one, the word that came to be used for such modest-but-positive measures was “Clintonian.” Bill Clinton had a good instinct for politics as the art of the possible — for identifying small positive steps like this and making them happen. Such things might not be revolutionary, but they resulted in tangible improvements in the daily life of millions of Americans. It’s a really big country, after all, and even minor reforms could, on a national scale, add up to substantial increases in fairness and the general welfare.

But while this law requiring disclosure of ATM fees was certainly Clintonian in its effect, and it was signed into law by Bill Clinton, we shouldn’t give him all the credit for getting it passed. A lot of the impetus for that law came from Rep. Bernie Sanders, I-Vermont, who worked hard to get the bill through the House of Representatives.

Sanders caucused with the House Democrats but he was officially an Independent who, famously, preferred to identify as a “socialist.” (Hence the Vermont joke, dating back to his time as mayor there, of referring to the state’s largest city* as the “People’s Republic of Burlington.”)

Sanders’ role in this legislation is why I remember it, and why I wound up referring to it, often, throughout the 1990s.

At the time, I was working for Ron Sider at Evangelicals for Social Action. Ron is best known as the author of a terrific book called Rich Christians in an Age of Hunger. That book seemed to get a lot of people very angry — particularly those who might qualify as its titular Rich Christians. And a lot of those angry people responded angrily by hurling the harshest, nastiest word they could think of: socialist.

This was silly and dumb, of course. Ron wasn’t a socialist, he was a Mennonite. The core of his book was a call for voluntary, private, personal generosity — what he called a “graduated tithe.” It was, essentially, a plea to “live simply that others may simply live.” He wanted readers to decide on a standard of living that seemed, to them, to be enough, and then to commit voluntarily to give a bit more of their more-than-enough to help the many millions of people who have less-than-enough.

But still, whenever I went out as a representative of ESA, this “socialist” thing was something I’d have to deal with. For many in the white evangelical world we were trying to reach, the only thing they’d heard about ESA and Ron Sider was that word. So I’d have to point out, as in the paragraph above, that Ron’s call for deeper voluntary personal generosity was not, in fact, anything at all like socialism. And sometimes, to help people get past that, I would talk about the law requiring disclosure of ATM fees.

People knew about this law because they’d seen it in action every time they used an ATM. That law, I pointed out, was passed thanks to the only member of Congress who refers to himself as a socialist. Here in America, in the 1990s, I would say, this is what “socialism” has come to mean: The very modest claim that banks should be required to inform you that they’re about to charge you two bucks for the privilege of access to your own money. This Red Menace doesn’t try to stop those banks from charging you what amounts to 10 or 20 percent for a $20 withdrawal, it just requires them to tell you about it beforehand. So, I said, half-joking, if that’s what “socialism” means these days, then I’m not sure it’s really something you need to be afraid of.

Anyway, even though I used the modest scope of that law as a kind of punchline for years, it was still, as I said above, a Good Thing. Rep. Sanders deserves real credit for pushing for it and President Clinton deserves real credit for signing it.

It took a couple more decades before we’d see legislation that even began to tackle the more substantial matter of the way ATMs and ATM fees fuel the overdraft racket that transfers tens of billions of dollars every year away from the working class and into the pockets of the banksters. That didn’t happen until Dodd-Frank was signed into law by President Barack Obama in 2010.

Dodd-Frank is a big, sprawling mess of an omnibus law, and whether it does enough or goes far enough to restrain the “too big to fail” banks and to prevent a repeat of the Great Recession is still a matter of debate. (It probably does not.) But apart from that aspect of the law, Dodd-Frank also includes a bunch of other, more modest measures — the kinds of things we used to describe as Clintonian. My favorite of those is the establishment of the Consumer Financial Protection Bureau, which is awesome.

I don’t suppose the CFPB qualifies as revolutionary either, but it’s changing your life, for the better, in dozens of modest little ways. Quite often, it works through the same modest mechanism of disclosure discussed above. Disclosure and opt-in measures haven’t halted the banksters’ annual theft of billions of dollars through the overdraft racket, but the amount of that annual wealth-transfer is, for the first time, going down instead of increasing. And the CFPB has had even more success going after payday lenders and the shadow-banking industry that fleeces the unbanked poorest of the poor even worse than Wall Street treats those of us who can afford a checking account. Whether or not the general public views Richard Cordray as a “revolutionary,” the banksters sure do.

I realize that all the good that the CFPB is doing is still not enough. There’s more to do and more that must be done. Much more. But I wouldn’t want to lose the tangible progress CFPB has made and is making. “All Cris Carter does is catch touchdown passes,” former Philadelphia Eagles coach Buddy Ryan said before sending the receiver off to a hall-of-fame career in Minnesota. I know what Ryan meant, but still, it turns out that actually catching those touchdown passes is kind of important.

– – – – – – – – – – – –

* The term “largest city” really means something very different from what you’re thinking once it’s qualified with the words “in Vermont.” Burlington has a population of about 42,000, which is roughly the size of Sayreville, N.J., or of Fairfield, Ohio, and quite a bit smaller than Farmington, New Mexico. But to my brother-in-law and his neighbors in the Northeast Kingdom, Burlington is still the city — a bit too crowded for their liking. Plus it’s full of transplanted Flatlanders. Burlington may be the smallest largest-city in any state, but it’s big enough that you can tell when you’ve found it — unlike Vermont’s state capital of Montpelier, which I drove through, twice, without realizing that I had done so. Vermont is very … Vermont.

** It’s helpful to compare Ron Sider’s gentle pleading with, for example, everything that every Christian ever wrote about wealth and poverty from the first century through the time of Augustine. Those Christians taught, unanimously, that superfluity is theft — that possessing any more than what you need for your daily bread was no different than stealing from the poor through violence. And they wrote detailed sermons and screeds outlining just what they believed counted as superfluous possessions.

Maybe those Christians could be described as, in some way, “socialist,” but it was just dishonest and wrong to use that term for the sort of thing Ron Sider was talking about. Heck, if the Apostle Peter had been a fan of Rich Christians in an Age of Hunger, he would’ve commended Ananias and Sapphira for their generosity and sent them on their merry way.

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