Nathan Tabor
Rewarding failure, the Democrat Party way
By Nathan Tabor
"We will remain focused on providing every resource we can to support the massive response effort underway at the Deepwater Horizon, but we are also aggressively and quickly investigating what happened and what can be done to prevent this type of incident in the future," said Secretary of the Interior Ken Salazar.
Secretary Salazar and Homeland Security Secretary Janet Napolitano made this and similar pronouncements as they established a joint investigation into the causes of the Deepwater Horizon oil spill. According to President Obama, the U.S. Coast Guard (USCG) and the Minerals Management Service (MMS) share jurisdiction in the investigation and Attorney General, Eric Holder, will reportedly initiate both criminal and civil investigations, as well. The joint investigation has the power to issue subpoenas, hold public hearings, call witnesses, and take other steps that may be needed to determine the cause of the incident.
But before Americans breathe a sigh of relief upon hearing the rhetoric and threats aimed against British Petroleum (BP), we must wait and watch what's being done in the backrooms of the U.S. Senate and House of Representatives.
While denigrating and chastising BP for its responsibility for the worst environmental disaster in U.S. history, lawmakers may be planning to actually reward BP and other fat cats by handing over taxpayer money in a de facto financial bailout scheme. As part of the Senate Financial Reform bill under consideration by lawmakers, a newly created slush fund would be used as a permanent backstop for Wall Street banks engaged in risky trading and lending practices.
Separately, an amendment added to the Senate Financial Reform bill by Senator Dick Durbin, a Democrat from President Obama's home state of Illinois, would, under the guise of protecting consumers, extend what amounts to a bailout to major retailers and other businesses, including big oil companies like BP. Although big oil companies are posting enormous profits, while in the midst of practically destroying the Gulf Coast's ecosystem and economy, Senator Durbin and others have decided to pour millions, if not billions, of taxpayers' dollars into the coffers of the people directly responsible for the Gulf Coast oil disaster.
Senator Durbin's amendment would effectively set price controls on the fees that oil companies and retailers pay when consumers make credit card payments. The unintended effect of which is to shift who pays these fees from companies to consumers. The amendment, which does NOT require retailers to pass savings on to customers, is being pushed by lobbyists for big oil companies like BP and big retailers like Wal-Mart.
Durbin admitted that he offered the amendment after detailed discussions with a big retailer CEO. The bottom line is that, absent an explicit requirement that retailers pass along any related savings to consumers, the Durbin amendment will put billions of dollars into the pockets of Wal-Mart, big oil companies like BP and other big box retailers who depend on consumers and their credit cards for revenue.
While Durbin claims his amendment will help both small businesses and consumers, former Bush Administration press secretary, Dana Perino believes this amendment will hurt consumers. "Much of what you'll find in the bill creates legitimate consumer protections. [But] Durbin's amendment to the bill would do the opposite. Imagine you're planning your monthly budget — you can take anywhere from 2 to 6 percent right off the top," said Perino.
"Retailers will be allowed to add a special charge to your bill if you decide to use your debit card...and given that option, don't you think they'll do that? Other consequences: you can kiss that no-fee checking account goodbye. Your rewards program? It probably won't have much value if this amendment remains intact," she added.
If there are any doubters out there, all they need to do is study Australia's experience with Swipe Fees:
Swipe Fees legislation passed in Australia seven years ago. Retailers began tacking on extra fees for consumers paying with plastic. Far from benefiting from lower prices, Australian consumers found themselves paying more at the cash register than ever before.
In the United States, a few years ago, gas stations charged drivers higher prices for gasoline if those drivers paid by credit card or debit card instead of cash.
While Americans watch the President and other politicians grandstanding and bashing big business, they are rewarding their villains with a huge windfall — and soaking Americans at the same time.
© Nathan Tabor
June 8, 2010
"We will remain focused on providing every resource we can to support the massive response effort underway at the Deepwater Horizon, but we are also aggressively and quickly investigating what happened and what can be done to prevent this type of incident in the future," said Secretary of the Interior Ken Salazar.
Secretary Salazar and Homeland Security Secretary Janet Napolitano made this and similar pronouncements as they established a joint investigation into the causes of the Deepwater Horizon oil spill. According to President Obama, the U.S. Coast Guard (USCG) and the Minerals Management Service (MMS) share jurisdiction in the investigation and Attorney General, Eric Holder, will reportedly initiate both criminal and civil investigations, as well. The joint investigation has the power to issue subpoenas, hold public hearings, call witnesses, and take other steps that may be needed to determine the cause of the incident.
But before Americans breathe a sigh of relief upon hearing the rhetoric and threats aimed against British Petroleum (BP), we must wait and watch what's being done in the backrooms of the U.S. Senate and House of Representatives.
While denigrating and chastising BP for its responsibility for the worst environmental disaster in U.S. history, lawmakers may be planning to actually reward BP and other fat cats by handing over taxpayer money in a de facto financial bailout scheme. As part of the Senate Financial Reform bill under consideration by lawmakers, a newly created slush fund would be used as a permanent backstop for Wall Street banks engaged in risky trading and lending practices.
Separately, an amendment added to the Senate Financial Reform bill by Senator Dick Durbin, a Democrat from President Obama's home state of Illinois, would, under the guise of protecting consumers, extend what amounts to a bailout to major retailers and other businesses, including big oil companies like BP. Although big oil companies are posting enormous profits, while in the midst of practically destroying the Gulf Coast's ecosystem and economy, Senator Durbin and others have decided to pour millions, if not billions, of taxpayers' dollars into the coffers of the people directly responsible for the Gulf Coast oil disaster.
Senator Durbin's amendment would effectively set price controls on the fees that oil companies and retailers pay when consumers make credit card payments. The unintended effect of which is to shift who pays these fees from companies to consumers. The amendment, which does NOT require retailers to pass savings on to customers, is being pushed by lobbyists for big oil companies like BP and big retailers like Wal-Mart.
Durbin admitted that he offered the amendment after detailed discussions with a big retailer CEO. The bottom line is that, absent an explicit requirement that retailers pass along any related savings to consumers, the Durbin amendment will put billions of dollars into the pockets of Wal-Mart, big oil companies like BP and other big box retailers who depend on consumers and their credit cards for revenue.
While Durbin claims his amendment will help both small businesses and consumers, former Bush Administration press secretary, Dana Perino believes this amendment will hurt consumers. "Much of what you'll find in the bill creates legitimate consumer protections. [But] Durbin's amendment to the bill would do the opposite. Imagine you're planning your monthly budget — you can take anywhere from 2 to 6 percent right off the top," said Perino.
"Retailers will be allowed to add a special charge to your bill if you decide to use your debit card...and given that option, don't you think they'll do that? Other consequences: you can kiss that no-fee checking account goodbye. Your rewards program? It probably won't have much value if this amendment remains intact," she added.
If there are any doubters out there, all they need to do is study Australia's experience with Swipe Fees:
Swipe Fees legislation passed in Australia seven years ago. Retailers began tacking on extra fees for consumers paying with plastic. Far from benefiting from lower prices, Australian consumers found themselves paying more at the cash register than ever before.
In the United States, a few years ago, gas stations charged drivers higher prices for gasoline if those drivers paid by credit card or debit card instead of cash.
While Americans watch the President and other politicians grandstanding and bashing big business, they are rewarding their villains with a huge windfall — and soaking Americans at the same time.
© Nathan Tabor
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(See RenewAmerica's publishing standards.)
