WAGE INFLATION is now the problem Biden is being blamed for! Open

QP! said:
I understand the varied arguments and am more familiar with this area of the market then most are.

What i am NOT saying is that there cannot be too much regulation that could harm the market.

What i am saying is YOU offered a 'reflexive ...it is bad because it is regulation' retort with no back up, and simply saying ' it is bad because its regulation' is not enough.

The article, which i had seen prior, does not offer any specifics but speaks to generalities on how 'any' controls could POTENTIALLY harm the market. We know they potentially can, but that is NOT a reason to not do them. You need specifics to make that argument.

If generalities are enough then they can be applied to every single gov't regulation over ANY and ALL businesses.

And it big business, their lobbyists and shills who echo that, each and every time WITHOUT specifics.

The Credit Card industry, within Banking overall, is one of the highest profit centers in most banks. So any argument that lowering the Penalty fees such that they generate $2.5B instead of $10B being the straw that breaks the banks back in being able to offer this product, or that they would otherwise ledn less, is suggesting there is no more margin or profit in the system and these fees are so crucial to that.

We should not buy it and more than big business who are making gauging profits now, would claim if you try to move them back to more normal margins (and profits) pre pandemic, would harm service.

Any more than we should buy that if the Trump tax cuts were repealed to the uber rich and corporations, they would all take their jobs elsewhere harming society.


it is ALWAYS the same cry, but just different version.
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Hilarious! A communist claiming he knows the market better than a capitalist does!!! :laugh:
No, price controls never work, Kewpie.
 
cawacko said:
I don't work in the banking industry so I'm not going to pretend to speak as some insider but while $2.5B or $10B are obviously big numbers stock prices, valuations and ultimately bonuses are based on going forward revenue. Executives who are incentivized to increase growth aren't going to simply accept the gov't putting a cap on what they can charge and the corresponding risks associated. I felt the author articulated well the risks and how banks would respond. And at the end of the day the people who will be hurt are the ones the legislation professes to be helping.

You are correct that we can't 100% predict market reaction to this legislation. But understanding economics and history gives us good insight. Not economics related but an analogy pops into mind that if you're going out partying (drinking) tonight I can't guarantee you won't feel great in the morning but there's a really good chance that will be the result.

(FWIW, i'm not attempting to be an ideologue and saying that ALL legislation is bad.)
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Fortunately, you don't have to work in the banking industry to understand the principle that price controls never work.
I notice that Kewpie has not answered your question yet.
 
QP! said:
what the article explained is a generic talking point.

It would apply equally to ANY and ALL bank fees or NSF charges or other and 'how it COULD harm XYZ' if you reduce it'.

Whether the NSF is $X or raised to 10X the next day or raised to 100X the following day, ANY and ALL attempts to stop it being raised or regulate it and bring it down, would be subject to the article argument.

That is why it is generic and meaningless as i could apply easily now to ANY future fees situation and the attempt to regulate it without even reading the specifics of what is being proposed.


If you do not think so, make up a situation for fees being raised, any that you want and present it here, and i will use the article language to counter it and you will see.

They are empty template talking points. Lazy.
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It IS the talking point, Sock. Price controls never work.
 
QP! said:
And yes, a lot of inflation is a result of that war. Good point.
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No. Inflation is caused by printing dollars with no corresponding increase in wealth. This is what the Federal Reserve is doing, under the direction of DEMOCRATS.

You cannot blame the Federal Reserve or the Democrats on Russia, Sock.
 
Into the Night said:
Price controls don't work, Sock. They always cause the same thing: shortages. In this case, these price controls will simply result in more people being denied credit and existing credit being yanked.
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Wage and price controls were tried in WW 2 and by Nixon late in the Vietnam war. Both achieved undesired consequences. In WW 2, FDR's use of them forced companies competing for scarce labor--there was full employment for all intents--had to find incentives to lure workers to companies that needed them and would normally offer higher wages. So, those companies offered wages-in-kind instead. These included things like free company medical coverage or health insurance, a cafeteria for workers that meant they didn't have to use ration cards on scarce food products and could eat on the company's dime, free transportation to and from work, etc.
When the war ended most of those wound down and disappeared, but some like health insurance stayed and even expaned.

Same thing happened with Nixon.

You control the price of something pricing it below market value and you create an artificial scarcity of it as manufacturers and vendors stop selling and making it because they can't generate a fair profit.
 
T. A. Gardner said:
Wage and price controls were tried in WW 2 and by Nixon late in the Vietnam war. Both achieved undesired consequences. In WW 2, FDR's use of them forced companies competing for scarce labor--there was full employment for all intents--had to find incentives to lure workers to companies that needed them and would normally offer higher wages. So, those companies offered wages-in-kind instead. These included things like free company medical coverage or health insurance, a cafeteria for workers that meant they didn't have to use ration cards on scarce food products and could eat on the company's dime, free transportation to and from work, etc.
When the war ended most of those wound down and disappeared, but some like health insurance stayed and even expaned.

Same thing happened with Nixon.

You control the price of something pricing it below market value and you create an artificial scarcity of it as manufacturers and vendors stop selling and making it because they can't generate a fair profit.
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Not that this is considered to be a bad thing....for instance see how NYC landlords are being destroyed.
 
T. A. Gardner said:
Wage and price controls were tried in WW 2 and by Nixon late in the Vietnam war. Both achieved undesired consequences. In WW 2, FDR's use of them forced companies competing for scarce labor--there was full employment for all intents--had to find incentives to lure workers to companies that needed them and would normally offer higher wages. So, those companies offered wages-in-kind instead. These included things like free company medical coverage or health insurance, a cafeteria for workers that meant they didn't have to use ration cards on scarce food products and could eat on the company's dime, free transportation to and from work, etc.
When the war ended most of those wound down and disappeared, but some like health insurance stayed and even expaned.

Same thing happened with Nixon.

You control the price of something pricing it below market value and you create an artificial scarcity of it as manufacturers and vendors stop selling and making it because they can't generate a fair profit.
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It was also tried by Carter, which caused the long gas lines.
 
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