- The Durbin Tax

I'm not a big bank guy - haven't been for years. But I still saw the Durbin Tax issue coming a mile off.

Dick Durbin from the 'know it all' party, decided that he wanted to order the banks to cut their interchange fees on debit cards. He put his name on an amendment to Dodd-Frank, and it was passed by Congress. The banks immediately took steps to comply with the law by canceling their fee's as ordered, and then implemented totally new fees that would be unaffected by the rule, in order to replace the revenue.

Durbin was aghast; everyone else was totally unsurprised. Didn't those banks know that it's their responsibility to take a loss when some dumb as dirt Senator from kleptocratic Illinois commands them to? The answer was "apparently no".

So Durbin responded to their response, by trying to create a run on Bank of America, the first bank to announce it's new fee structure. From the floor of the Senate he told bank customers to flee the bank, and do business elsewhere. Talk about government intervention.

For those of you who don't know, this is the way it works in business, and is why regulation never achieves it's desired goal. Government comes up with a stupid rule designed to achieve a political goal, and the banks and other effected businesses hire a bunch of smart guys to get around the law and pass the cost on to the customers. It's ALWAYS that way. The entire derivatives industry (measured in the hundreds of trillions of dollars globally) has grown out of the perfectly rational response to perfectly irrational banking regulation.

This is why I keep arguing that we should cut the business income tax to zero. Eventually, any (and all) costs imposed by government fiat will be transferred to the consumer. Every single one. What's worse - it will be easier for the big players to transfer that cost than the small ones. In effect, more regulation designed to limit the 'too big to fail' banks actually strengthens their market position instead of weakening it. But try telling that to '$hit for brains' Dick Durbin.

The only way to really lower the costs to the consumer is through competition, and the only way you get that is through deregulation. Repeal Dodd-Frank and all the other regs that help to give the 'too big to fail' banks an advantage, and let smaller banks eat into their market share. Eliminate the corporate income tax, and watch our economy soar as foreign corporations move here to get better access to our market.

But thanks to the economically illiterate far left like the idiot doofus above, it will never happen.