A public hew and cry has arisen against the announced plan of major banks to charge depositors three to five dollars a month for the use of debit cards to make purchases. In an extremely rare instance of 'market justice' the value of Bank of America’s shares tumbled.
As significant as the fact of the planned charges is the logic that drives them. Facts on the ground are always merely manifestations of a paradigm in the air. As important as opposing the charges is opposing the twisted thinking behind them.
The shylockian mind-set behind the planned debit-card charges was best illustrated by Wells Fargo’s Jamie Dimon who stated, “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger.”
Dimon was referring to the fact that, under the Durbin-Frank financial “overhaul” law, banks are prohibited from charging more than 24 cents in service fees per purchase transaction. Prior to the “overhaul,” banks were charging 44 cents per purchase transaction. The law halved the amount they could charge.
But like most garbage flowing down from Capitol Hill, the overhaul contained a loophaul. (We are shocked!) The debit fee was charged to the merchant not to the customer and the law only limited the amounts banks can charge their merchant customers. There was a silver streak in the legislative swill after all.
With this background in mind, Jamie Dimon’s twisted logic boils down to saying that what the banks can’t take from Paul’s hide, they will take from Peter’s. But one way or another the banks will get their pound -- a full English pound -- of flesh.
The rhetorical cheat behind the financial cheat is easy to see. The banks are not charging more for one service (a coke) to make up for price controls on another (the burger); they are rather like gangs of hoods prowling the street looking for pockets to plunder. “Hey! If we can’t roll the guy in the suit, let’s roll the little old lady in the walker.”
But, irrespective of Jamie Dimon’s spurious analogies, the driving force of the paradigm is the notion that banks are entitled by some divinely ordained law of nature to a certain maximum level of profit. The point of departure for Bank of America, JP Morgan-Chase and Wells Fargo is simply the presumption that they are entitled to 44 cents per purchase transaction.
The banks would have us believe that this amount reflects some sort of “natural market law” like water seeking its own level. If they can’t get the quantum of flow from one source it is “only natural” that they should extract it from another. Dimon’s analogy simply assumes and would have us believe that 44 cents is what banks are entitled to and cannot be faulted for demanding.
Wherefrom this 44 cents? Banks no longer bother with the pretence of justifying the charge on the basis of costs of operations. The amount is simply what they (on average) have decided to charge. The “natural market level” is nothing more than the ad hoc level of banker avarice.
A 2010 Nilson Report report showed that in 2006 debit card usage generated just over 10 billion dollars in profits. In 2010 those profits had soared to just over 20 billion. This roaring, soaring surge of money certainly did not reflect a doubling of the costs of maintaining installed telemetric swiping machines.
In fact, the Federal Reserve has calculated the average variable costs of a debit charge at $0.071 for transaction processing, $0.059 for network fees, $0.049 for fraud losses, and $0.018 for fraud prevention costs, for a total of .19 cents per purchase. There can be no claim that banks are simply passing along their operating costs to the customer be it in the price of a coke or of a burger.
In fact, the Federal Reserve limit of 24 cents has a built in profit of 4.8 percent per transaction. That’s over half the average State sales tax. But that is not enough to satisfy the rapacity of Jamie Dimon or Bank of America’s Brian Moynihan. They want more, more and more of your flesh.
The bankers’ lust for geld is epitomized by a famous motto from Spain’s Siglo de Oro which symbolized the conquistadors’ lust for gold.
Al espada y el compás, más y más y más y más.
By sword and compass, more and more and more and more!
The lust for more is the same sin as the ne plus ultra of rapacious Iberia. The only difference is that today’s river of gold is extracted from the diminishing pay checks of struggling workers rather than from the sweat of Indian press gangs.
Needless to say, if they don’t bother justifying the charges on the basis of costs, it would never occur to Dimon or Moynihan to justify them on the basis of social utility. The idea that privilege, position and property should subserve the social good simply does not exist in the world of so-called “financial services”.
Understandably, most people oppose the monthly charges because they financially hurt. But there is a more fundamental point that progressives in particular need to press.
Defining the Progressive platform a century ago, Teddy Roosevelt insisted that corporate profit should be allowed “only so long as the gaining represents benefit to the community.” “The true conservative,” he said, “is he who insists that property shall be the servant and not the master of the commonwealth.”
Progressives should not concede or overlook fundamentals while complaining about symptoms. They need to drive home the point that banks and all financial institutions should be treated and regulated as public utilities. They exist to lubricate the economy, not to suck it dry.
But the issue is broader than utility. The other half of the equation is sin which, in its most primary sense, refers to those concepts of conduct and being that arise from subjective knowledge, shared by all, concerning the objective phenomenon of the “all” -- of society, of creation and, ultimately, of the cosmos.
There is a reluctance in progressive circles to talk about sin, as if doing so entailed an abandonment of reason and a return to archaic and repressive mind-sets. I believe this is a mistake. Social utility and social morality are two sides of the same coin. They are complimentary perspectives which, when harmonized, broaden perception and strengthen the argument.
Utility represents what the French mathematician and philosopher, Pascal, called l’esprit de geometrie -- so called ‘linear thought’ which orders inferences and causes toward postulated conclusions or goals. The concept of ‘sin’ reflects what he called l’esprit de finesse -- best translated as ‘collective intuition’.
This intuition is more than just an historical consensus or agreement among individuals. Like the faculty of physical sight, it is a ‘brain wiring’ which we all share and which enables our awareness to be embraced by the whole of all parts and to be infused with a sense of the whole in each of the parts. When we see the whole we necessarily see our place in it; and seeing one’s place understand how we are supposed to be.
Philosophers have used various terms to denote this intuitive faculty. According to Pascal, l’esprit de finesse “is simply a question of seeing -- but of seeing well and completely.” Plato called this faculty ‘nous’ which, he said, was a passive state of knowing one step beyond the struggling effort or 'mathesis' of learned, logical knowledge. In Medieval usage, the act of intuitive knowing was referred to as an intellection or “in-taking” of the true nature of things.
Howsoever called, the myriad insights which comprise intuitive thought are “so fine and so numerous” (Pascal) that they can only be expressed in the form of a metaphor, an allegory, a parable, a poem or a song wherein the ‘argument’ consists in shades of meaning and resonances of feeling. It is from this esprit de finesse that we derive our concepts of sin.
Sin is typically thought of in terms of discrete personal failings. But before we can call something “wrong” we have to have a sense of what is “right” - what Eastern philosophy calls Tao. More essentially than any particular wrong, “sin” denotes an absence of harmony and this absence presupposes an ordered social relation which we intuit ought to be there.
Thus understood, our concepts of sin are fundamentally social in two ways. First, they arise from an intuition that we are part of the whole. Secondly, they are formed by an intuition which is itself collective.
Man’s earliest intuitions identified sin with harm to the pack. As a young man once told Socrates, “the just man is he who does good to his friends and harm to his enemies.” In a famous exchange, Socrates proved that the young man was wrong; that the just man, if he truly loved justice, had to do good to his enemies. Socrates did not deny that evil or injustice or sin consisted in doing harm to the pack, he simply enlarged the circle so as to include a greater whole.
Over the course of history the scope of our shared subjective awareness of sin has enlarged as we ourselves have evolved. What was at first viewed as transgression against a tribal god and “our” pack got reformulated into the unawareness of a “universal father” and alienation from humanity. But within the process of becoming, the constant has always been a consciousness of our shared predicament with others “of our own kind”. At whatever stage of our historical development, the idea of sin derives from a societal sense of social self -- from social self-recognition.
This collective mutuality is what the words 'society' and 'community' hearken to. The Latin 'socius' means companion or ally, and the word 'comunis' derives from sharing or commingling. From these roots, 'society' is defined as a collaborative fellowship for a common purpose. Thus, Aristotle wrote that all social interaction was comprised of varying levels of friendship.
This friendship is not just something that takes place “within” society (a geometrical perspective); society itself is a state or condition of friendliness. The concept of society is, at its core, coextensive with the Golden Rule which is the sum and whole of moral law.
Curiously, the limited “pack morality” of primitive societies was more closely connected to an intuition of the greater animated natural whole and it is only now that we are re-opening our minds to an intuition of the great natural society that is our ultimate home.
But it was never entirely lost. The Tenth Century abbot, Aelred of Rievaulx, describes our universal friendship thus:
“What forest bears but a single tree? Even in inanimate nature a certain love of companionship, so to speak, is apparent and thrives in society with its own kind. And surely in animate life who cannot easily see how clearly the picture of friendship is, and the image of society and love? For, although in other respects animals are rated irrational, yet they imitate man in this regard to such an extent that we believe they act with reason. How they run after one another, play with one another and betray their love by sound and movement. So eagerly do they enjoy their mutual company, that they seem to prize nothing else so much as they do whatever pertains to friendship.”
What Aelred intellected “rings true” just as the tones of Beethoven’s Ninth Symphony convince us that an elixir of joy permeates all creation from the lowly worm to the cherub by god’s throne. Ultimately, sin is simply un happiness.
Pharisees and moral philosophers have brought discredit on the concept of sin by trying to rationalize it with l’esprit de geometrie thereby reducing it to a species of accounting which in turn leads to a “privatization” of morality and a divorcing of sin from its primary social context.
On the other hand, to say that the concept of sin is intuitive does not signify an individualistic “feels right” relativism. The intuition is social and shared universally. It requires us to submit ourselves to the broader social conscience. The less shared, the more the acuity of the vision is suspect as astigmatic or partial.
It is certainly true that throughout time witchdoctors and priests have misused the concept of sin to agitate and mislead people. But the same might be said of science which can just as readily be abused in order to wreak harm. Collective intuition is not less reliable than scientific objectivity; it simply represents an alternative basis of knowing. We should trust our subjectivity and not be frightened away from a proper awareness of sin.
In allowing itself to be frightened away and in seeking refuge in a supposedly more certain “objective rationality,” progressives concede the field of “public morality” to fundamentalists who would trivialize sin into questions of sex, alcohol and nudity. The concession looses half the argument and fails to give tenor to what we all intuitively know.
Bringing l’esprit de finesse to bear on Jamie Dimon’s paradigm of behavior allows us to see the fundamentally sinful and socially destructive nature of the bankster soul.
The geometry of avarice is simple. It consists in grabbing more than one needs and, given the finitude of resources, thereby taking what is needed by others. The finesse of the matter is not simply charging more than what is needed to cover the costs of operations, but a repudiation of our communality. It is a mindset from which fellow feeling is absent.
This absence is expressed in art by paintings of the hunched and inwardly turned miser counting his coin. The miser’s turn inward is a turn away from society. He represents the paradox that a bloated ego is a shrivelled one.
In the Old Testament, indifference to the needs of the poor is the Sin of Sodom. (Ezekiel 16:46-50) The New Testament calls avarice "the root of all evil." (1 Timothy 6:10) Medieval thought viewed avarice as the sin most offensive to the spirit of love which, as we have noted, was understood to be the animating and unifying force of society.
It is a mistake to ignore this tradition of moral understanding or to be embarrassed by it. William Jenning Bryan’s Cross of Gold speech is powerful to this day not because it is good rhetoric but because the image is true.
And crucifying man is what Dimon and Moynihan have done and continue to do. We should not forget that Bank of America, Wells Fargo and banks throughout the land were, directly or through fraudulent alter egos, responsible for the mortgage meltdown and global financial collapse that ensued.
We do well to remember that the corporate cretins who want to charge “more for the burger” are the same criminals who fraudulently colluded in chopping, packaging and off loading knowingly worthless mortgages. These same crooks are now trying to foreclose on properties they don’t have title to precisely because they “diced and dished” the securities. Next to such scum, Shylock was a saint.
But in the twisted world of perfect bankster equity, the same parties who caused the financial meltdown, get bailed out with tax-payer money. When flooded with treasury dollars at effectively negative interest, these same banks still refuse to lend or to renegotiate mortgages. When the common economic interest depends on restimulating consumer spending, these same banks still insist on charging 15% to 24% credit card interest and now insist on the right to suck out of the economy 20 billion a year in debit card fees.
The planned debit charges are not some isolated incident of over-reaching. They are yet another maw of a man eating plant that needs to be raked up, eradicated and purged from the garden.
America the Beautiful sings to us about more than amber fields of grain. Katherine Lee Bates, gave voice to an American exceptionalism grounded in a higher consciousness purified of sin,
Till selfish gain no longer stain
The banner of the free!
And nobler men keep once again
Thy whiter jubilee!
That happier song should be our anthem.
© Woodchip Gazette, 2011