I watched a 2011 April’s Fool Day ABC news story dealing with increases in ATM fees. It reported that the banks need to make up for the impact of new banking law restrictions. The media accepted what the banks are telling them without critical thought. Democracy’s Fourth Estate needs to be skeptical not just of government, but of all sorts of institutions, including (particularly) corporations. News broadcasts should just report facts and leave reasons for actions to analysts.
Banks have come through taxpayer bailouts making excessively large profits. They needed the bailouts because of banking industry getting away from the conservative investments they should have been making. They deliberately created and purchased mortgage backed securities that had been designed to fail so that they could cash in on inflated AIG insurance protection. They made loans to people they knew were unqualified just to feed the demand for more mortgage backed securities.
It’s not that banks NEED to make up for the reduced profits they will get on credit cards. Their credit card operations will still be profitable, just not at the inflated rates they’ve become accustomed to. Investors in bank stocks should expect modest but dependable returns on their investments. I thought riskier growth stocks are the investments that give greater returns, not with blue chip investments such as banks, public utilities and insurance companies.
The banking industry must be happy to have sold the notion that the federal government is to blame for the fee increase. (I think the health insurance industry similarly took advantage of Obama’s heath care legislation as the blame for continuing their previous trend of large increases in insurance fees.) Our media needs to take more care with the language they use to report news, so that they stick with facts and not claimed reasons. As with Orwell’s “newspeak,” control of language can subliminally sway public opinion.
Also see Personal Money Store’s Money Log story.