"a fish, a barrel, and a smoking gun"
for 14 December 1999. Updated every WEEKDAY.
Gimme Gimme Gimme



The American Way means many

things: the opportunity to excel

and thrive through hard work and

thrift; a healthy and responsive

democracy; an aristocracy of

merit, not birth; a wide-open,

unstuffy people astride the

world by grace of moral

uprightness and unparalled



But one of the truest essences of

an American, exhibited in

everything from Lottomania to an

inexplicable yearning for

Canadian-style health care, is

the desire to get something for

nothing — with the robust

certainty that it's nothing less

than what we deserve.


This spirit animated California's

recent nose-thumbings at the

sputtering bully that is the

Banking Industry. Banks'

practices of slapping people

with two ATM fees — one from

customers' own banks, another

from the bank that owns the

machine — were banned in two

of the Golden State's most

prosperous cities. (More

precisely, they were

half-banned: Banks are still

allowed to charge people for

using another bank's ATM.) Some

66 percent of San Francisco

voters approved an initiative

legislating free ATM hospitality

for everyone stuck in that

city's cramped, smelly confines.

The Solons of Santa Monica

took the same step themselves,

freeing their quaint Southern

California beach town from the

greedy grips of the bloodless

Mr. Drysdales intent on stifling

the free flow of cash.


In a country with a living,

though senile, memory of massive

bank failures, banks have always

seemed plenty suspicious. From

your eccentric aunt who

considers her sugar jar safer

than First Amalgamated Federal

Bank Corp.'s vault, to egghead

icons like Ezra Pound, everyone

suspects there's something

untoward, if not satanically

evil, about the profession of

taking people's money and

lending most of it out at

interest. Even free-market

economist Murray Rothbard argues

that fractional reserve banking

— the prevailing system

whereby banks don't actually

store deposits and must honor

any and all withdrawals — is

inherently fraudulent and

criminal, since banks are making

implicit promises (to return

depositors' money upon demand)

they can't possibly keep.


Add overly long teller lines and

check-clearing waiting periods,

a series of consolidations that

have swallowed up many people's

original banks of choice;

confusingly arcane monthly

statements; and the occasional

pesky overdraft fee (always

undeserved, of course), and most

everyone pleasantly daydreams

about incinerating a banker in

his Monaco penthouse. So it

didn't take much for San

Francisco, Santa Monica, and

such national anti-ATM hotheads

as Maxine Waters and Bernie

Sanders to see there's a hefty

political percentage to be

earned making sure banks lose

for once, especially in service

of the sacred principle of

Something for Nothing.



Banks are all too familiar with

the principle of getting

something for nothing

themselves. Prior to the

deregulation of the '80s, they

enjoyed an unshakably cozy and

profitable life, regulated and

circumscribed by government in

ways almost entirely to their

benefit. Competition

was severely restricted and

banks embraced the dictates of

"3-6-3" — pay 3 percent on

deposits, charge 6 percent on

loans, and hit the golf links by

3 p.m. Deregulation of interest

rates in the Alex Keaton era

changed all that, and last

month's de jure repeal of the

Glass-Steagall Act — an

edict which separated commercial

banking from investment banking

and which had grown so feeble

and toothless that 73 percent of

Americans polled believed the

law had been handed down from

Walton's Mountain — will

change things even more. Profits

are no longer guaranteed;

instead, they're soaring.


Craven pets of the State though

the banks long were, those

poltroons at Bank of America and

Wells Fargo kindle in their

otherwise damned souls a tiny

flame of Atlas (Charles Atlas,

at least), and in this case they

were prepared to shrug. When

Santa Monica's ban went into

effect in early November, both

banks stopped offering the

service they could no longer

charge for. The Naderites at

California Public Interest

Research Groups, who have taken

the idea of consumer protection

to the point of protecting

customers from having to pay for

services, expected the aggrieved

proletarians to boil over with a

Thermidorean reaction of

whooping and bloodletting, but

such a sad pass was narrowly

averted by US District Judge

Vaughn Walker.


Walker declared that the cities

had no authority to intrude

between the freely chosen

transactions of America's barons

of finance and their beloved

customers. His decision didn't

fall back on hoary

clichés like freedom of

contract or the inalienable

right to truck and barter under

any mutually agreed upon terms.

Rather, he declared that only

the federal government had such

authority over nationally

chartered banks. As the Dallas

Morning News helpfully, if

somewhat frighteningly,

explained it, "Federal law

empowers national banks to

engage in a number of activities

and charge for their services."

Once, American politico-legal

philosophers called on the

authority of Nature and Nature's

God as the source of such

profligate liberties as the

freedom to conduct a business.

But we don't throw tea in the

harbor or wear those powdered

wigs anymore, at least

not in public.


The legal fight isn't over: It's

never over, as long as a lawyer

still remains with breath in his

lungs, a fire in her heart. But

instead of a truly radical

solution — one in which, for

example, both the local

communities and the banks might

live with the results of their

actions for a time and reach

some wiser detente in the future

— the issue will be settled

in court. The banks have been

warned to keep the funds

collected from the fee in

escrow, lest they are eventually

ordered to fork it over either

to the aggrieved customers or,

more likely, to some state fund

for undisclosed "consumer

protection" activities —

these being, say, informational

campaigns warning people that

the food in those honor-system

candy bins isn't actually free,

or that you have the full right

to send back that Columbia House

selection if you don't really

want it.


New York City Council Speaker

Peter Vallone, showing that

valiant dedication to

middle-class convenience which

has defined the Giuliani era in

New York, declared that the

banks' moves to deny

non-customers free use of ATMs

is like "cutting off their noses

to spite their faces" —

apparently believing that

granting favors to people who

aren't and will never be your

customers is essential to

business survival.



Although banks lose nothing, not

even the always-tenuous

goodwill of their own customers,

by cutting off outsiders from

ATMs, the move does strike a

blow against the entire concept

of network convenience. With

things like ATM cards and credit

cards, a significant portion of

their value comes from knowing

you can use them everywhere. But

ATM cards are linked necessarily

with your bank account. As long

as your bank has them, not being

able to use other banks in the

network isn't likely to make you

cut your card in protest. Your

momentary ire can be safely

vented against that foreign ATM

owner, and the punishment is

inflicted on the local newsstand

operator or massage parlor

hostess, who ordinarily benefits

when you have easy access to

cash. ATM proliferation has

followed ATM fees — it's not

just corporate propaganda

telling us those things ain't

free either to install or to

maintain. Nor do ATMs really

save banks money on tellers

— as any of the almost

constant dozen or so people

regularly standing in line at

Wells Fargo know, the customer

bears the burden when lots of

people want to use teller



ATMs are in any operational sense

a technological miracle,

especially to anyone old enough

to remember even the early '80s.

And miracles cost: Just ask

Jesus, called the Christ. Goofy

sci-fi visionaries like

Hugo Gernsback used to imagine

the people of Tomorrow, Today!,

wandering about in a perpetual

delighted daze, ready at any

moment to explain the miraculous

operating principles of their

clean, wealthy, and efficient

society to any passer-by from

another time, or even one

another. While those flight-suit

thingies they always had to wear

were a bit much, a little of

that spirit today could do us

good. The pursuit of petty

entitlement at no cost is a

child's game, and — as a

look at the Social Security

trust fund reveals — America

is no longer a young nation.

courtesy of Eugen von Bohm-Bawerk