Free Markets and Unicorns
Q. What do you call it when you lie about the mileage when selling a car?
A. Fraud. The NHTSA calls this a “serious crime and consumer fraud issue.” Additionally, between 2002 and 2005 the NHTSA Office of Odometer Fraud says there was a “definite escalation in [odometer] fraud.”
Q. What do you call it when a woman falsely claims to have a tubal ligation?
A. Tom B. Taker, Jr. Or, as I like to call it, a 21-year donation to The Human Fund.
Today’s axiom is a simple one.
Tom’s Law #42
There’s no such thing as a free market.
You think I’ve gone too far this time? You say, “Open your eyes, Tom. Look around. You’ll see free markets everywhere you look.”
Bollocks! (If only those had been tied instead.)
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When the market drops
Note: Due to the upcoming tenth anniversary of 9/11, there will be no “Termination Tuesday” bracketology this week. It will be back again next week. In the meantime I’m actually going to try to behave.
Would you like to play a game? Don’t worry – it’s simple. First we’ll consider a factoid and then we’ll say the first thing that pops into our heads. This is just an idea. Let’s try it once and see what happens.
Factoid: Approximately one-sixth of the human population on this planet does not have access to safe water.
Response: The solution is a new market! We should be charging a whole lot more for water!
Erm? Did we not all come up with the same answer? How odd.
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Haiti: Generosity reduced by three percent
On January 14th The Huffington Post reported that donations made by generous Americans using credit cards to charitable organizations assisting with relief efforts in Haiti were being “skimmed” by credit card companies by three percent.
The Huffington Post said that for every dollar donated about three percent was kept by banks and credit card companies in the form of transaction fees. It was additionally reported that these companies traditionally keep about $250 million from charitable donations annually.
Who knew that profiting from the generosity of others could be so bloody lucrative?
Then, on January 16th, I heard about the issue from MoveOn.org in an email:
But when Americans donate to charity with their credit cards, the credit card companies get rich. In some cases they keep 3% of the donation as a “transaction fee,” even though that’s far more than it costs them to process the donation.
Now the New York Times is reporting that “some” fees are being waived:
After being criticized for siphoning off up to 3 percent of charitable donations for transaction fees, the nation’s largest payment networks — Visa, MasterCard, American Express and Discover — announced that they would waive fees for some contributions aimed at aiding Haiti in the wake of a devastating earthquake.
The New York Times reported that these transaction fees typically range from 1 to 3 percent.
The Huffington Post also reported that only one time before did the credit card companies waive these transaction fees and that was for the tsunami disaster of 2004.
The rest of the time it is apparently business as usual which means profiting from charitable donations.
So the credit card companies said they’ll waive some fees. Who will do what? Let’s find out (per the New York Times):
- Visa – “would not apply interchange fees, through February, to donations made to a select group of major charities — the names of which were still being compiled — that are providing support to Haitian relief efforts. The company said it would also donate any revenue that was generated by charitable donations related to the Haiti crisis through next month.”
- Mastercard – “would wave interchange fees on relief donations made using United States-issued MasterCards to the American Red Cross, AmeriCares, Unicef, Save the Children and CARE U.S.A.” The article did not indicate a time frame for this.
- American Express – “through the end of February, it would rebate the transaction fees for charitable contributions made on its card directly to the nonprofit organizations listed on the Agency for International Development’s Web site in support of Haiti relief.”
- Discover – “said it was also waiving some fees but did not immediately offer details.”
Wow. What commitment. If that doesn’t warm the cockles of your heart I don’t know what will. Apparently if you contribute to charity outside the bounds of these very narrowly defined exceptions they will still happily gobble up those transaction fee profits. Additionally they appear to be building in time limits on how long they are willing to do this, like a whopping month or two. I guess they figure they’ll do what looks good now in the moment when the public’s eye is focused on them and then go back to normal once this all blows over. It’s true the memory of the American people can be short.
Meanwhile, I’ve lost all “interest” in credit card companies. I already boycott them for financial reasons. Now I have extra incentive. Thanks, evil scum.