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July 28, 2010
Credit Cards - Take From Poor, Give to the Rich?
Topics: Political News and commentariesMore Marxist, anti-capitalist, class warfare, wealth redistribution rhetoric from our government, this time it's via the Federal Reserve Bank of Boston (emphasis added):
A new paper from the Federal Reserve Bank of Boston says merchant fees and reward programs offered by many credit-card issuers essentially take money from those who have the least and give it to those who have the most. The imbalance may have to be remedied via government intervention, the authors, Scott Schuh, Oz Shy and Joana Stavins, argued. The paper was published as part of the bank's Public Policy Discussion Papers on Monday.In their zeal for "social justice" and concern for "wealth redistribution" from those who have earned their income (and have credit cards because they are financially responsible) and those that haven't, the authors seem to have overlooked the costs of marketing (for both the bank and the merchants) and the fact that those evil capitalist pig banks provide a service that enables merchants to increase their volumes and stay in business, and keep their overall prices down low enough that those that don't have or use credit cards can afford to buy the groceries they need.... The Boston Fed paper deemed its main contribution to the study of credit cards' impact the researchers' ability to sort out costs based on household income, going so far as to derive how much wealth is transferred between different groups. The paper also asserts that credit-card issuers aren't out to gouge those who aren't using their services.
And for you credit card-bearing readers feeling a tad bit guilty about your greedy rewards points, you might do well to read this January New York Times article (H/t - Financial Times).
As a commenter quips at Free Republic, any "redistribution of wealth" occurring from credit card use seems only fair since home mortgages were designed (by Fannie and Freddie) to steal from those that work for their money and give to those that don't..
Posted by Richard at July 28, 2010 10:27 AM
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