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Banks Block Walmart



March 09, 2008 – Comments (3)

One thing I have to say about the political system, and capitalism it is nonsense to believe there is a free market system.  What exists is gross manipulation of the political system by wealth to protect wealth at the expense of the masses.

I was just reading Mish and he mentioned Walmart wanting to open a bank and being prohibited.  Walmart opening a bank would probably result in affordable ATM withdrawals.  It is absolutely not in the public interest to have banks constantly skim and extract so much wealth for merely pushing paper around.  

Technology has increased, labour inputs in banking have dramatically decreased as machines do work people used to, yet costs for banking have gone sky high.  BS that this is a democratic process.

Political contributions should not be tax deductible.  This measure would at least put a bit more power into the masses because saving $50-100 in taxes for Joe Little Guy isn't going to make much difference for Joe Little Guy.  Mr Corporate Bully on the other hand doesn't have the masses funding his bullying through tax deduction that save him $50k or $100k or basically a whopping percentage of his "donation."  This is a system of taxpayers paying for political bribes that generally screw them over.

Or, better, put a lid on the tax deduction from a political contribution, at say $100.  This way it serves the masses that are involved in the political process, provides equality in the amount of free influence, and Mr Corporate Bully at least pays for his bribes, not tax payers.

3 Comments – Post Your Own

#1) On March 09, 2008 at 12:23 PM, Tastylunch (28.71) wrote:

what's interesting to meabout that was Home Depot and Target were allowed to open theirs (I think it's some loophole called an ILB, Industiral loan bank or ILC industrial loan company) but neither of them looked to be planning to use their bank as retail.

Many big companies have ILBs (Sony, Home Depot, target to name a few) basically so they can lower their borrowing costs by lending themselves capital at sub market rates, none however intended to use these to start a retail bank. My understanding is that Wal-mart was looking to do an end around the normal process of opening a bank, so they could have a low cost bank in their super centers. If they tried to go aboveboard they may have success. Understandably since banking is very lucrative and rather unconsolidated compared to most industries the big banks freaked out and lobbied hard to get it denied. I think in this instance the banks unfortunately had a legitimate argument.

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#2) On March 09, 2008 at 5:14 PM, DemonDoug (30.98) wrote:

Tasty, please read carefully what I'm going to write:

ILB's cannot operate as retail banks.

Wal Mart was looking to set up an ILB to do what target does - create an in house credit system for purchases at wal mart stores, with any fees or interest paid to wal mart without a third party.  The point of this was cost control.  As opposed to paying the juice to other CC companies, the transaction fees would be zero and the cost associated would be the management of the credit system.  Seems like you get that part.

The second article you linked, an email regarding leases to banks in wal mart stores.  Simply a scare tactic.  Do you know how much money Discover, Amex, Visa, and Mastercard make off of Wal Mart every year?  Have you seen the list of companies that have ILB's? Merrill, Morgan Stanley, UBS, Amex, GMAC, Lehman brothers - you think they want Wal Mart to steal their business?

Part of having an ILB is that you can't just start opening branches and banks and that type of thing.  The fact that you believe it means that you've bought into what the big banks want you to believe, and what the zombie financial media has put out there for you.  Walmartwatch has also bought into this nonsense. I haven't seen a Home Depot or Target savings account, have you?

dwot: Unregulated capitalism is just as bad as communism/fascim.  Imagine if there were no environmental or worker safety laws.  True capitalism would have none.  What I believe we should strive for is a fair market.  Now that is an ideal that likely can never be reached, but that should be our goal - fair regulations, rules, taxations, and conditions for all market participants (including labor). 

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#3) On March 09, 2008 at 7:11 PM, StockSpreadsheet (67.44) wrote:

Officially, it was stated that Wal-Mart should not be able to open an ILC because Wal-Mart was so big and so pervasive that they would have an unfair advantage in the market.  (The same arguement that has been levelled against Microsoft and its practice of bundling its own programs, (browsers, media players, etc.), into its operating systems at the expense of other competitors products, and forcing the PC sellers to not also add the competitors products or they won't get the good deals on Microsoft operating system software.) 

Also, there have been many complaints against Wal-Mart, (alledging unfair trade practices, among other things), that should be resolved before  allowing them to open the ILC, (the ILC being the carrot for Wal-Mart reforming its ways).

Whether any of this is valid or not is another matter.  


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