Gordon Robinson | Piracy and lunacy
Prominent political illusionist Fitz Jackson's suddenly renewed, Opposition-inspired fervour regarding the cruel imposition of exorbitant bank fees on Jamaica's most vulnerable has led to a raging Twitter war with economics lecturer Damien King.
This needs historical and motivational perspective. The first government MP to raise these concerns was Karl Samuda in January 2011. He presented the results of a 2009-10 Fair Trading Commission (FTC) report on the nature and extent of competition in banking.
The FTC declared the two biggest banks (NCB and BNS) the worst offenders. Then, Samuda contradicted BNS President Bruce Bowen, who hinted in 2010 that lower fees/interest rates would mean job losses, by contending that banks' profit margins could easily survive lower bank fees.
Samuda in 2011: "We focused primarily on service charge because we feel that these ... are unreasonable, they are high ... excessive ... . I'm not singling out anybody for any overaggressive treatment, but obviously NCB and BNS are low-hanging fruit."
Importantly, the FTC found only eight per cent of consumers were aware of changes in bank fees. This despite 31 per cent admitting they were notified. Samuda didn't consider legislation to be the solution, proposing instead other tools of transparency to assure accountability:
"That's going to be the [Consumer Affairs Commission's] job, to provide information to our consumers ... . No longer will we simply ... accept what's thrown at us, but will be monitoring it and highlight instances where we feel there's unreasonable activity taking place."
RESOLUTION ON BANK FEES
In 2013, with PNP as Government, South St Catherine MP Fitz Jackson tabled a resolution on bank fees. It was debated and referred to a joint select committee. During that debate, Fitz said:
"How could any human being , ... any bank board, any bank CEO sit down and allow this to happen to the most vulnerable ... bearing in mind there are so many vulnerable persons in the country ... ?"
The PNP Government did nothing to accelerate Fitz's resolution in the three years before its forcible eviction in 2016.
In 2014, the PNP tabled a Banking Services Bill that didn't address Fitz's concerns. In its Banking Services Act 2014, Section 126 ('Unclaimed Monies') provided that any sums "unclaimed" in accounts for a year during which two advertisements were published in the Gazette and "a daily newspaper" "shall become part of the revenues of Jamaica". THAT's how concerned PNP was about "so many vulnerable persons in the country".
Since 2016, bank fees and interest rates have lowered and fees charged on "dormant" accounts withdrawn. Suddenly, Fitz became recharged and has been promoting his "new" Banking Services Bill casting Government MPs as accessories in the rape of poor people's meagre finances.
Causal connection or not, lower interest rates and withdrawn "dormant account" fees did coincide with bank job losses, as Bruce Bowen warned. Customers endure longer lines; fewer tellers; and a lowering of customer-service standards.
Whether this is self-fulfilling prophecy or connected to a drive encouraging online banking doesn't change reality. Online banking has its own expensive consequences inflicted by hackers finding Jamaican banks easy targets. The worst part of the personal violation experienced by some hacked customers is the callous indifference by banks whose routine retort is: "Go to the police."
So it came to pass that, in 2018, Jamaicans, notorious for inconsistent short-term memory, hailed Fitz Jackson, the same MP who said nothing when constituents were raped by a foreign toll-road company charging them, extortionate fees to drive to and from work daily, as a knight in shining armour challenging fire-breathing banks. Not so economics lecturer Damien King, but, as usual, his critique seemed unrelated to reality. He tweeted;
"My first year economics students already know ... attempts to legislate prices nearly always leaves (sic) consumers worse off. The bank fees bill was such an attempt. It's better off dead."
Fitz's fumbling responses led King swiftly to the tiresome refuge of self-important professionals, so he asked if Fitz was an economist. This suggests only economists can deliver justice to communities' raped by banking pseudo-competition. Again, Fitz answered poorly, relying on studies by other economists, thereby legitimising King's implied claim to exclusivity in problem solving.
Fitz's correct response should've been that constituency representatives are much more qualified than economists to assess the effect of institutional piracy on real people and devise appropriate protections. King, energised by Fitz's weak debating skills, persisted, characterising the admission that not all banks charge the same fee as proof regulation is unnecessary. "Choice" was his solution to all problems. He was careful not to be drawn into a "socialist" versus "capitalist" rationale for his views, but can't escape the appearance that his stubborn reliance on "choice" could only be driven by extremist capitalist philosophy.
He was right about one thing, namely, political philosophy isn't the issue, but only because either dogma taken to extremes is destructive of society. Both only create elitism and resultant discontent. Unbridled democratic capitalism in a small impoverished nation with significantly undereducated human capital is a recipe for widespread corruption, mistreatment and manipulation, followed by disenchantment, low productivity and resort to violent destabilisation of economic or other growth.
You got to ha' heavy contact, know how to move up in society
to make any kind a impact IN THIS COUNTRY!
You got to know how to gyp di field;
how to scheme and swindle properly;
perfect the art a wheel and deal IN THIS COUNTRY!
I say survival in dis land isn't easy for no man.
Wid unemployment and high inflation,
some of we go dead before di end a this recession.
Unbridled democratic socialism creates erroneous concepts of entitlement and misplaced desires for revenge, driving wedges among societal strata, capital flight, and violent destabilisation of economic or other growth.
To provide for your family today on your present salary,
is an impossibility IN THIS COUNTRY!
So many bills to pay, there is no conceivable way
to save for a rainy day IN THIS COUNTRY!
Avariciousness, to be precise, is why every damn thing so overprice.
Big business making everybody feel
Government gi' dem an open licence to steal.
Neither extremity helps. Damien King fails to recognise or admit that his ideas are at the extreme end of capitalism, so he doesn't notice that banking fee regulation isn't price fixing but protection for citizens from a de facto local banking cartel who have already fixed prices (minor differentials irrelevant) and have the economic muscle to do so repeatedly. 'Regulation' inherently includes discretion to permit the regulated activity within established parameters of business expense and consumer need especially the most vulnerable. Anyone, including King, wanting to know how this works in countries like Jamaica, can ask the Office of Utilities Regulation.
King disavowed any relationship between his arguments and a 'free-market' philosophy, yet trumpeted (no pun intended) free-market 'choice' as being the reason why regulation was unnecessary. But that "choice" doesn't exist in a context where its existence is overwhelmingly unknown; the 'choice' is dubious at best, illusory at worst, and the customer, deliberately undereducated by government policies aimed at capturing his undiscerning vote, requires help not only in recognising the choice but in making it.
King readily conceded that the decision to regulate or not depended on "what works in each peculiar circumstance", yet never acknowledged Jamaica's peculiar circumstances of chronic educational inequality and low financial sophistication.
In Jamaica, "Mi a born PNP/JLP" easily becomes "My father's bank is my bank!" The most vulnerable have no 'contact', no government contract, and no ability to seek expensive advice, so the avoidance of THAT non-economic trap is the responsibility of our political representatives and bears no relation whatsoever to economics. In that regard, despite his on-again, off-again political history, Fitz Jackson's qualifications are superior to King's by street, lane and village.
At last, here in Trinidad, we see capitalism gone mad!
Thirty-five years ago, my idea of the Caribbean's best lyricist, Slinger 'Mighty Sparrow' Francisco penned a remarkably pointed social commentary and exhibited an unparalleled combination of expertise with poetic meter and command of language. He called it Capitalism Gone Mad!
In Jamaica, we suffered socialism gone mad in 1974-80. Do we want capitalism to do the same 40 years later? Damien King's Freudian moment:
"The idea that if you don't regulate ... it's free-market capitalist and, if you regulate, it's socialist, isn't the issue ... . There are markets that work best when you regulate them. Financial markets - the stock market - works best because it's regulated; because there's a regulation that governs what publicly traded companies can do and the information they have to declare. That increases confidence in the market, and allows people who are not necessarily financially sophisticated to feel that they can trust the market. THAT is as a result of regulation."
Oops! Are financial markets equal, but some more equal than others?
Peace and love.
- Gordon Robinson is an attorney-at-law. Email feedback to firstname.lastname@example.org.