There have been a fair number of stories recently to the effect that, as far as the banks (particularly the big ones) are concerned, the economic crisis is now “officially” a thing of the past. This has led many of the more progressive commentators to wonder just how those banks have managed to return to their status quo while so many of the rest of us remain left in the lurch. One data point to consider was reported in today’s San Francisco Chronicle by Marisa Lagos of their Sacramento Bureau:
Advocates for the poor say that while [California Governor Arnold] Schwarzenegger has rightly cracked down on such abuses [by welfare recipients using welfare debit cards at casinos, for example], he has failed to curb another source of waste: escalating bank fees that take money from needy families and from the California businesses where that money would otherwise flow.
By the end of this year, they estimate, more than $38 million will have been transferred from poor families to banks in the form of ATM and debit fees over the past three years. For example, in 2008, according to state figures, banks collected $10.1 million in fees from welfare recipients; this year, they are on track to collect more than $15 million. In June 2008, recipients paid out $833,000; banks collected $1.44 million the same month this year.
This amounts to adding insult to injury. Initially, all American taxpayers were informed that their tax dollars would “stimulate” (an optimistic euphemism for “bail out”) banks that were failing as a result of their own practices that ranged from ill-conceived to downright abusive. Now that the word is out that the banks are beginning to pay the government back, Lagos’ story provides one sign of the source of funds for those payments. This is about as clear-cut a story as one might encounter about how the poor are the ones who pay to keep the rich in a state of wealth to which they have become accustomed. After all, where else would those bankers get the money to payroll all those lobbying efforts to thwart any substantive move towards economic reform?