DOTE readers already know my well-substantiated view of what goes on in our Imperial Capital. Forget about it! Those making a dishonest living in Washington live in a bubble, totally disconnected from your everyday concerns. In the words of George Carlin, they don't give a fuck about you. Corruption is rife Inside The Beltway. Corporate and other special interests dominate everything Congress does. America is a Democracy in name only. Thus does the Empire decline.
A recent story in the Huffington Post beautifully illustrates all these points. The story is Swiped: Banks, Merchants And Why Washington Doesn't Work For You by Zach Carter and Ryan Grim. At issue are so-called swipe fees, the fees merchants must pay to process credit and debit card transactions. The fight pits the Big Banks against the Major Retailers.
The fees [paid by a single merchant] are a tiny fraction of Wall Street’s swipe fee windfall; banks take in a combined $48 billion a year from these “interchange” fees on debit and credit cards, according to analysts at The Nilson Report. That money comes out of the pockets of consumers as well as merchants, as stores pass on whatever costs they can to their customers.
Major retailers — the Walmarts, Home Depots and the Targets of the world — complain that card fees are one of their biggest annual expenses, and they’ve entered into a Capitol Hill battle royale against card companies to roll back the lucrative fee regime. Last year’s financial reform bill ordered the Federal Reserve to crack down on debit card swipe fees, a $16 billion pool of money from which $8 billion flows to just 10 banks. As a concession to Wall Street, credit card fees were left unscathed.
The article is very long and contains lots of damning detail. Armies of lobbyists have been enlisted.
The swipe fee spat is generating huge business for K Street: A full 118 ex-government officials and aides are currently registered to lobby on behalf of banks in the fee fight, according to data compiled for this story by the Sunlight Foundation, a nonpartisan research group. Retailers have signed up at least 124 revolving-door lobbyists.
Bribes are being passed out like candy at Halloween.
Money flows freely around the fee battle. Political action committees organized by members of the Electronic Payments Coalition, a cadre of banking trade groups, dumped more than $500,000 into campaign coffers during January and February alone, according to data compiled by the nonpartisan Sunlight Foundation. During those same months, PACs for Walmart and Home Depot gave a total of $75,000 to 26 senators, along with $45,000 to political parties, while Target dropped an additional $54,000.
The bottom line? Just study the graphic and read this concluding text.
The swipe fee debate, as mundane as it may appear, is emblematic of how Washington works today — and helps explain why Congress hasn’t passed an appropriations bill in years, can’t write an annual budget, is flirting with defaulting on the country’s debt and effectively gave up on job-creation efforts in the midst of a brutal economic downturn. There are, to be sure, a variety of reasons that Congress is zombified, but one of the least understood explanations is also one of the simplest: The city is too busy refereeing disputes between major corporate interest groups.
As swipe fees dominate the Congressional agenda, a handful of other intra-corporate contests consume most of what remains on the Congressional calendar: a squabble over a jet engine, industry tussling over health-care spoils and the never-ending fight over the corporate tax code.
The endless meetings and evenings devoted to arbitrating duels between big businesses destroy time and energy that could otherwise be spent on higher priorities. In America today, over 13 million people are out of work and millions more are underemployed. One out of every seven is living on food stamps. One out of every five American children lives in poverty.
Yet the most consuming issue in Washington — according to members of Congress, Hill staffers, lobbyists and Treasury officials — is determining how to slice up the $16 billion debit-card swipe fee pie for corporations.
Click on the image to get a better view.
If you want all the gruesome details, read the entire Huffington Post report, which contains illustrative videos of our elected representatives "in action", nifty graphics and more detail than you will ever need.
Bonus Video — a small sampling of the bullshit