Assuming this system works well, it will have an enormous impact on cash transfers — revolutionizing the way Americans dine out, the amount of cash we carry, etc. The friend who promises to pay you back when you’re out to eat but never actually does? He will need to come up with a new excuse. It’s amazing that this is the first time such a (useful) idea will potentially become widespread in the United States, as it already exists in other countries:
But our long national post-meal nightmare may be nearing an end. On Wednesday, Visa announced a new person-to-person payment system that could transform how we pay our babysitters, split our checks, and reimburse our friends. Starting in the second half of the year, users will be able to send money to any other Visa cardholder, regardless of where they bank or where they live. The sender need know only her recipient’s 16-digit account number, cell number, or e-mail address. Either the cash just shows up in the account linked to the recipients’ credit card, debit card, or prepaid card or the recipient gets a notice to OK the transfer.
I am definitely guilty of refusing to carry much cash around, preferring to use a debit card. This can be an inconvenience when you need to exchange cash with friends, and when you’re shopping somewhere that is cash only or has a minimum purchase requirement to allow credit and/or debit cards.
There will be fees. But given that Americans already pay billions in annual ATM fees, its not clear that this will be any worse, and you won’t have to run and find the nearest ATM.
CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.
CEI Weekly
March 18, 2011
>>Featured Story
Energy efficiency mandates are lowering Americans’ quality of life by lowering the quality of our household appliances. In The Wall Street Journal this week, CEI General Counsel Sam Kazman explains how energy restrictions have ruined top-loader washing machines, which were once both inexpensive and effective. Read Kazman’s op-ed here.
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Have a listen here.
CEI Senior Fellow Greg Conko discusses his recent trip to Kenya where he met with members of Parliament and other officials about the best way to regulate the introduction of genetically modified crops to the country.
This is a few days old, but it’s worth mentioning: “EPA Tangles With New Critic: Labor.”
The labor unions were supportive of the Waxman-Markey bill in the House, and are clearly much more aligned with Democrats than Republicans, especially given the collective bargaining issues that have emerged in the past month. However, they aren’t supportive of EPA’s current efforts to regulate mercury, carbon dioxide, etc. The article quotes a union leader:
“If the EPA issues regulations that cost jobs in Pennsylvania and Ohio, the Republicans will blast the President with it over and over,” says Stewart Acuff, chief of staff to the president of the Utility Workers Union of America. “Not just the President. Every Democratic [lawmaker] from those states.”
This is certainly true, and it would seem to counter the (rest of) left’s argument that none of these costs are trivial, that EPA regulations will actually create jobs, are a free lunch, etc.
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Text messages cost 20 cents to send, even though they use a fraction of a penny of bandwidth. What gives? Antitrust authorities want to know.
Over at The American Spectator, I explain that it is likely a case of unbundling:
Maybe phone companies are unbundling texting from their other services. That way the only people who pay for text messages are the people who use them. If phone companies don’t have to provide texting service for people who don’t want it, they can keep costs down and charge lower prices.
This is much more fair to customers:
Why not just give all customers unlimited texting and charge a higher monthly bill? That would punish people who don’t text, such as this writer. By eschewing the flat rate and tolerating a few texts per month from family and friends who haven’t been properly trained, non-texters can save $50 or more per year.
Monopolists (and oligopolists) don’t behave that way. Companies competing against each other on price do. Trustbusters are forgetting something else, too. If a monopoly exists at all, it is very temporary.
It turns out that a young company called Beluga makes a free texting application for smartphones. Few things are as temporary as monopoly (or oligopoly) power. Since Beluga bypasses the texting cartel, you can have unlimited texting without the $5 monthly fee. Think of it as Skype for the text messaging set.
Read the whole article here.
There are a few reasons to be bothered by the Florida dress code bill that just passed a State House Subcommittee.
First, it’s unnecessary. The bill would require all school districts to adopt a dress code that prohibits students from “wearing clothing that exposes underwear or body parts in an indecent or vulgar manner.” But most schools in Florida—like most schools throughout the country—already enforce dress codes. There’s no reason for state lawmakers to be determining what constitutes appropriate attire for Florida students when school officials across the state have already done so.
Second, the bill purports to homogenize dressing standards in a state that is culturally and ethnically diverse. The NAACP Florida State Conference claims that a state-wide dress code would unfairly target young black males. They may have a point. What’s considered inappropriate clothing in one school district might not be considered inappropriate in another—which is why dress codes should be a local, not state, issue.
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Rep. Steve LaTourette (R-Ohio), vice chair of the House Committee on Transportation and Infrastructure’s Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, essentially told a bunch of transit lobbyists yesterday that he’d be willing to kowtow to whatever demands they made of him. As reported by Streetsblog:
“You’ve got to get in people’s faces,” [LaTourette] told [American Public Transportation Association] participants. “You’ve got to go in and ask for something” — even of the “knuckledraggers that came in in the last election that hate taxes.” He said it’s only fair that people pay for the transportation infrastructure they use.
While the tax-loving congressman appears concerned about the financial health of the Highway Trust Fund (its insolvency which is largely the result of the theft of highway-user revenue — mostly generated by federal excise taxes on gasoline and diesel — that is used to fund transit and other non-highway projects), he certainly didn’t propose abolishing the Trust Fund’s Mass Transit Account, which is responsible for most of the highway-user robbery. Will LaTourette go on record as opposing future Highway Trust Fund revenue diversions to transit? Will he propose funding a reauthorization of NASA’s recently killed back-to-the-moon Constellation program out of the Mass Transit Account? So much remains to be seen.
Back before the election, intellectuals with ties to the Obama administration proposed a trillion-dollar bailout for some (but not all) underwater mortgage borrowers, as a way to increase consumer spending.
Last week, The Washington Post reported that bureaucrats at the newly-created Consumer Financial Protection Bureau (CFPB) want to do something similar on a smaller scale. Their proposal would require banks to write off part of the mortgages of certain (but not all) mortgage borrowers who owe more on their mortgage than their house is worth. Worse, they would require mortgage servicers to write off loan principal on loans owned by other institutions, like pension funds, violating their property rights.
Virtually all of America’s pension funds own mortgage-backed securities. Pension funds that millions of people rely on for their retirements would lose billions of dollars due to reduced mortgage value. These demands are contained in a 27-page proposed settlement sent to the banks by the CFPB, the Justice Department, and state attorneys general who sued the banks over their recent foreclosure documentation lapses. Such demands flout court rulings like Louisville Joint Stock Land Bank v. Radford (1935), which overturned a federal law that wiped out mortgage value.
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Tech:
Internet is world’s ‘greatest spying machine’: Assange:
“Julian Assange, the founder of whistleblower website WikiLeaks, has warned that the Internet was the “greatest spying machine the world has ever seen” and an obstacle to free speech.”
Al Franken: ‘They’re coming after the Internet:’
“Sen. Al Franken claimed Monday that big corporations are “hoping to destroy” the Internet and issued a call to arms to several hundred tech-savvy South by Southwest attendees to preserve net neutrality.”
Fed instructs teachers to Facebook creep students:
“Education Department officials are threatening school principals with lawsuits if they fail to monitor and curb students’ lunchtime chat and evening Facebook time for expressing ideas and words that are deemed by Washington special-interest groups to be harassment of some students.”
U.S. military blocks websites to help Japan recovery efforts:
“The U.S. military has blocked access to a range of popular commercial websites in order to free up bandwidth for use in Japan recovery efforts, according to an e-mail obtained by CNN and confirmed by a spokesman for U.S. Strategic Command.”
NASA Building Network of Smart Cameras Across the US:
“A major government agency is looking to blanket the US with cameras that will never stop their surveillance. But don’t worry privacy pundits, those cameras will be spying on the sky, not civilians. NASA’s All-sky Fireball Network is a series of cameras that track meteorites as they enter the atmosphere.”
Cutting prices is the only way to stop piracy:
“The Media Piracy Project, published last week by the Social Science Research Council, reports that illegal copying of movies, music, video games and software is “better described as a global pricing problem” – and the only way to tackle it is for copyright holders to charge consumers less money for their wares.”
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Correction: In the original post, I erroneously included Sen. Mike Crapo twice, when I meant to include Sen. Mike Enzi (R-Wyo.) as one of the pro-price control Republicans.
In his post, “Durbin and Federal Reserve Plot to Fix Prices and Harm Consumers,” RedState.com editor Erick Erickson blasts the price controls on debit card retailer interchange fees in Dodd-Frank’s Durbin Amendment. In addition to noting the harms to consumers as costs of debit card processing are shifted to them from retailers — harms such as loss of free checking and imposition of new fees that have set off bipartisan alarms — Erickson lays out the principled conservative case against these price controls and all price controls.
If nothing is done, the Federal Reserve’s price controls stemming from the Durbin Amendment go into effect in July, and banks and credit unions will to lose up to 90 percent of the revenues they make from the interchange fees they charge retailers. These losses will almost certainly be shifted to consumers as both small and large financial institutions have said they will have to raise fees, in some cases to stay solvent. Although smaller banks and credit unions are technically exempt from some portions of the bill, both the Independent Community Bankers of America and the Credit Union National Association have said the exemptions are basically meaningless.
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