|Federal Reserve building, Washington D.C.|
A joint effort by former Vice President Joe Biden and socialist Vermont Sen. Bernie Sanders to unify Democrats around Biden’s candidacy has produced a 110-page policy statement that was released yesterday.
Most alarming in the paper is a recommendation that bank accounts be made available at the Federal Reserve for low- and middle-income families.
This would be a shocking expansion of the government role in the banking sector.
Specifically, the statement says:
One in four American households are either unbanked or underbanked, putting them at risk of losing money due to exorbitant fees or usurious interest rates. Democrats will support and encourage Congressional efforts to guarantee affordable, transparent, trustworthy banking services for low- and middle-income families, including bank accounts and real-time payment systems through the Federal Reserve and easily accessible service locations, including postal banking.
Of course, the exorbitant fees are the result of government regulations which make it extremely expensive to handle a bank account. Back in the day, before the “war” on drugs, you could walk into a bank tell them your name was Joe Blow and an account would be opened for you–without ID or a background check.
It was as easy as it is to now open an email account.
Then came the war on drugs “know your customer” rules which treated every bank prospect as though the prospect was a possible money launderer. This resulted in background checks on anyone that wanted to open a bank account and filings with government agencies such as suspicious activity reports on account holders. This with other regulation raised the cost and risk of opening a new account.
All you would need to do is end the authoritarian regulations on banks, and fees would drop. But the concern over exorbitant fees is just a cover for the authoritarians who want more control over everyone’s life in every imaginable way.
I continue to think Hayek was an optimist when he titled his book,”The Road to Serfdom.” The way things are going it could get a lot worse than serfdom.