Never miss a post. Subscribe today.

   
Jon Tester Montana Politics

Senator Tester Is Looking Out for Montana Community Banks

There has been a lot of one-sided attention paid to Senator Tester’s Debit Interchange Fee Study Act, with some suggesting that the Senator is taking the side of large banks against Montana retailers. This piece in Forbes by Tim Chen, from a month ago, makes it clear that the real story is much more nuanced, and that Senator Tester is actually protecting the interests of small community banks and credit unions, as he has consistently argued:

Small community banks and credit unions, on the other hand, face a different set of challenges. For community lenders, the per-card cost of fraud protection is far higher, because they are unable to take advantage of the same economies of scale as national banks. They generally see smaller profit margins and higher expenses. Credit unions, in particular, rely on interchange revenue to fund debit rewards programs, high-yield accounts and free checking. Because these not-for-profit institutions convert all of their profits into benefits for their customers, they are unable to simply absorb the loss of swipe fee revenue without passing the pain onto their members.

In a survey conducted by the National Association of Federal Credit Unions (NAFCU), half of respondents said they were considering eliminating free checking, half were considering eliminating or reducing debit rewards, and nearly 9% reported considering layoffs. Tellingly, 75% of credit unions said that they have reviewed or are currently reviewing their business plans to account for lost interchange revenue.

That’s particularly relevant, given that over one-third of Montanans are currently members of credit unions.

Despite the claims of retailers, there is little reason to believe that consumers will see lower prices:

it’s not immediately evident that capping debit interchange fees will result in lower prices for consumers. In fact, a survey by Javelin Strategy and Research found that two-thirds of consumers doubted that the Durbin Amendment would lower prices at all.

There is nothing in the Durbin Amendment that mandates these “savings” be passed on to consumers, either.

It’s easy to be swayed by advertisements paid for by major retailers like Wal-Mart suggesting that Senator Tester is anti-consumer and pro-bank, but this debate is far more complicated than banner ads found on online newspapers and the opinion pieces written by retailers.

It’s an easy narrative to spin this as Big Banks against the consumer, but it’s actually Big Banks against huge retailers, with small lenders caught in the middle. Tester’s bill to delay implementation to study the impact of reducing the interchange fee is simply a pragmatic solution to a complex problem.

Representative Rehberg and his campaign are exploiting an issue with a simple narrative that does not address the real needs of Montana lenders or bank customers—all without even taking a position on the bill.

Let’s not make it easier for him.

If you appreciate an independent voice holding Montana politicians accountable and informing voters, and you can throw a few dollars a month our way, we would certainly appreciate it.

About the author

Don Pogreba

Don Pogreba has been writing about Montana politics since 2005 and teaching high school English since 2000. He's a former debate coach, and loyal, if often sad, fan of the San Diego Padres and Portland Timbers. He spends far too many hours of his life working at school and on his small business, Big Sky Debate.
His work has appeared in Politico and Rewire.
In the past few years, travel has become a priority, whether it's a road trip to some little town in Montana or a museum of culture in Ísafjörður, Iceland.

146 Comments

Click here to post a comment

  
Please enter an e-mail address

  • It really is a mad world when progressives argue for bailing out Wall Street banks.  That’s Durbin’s point.  Or is it so strange after all?    Politicians are what they are.  Wiener has proven that yet once again.  Tester shows himself to be fully baptized in the font of campaign contributions.  As David French of the National Retail Federation put it:  “How does he explain voting with MasterCard and Visa, which are located
    in San Francisco and New York, and voting against consumers and retail
    merchants in Montana?”To hell with debit rewards programs.  How lame of an excuse to screw the vast majority of Montanans.  Shame on Tester.

  • It really is a mad world when progressives argue for bailing out Wall Street banks.  That’s Durbin’s point.  Or is it so strange after all?    Politicians are what they are.  Wiener has proven that yet once again.  Tester shows himself to be fully baptized in the font of campaign contributions.  As David French of the National Retail Federation put it:  “How does he explain voting with MasterCard and Visa, which are located
    in San Francisco and New York, and voting against consumers and retail
    merchants in Montana?”To hell with debit rewards programs.  How lame of an excuse to screw the vast majority of Montanans.  Shame on Tester.

  • As Bill Cheney from the Credit Union National Association put it:
    The 92 million Americans who are members of the nation’s 7,600 credit unions have a train wreck in front of them — and the next two months are going to prove critical as they face an all-out lobbying steamroller to transfer billions of dollars from their pockets into the coffers of some of the largest corporations on Earth.
    ?The Wal-Marts of the world have spent millions and years lobbying Congress to effectively eliminate a little-known transaction fee known as “interchange” — or “swipe fees.” Very simply, interchange is paid by merchants who want to use the vast debit card network.
    It turns out that Tester is looking out for them–and the hundreds of thousands of Montanans who rely on their services. 

  • Don, consider the facts rather the spin to silk purse this sow’s ear.  See:  https://www.documentcloud.org/documents/96677-interchange-snapshot-letter-2.html

    For some of the larger CU’s, the processing costs are just 2 cents per transaction while profits are at 36 cents.

    Small banks and CU’s are exempted from Durbin’s effort the last time I looked.  Has something changed?

    See also Simon Johnson’s piece in the NYT:   http://economix.blogs.nytimes.com/2011/05/12/small-banks-and-debit-card-reform/?partner=rss&emc=rss

    Carrying Tester’s water on this mess of “pay to play” to build his campaign chest does not become you.

  • I’d be inclined to trust Ben Bernanke, who said that small lenders could fail:

    Bloomberg reports that Federal Reserve Chairman Ben Bernanke told lawmakers that there was “reason to be concerned” that the debit interchange exemption for smaller financial instructions wouldn’t be effective and may even result in bank failures.“I can’t say with certainty, but I think there is good reason to be concerned about it,” responded Bernanke at a Senate Banking Committee hearing.

    • Inclined to trust Ben Bernanke? About bad things happening if people don’t side with the banksters?

      LOL

  • Banks and CU’s survived before debit and credit cards.  It strains credulity to suggest this is the camel’s back breaking straw, especially since these smaller institutions would be exempt from the caps and charge more that the larger institutions.  Read Simon Johnson’s piece that I link above.

    Tester is not on supporting Montanans who will wind up paying higher costs by delaying this much needed reform.  Keep in mind that all Montanans pay these costs in the products they buy whether they use debit cards or cash.

  • I did read the piece, Craig. I’ve read both sides of the issue. I trust Bernanke, who says this change could lead to small bank and credit union failures. That would be devastating for small communities in Montana.

    What evidence do you have that consumers will benefit from this “reform”? There is nothing in the Durbin Amendment which mandates passing on these “savings” to consumers.

    If it’s so clearly a black and white issue of consumers against banks, why hasn’t Representative Rehberg made up his mind?

  • Don, I trust facts, not personalities.  Competition brings down prices, BUT the wall is made of costs.  These debit card fees go into the cost homogenizer.  http://www.sltrib.com/sltrib/opinion/51934100-82/debit-fees-swipe-banks.html.csp

    ===quote===

    Americans now pay the world’s highest debit card transaction fees with
    small businesses and merchants alone shelling out $1.3 billion per
    month. And again, we must remember that consumers ultimately cover that
    cost because it is rolled into the price for every item in a store.
    Seven of the eight countries in the world with the highest per capita
    debit card usage have no swipe fees at all. And every nation that has
    investigated these questions has reformed swipe fees, or is still
    actively investigating. Interestingly, Visa and MasterCard, the giants
    of the industry not just in America but in many other parts of the
    world, already agreed to voluntarily lower debit swipe fee rates in
    Europe to a lower level than what the Federal Reserve has proposed for
    the U.S…

    But bankers themselves don’t believe what
    their lobbyists are saying in Washington; 60 percent of readers of
    American Banker magazine agree that debit card fee reforms will help
    small banks and credit unions. Swipe fee reform will only impact large
    banks with assets over $10 billion. Most community banks are exempt from
    the law.

    The fact is that high debit swipe fees hurt
    competition, innovation and economies. The two-year delay sought by the
    major banks to “study” the impact will cost consumers $24 billion
    through the continuation of excessive swipe fees.

    ===end quote===

     

  • Funny, Craig, I thought you were the free market type.  How about letting the market determine how much is reasonable for a debit transaction fee?   Now all the sudden the heroes of the market are saying that there needs to be a cap on how much profit a company can make on a service?

  • PW, is that the best you got to attack me to deflect from the issue and attack me?  There is no market competition here to go against Visa and MasterCard to determine a fair price.  Tester knows this, and that’s why he is raking in the financial institution contributions to his war chest.  To hell with the average Montanan.  His future is determined by Wall Street.  He learned at Schumer’s knee.

    The title of this post and the argument is about misdirection.   60% of the readers of American Banker magazine know that the Durbin reform will benefit small financial  institutions.  Lower costs for retailers will allow them to compete.  Didn’t those SU Jesuits teach you anything?  Much better business program  at Gonzaga.

    • Albers School of Business is actually very highly ranked.  But then, I only took two classes from them.  What those classes taught me, however, was an appreciation for the free market.  My textbook was written by Paul Krugman, and I found his evidence of the benefits of free markets to be very compelling. 

      Frankly, I don’t really prefer one side over the other on this issue.  Wal-Mart vs. Mastercard – what do I care?  But the move to limit bank profits concerns me for two reasons –

      1.  It strikes me as spiteful.  The banks caused the financial crisis, so lets take some of their money away.  Whether it’s a good idea for customers or not, the motivation, at least among many progressives, is some kind of revenge on the banks.  That’s not how policy ought to be made. 
      2.  There are market-based options – if stores really wanted to slash these fees to pass the savings on to customers, they’d offer cash discounts.  Very few do.  That indicates to me that it’s not really worth their money to solve the problem in the market; they’d rather just have the government do it for them so they can increase their own profits.  Claiming that the retailers will pass the savings on to customers is no less dubious as claiming the banks use their debit card money to support rewards programs and free checking. 

      I can see the logic that says this should help smaller institutions, but if that’s the case, why aren’t the organizations representing those institutions supporting it?  Bottom line – this may help consumers, but I’m not convinced that that outcome is certain enough to justify intervening in what is essentially a struggle between retailers and banks for more profits. 

      • PW, there is no free competitive market with these fees.  Your education failed you on this.  The Hill explains:  http://thehill.com/blogs/congress-blog/economy-a-budget/165353-conservatives-should-support-swipe-fee-reform

        ===quote===

        To be sure, they’re starting with a good principle: The business
        world tends to correct itself without government involvement. Most of
        the time, if a company jacks up its prices for no reason, consumers will
        go elsewhere.

        But that is not how swipe fees work. There is no
        market force keeping them in check. That’s why a bank can charge 44
        cents on average for a service the Fed has determined actually costs 4
        cents on average to perform without being put out of business by a
        lower-priced competitor.

        Essentially, banks have banded together to fix prices. They do this
        by routing their debit-card transactions through the electronic
        “interchanges” run by credit-card companies. Two companies — Visa and
        Mastercard — control 80 percent of debit cards, and they set the fees,
        even though it’s the banks that receive the money. Banks don’t have to
        compete with each other.

        So what happens when, say, Visa decides
        to jack up debit-card rates — as it has repeatedly in recent years? The
        banks hardly mind, because they get more money, which encourages them
        to issue more cards, which is good for Visa. The average debit-card user
        won’t notice the difference; in fact, he might think he benefits if his
        bank offers a rewards program to encourage him to swipe more.

        The people who do mind are the ones paying the fees — businesses. And  they have next to no recourse.

        ===end quote===

        It’s really sad that Tester has climbed in bed with the same financial sharks that created the Ponzi scheme that was a major driver of the mortgage/credit crisis.

        • I see what you mean by a non-free market – after all, it is just two companies that control a large portion of the market.  But does that mean the government should also restrict the profit that can be made on soft drinks?   After all, two companies have a comparable share of that industry, and think how much it would save consumers!  Nonetheless, market sense says it’s a bad idea to start interfering without a better reason than that.

          And your last paragraph is merely innuendo – you and I know that debit card transactions have nothing to do with the credit crisis. Again, trying to take away bank profits as a form of revenge isn’t good policy. 

  • Craig, you’re citing 60% of an online poll as evidence. On Tester’s side are national and state credit union organizations, and the Montana Bankers Association.

    I suspect they are representing the interests of their members. 

    • Montana banks were largely exempt from the rule. As were credit unions.

      These banks, typically on the side of the consumer, didn’t like the fact that they’d have to compete with banks that no longer had to charge the fee.  That’s my overall understanding of why they positioned themselves that way.

      • You’re right that they were exempt, but I think they had legitimate fears about that competition. If anything, small Montana banks will have to choose between keeping the fees (and losing customers) or cutting back services.

        I’m just certain that’s why Tester took the position he did. I can’t accept that he did it to curry favor with Wall Street–and I don’t think there is any evidence that he did, nor any reason to believe it.

        I could be wrong, but I have more faith in the man than that.

  • Don, your speculation is unconvincing.  Follow the money from the source into Tester’s campaign pockets. Then read Andrew Kahr’s piece in American Banker:  http://www.americanbanker.com/bankthink/never-mind-the-lobbyists-durbin-amendment-helps-small-banks-1033898-1.html

    ===quote===

    Never Mind the Lobbyists, Durbin Amendment Helps Small Banks

    Posted March 3, 2011 | 
    Andrew Kahr

    The Durbin Amendment in Dodd-Frank lowers the interchange paid to
    large banks on debit card purchase transactions, and hence takes money
    away from these banks to give it to merchants, almost dollar for dollar.
    When passed, this provision was politically popular. It was a time for
    bank-bashing.

    Now this component of Dodd-Frank is much less popular. Maybe
    legislators have noticed that even if Wal-Mart passed through every last
    penny of the 0.7% of debit card sales it’s apt to save to customers in
    the form of lower prices, the consumer benefit is likely to be invisible
    to voters. In any event, the banks have made themselves highly audible
    to voters in shrill but absurd threats to cap debit card purchases at
    $50 and the like. Another form of lobbying.

    One of the arguments made against the Durbin restriction on interchange is that it will hurt community banks.

    Poppycock.

    Since Durbin explicitly excludes banks with assets under $10 billion
    from the restriction on interchange, it takes a hyperactive imagination
    to see how these banks could be hurt by it. Lobbyists have the requisite
    inventiveness.

    If large banks get 75% less interchange than they do now and small banks
    continue to get today’s interchange rates, then obviously this confers a
    substantial competitive advantage on the small banks. They can impose
    lower fees, pay more interest, and give greater rewards to depositors.
    Anything that reduces revenue for big banks but not for small ones
    should help the latter compete more effectively against the former.

    ===end quote===

    The Durbin legislation prohibits adverse selection against the exempted small banks and CU’s.

  • It’s not speculation. I am relying on the arguments of those who say they will be most affected by this reform.

    Karen Thomas, senior executive vice president of government relations and public policy at the Independent Community Bankers of America (ICBA), today issued this statement following news that Visa will introduce a two-tier debit interchange system for large and small financial institutions.”ICBA does not believe Visa’s intent to establish a dual interchange system for large and small financial institutions will shield community banks and their customers from the negative impact of government price-fixing of debit card interchange over the long term. A two-tier system will continue to benefit big-box retailers while leading to more consumer fees, fewer product choices and greater consumer confusion regarding card acceptance as these merchants find ways of routing transactions to maximize their cost savings and profits and shift costs to consumers.”Despite Visa’s actions, the Durbin Amendment requirements will not prevent large retailers from steering customers to cheaper rate-controlled cards issued by large banks. Further, Visa’s intention leaves unanswered questions about how interchange price-fixing will affect community bank customers, how other networks will respond to the Federal Reserve’s proposed rule to implement the Durbin Amendment and what effect industry pressure will have on network pricing going forward.”

    Arguing that Tester is doing this for campaign contributions is simple unsupportable as well. That’s speculation–and merely partisan speculation–at that. Tester has hardly been an ally of big banks. He has, however, championed small banks and credit unions in Montana.

    • Don, your repetition of Tester’s talking points is silly.

      The ICBA has much to explain.  I refer you again to Simon Johnson:  http://economix.blogs.nytimes.com/2011/05/12/small-banks-and-debit-card-reform/?partner=rss&emc=rss

      ===quote===

      The I.C.B.A’s main justification for its position is a “survey”
      of independent community bankers that shows they are opposed to the
      Durbin Amendment — that is, lowering the debit fees of banks with which
      they compete. This result is odd, particularly given that a simple
      online poll by American Banker showed that 60 percent of its readers
      thought that small banks would gain from the amendment — and this
      result came after the I.C.B.A. tweeted that it wanted votes against the
      Durbin plan.

      The I.C.B.A.’s Web site does not disclose details of who was surveyed
      or by whom, or what questions were asked. Its staff members were
      friendly but confirmed to me that they would not disclose these details.
      (My impression is that the survey asked banks how they would respond if
      their debit interchange fees were greatly reduced — not whether the
      Durbin Amendment would actually reduce these fees).

      It’s time for the I.C.B.A. to disclose those details. Is this a real
      survey or another instance of lobbying posing as research? The I.C.B.A.
      should share this information both with its membership and with the
      public.

      ===end quote===

      As to your blind faith in Bernanke read this:  http://www.etfguide.com/research/580/23/Ben-Bernanke%27s-Inflation-Speech-It%27s-Not-My-Fault!/

      ===quote===
      Ben Bernanke’s Inflation Speech – It’s Not My Fault!

      By, DARYL MONTGOMERY

      Jun 07, 2011

      Ben
      Bernanke gave a speech on Monday, where he tried to explain away rising
      prices as being caused by some general increase in global demand. As
      central bankers always do, Bernanke denied money printing was the reason
      for higher prices. The Fed has been on a money printing binge since
      2008.

       

      Americans shouldn’t expect to hear the truth about
      inflation from Fed Chief Ben Bernanke.  In a speech given to the International
      Monetary Conference in Atlanta, Georgia on Monday, the money-printer-in-chief
      of the Federal Reserve denied that the Fed’s easy money policies are responsible
      for the inflation that is currently showing up in commodity prices. The public
      shouldn’t have expected anything else from the dissembling Fed Chair, nor
      should they believe anything he says.
      Bernanke claims that rapidly rising commodity prices are
      the result of rising demand and not enough supply. While in isolation this is
      always the case in economics, it doesn’t explain why demand is rising in leaps
      and bounds and why this has occurred during the time the Fed has been on a
      money printing binge. Bernanke did not make comparisons in his speech between
      demand and prices in 2008, when the Fed turned up the printing presses to
      maximum, and now. Let’s look at a few of them: U.S. gasoline prices went from approximately $1.60 a gallon to almost
      $4.00. Oil prices have tripled from a low around $33 a barrel. Copper prices
      almost tripled during the same time. Cotton prices have gone through the roof
      and took out a high established around 150 years ago. Silver prices went from a
      low of $8.88 to almost $50.  And that’s
      just a partial list.
      Did global demand for oil, copper, and silver increase by
      three or more times in two and a half years? It most certainly did not. If anything economic demand has only
      increased by a few percent. There is something that increased by a lot more
      however – the Fed’s balance sheet, which expands when it prints money. That has
      gone through the roof just like commodity prices. Money printing of course
      increases demand for any number of items because it makes a lot more funds
      available in the financial system. Somehow, Bernanke didn’t quite connect the
      dots between the two in his speech.===end quote===Tester has genuflected to the major financial institutions and been appropriately rewarded.  

  • Off-bace, or simply misinformed?   You people talk in circles seeking no direction towards salvation by solution. This is a case of the blind leading the dumb. Forget the popular talking points and go for the heart of the beast. House Resolution 1489, a return to sound banking via the reinactment of the Glass-steagall act. Without that act , all your words are in vain, with no effect towards any change for the good of the average american. So, get some guts and support the return to the American political economic system and throw out the speculators that have distroyed the future of all our people with finanical looting, protected by the very ones who have been elected to defend the General Welfare of all the people and their postarity. Vote them out as well. If Tester does not defend the return to a Glass-Steagall standard, then he is out of there along with the rest of the gutless congress. Tell them to vote for HR 1489 and defend the Constitution againts wall street and its money changers. Bind them down by the chains of the Constitution with HR 1489, now on the desk of every congressman. Demand a yes vote with no delay. 

  • Craig, when you stop citing an online poll as evidence you can attack my argument a bit more convincingly.

    The two tier system will be terrible for small banks and credit unions. Tester is looking out for them. I think, until a better system that has been researched in place, that’s a sensible position.

    • Don, the American Bankers poll of its readers (mainly bankers) is widely cited.  Since you claim that the two tier system will be terrible for small institutions, how about some proof or at least some examples? 

      Don, when you cite the ICBA, one of the largest issuers of debit and credit cards, for your support I’m surprised that the conflict in interest to tell the truth about the interchange fees wouldn’t give you pause.

  • It’s widely cited, but it was an online poll. I would argue that the lobbying position of the banking industry more accurately represents their feelings than a totally non-scientific, easily manipulated online survey.

    I think I (along with Tester and Bernanke and the Montana Bankers Association) have made the case pretty well. 

    Given the failure of the vote today, I guess time will tell. I am certain, though, that Senator Tester didn’t advance this bill for the tiny bit of campaign contributions that came his way. He did it because small Montana banks said they needed his help. 

  • You have proven that the largest banks collect the most in interchange fees. I suspect they also collect the most in overdraft fees, too. Perhaps you think the federal government should regulate that market as well?

    No one is denying that large banks would have benefited from the Tester proposal. No one on your side can credibly deny that retailers will benefit now. While consumers will inevitably see an increase in their banking costs and no reductions in the prices they pay to retailers, at least Wal-Mart will be happy.

    • Don, as Harry Reid pointed Tester’s efforts were unfair to Montana’s small businesses.  As to the money shower Tester enjoyed with his shameless bill, The Hill has the story: http://thehill.com/business-a-lobbying/156911-swipe-fee-opponents-direct-campaign-money-to-tester

      ===quote===
      Tester collected nearly $60,000 in contributions from credit card
      companies and other opponents of the proposed caps on swipe fees in the
      17 days following the introduction of his bill, public fundraising
      records show…

      The biggest surge of contributions to Tester’s campaign came from
      employees of TCF Financial Corp., the lead plaintiff in a federal
      lawsuit to block what has become known as the Durbin rule.
      Named
      after an amendment Sen. Dick Durbin (D-Ill.) attached to Wall Street
      reform legislation in 2010, the rule would cap the fees that banks
      charge retailers for debit-card transactions at 12 cents — about a
      fourth of the 44 cents now charged for an average transaction.
      TCF
      Financial collected more than $110 million in card revenue last year,
      most of it from interchange fees, according to a report on the company’s
      10-K filing by TheStreet.com.
      TCF Financial sued the Federal Reserve in October to block the rules that would be implemented because of Durbin’s amendment.
      Six
      days after Tester introduced his legislation, which would delay
      implementation of the regulations by between 12 months and 18 months,
      executives at TCF Financial gave his campaign nearly $16,000 in
      contributions, including $9,000 from the company’s political action
      committee.
      That same day, Tester received $500 contributions from
      two executives at Wells Fargo; $2,500 from Richard Davis, president and
      CEO of U.S. Bancorp, as well as $1,000 from the company’s political
      action committee; $1,000 from Bank of America’s PAC; and $1,500 from
      Discover Financial Services’ PAC.
      A few days later, the American Bankers Association delivered a $5,000 contribution.
      ===end quote===

  • Well, I know you agree with Harry Reid on fiscal matters. 

    This is just silly. Senator Tester didn’t sell out Main Street businesses for $60,000 in donations. That’s just facile analysis. 

  • Don, the 60K was only a down payment.  More to come.  Schumer mentored Tester on this fact of political life.

    Did you bother to look at the vote?  19 Dems voted with Tester while 32 voted with  Durbin. Is it the 19 or the 32 Dem senators on the side  of Montana’s Main Street businesses?  Harry Reid points the way.  Shame on Tester for siding with Schumer’s Wall Street over Montana’s Main Streets.

  • I do so enjoy how you claim my arguments are simplistic and misleading right before launching into your spin. Your reliance on an online poll and newfound love of Harry Reid and price fixing are commendable, sir.

    • Don, your argumentation is descending into  ridiculous vapidness.

      Are those 31 Dem senators who voted with Durbin stupid, misguided, or right on the button?  Please have the last word.  I am finished on this topic.

  • Whatever, you hypocrite. It’s just about scoring points against Tester. You can’t prove your absurd allegation that it’s about money so you just make up facts. I assume then, that you believe Representative Rehberg has been bought by Home Builders, Realtors, and Auto Dealers, just to name a few?

    In the face of the fact that I can prove Montana banks and credits are the ones who pushed for Tester’s action, you repeatedly brought up a DAMN ONLINE poll, as if it proves something. Montana bankers and credit unions–you know, small town businesses– asked Senator Tester to do this. Major retailers like Home Depot have already acknowledged they don’t plan to give this money back to consumers. In fact, they told investors that they expect to make $35 million next year. So much for the benefiting consumers.
    Given that retailers mounted a $1 million dollar campaign against Tester alone (http://www.politico.com/news/stories/0611/56380.html), I’d say this is a lot more about the big boys than mom and pop shops on Main Street.

    I know this is complicated, but perhaps some issues have divides that are somehow different than D/R. I bet if you look really hard at the roll call vote you might even be able to figure out what it was.

    • Don – there are more small businesses in America than those large-box retail stores.  How do you think those swipe fees affect them?

      So Home Depot and Walmart says they are going to pocket those fees for themselves – i can’t argue with that…but what I do know is that the bulk of retailers out there – and especially start-ups, these swipe fees are major impediments and profit-suckers.

      I really wanted to think that Tester was right on this – it’s a shame that wasn’t the case.  He didn’t need to be.

  • It’s possible that Tester picked one kind of small Montana business over another, but I think that those costs that local banks are going to absorb aren’t just going to go away. They’re going to be passed on to consumers and small businesses. Home Depot is just one example; if they are going to rake in $35 million, how much will Wal-Mart take in?

    In the end, I think it’s fair to have policy disagreement with Tester on this issue. I just object to the idea that he sold out to big banks. That’s just too much to ask me to believe, unless he has completely changed since he voted against the Wall Street bailout and got elected in 2006.

    I don’t see that. Look at his vote just last year on ending the bailout:
    http://tester.senate.gov/Newsroom/pr_012110_bailout.cfm

    Tester might be wrong, but he is certainly no sellout to Wall Street.

  • I know they didn’t, but I know how Tester voted:

     Senator Jon Tester today cosponsored and voted for a measure to immediately end the recent multibillion dollar bailout of Wall Street.Tester voted against the $700 billion bailout of America’s financial industry, formally known as the Troubled Asset Relief Program (TARP), in October of 2008.  He said the plan—proposed by President Bush—wasn’t “tough enough to protect American taxpayers and small businesses.”Tester is the only Senate Democrat to vote against both the Wall Street bailout and the bailout of the U.S. auto industry several months later.Today, Tester joined a bipartisan group of senators cosponsoring a measure to immediately stop the federal government from spending Wall Street bailout money.  The measure would also require all repaid and unused TARP funds to be used to lower the national debt.

    • Let’s see. The bailout of the auto industry is a bad thing in Tester’s mind, and in yours? But it saved, industry-wide, probably well over a million jobs (mostly union) and a whole American industry. And it worked. 

      And use all repaid and unused TARP money to lower the national debt? How about we use that money to further stimulate the economy and for job creation? Or are you an austerian like Tester? 

      And if you think this issue proves that Tester isn’t a Wall Street tool, you might look at the fact that right after TARP was passed, that many of the banks didn’t want the money, as it had too many strings attached. And many paid it back before it was necessary so as to avoid the onerous conditions attached to it. 

      Now take Tester’s vote against the Brown-Kaufmann “Too Big to Fail” amendment to FinReg (as pro-Wall Street of a vote as can be made), and we still have a financial system at great risk of major systemic failure. And of course, it will be bailed out again–except the scale of the bailout will dwarf TARP, as the big banks have grown, and continue to grow.

      And if you look at the fundraising that Wall Street did for Jon last year (follow the link in my comment above for the documentation), you’ll see a major case for what I see as corrupt behavior by our junior senator–tying Wall Street contributions to particular votes favorable to their cause.

      • Thanks for pointing out that TARP was repaid, and that the auto bailout saved many jobs.  I feel like the general progressive crowd is not quite so understanding.  I’m not sure I’d call TARP conditions ‘onerous’, however. 

        However, I would like to point out one thing – paying down the national debt, or reducing the debt we’re taking on presently, may have the effect of stimulating the economy.  Right now the feds are soaking up enormous amounts of credit that would otherwise be on the market, funding someone else.  Generally, I would say to spend the money on stimulus, which is more effective than simply increasing credit in the market.  It’s a little bit different now.  Greece and Portugal have both failed to pass austerity plans, and while they are an ocean away, the perception of sovereign debt in developed nations is changing.  If some action isn’t taken to reign in our deficit spending in the next couple years, it is possible that our debt rating will be reduced.  That will make all future borrowing much more expensive and will make inevitable austerity much more painful. 

        • Onerous was in the eyes of the banks, not me. I would have made the conditions much more onerous.

          As to austerity, what is more important? Our national debt rating, or a permanent structural change in employment levels, i.e. 7% becomes the new norm, instead of 4.5%?

          I don’t feel that the long term damage being done to unemployed populations is worth it. Especially when the debt is largely the result of a few factors that occurred under Bush: unpaid for tax cuts, war, and medicare prescription benefits without federal bargaining rights. Attack those three points, and the debt problem dissolves.

          As to who is soaking up credit, it doesn’t matter. Economically, demand is the problem, not lack of credit. The middle class is horribly overleveraged now that their main asset–their home–has plunged in value. And they will continue to pay down debt until the economy stabilizes. They have no choice–banks will not lend to them (or lend less for things like cars and home repairs, etc.) with the level of debt they have. Businesses won’t invest because there is no demand. And if businesses won’t invest, there is no need to divert credit away from the government.

          People who think that freeing up credit through government austerity is going to stimulate the economy will realize the error of their ways as the country, and the world sinks into recession in the next 18 months. Which will have horrible political ramifications for democrats.

          Austerians need to fess up and admit they are ok with seeing unemployment over 7% for the mid-long range future. Because that is what is going to happen. Which will strain social services, reduce tax revenues, and force more difficult structural changes in our society, like reducing medicare and social security benefits.

          Austerity NOW! presages the unravelling of the New Deal.

          Ready for that? Or are we going to argue about it and treat it like a grand experiment that historians will look back in 10 or 20 years and say, “just what were they thinking?

          You are looking to europe for answers to our economic predicament. Just take a look at Japan in the 90’s and it’s “lost decade” and you will see a model for what is going to happen to our economy under austeritian economics.

          I could go on and on. Yes, I’m with Krugman on the austerity angle. History will tell who is right and who is wrong.

          • Those arguing for deficit spending shouldn’t invoke Japan.  Throughout their lost decade, they spent heavily.  They currently have the highest debt-GDP ratio in the industrialized world, and it did them no good; indeed, even before the disaster their economy was still stagnant.  That has nothing to do with austerity; indeed, the Japanese tried to the opposite of austerity, and failed. 

            There IS something to be said for a balanced budget, even if now isn’t the time.  Successful welfare states like Norway and Sweden have recognized that a yearly surplus is key to maintaining their systems. 

            And even if we can’t fix the budget now, there’s something to be said for starting to take it seriously.  Portugal and Greece didn’t lose their credit ratings merely because their finances were bad, but because their people and politicians, both in parliament and on the streets, showed open disdain for the idea of sacrificing to pay down their debt.  It is now apparent how that turned out for them – the Greeks may still default, despite assistance from the EU.  The Portuguese government collapsed, and Socrates has been replaced by what will almost certainly prove to be a far more right-wing and more austere regime than the Portuguese are used to. 

          • Well, no. Japan didn’t “spend heavily” throughout their lost decade. They did during portions of it, to be sure.

            My point being that looking at Japan is a much better place to understand macro than looking at Portugal or Greece when trying to understand what’s going on in the U.S.

            Krugman made a good case today against the sort of voodoo economics that the austerians are trying to impose in our country right now. When you are in a liquidity trap–which the U.S. is, similarly to Japan–austerity can be destructive to the economy and labor markets in the long run, and now give the expected effects in the short and mid.

            http://krugman.blogs.nytimes.com/2011/06/11/thoughts-on-voodoo/

            No need for me to restate his case. 

  • I didn’t take a position on the bailout. But he can’t win under your formulation. If he had voted for it and taken any money from the UAW or an auto company, wouldn’t he have been a sellout? Wouldn’t he have been selling his votes to bail out a set of multinational companies?

    I’m not try to be combative, but it seems like you’re determined to take the position that Tester is wrong no matter what he does.

    • There is a tension between labor and capital. Always has been. When a politician favors one over the other–and I happen to think the vote on the auto industry bailout, and particular votes on FinReg reveal one’s bent on this dimension–he has to accept the fallout.

      I would much rather a dem politician get rewarded from unions for doing the right thing, than get rewarded from Wall Street for doing the wrong thing. Of course my notion of right and wrong may not align with yours, or anybody else’s.

      But being a left-wing indy, I have no problem pointing out inconsistencies in dem positions. Call it a pull from the left to counteract all this rightward movement in politics. 

  • It’s especially easy to point out contradictions in others when you don’t have a consistent position of your own. 

    If Tester is a Wall Street sellout, he’s pretty terrible at it.

    • ” don’t have a consistent position of your own”? I guess I haven’t made myself clear enough. I’ll try harder in the future.

      As to Wall Street “sellout” that’s your term, not mine. I think he’s a cold calculating politician who has learned to work both sides of the fence to his advantage. His take from Wall Street will be attacked relentlessly from the Rehberg camp. And he’ll fight that attack with contributions from Wall Street and K Street. 

      And he’s earned his newest moniker from his political opponents: “Wall Street Jon.” Regardless of your opinion of his Wall Street sellout-edness, it just may be his undoing. 

      Here’s what Ryan Grim from HuffPost had to say in his major piece about the whole swipe card fiasco:

      “Tester has become a Wall Street courtier. He’s hauled in over $821,000 from the finance, insurance and real estate industries since entering office, according to the Center for Responsive Politics. In the first quarter of 2011, he raised total funds of $1.16 million — double his GOP opponent — including more than $100,000 from PACs representing the finance, insurance and real estate industry (That total only counts PAC money, not contributions from executives).”

      Not exactly what I would call a “terrible Wall Street Sellout.”

  • Well if Dennis Rehberg and his campaign staff are calling him “Wall Street Jon” it certainly must be true. They would hardly be inclined to distort Senator Tester’s record. They’re also going to claim he’s a radical environmentalist and you know that. Is that going to be true?

    Look at your position. According to you, Tester is carrying water for Wall Street, even though he voted against the bailout. Your evidence? Votes in their favor and contributions from them. You also think he should have voted for the auto bailout, even though he has taken contributions from unions.

    He can’t win. I guess he could unilaterally disarm and run a campaign against someone who will raise at least five million dollars from the most odious corporate, anti-environmental, anti-human rights, anti-consumer groups in the country.

    Sellout isn’t my term. It’s all over progressive blogs and tweets. Here’s what I think: Tester is less liberal than many of us. He’s also got to be more pragmatic than we do, both in terms of policy and politics. That’s the nature of the beast–and the nature of the man, someone who is probably never going to live up to the standards being set for him.

    That he is being excoriated for that while his opponent can not even take a position on many of these issues is just very difficult for me to understand.

    Maybe I am losing some of my idealism, but I’d much rather have the Tester who occasionally disappoints than the Rehberg who will work to destroy our way of lives representing us.

    • You resort to the lesser of two evils meme. That’s understandable. That’s what most “pragmatic” people do.

      As to “living up to standards” what, we don’t have standards for politicians any more? They can take conflicting votes (against bailout, against Brown-Kaufman and swipe fees) and we can’t call them on it? I call it tokenism–taking an easy vote against the bailout to establish cover and then working on the bits and pieces behind the scenes on another piece of legislation for the same industry.

       The FinReg legislation is where  the real money lies. The bailout was a loan to an industry. FinReg covers how Wall Street is regulated. As that Grim article I referenced above pointed out (I put a link in but it disappeared) legislation like tester’s just works to figure out how to divvy up the mega-profits being sucked up by Wall Street (remember Taibbi’s “vampire squid” image?). That’s a huge diversion to the work that needs to be done: like how to get people back to work.

      Swipe fees is a potential $16 billion pie to be divvied up between banks and businesses. What start an internal war between dems on the issue when the economy is still fragile, and unemployment should be the single most important issue in D.C.?

      It’s madness to me. Which is why I get so frustrated with the policies that politicians like Tester focus on, and feel obligated to speak out.

      I, for one, am not going to let a political campaign and election 18 months out keep me from critiquing policies that are getting worked on or ignored today. And when Jon sets himself up for major damage in his political campaign by focusing on Wall Street instead of Main Street, my pointing it out is just an attempt to spur his supporters into pressuring Jon to focus on what is needed foremost: address unemployment.

      All this hoopla with dems being reactionary to the tea party and right wing conservatism is going to kill them at the polls next year when the elections are going to boil down to one thing: the economy and unemployment. 

      The politician that stands up and states what is obvious to many of us–that republican political strategy is to tank the economy so as to get an advantage in the next election–and does something about it, will be the successful politician. I don’t see Jon answering that call yet.

  • Not a choice between two evils at all.

    One one hand, you’ve got someone who is mostly on the side of labor, the environment, education, and civil liberties. Some of his policies are not what I want–and there is no reason not to critique those–as long as it’s fair. I don’t see the argument that Tester has put big business ahead of Montana at all.

    On the other hand, you have a truly odious individual, opposed to workers, who will actively undermine the environment and education. He reliably votes against the interests of workers and Montanans.

    Those are our two choices in 2012. They are the only ones who can win.

    No one is saying you can’t criticize Senator Tester. I find it laughable that a totally unconnected teacher in Montana who writes a blog somehow has the power to “silence” or marginalize” anyone. 

    Can’t I disagree with you? Why am I the one trying to silence anyone?

    • I don’t think Tester is an evil man. But some of his policies I do believe are “evil.” LIke his stance on the DREAM Act. Or on wolves and wilderness. Standing up for Wall Street over Main Street.

      Rehberg on the other hand has been characterized in all of the negative campaigning as an evil person. Do you really believe him to be evil? Or just that his policies and/or politics are evil? Is he the devil incarnate? Or just an alcoholic making bad choices, not caring who his policies and politics negatively affect, as long as it enhances his chances of getting elected?

      When people invoke the “lesser of two evils” trope when comparing politicians, usually they are comparing politics and policies, of which there is much to dislike about both politician’s–one less so than the other.

      And I’d contest the notion that Tester is mostly on the side of labor or the environment. I find his vote on the auto bailout, for austerity, and votes for Wall Street to be decidedly anti-labot. And his wolf rider and logging mandates and hard release in his Logging Bill to be anti-environment. And his vote against the DREAM Act is a vote against civil rights of the children of undocumented workers.

      Then again, I’m the discontented radical “extremist” here. So I understand my positions are unpopular around moderates.

      And where do I say you’re trying to “silence” me in this thread? I don’t. But I do know that folks are beginning to “circle the wagons” around Tester as the campaign starts to heat up, and don’t like to hear criticism from his left. 

      And disagree all you want Don. But let’s separate policies from politic once in a while. Can you debate Tester’s policies that are unpopular? Are you happy with the DREAM Act? DId you support the Brown-Kaufman “too big to fail” amendment to FinReg? DO you really think that Tester’s swipe card fee bill was necessary now? Especially when what it really did was to pit dem against dem, and paired Wall Street with community banks against Walmart paired with Main Street small businesses? DId it help consumers at all, in any fashion?

      Tester’s policies need a good solid debate amongst those left of the right. But I don’t see that many within the circled wagons are willing to do so. 

  • What did the AFL-CIO say about Jon Tester after unanimously endorsing him?
    “Montanans need quality, sustainable jobs. That’s the bottom line. Senator Tester has consistently been personally active and vigilant in promoting sustainable Montana jobs that pay wages that support a family and offer health insurance coverage and defined benefit pensions. He knows what it takes to create those jobs and we’re proud of the work he’s done,” said Jim McGarvey, Executive Secretary of the 38,000 member labor organization.

    On Civil Liberties/Rights, Tester
    voted to end the Patriot Act
    voted against Don’t Ask, Don’t Tell
    has a 100% rating from NARAL
    has a 90% rating from the ACLU

    On Economic Issues, Tester
    has a ‘B’ rating from the Drum Major Institute
    has an “A” from the NEA, which is the national organization for Montana’s largest union

    Christ, he has a 70 from the Council for a Livable World, which is the nation’s premier arms control organization.

    He did all that as a Senator in a moderate to conservative state.

    Here’s my point, which I know I repeat all the time. Yes, it’s fair to criticize some of Tester’s decisions. As you know, I criticized his DREAM Act vote and his position on unemployment last year.

    To depict him as some kind of conservative, though, is just not supported by the facts. I’m in a union–and my family has always been strong supporters of unions. I believe they are the most important force for social and economic justice in this country for the past 100+ years. If Jon Tester were “anti-labor,” I’d go after him, the MEA would go after him, and the Montana AFL-CIO would go after him. That none of us are doing that suggests perhaps your definition of pro-labor needs some reconsideration.

    I don’t care if Dennis Rehberg is evil. I do care, however, that his policies would be hugely detrimental to things I care most about. 

    Criticize Jon Tester all you want. I’m just asking for a bit of perspective here. 

    I’m no moderate defending a Blue Dog Democrat. I am deeply committed to liberal (screw the term progressive) causes and I think supporting Jon Tester, flaws and all, is the best way to protect those causes.

    • Pogie, would you respect me less if I told you that comment just made me tear up in joy?  I took some small amount of heat for suggesting that ‘progressives’ don’t support unions unless it’s convenient; that heat came from progressive moral cops, of course.  To them, unions are “good”, but someone who supports unions is “evil” if he votes for things that don’t actually effect help or hinder those who feel strong ties to unions.  In other words, they support unions as a concept but not the people who make up the core of what a union actually is, or was meant to be.

      It is a fantasy that some have, claiming that ‘support’ is what happens from the top organization down to it’s minion followers, and that the moral position is to fight evil when it is encountered.  Life isn’t a comic book.  Unions support Jon Tester because he fights and struggles for policy that favors the people who make up unions.  His ~evil~ vote against the DREAM act is dis-favorable to many, me included.  But, really, it isn’t evil.  It affects few in the base, save the moralizers.  It was a vote that most among his constituency favor.  His wolf rider was the same.  Those who project the image of ~evil~ in Tester’s votes are more concerned with their own personal sense of morality then they are with any other individuals, or organizations that favor individuals.  They don’t care about Unions or labor.  They care for themselves.

  • I’m impressed, I have to say. Really rarely do I encounter a blog that’s both educative and entertaining, and let me inform you, you’ve gotten hit the nail on the head. Your thought is excellent; the issue is something that not sufficient individuals are talking intelligently about. I am very glad that I stumbled across this in my seek for something regarding this.

  • There are some fascinating closing dates on this article but I don’t know if I see all of them heart to heart. There’s some validity but I will take hold opinion till I look into it further. Good article , thanks and we want extra! Added to FeedBurner as nicely

  • After looking at you blog, I assumed your content regularly is incredible! We’re very as if your articles. I bookmarked your blog site! I trust you’ll behave better at some point.

  • When I originally commented I clicked the -Notify me when new comments are added- checkbox and now each time a remark is added I get four emails with the same comment. Is there any method you may take away me from that service? Thanks!

  • I carry on listening to the news broadcast lecture about receiving boundless online grant applications so I have been looking around for the most excellent site to get one. Could you advise me please, where could i acquire some?

  • Hey there this is kinda of off topic but I was wanting to know if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding expertise so I wanted to get advice from someone with experience. Any help would be greatly appreciated!

  • Heya! Exce llent content! I’m a usual visitor to your site (more like addict :P) of this website sadly I had a issue. I’m certainly not absolutely sure whether its the right place to question, but you’ve got no spam comments. I get comments seven days a week. Possibly can you assist me? Appreciate it!

Support Our Work!

Poll

Who Are You Supporting in the Democratic Primary for the Senate

Subscribe Via E-mail

Follow us on Twitter

Send this to a friend