Hacker News Reader

Comment by alexnewman | Hacker News Reader

You know who had this? The USSR. This is about ending private banking. It's as bad as an idea as communism.

I want the end of private banking for your average deposit accounts [1]. Commercial banks don't make money off the accounts unless they can charge extortionate fees (overdrafts) [2], and credit/debit interchange is going down drastically when Fed instant payments roll out in 2023 (they are showcasing functional apps/use cases internally in the next few months, and are on schedule for their go live date). Government is accountable to its citizens, commercial banks to their shareholders. The logical conclusion is to offer deposit accounts and instant payments to all as a utility, and support infrastructure to allow other institutions (private banks, fintechs, etc) to extend credit.

But to equate public good deposit accounts, simple rows in a database tracking fiat, with communism is grossly disingenuous. Shall I defend the US Post Office, Social Security, and Medicare (other wildly successful public goods with high approval ratings) against being painted as "communism" as well? These are fundamental components and public goods of a developed society, and financial infrastructure falls into such a category (as you cannot live without it, and if you attempt to, you are going to learn how expensive and hard it is to be unbanked/underbanked).

[1] https://www.google.com/search?q=fedaccounts

[2] https://bam.kalzumeus.com/archive/

You have to understand that banks make the money they lend. Banks do not lend against reserves.

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

Giving this control to the government is a bad idea and will lead to the solviet-zation of the banking industry.

I am familiar with fractional reserve banking. Banks can obtain capital through other mechanisms than deposit accounts (CDs, bonds, etc) to enable their lending operations (mortgage debt, credit card debt, and auto loans are already securitized on the bond market, for example) and profit off of the (hopefully properly risk managed) spread. Commercial banks are not entitled to the deposits of citizens, nor should citizens have their financial lives beholden to commercial banks rent seeking off of their deposit accounts and cashflow. To your point about "giving this control to government", they already have it; they are the ones who set reserve requirements and oversee commercial banks (by way of the Fed and the OCC). Wells Fargo, Chase, and Bank of America are what soviet run banks would look like; wide spread abuses without sufficient repercussions to disincentivize reoccurrences (Wells [1]) and poor service for customers with the spoils funneled to the top (JPMC and BoA).

[1] https://www.yahoo.com/now/wells-fargo-scandals-the-complete-...

When’s the last time you heard of anyone setting up a CD ladder? 1995?

Sounds roughly the same time a checking account earned interest? My point was that banks have other avenues of obtaining operating capital for lending operations.

Lack of private banking is pretty minor aspect. Comparing to, say, having de-facto scrip instead of proper currency.

I think you need to come up with a more compelling point against this than "the USSR had it".

You know who had public transport? The USSR. Public transport is as bad as an idea as communism.

suddenly, current state of public transport in the US makes sense

I suspect you’re joking but I think there’s a good argument to be had for now allowing the government to have any influence in transportation.

Annoyingly, it had better public transit than the majority of the US does!

No. Someone needs to come up with a compelling reason to change our practices first.

Isn't sorry state of banking in US compared to pretty much everywhere in the world a compelling reason?

Oh well, there goes any chance of getting district heating this lifetime

USSR Communism also had a fire department - should we get rid of that as well?

Argue on the merits of something, not because a county had it or didn't.

Denmark has privatised most of their fire departments interestingly enough

If the USSR has things the USA didn't we should be very careful about adopting those things if it increases state power. It was a tyranny afterall

Reply on news.ycombinator.com