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LAT's Oliphant Lets Joe Biden Babble Away, Part 2 of 3: The VP's Ignorant Hit at Bank of America

By Tom Blumer | October 06, 2011 | 19:58

A  A
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In a report filed at the Los Angeles Times's Politics Now blog earlier today, Washington Bureau reporter James Oliphant relayed a number of whoppers delivered by Vice President Joe Biden without anything resembling a challenge. In Part 1, I noted how Biden, who in August described Tea Party sympathizers as "terrorists" and in September as "barbarians," today spoke in complimentary terms of how much the Occupy Wall Street crowd has in common with them.

This part will deal with Biden's hit at Bank of America and its $5 monthly fee for debit-card use. The relevant excerpt from Oliphant's writeup follows the jump (bolds are mine throughout):

Story Continues Below Ad ↓

... (Biden) cited Bank of American’s new monthly $5 debit card fee as a symbol of public unease.

“Banks are part of the problem in the economy,” he said. “The American people know -- they don’t guess, they know -- the reason the CEO of the Bank of America, or anybody in that business, is in the business is because they, that guy making 50,000 bucks bailed him out, bailed him out. Put his financial security on the line when his government said we’re gonna come up with a trillion-plus dollars to bail him out.”

Of Bank of America, Biden said, “At a minimum, they are incredibly tone deaf. At a minimum. At a maximum, they are not paying their fair share of the bargain here. And middle-class people are getting killed.”

Well Joe -- and James Oliphant -- if losing money in your enterprise counts towards paying your "fair share," B of A should be getting tons of praise, as it has been mostly losing money for years (click to enlarge and open in a new window or tab):

BofA2007to2010 BofA4QtrsEnded2Q11

The left graphic shows that Bank of America lost a combined $5.8 billion in calendar 2009 and 2010. The right graphic, containing the results of the past four quarters through June 30 of this year, shows that the bank has lost over $16 billion during that time.

In a truly free-market situation, the proper response would be that this is the bank's and its depositors' problem. But of course it's not that way in what is probably the most heavily regulated sector of the economy. "Financial reform," also known as "Dodd-Frank," and a myriad of congressional and Federal Reserve regulations which preceded it, have greatly constrained banks' ability to conduct business as they see fit.

Dodd-Frank included an amendment championed by Illinois Senator Dick Durbin which ordered the Fed to dictate maximum merchant fees for debit-card transactions. As shown in a Monday post about the Associated Press's poor coverage of this matter (at NewsBusters; at BizzyBlog), the Fed's new limit will cut banks' debit-card profitability by about half, amounting to an estimated $9.4 billion. B of A's share of that is likely at least $1 billion. To partially make up for that loss, B of A is instituting a $5 per month debit-card usage fee in any month during which a merchant purchase is made (ATM usage fees, if any, are apparently unaffected). Even if it gets back its regulation-driven losses, which seems doubtful, the bank still hasn't solved its profitability problem. B of A's shaky situation makes Durbin's suggestion that customers should "Get the heck out of that bank" -- which is even harsher than Chuck Schumer's similar statement a few years ago which led to a run on and the closure of IndyMac Bank -- incredibly irresponsible.

James Oliphant and most other reporters are pervasively failing to report Bank of America's fundamental lack of profitability. In the process, they are causing much of the public to believe that the bank's attempt to recover some revenue in its debit-card business is some kind of exercise in unadulterated greed, when in fact it's a difficult move by an entity fighting for its survival to stop at least some of the bleeding.

Joe Biden is feeding into this unjustified negative sentiment. James Oliphant and others are letting him. How negligent -- and how typical.

If a regulation costing over $9 billion to the auto industry had been proposed in 2008, it's virtually impossible to believe that the press wouldn't have pointed out how the Big 3 automakers were already losing money. So why is almost no one reporting that Bank of America has been unprofitable?

Part 3 will deal with Joe Biden's mischaracterization of the the nature of the “bailouts” which followed the passage of the Troubled Asset Relief Program (TARP) in the fall of 2008, and set some history straight for readers who are unaware of what really happened.

Cross-posted at BizzyBlog.com.

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Comments

Most informative article,---

Submitted by matthewdean on Thu, 10/06/2011 - 8:26pm.

and sadly, even more evidence of just what a moron the VP,  a heartbeat away from the Oval Office, is.  (Not that he would necessarily be more of a disaster than Obama has turned out to be)

Amazing that so many politicians are a couple bricks shy of a load, whether speaking of intelligence or just plain old common sense.

MD

"The credibility of the story is undermined by the selection of sources." - (h/t Jer)
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Can Hardly Wait

Submitted by IrateNate on Thu, 10/06/2011 - 8:53pm.

Joe Biden is such an idiot, I'll wager his memoirs will be a pop-up.

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Naw, he will never figure out how they work

Submitted by Boudin on Thu, 10/06/2011 - 9:22pm.

It's still "technology (he) cant understand", to him

Seek Truth, Defend Liberty
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Biden's Memoirs

Submitted by Tugboat Phil on Fri, 10/07/2011 - 7:37am.

Probably not a pop up, more like an Error 404.

President Obama is a Muslim (from his own lips), Kenyan (read it from his publicist) a homosexual (read it on a news magazine cover) and a Socialist (I'm alive and can see it for myself)
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Idiots!

Submitted by 767pilot on Thu, 10/06/2011 - 10:58pm.

Oh!, we aren't socialists. Another example of Barry's great adventure. Government has no business trying to fix prices, which this obviously is. Free market capitalists have no problem telling everyone who they are and what they believe. Barry and his partners in crime will lie all day long about who they are and what they want to "transform' this country into.


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While letting Biden ramble on

Submitted by Reaver on Thu, 10/06/2011 - 11:02pm.

While letting Biden ramble on unchallenged is not good journalism it’s also the White House’s worst nightmare. Give Joe enough rope and he’ll hang himself every time.

“Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views.” ~ William F. Buckley, Jr.
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This is great!

Submitted by motherbelt on Thu, 10/06/2011 - 11:28pm.

Because, you know, nothing's more exciting than Joe spinnin' a yarn, like about FDR going on TV when the stock market crashed.....

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Psycho-babble - Part 2

Submitted by Bodini on Fri, 10/07/2011 - 12:21am.

Please commit him before he hurts an innocent passerby!

Bodini
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In the Know

Submitted by Utherpend on Fri, 10/07/2011 - 10:44am.

Which Joe Biden is never in.

I work for B of A and the problems started with the previous CEO and the bad purchases he made, one was Country Wide which the government caused due to Fanie and Freddie run by Frank and the cronies in the liberal congress. Add in that the government "persuaded" them to buy out Merrill Lynch and that simply added to the problem. The current economy, owned by the Obama White House is the final reason for their problems.

"For a people who are free, and who mean to remain so, a well-organized and armed militia is their best security."
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Stop Censoring The Gosnell Trial!

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