2/02/2006
banks are not for poor people
we used to have a people's bank or a poor man's bank. it started as a poor bank and accept poor man's money. even school children's pocket money of a few cents and pasted as stamps. that was how the poor man's bank started.
today this poor man's bank has forgotten all the poor men who helped to build it up into a rich bank and becomes a rich man's bank. it does not welcome children's little savings anymore. or it does but make sure that it is more than a certain amount. and any poor man who thinks of putting a few hundred dollars into the bank may end up with no money after paying administrative fee for having too little money in his bank account. instead of earning an interest, the bank levy a fee for putting too little money there.
this is the price of progress. no money no talk. the poor man's bank now would not even want to know you. so poor people with a few dollars of savings better keep it under their pillows or in plastic containers and hide them somewhere at home.
would there be a day when the banks go back to woo the poor man? ingrates?
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4 comments:
It all depends on the bank: do they want a system where their best customers "subsidise" their worst - and this is entirely up to the individual banks.
In the "good old days" banks were glad to have anyone's business. Nowadays they are symbols of corporate greed weilding uncanny usury power.
Remember, banks are protected monopolies. They still remain so even after "deregulation". They are NOT deregulated - they are still protected monopolies. Don't believe, try and set up your own bank at a roadside stall. :-)
With all forms of govt protection - shortages are caused. In this case, shortages for cheaper bank services for a "lower end" market.
Now take the pen industry: if you want you can spend $5000 or more on a pen. You can also buy one that does the same job for 30¢
No govt protection - free market - everyone gets service.
if they pay their top executives lesser bonuses, the savings should be more than enough to pay for the administrative charges of the small savers.
it was wrong to takeover a small bank and deprived the small savers a bank to keep their small change. why, poor people do not deserve to be served? let me answer this one. can they afford to give tips or not? : )
If one considers 'service" a value, then to receive service, one must be prepared to pay for it.
Actually I am the same as many people in the world today. whenever I see a "social" problem, like many other people, I say "Where's the govt?" The way I and most other people differ is they ask: "What is the govt doing about this?" and I ask: "what did the govt do to CAUSE this to happen?"
Where I and most people also disagree, is that I believe, and also have empirical evidence on a moment to moment basis, that the spontaneous order is the only legitimate way to bring anything into existence. No central power can compete with the spontaneous order.
Now let's go to China...
China, as you know enjoys a vibrant increasingly freemarket economy. It does so regardless of the challenges facing it - namely - a weak "official" banking system, generally impoverished and unskilled people.
So how does a country with so many poor and unskilled and a weak domestice banking sector do so well in the global market?
Savings and investment. By the poor and unskilled... but they don't use their banks. In fact numerous "financial collectives" sprung out of the natural order, to meet the demand for investment capital. Entire villages have formed their own "investment banking systems" to develop their backward rural communities into thriving manufacturing bases.
These "poor" people are also terrific savers. They, and their Indian cousins are the world leaders in saving. They retain (save) a LARGE part of their megre incomes, and there are 100's of millions of them!
So... "Where is the govt?" Communist China has one of the loosest govts in the world! "What!?!" You may say... but they do. They are SO INEFFICIENT that it is impossible to control 1.3 billion people, most of them hell-bent on bettering their circumstance. Therefore, in actual fact, there is very little EFFECTIVE govt regulation - so people essentially "do as they need to", thus allowing the (anarchic) spontaneous natural order to do its work.
Now back to our Mother Cuntry... Singapura ;-)
It is over-fucking-regulated. You have an on the bola govt, who knows all and sees all - who polices drug consumption (hang, jail, fine or tax), sexuality (same-sex relationships), racial ("time-bombs") and religious matters (tudongs), kills any dissent and opposition (never mention "white elephants"), sues people for "defamation", exiles citizens without due process, runs the biggest businesses and thus owns the largest companies.
All the banks - are govt protected. All the finance companies - are govt protected. DBS (a govt bank) can do as they please to the "poor" POSB customers.
But lets be fair here... the POSB is definitely a better bank since "privatization". Actually, despite its statist and socialist beginings, it is my favourite bank. They are everywhere, and their fees are LOW.
Unfortunately, I can't say the same about its parent company - they suck.
What the govt can do, in the spirit of free-enterprise, is to loosen up their "need" to control everything and allow a financial sector to spring from the natural order - one that serves the needs of customers.
I am reminded by an interview I watched on TV. It was with one of the Chinese CEO's. Great guy, in his early 40's, smart, saavy and successful. He said:
"Serve the poor first. The rich will come".
what you just said is generally similar to my views except for a little fine difference.
as for china, it is totalitarian but inefficient like you say. they want control but unable to control. in many areas, it is the local that is controlling their own lives. they are evolving and finding their own place in the growing economy, to make themselves relevant. it is a great paradox.
spontaneous activities, sponstaneous economy etc are as good as it gets. but my difference starts here. everything spontaneous and without managing leads to abuses and extremes. a little moderation is necessary. the other extreme is over moderation, leading to over regulation.
greenspan did a fine job by moderating. though sometime he is slightly out. but there is a need for a little govt in anarchy and a little freedom in totalitarianism.
the middle path, buddha said.
we can have all the banking system. but there is a place for a small man's bank. not everyone is filthy rich. likewise, there must be some charity, some help for those who are unable. that is what makes human different from animals.
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