Bernie Sanders’ problems with words, numbers, facts, reality, etc.

In case you haven’t heard, Bernie Sanders really doesn’t like banks. He truly detests Wall Street banks, but Main Street banks aren’t exactly his bag, either.

And neither are facts, or financial literacy.

On Tuesday, a tweet from his account drew a lot of derision from conservatives on Twitter, including yours truly. Here’s the offending message:

“Each time”? I don’t know about you, but I might pay an ATM fee once or twice per year, on those occasions when, for the sake of convenience, I knowingly use a machine not owned by my bank. It stings, and I avoid doing it as much as possible — and those are the exact reasons those fees exist.

A Sanders defender joked about the cost of “moving electrons,” (yeah, bro, right on!) but there are actual costs incurred for the purchase, installation, maintenance and especially the stocking (with cash, not electrons) of ATMs. Banks would prefer not to have non-customers taxing their resources and impose fees to discourage them from doing so. (Of course, this isn’t the only model: Some banks choose not to build and maintain a network of ATMs and instead reimburse customers for the fees they incur when they use other banks’ machines.) And it’s no coincidence that ATM fees, and other charges, have gone up since Democrats put caps on other bank fees with the

But back to those words “each time.” I figured it was possible to find out exactly how often ATM users pay fees, and indeed a 2013 report from the Government Accountability Office has just those statistics.

Using 2011 data, the GAO found that financial institutions charged a fee for ATM usage about — drum roll, please — 8.4 percent of the time. That’s one out of 12 times, not “each time.” In fact, people used U.S. banks’ ATMs more than 3 billion times that year without incurring a fee.

Now, there is one group of ATMs that did charge fees almost all the times they were used. These are the ones run by “independent ATM operators” — think the generic-branded machine you might find at a gas station — and they charged fees for 93.3 percent of transactions. That sounds like a lot, until you consider that people used bank-owned ATMs about 22 times as often as these independent ATMs, almost certainly because of those fees. They are there purely for convenience, and they charge a price for that convenience: Remember, there’s a cost to ensuring they are available, with cash to dispense, on those occasions you can’t make it anywhere else. In any event, if we add those transactions to the ones at bank-owned ATMs, we have a grand total of 12 percent of the time that people paid fees at ATMs in 2011.

That neither Sanders nor his supporters understand all this — or maybe just don’t want to acknowledge it — is not surprising. His entire campaign is built on a foundation of financial and economic illiteracy, the notion that just because some other people have more money than the rest of us, we can take it from them, on and on and on, and only good things will happen. This makes for good fairy tales, but bad policy.

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67 comments
MarkVV
MarkVV

When you read Kyle’s article about Bernie Sanders entitled “Bernie Sanders’ problems with words, numbers, facts, reality, etc.” and it turns out to be a critique of what Bernie said about ATM fees, you know what the saying” scraping the bottom of a barrel” means.

Dennis Russell
Dennis Russell

As a bernie supporters this (ATM fees) is my least favorite proposal of his. Now quit bickering over this incredibly small piece of his plan and look at the rest of his amazing speech he gave on Wall Street. The economy is rigged because the very wealthy have paid to make it that way by writing our legislation and buying our politicians. There is no doubt this is going on and bernie is the ONLY ONE addresseing it. No matter you political affiliation he is fighting for your vote to count

Finn-McCool
Finn-McCool

Kyle, do you have an issue with Bernie wanting to create a financial transaction tax?

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool Yes, because I'm not a big fan of losing our financial services industry to other countries.

khckhc
khckhc

@Kyle_Wingfield @Finn-McCool do you think thetop .1 of 1% need to garner even more wealth especially when they probably get more info and advice and better trading from the wall st crowd?  how many people on wall st get suspended fired for bad things?

FIGMO2
FIGMO2

I know Bernie has proposed post office banking. Why doesn't he start off with free-to-use ATMs there? Other countries have 'em. 

Finn-McCool
Finn-McCool

@FIGMO2 No, no free-to-use ATMs. Do you really want your tax dollars going to funding machines that allow people to get to their money?


If people have money, and they want to get to their money, then they should be the ones paying to get to it. Not the rest of us.

Finn-McCool
Finn-McCool

@FIGMO2 Until folks realize NOTHING is free, companies and financial institutions will continue to pull the wool over their eyes.

FIGMO2
FIGMO2

@Finn-McCool @FIGMO2

I bank with a credit union, sooooo...

Nothing is free? People should pay their own way?

You're a dem, right?

FIGMO2
FIGMO2

@Kyle_Wingfield @FIGMO2

So what's the downside of our postal service teaming up with banks to service the underserved? An alternative to payday lenders if'n you will.

There's gotta be an unintended consequence...there almost always is.

Kyle_Wingfield
Kyle_Wingfield moderator

@FIGMO2 In most of those countries, the postal services also own/run their own banks. So they are hosting their own ATMs there, not offering a separate service per se.

Finn-McCool
Finn-McCool

Being someone who struggled with college loans and trying to make a living and now being someone who is able to live well below my means, I can tell you first hand that my interactions with banks has completely changed over the years.


I don't feel preyed upon now.

Finn-McCool
Finn-McCool

I guess the whole "pyramids are grain silos" statement is more factual than the "every time" ATM statement, right?

Finn-McCool
Finn-McCool

You do realize Bernie lives in a casino and has never left the premises, right?

Hedley_Lammar
Hedley_Lammar

In case you haven’t heard, Bernie Sanders really doesn’t like banks.


Neither do most Americans. As Clark Howard describes them the big 4 monster giant mega banks take up about 80 percent of the market. And Bernie is right. They aren't out to serve their customers they are out to get as much of your money as they can. Welcome to fee hell.


I would encourage everyone to move your money to a credit union


The  biggest banks now control over half the market and they are getting bigger. Oh and when they make bad decisions and get in financial trouble. Us taxpayers get to bail them out. Nobody goes to jail Nada.


Until the feds stopped the banks from charging overdraft on debit cards they were killing people ( especially poor people ) with that stuff.


As to Bernie's claim I have paid as much as 5 dollars for an ATM transaction. And his larger message is solid too. The big banks are feeing us to death.


Don't believe me ? Ask Clark Howard what he thinks of them.

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "Welcome to fee hell."

My accounts are with one of those four big banks. I haven't paid a fee I didn't know was coming (i.e., a fee for using another bank's ATM) in years.

If the banks are so bad -- and I'm not arguing they're angels, by a long shot -- why does he have to offer such a distorted example of what's wrong with them? As the data clearly show, people avoid ATM fees the vast, vast majority of the times they use ATMs. 

Finn-McCool
Finn-McCool

@Kyle_Wingfield @Finn-McCool Kyle, you might want to watch the John Oliver episode on payday lenders. Might give you glimpse on how a big segment of our population lives.

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool It has nothing to do with income. It has to do with how you use the account. There are almost always multiple ways to avoid monthly fees, and minimum balances (which can be high) are only one of them. Use your debit card, have your paycheck (or SS check) direct-deposited, etc.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar My accounts are with one of those four big banks.


Sucker


As the data clearly show, people avoid ATM fees the vast, vast majority of the times they use ATMs. 


Why should they ever charge a fee ? Trust me they are just getting it a different way then. 

RoadScholar
RoadScholar

@Finn-McCool @Kyle_Wingfield Most banks waive fees if you have a certain amount of business /deposits in them. Poor people live paycheck to paycheck with little savings. Now how do they get the same treatment you get Kyle?

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "Sucker"

I pay nothing for the accounts, have a wide array of locations (ATMs and branches) where I can access my money, and keep all but my transactional funds in other accounts where they earn more of a return. How exactly am I being suckered?

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar As for this: "Why should they ever charge a fee ?"

Do you think there's zero cost in buying, installing and maintaining ATMs and keeping them stocked with cash? I lived in a country (Belgium, not some underdeveloped nation) where there were stricter rules about fees banks could charge. If you wanted money out of the ATM, you were wise to withdraw it before a weekend or holiday, because otherwise you were highly likely to find the ATM was out of cash. If you want to live in that kind of a place, knock yourself out.

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool And in many, many cases, that's because of a lack of consumer education. It's not because there are no financial institutions with products that would fit their needs.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar Do you think there's zero cost in buying, installing and maintaining ATMs and keeping them stocked with cash?


Do you think the banks aren't making money ? 


I have no idea what the cost associated with having a teller stock the thing every morning with cash is but im betting it aint much.

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "im betting"

This is your "tell" for not having a clue but arguing determinedly for your ideology anyway.

Finn-McCool
Finn-McCool

@Hedley_Lammar @Kyle_Wingfield I have to agree with Kyle. There should be a convenience fee tied to using ATMs that aren't owned by your bank. If you don't like the fee, go elsewhere or do without.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar No.


I know several tellers who do just that every morning. 


They WANT TO KEEP THE MACHINE STOCKED WITH CASH


Why ?


FEES !!!!!


THEY MAKE MONEY ON THOSE TRANSACTIONS !!!


Otherwise they wouldn't give a damn if you could get to your money or not

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "THEY MAKE MONEY ON THOSE TRANSACTIONS !!!"*


*8.4% of the time. The other 91.6% of the time, not so much.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar Right. And those fees make for a tidy profit thank you


Seriously I know a few ladies that are tellers. They get in trouble if the machine isn't stocked especially over the weekend.


Because if the machine is out of cash they cant make money.

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar Also, this: "I know several tellers who do just that every morning."

Do they drive out to all the ATMs that aren't at branches and stock them too? No, they don't. (In fact, I'm thisclose to calling BS that the "tellers" stock the ATMs, since that almost certainly involves an armed person with an armored truck, not some lady in heels or guy in a shirt and tie.)

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool It reflects the financial literacy of the entire campaign, as evidenced in virtually everything else Sanders says.

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "And those fees make for a tidy profit thank you"

You previously said you have "no idea" what the cost is, but now you're certain there's a "tidy profit" involved? Do you think anyone buys what you're saying?

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar  Email to teller friend.


Good Morning


Help me settle a bet. When you worked at XYZ Bank were you ever responsible for stocking the ATM's with money ? Or was it done by an armed guard via armored truck ?


Weird question.

At my branch it was our responsibility.

At some, the ATM was not attached to the branch, therefore done by an armored service.


Seems it depends where the machine is. 

Finn-McCool
Finn-McCool

@Kyle_Wingfield @Finn-McCool No, the premise of your write up is that that tweet is proof the campaign is illiterate. I think it was a hair-brained statement, sure, but I don't think it sums up the campaign.

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool How many ATMs do payday lenders have? You're changing the subject. I'm not defending them.

Finn-McCool
Finn-McCool

The entire campaign is illiterate because of ....... one tweet that included the word "every". Ok


Are you that bored, Kyle?

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar Pointing out a ludicrous claim in a typed, uncorrected message -- not some off-the-cuff, verbal remark -- is "gotcha"? That's as silly as what Bernie tweeted.

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool "The entire campaign is illiterate because of ....... one tweet "

No, the entire campaign is financially illiterate, and this tweet is one good example of that.

Kyle_Wingfield
Kyle_Wingfield moderator

@Finn-McCool How about the one in the last debate where he questioned the difference in interest rates between student loans and mortgages? That happened during my vacation or I would've blogged about it (maybe I still will).

If he doesn't understand the difference between the rate charged for a 30-year loan made with a piece of property attached as collateral, and the rate charged for a loan dependent on the motivation and success of an individual student, he isn't smart enough to be president. If he simply won't acknowledge the difference because it would upset his supporters, he isn't honest enough to be president.

khckhc
khckhc

@Kyle_Wingfield @Finn-McCool so why is credit card interest rate so high even for folks with excellent credit.   have you never heard of the axiom the best investment is in yourself ie education, training etc?  tell all the folks that went underwater how good their mortgage house investment is was.

khckhc
khckhc

@Kyle_Wingfield @Finn-McCool forgot to add that student debt should be short term and cost of capital today is so very low. arne duncan should be ashamed of himself and job he has done there.  peg the interest rate to probability of job in your major for instance.

Kyle_Wingfield
Kyle_Wingfield moderator

@khckhc "so why is credit card interest rate so high even for folks with excellent credit."

Because a) there's no collateral, and b) historically the default rates on credit card debt have been much higher.

I have heard your axiom, which is why it is logical for many people to take out student loans. However, I have never heard anyone say "the best investment is in someone else," which is what would have to be true for people to lend their money for other people's educations at lower rates.

khckhc
khckhc

@Kyle_Wingfield @khckhc thanks for responding....i am not avid financial reader/analyst but just how profitable are these firms and so much for the axiom do unto to others

Kyle_Wingfield
Kyle_Wingfield moderator

@khckhc "so much for the axiom do unto to others"

Oh please. There are millions and millions of dollars given away in scholarships in this country every year, and no one is suggesting that should change (for the worse, anyway). We are talking about the interest rate charged for a large-scale loan program, and that has to take financial considerations into account unless it's just going to be a straight-up giveaway (which a Bernie fan might support).

khckhc
khckhc

@Kyle_Wingfield @khckhc when middle america was strong there were usury laws to the best of my recollection...and do you know what general profit margin student loan companies operate on?