Do Debit Card Transaction Fee Rules Apply to PayPal?

Fast Money brings up an interesting point tonight. PayPal works just like a debit card — it takes money from your checking account and transfers it to a merchant’s account. So is PayPal subject to the new rules that limit transaction fees for debit card transactions?

CNBC’s Fast Money: Ebay to be Impacted By Durbin Amendment?

No one seems to know yet. PayPal, in a letter to the Fed, says it’s a merchant, but it’s referring specifically to the transactions for which you pay PayPal using a credit or debit card. If you have used PayPal, though, I am sure you have noticed the service urging you to pay from a checking account (or using your PayPal balance, if you have one), and most PayPal transactions are done this way. For these transactions at least, PayPal cannot be considered a merchant.

For the purposes of speculation, suppose that the new transaction rules do apply to PayPal. PayPal’s revenue would decline sharply when the new rules go into effect — by about $1 to $2 per transaction. At the same time, consumers’ online spending power would go up by the same amount — imagine how much more you could buy if it cost $1 to $2 less to buy and sell things online using PayPal.

“Essential Leadership Qualities” and Shamanic Skills

David Morelli of Everything Is Energy is launching a leadership training program, Enwaken, based on a list of four “essential leadership qualities.” There are introductory videos describing each of the leadership qualities, which can be seen at the links below. Among the various kinds of leaders, Morelli seems to specifically be thinking of people who take on the challenges of creating change in people’s lives or in the world. They won’t succeed, he says, without these qualities:

1. Presence. For you to be a leader, people have to notice you.
2. “Leaders create,” designing a course of events rather than just selecting among the alternatives that are offered.
3. “Leaders make their vision bigger than the obstacles that are in the way of their vision.”
4. The ability to project energy into work, a space, a group, or a project.

When I first saw the list, it struck me that the four qualities Morelli picked are all traditional shamanic techniques, related to shapeshifting, will, seeing, and attention. It turned out I wasn’t just imagining this shamanic connection. In a subsequent discussion, Morelli specifically describes the shamanic technique of “holding a container.” In its most familiar form, this means maintaining a comfortable energy in a room where people are working together.

Traditional leadership training from the second half of the 20th century is based on a combination of World War II military culture and sales culture. Using shamanic culture as a starting point instead might seem like an abrupt shift, but it probably makes sense at this point. The vocabulary of shamanism is more familiar and accessible to most of us, by now, than the points of reference provided by sales jobs and a war that happened a lifetime ago. To put it another way, more of tomorrow’s leaders have seen a Harry Potter movie than have led a battalion into Germany.

Al-Qaeda Disappears Into Its Own Chaos Strategy

Looking back, I realize al-Qaeda made a tremendous effort to destabilize Pakistan, but only a token effort to overthrow it. It wouldn’t want the burden of running a poor country, but it didn’t want the burden of effective law and order cramping its profits either. Disorder and instability are the hallmarks of a country where al-Qaeda has set up shop — it is as if Osama bin Laden read Thriving on Chaos and said, “You know, if you pick a poor enough country, you can employ this strategy on a national scale.” Pakistan was perhaps a little too resourceful and proud for al-Qaeda’s chaos strategy to work there.

One problem with seeding chaos as a strategy is that you can never tell where chaos will end up once it gets started. It is al-Qaeda that is in chaos now, with newfound logistical and administrative problems undermining its revenue just as newly seized documents reveal operational secrets.

The analysts who suggest that al-Qaeda will carry on as if nothing has happened are not following the money. They are treating al-Qaeda as if it were a purely political organization. That’s a form in which it never really existed, though its more idealistic adherents might have imagined it that way. Bin Laden was the financial mastermind behind al-Qaeda, the chairman of the board who saw that few strategic mistakes were made in its criminal enterprises. He was found in part by following couriers. The mere fact that couriers were needed on a regular basis shows that al-Qaeda could not function without bin Laden’s strategic direction. Without him, then, mistakes and financial losses will occur on a regular basis. Deprived of its criminal profits, al-Qaeda will be hard pressed to finance the murder of thousands of Muslims this year — instead, it will be al-Qaeda that is bleeding.

With Osama bin Laden’s Removal, a Less Corrupt Pakistan

The troubles in Pakistan make more sense in light of this morning’s news. Al-Qaeda leader Osama bin Laden had been holed up at the edge of an elite military facility in a district capital there. The kind of severe political problems seen in Pakistan, which have included the rapid assassination of active political figures, can rarely occur without official corruption, and it is hard to imagine a more corrupting figure than a fugitive billionaire-investor drug dealer cult leader on a mission to overthrow civilization. The location of bin Laden’s fortified mansion makes it clear that he was working with factions within the Pakistani military.

The removal of bin Laden from Pakistan can only result in an instant reduction in corruption in that country. To avoid investigation, bin Laden’s collaborators in the military and administration will now be obliged to act as if they had no knowledge of the scheme to destabilize and overthrow their country, which will mean they can no longer meet to coordinate bombings, assassinations, drug running, and other criminal activities. Al-Qaeda will attempt to carry on in Pakistan, but like any criminal organization that faces a serious risk of arrest for the first time, it will find that it is far more limited in what it can do. In addition, many al-Qaeda members do not agree with bin Laden’s vision of destroying civilization, so al-Qaeda will either shrink or be further weakened by internal dissension.

Weekend Video Viewing

Apparently it’s music video weekend on The Shamanic Economist. Here is another unlikely new music video — this one actually created by economists to discuss some of the unresolved problems in economic policy. It is surely the best economics music video ever created. If you’re a fan of economics or hip-hop, you have to see this:

Fight of the Century: Keynes vs. Hayek Round Two

The discussion of economic matters is important in itself, and besides that, the production values of the video are a startling step forward from the traditional idea of academic audiovisual materials — like yesterday’s video, another example of broader access to the advanced movie production techniques that a decade ago belonged to a short list of well-funded media businesses.