Putting more and more wolves in charge of guarding the henhouse might characterize the big problems we’ve now created for ourselves.
Government is growing. The private economy is shrinking. Those wielding political power see fewer and fewer problems they believe private citizens can solve on our own. Soon, each one of us will have our own personal guardian bureaucrat.
The real difference between us and the hens is that the hens are not paying for the wolves’ salaries and benefits.
This past week new rules governing our credit cards kicked in, following passage of the Credit Card Accountability and Responsibility Act, signed into law last year.
The point of the CARD Act is to protect us consumers from the scheming bankers from whom we get our credit cards.
As result of these new protections, consumers can be grateful that credit card interest rates are the only interest rates that are not now dropping. According to the Wall Street Journal, the average card interest rate is now 1.6% higher than last year and the gap between credit card rates and the prime lending interest rate is the highest it’s been in 22 years.
More good news for consumers is that there is less credit available. The average credit limit on new cards being issued is down 11% from last year.
And, because the CARD Act implements new rules limiting the flexibility that banks have, for example, in changing rates on balances of overdue accounts or on exceeding credit limits, banks are simply finding new ways to raise revenue.
Over the last year median annual fees on cards increased 18% and median fees on cash advances increased 33%.
It’s hard for our politicians, who are busy spending our money and raising our taxes so we can pay them to protect us, to grasp that there is a private economy in our country with private businesses that earn their living serving consumers. And that when regulators start telling them what to do, businesses must find alternative ways to provide their services and earn a living or shut down.
Equally hard for politicians to grasp is that if our private economy is left free, it’s competitive. So if consumers are not getting a good deal, and there is a better deal to be had, a competitor will step in and offer it. Nor can power loving politicians fathom that, except in the case of our new health care law, in which government will force private citizens to buy government defined health insurance, citizen consumers are free to do and buy what they like.