Last July, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, a towering regulatory behemoth ostensibly designed to safeguard the nation’s financial stability and promote accountability and transparency in the financial system (oh good, because the government is clearly the perfect candidate to police private institutions’ financial stability, accountability, and transparency – everyone just relax, the feds are on the job!).
And of course, few massively burdensome regulatory bills are complete without some sneaky, economically nonsensical amendments, which Illinois Democrat Dick Durbin so magnanimously provided in the form of a cap on the debit card swipe fees that card issuers can charge merchants. The bill only applies to those evil, greedy card companies with more than $10 billion in assets, and requires that the interchange fees be "reasonable and proportional to the actual cost" of processing the transaction (which the politicians, in their infinite wisdom, have decided is about 12 cents per purchase, as opposed to the current average of 44 cents.)
Senators Jon Tester (D-Mont) and Bob Corker (R-Tenn) proposed to put some breaks on this thing by delaying its implementation in order to study the potential effects of the law on the financial sector (which is just silly, since no government central planning has ever produced unintended consequences – what could possibly go wrong?!). Unfortunately, while the amendment did garner 54 versus 45 votes, it did not get the 60-vote supermajority needed to prevent a filibuster. Dagnabbit.
Plenty of Senators were T.O.’d with Tester and Corker, since they forced a vote on a measure they knew would probably fail and made everyone go on the record in a case in which the highly sensitive special interests and campaign contributions of both the financial sector and the retail lobby are involved, blah blah blah. (It is during moments like these when I really come to appreciate the ideological fortitude of Rep. Ron Paul – say what you want about him, but the dude does not waver.)
It is truly disheartening that a law like this was even passed in the first place. How many times – how many times – will we be forced to live through examples of the government encumbering market signals with price ceilings/floors that create inadvertent shortages/surpluses and harm consumers? Can anyone really believe that we are all victims of corporate usury while a few greedy CEOs live the high life? Do politicians understand that there are costs to operating a business and that, without interchange fees, these costs will manifest themselves in other ways, to the detriment of the little guy? Did Dick Durbin ever take an Economics 101 class? Is this real life?