September 25, 2009

Price Contriols Don't Work, Huh?

Remember when the 111th Congress stepped up to protect us little guys from the mean old credit card companies? They were going to dictate terms that are fair. Scrivener notes "Politicians shocked! Price controls produce the same result as always."

After passing the new law by an overwhelming vote, it hailed its achievement as a great bipartisan act of consumer protection.*

But now Reps. Barney Frank and Carolyn Maloney, the prime political movers behind the new restrictions, are shocked and appalled to find that credit card issuers are raising interest rates before the effective date of the new law, as per their press release ...

Pew Charitable Trust reports that interest rates have spiked by an average of 20% on credit cards representing more than 91% of the $864 billion in outstanding credit card balances. It’s clear that credit card companies are taking advantage of this period between the signing of my bill and the current effective date,” Rep. Maloney said. “The breadth and depth of the rate hikes happening now point to the need for faster consumer protections. Americans need relief now.”

I just hope that there are no unintended consequences of their dictating terms to health insurers. Nah -- certainly, they've figured all that out...

111th Congress But they'll rock at health care Posted by John Kranz at September 25, 2009 5:25 PM

"... a great bipartisan act of consumer protection." A great act of meddling with the markets.

"... Americans need relief now..." Is there such a thing as Pyrrhic relief? One more relief like this, and we'll be totally bankrupt. Oh wait, we are already. Nevermind.

Is it not amazing that, no matter what the government does in its efforts to manipulate the economy, it always - WITHOUT FAIL - has exactly the opposite effect. Current economy policy may be proof that insanity is truly defined by doing the same thing over and over again, and expecting the results to change from prior attempts.

Posted by: Keith at September 26, 2009 12:47 PM

In light of our pragmatism debate, I am curious exactly how bipartisan the vote was. Anybody (well, everybody) better at this than I am? I am trying to find the bill and the roll call. I am guessing that it's "the usual suspects" in the GOP giving cover.

Posted by: jk at September 26, 2009 1:07 PM

Nope. Mea Maxima Culpa! The bill passed the Senate 90 - 5. Bipartisan as a pay hike!

Posted by: jk at September 26, 2009 1:09 PM | What do you think? [3]