Even Obama nods

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This was a meeting with credit card issuers to discuss the coming crackdown on their usurious lending practices.

These are price controls, plain and simple. And the only effect of price controls is to cause shortages… In this case, shortages of consumer credit. Now, I do not mind; I think Americans already carry too much debt because they have too much credit. And I personally have never carried a balance on a credit card and never will. This is about the least relevant thing the government could do right now, but it makes for great populist theater, so Obama and the Congress are all over it.

What I am trying to say is that I would have dozed off too.

2 comments to Even Obama nods

  • Brought to you by folks who don’t understand why rent control doesn’t work…and the people who think it does.

    http://tauntermedia.com/2009/04/26/in-support-of-usury/

  • Credit card lenders are really unsavory. I don’t know whether it’s worthwhile to limit what kind agreements they can enter with their customers, but it’s generous to say this is a price ceiling that will lead to surplus demand. High interest consumer debt is on the borderline between being a product and taking advantage of unsophisticated people.

    I understand the model that says a price ceiling results in customers will to pay market price and suppliers will to produce for market price being forbidden from making their transaction because of gov’t interference. The model I use is what kind of limits will we place on the types of agreements that people who are desperate and barely able to understand a contract may enter into.

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