Why cap swipe fees?
Visa and MasterCard were slammed by the announcement of the Fed鈥檚 new price controls on swipe fees for merchants using the cards. This regulation is obviously horrible for consumers and producers and issuers 鈥� it is just bad all around and represents a backward step in economic progress. No way will small business benefit, contrary to the claims.
I can鈥檛 even imagine what the Fed is thinking here. The logic here seems just about as unsophisticated as anything to come from these people in a long time鈥any months even. In any case, I鈥檓 puzzled. I understand why the Fed bails out big banks (they are friends). I understand the real reason the Fed inflates the money supply (government likes that). I understand the underlying rationale behind most legislation given that it is constructed to benefits the elites at the expense of the people. But I do not get this. I鈥檓 asking the question: who benefits from this regulation? What鈥檚 the special-interest dynamic at work here?
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