Credit cards

I somehow missed this from a few days ago:

Seizing on the growing unpopularity of credit card companies, President Obama on Thursday threw his support behind legislation moving swiftly through Congress that would restrict the ability of banks to impose higher fees and interest rates on consumers.

In a White House meeting with credit card industry executives, Mr. Obama sought to jawbone the companies into accepting changes — some voluntarily, some through legislation — that could cut heavily into profits at a financially difficult time.

...In response to one executive who was trying to make the case for less regulation, Mr. Obama told the executives to remember that they were “talking to a president who still has a very fresh memory of relying on credit cards” to finance his lifestyle. “I know them firsthand,” he reportedly said.

Mr. Obama’s firm tone left some executives resigned. One executive told the president that although her assignment had been to try to persuade the president not to support new restrictions, “it was pretty clear I won’t succeed.”

So the fact that El Presidente has used credit cards in the past evidently gives him the right to dictate how the industry should be run. I suppose the fact that he has driven a car before justifies his decision to fire Rick Wagoner.

As Troy Senik comments:

Obama’s attempt to run the credit card industry from the West Wing is illustrative of the practical drawbacks of such massive government intervention. Though it may be difficult to convince a public that believes he can multiply loaves and fishes, President Obama cannot change the laws of the marketplace. If he robs credit card companies of the ability to price risk through interest rates, he will see the supply of available credit dry. If he attempts to build a “green economy” by taxing current energy suppliers into penury, he will eliminate more wealth than he creates. And if he forces Detroit to make vehicles that are designed for the preferences of Al Gore rather than the tastes of the market, he will make an already fading industry comatose.

There is a greater risk, however, in this age of burgeoning industrial policy and it is a moral one. By severing the free market’s link between performance and reward, the federal government has totally undercut the ethical rationale of capitalism. For all the recent talk of “greed”, the greatest stain on our economy comes not from the imprudent executive. His fate awaits him in the marketplace. Rather, the real shame comes when the state saves the reckless and the venal at the expense of the upright and the decent.

Economists tell us you get more of what you subsidize. Perhaps that is why wholesale failure is quickly becoming America’s biggest growth industry.

It's all quite unbelievable.