New Price Controls on Credit Card Interchange Fees

When will these people learn? This regulation will have negative unintended consequences on consumers. First, before I even say anything about that, I want to know how far in the pockets of special interests is Senator Dick Durbin (D-IL), the politician who proposed this amendment?  He must be a hit with retailers.

This is not a win for consumers, as fans of this regulation suggest. It opens up all kinds of incentives for credit card issuers to charge more for other services, for special interests such as this person and the industry being regulated to lobby for more or different rules, it empowers the politicians who can play of these special interests for their own gain.

Banks and other credit card issuers will figure out ways around this regulation by jacking up fees on other products, discontinuing less profitable products, or both.  In short, consumers will pay more for fewer choices on how to finance certain transactions.


Not Your Job, Not Your Business, Pols

WASHINGTON (MarketWatch) — Lawmakers on Monday expressed concern about the planned merger between NYSE Euronext and Deutsche Boerse AG, focusing their worry on how the deal will result in one entity controlling a larger share of the American equity options market than any other company.

Instead of piling on more rules and regulations which forces government to provide the kind of oversight these hearings suggest, reduce regulations and make it easier for new entrants to compete against established firms. As we see here, more government begets more government. Reduce government and there is less need for more of it. More rules and regulations cement large, established firms in place because they can use regulations to keep out firms with fewer resources to deal with the regulations.

But both Reps. Robert Goodlatte (R-VA) and Rep. John Conyers (D-MI) would rather wield power than actually improve the general welfare.


Obama Calls for More Training Programs

“One thing government can do is partner with the private sector to make sure that every worker has the necessary skills for the jobs they’re applying for,” Mr. Obama said. He pointed to a program announced Wednesday for 500,000 community-college students to get a manufacturing credential approved by the National Association of Manufacturers.


What a novel idea. Why didn’t the 43 previous presidents and previous Congresses think of that? What we need is less involvement from government, not more. Lower taxes and fewer regulations is a start but we need to go further.

Employees — skilled, semi-skilled, and unskilled — and employers — small, medium, and large — must be able to find each other and come to an agreement on terms. People who want to work should identify what they are good at, what they like, and how they can add value to a prospective employer’s firm. Both need to use jobs boards such as Dice, Monster, Linked, company websites big and small. Check with friends and family. Go to parties and network.

George P. Shultz and Paul A. Volcker on why the ‘war on drugs’ has failed—and what to do next

“The global war on drugs has failed, with devastating consequences for individuals and societies around the world.”
. . .
The question is: What is the best way to go about it? For 40 years now, our nation’s approach has been to criminalize the entire process of producing, transporting, selling and using drugs, with the exception of tobacco and alcohol. Our judgment, shared by other members of the commission, is that this approach has not worked, just as our national experiment with the prohibition of alcohol failed. Drugs are still readily available, and crime rates remain high. But drug use in the U.S. is no lower than, and sometimes surpasses, drug use in countries with very different approaches to the problem.
. . .
The problem starts with the demand for drugs. As Milton Friedman put it forcibly over 20 years ago in the pages of this paper: “It is demand that must operate through repressed and illegal channels. Illegality creates obscene profits that finance the murderous tactics of the drug lords; illegality leads to the corruption of law enforcement officials.”


Two Football Fields of Money Achieved What?

Following the Federal Reserve’s decision to throw two football fields worth of dollars at the US economy all that has been achieved is a fall in unemployment from 10 percent to 9.1 percent, according to Philippe Gijsels, the head of research at BNP Paribas Fortis Global Markets.

The two football fields of money refers to the second round of money creation, known as quantitative easing, and the money that has been pumped into the US and global economy.

“Before the two football fields of money, US unemployment stood close to 10 percent.

Now it stands at 9.1 percent. This can hardly be called a great success,” said Gijsels in an interview with
. . .
“Two things are clear in my mind. We will see a volatile summer. And we may be re-writing the rules of the market game once again. So please pay close attention” said Gijsels.


Banks Battle Over US Tax Laws

Banks and foreign governments are mounting an increasingly desperate push against a sweeping US tax law that will force overseas institutions to report their American clients to the Internal Revenue Service.
The Foreign Account Tax Compliance Act was passed by Congress last year and comes into force in 2013.

Sound good to you? Well, its nonsense. If the tax laws were less onerous and the pigs in power stopped spending our money and enacting laws for their own enrichment, taxes would be lower and compliance higher.

Naturally, there are ways around this monstrosity:

“There’s a big loophole in Fatca,” said Dirk Suringa, a tax lawyer at Covington & Burling and a former Treasury official. “It does not prevent US taxpayers from opening a hidden foreign account at a complicit foreign bank that holds only foreign investments. It leaves open the possibility of continued cheating if people sell their US direct and indirect assets, which is another thing we do not want.”