In this administration, it’s always someone else’s fault. Inflation is now the No. 1 concern of voters, so the White House first blamed COVID. Then Donald Trump’s tax cuts. Then Vladimir Putin. Then meatpackers and the poultry industry, Big Oil and pharmaceutical companies.
Now, Democrats have identified a new inflation scapegoat: plastic. Visa, Mastercard, American Express and other credit cards hidden away in your wallet.
Sen. Dick Durbin (D-Illinois) has had it out for credit cards for almost two decades, even though over that period, credit cards, which were once reserved for the rich, are now nearly ubiquitous in our society. Many stores don’t even take cash anymore in the post-COVID world. The benefits and conveniences of paying with a plastic card are easily in the tens of billions of dollars to retailers and shoppers. Stores benefit because shoppers don’t have to have cash on hand to make purchases. They also benefit from not having to deal with the exchange of cash, which can lead to theft by unscrupulous employees at the register.
Credit cards are convenient for consumers because we don’t have to walk around with hundreds of dollars in our wallets.
But Democrats allege that the interchange fee that credit card companies charge retailers and merchants for their service on transactions is excessive. This interchange fee typically ranges between about 1% to 3% of the retail price of the transaction. If retailers don’t want to pay the cost because they think it is exorbitant, they don’t have to accept cards and can take cash only. Few retailers don’t take plastic every day to avoid paying the fees. It’s a free country. But the vast majority of retailers see the benefits far exceeding the costs.
Durbin, a member of the Senate Judiciary Committee, doesn’t see it that way. Instead, he blames Visa, Mastercard and Discover for making food and gas more expensive. At a recent hearing, Durbin fumed: “Today, we’re going to talk about a hidden fee that fuels the fires of inflation across America every day. What they may not know is this swipe fee is contributing to the problem of inflation.”
But for this to be true, interchange fees would have to be higher than before Joe Biden became president and before inflation surged to 8.5%.
But the fees aren’t rising. Industry sources report that over recent years, the average merchant fee (for debit, credit and prepaid cards) has fallen slightly.
By the way, merchants and retailers get concrete benefits in exchange for the fees they pay to accept credit cards. Those fees cover the cost of security and fraud protection, infrastructure improvements and consumer benefits programs such as cash back and rewards.
What Durbin and the Democrats want is government price controls on credit card companies. They say there isn’t enough competition, but there are at least five major credit cards the public can buy. There is plenty of competition in the industry. Nor is there any evidence that cutting the fees to the retailers will lead to lower prices paid by consumers at the gas pump or the grocery store checkout line.
Today, about 70% of retail transactions take place with credit cards in part because nearly everyone, except those with terrible credit histories, has a credit card these days. Projections say in the next decade, more than 80% of payments will be made with plastic as we move inevitably to digital transactions and a cashless society.
The significant impact of Durbin’s price controls will not be to tame inflation but to restrict who can get access to credit cards. In other words, the poor will get hurt the most. Isn’t that turning out to be the case with nearly every liberal policy these days?
Stephen Moore is a senior fellow at Freedom Works. He is also author of the new book: “Govzilla: How The Relentless Growth of Government Is Devouring Our Economy.” To find out more about Stephen Moore and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
dirty dick durbin strikes again- he is truly infected with the same bug of stupidity that has over come F joe biden-
In this traitorous, corrupt, puppet president Joe “B”iden/Obama administration,
it’s always someone else’s fault.
The corrupt, treasonous Democrat elite and the Democrat Party never take responsibility or are held accountable for their own treasonous, unlawful, destructive, dishonorable, immoral actions and agendas. Democrats always blame someone or something else for their own actions.
Even if the Democrats are caught “red handed”.
The democrats will blame everyone and everything under the sun before they place the blame where it really belongs – the fault is the dems and their total focus on ruining our economy and destroying fossil fuels as an energy source. Their goal is to bring our country to its knees and have us begging for our very e is ten each and then slowly instituting socialism in our country to make us the next Venezuela.
WAKE UP AMERICA AND USE YOUR VOICES AND VOTES TO GET RID OF EVERY POLITICIAN WHO EVEN MENTIONS SOCIALISM!!!
TO dememented Dems, from the 50s on, ITS ALWAYS been someone or something else to blame..
“Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy.”
—Sir Ernest Benn (British author/publisher)
And it shall be ever thus.
“The significant impact of Durbin’s price controls will not be to tame inflation but to restrict who can get access to credit cards. In other words, the poor will get hurt the most. Isn’t that turning out to be the case with nearly every liberal policy these days”
Go figure. Six-figure salaried Congressional members who continually practice financial irresponsibility by raising the debt ceiling and printing more money—who enact legislation and policies that squeeze the incomes of the working class and the poor—want to increase the financial strain on the vast majority of the population. While credit cards are still largely a nice perk—in today’s economy, they are a necessity for a lot of people just trying to get by.
BECAUSE they don’t physically PAY the price for all this balloney.
Having just finished an article of cancelling student debt and now regulating credit cards in some way I find them tied together. Government spends, the people spend, then the government starts spending way beyond its means so the people follow the example set by their leaders and do the same. Never worry about the bill coming due! many who pais off their loans and limited their spending, not carrying cedit balances, will now be burdened with carrying the debt incurred by others and the government. Is that our FAIR SHARE?
It’s the Durban version of Bank of America, where Democrats ring up the cost of the goods that improve their party’s chances for re-election, then send WE THE PEOPLE the bill to pay off the debt and borrowed money. Their version of inflation is to give people $2000 in covid money before the election, for votes even if you are not legal to vote, then claw it back in bad administration by shutting down our petroleum supplies raising the price of everything about $5000 per year per individual in higher energy and food costs. I have not seen so much inflatable hot air from these Democrats as well as misuse of plastic money, since Hunter got caught on video manually inflating his personal plastic blowup doll.