We all got a lesson this week in one of the most powerful forces in world history. It is maybe the most important political dynamic on the globe today -- even more powerful than the separation of powers found in the Constitution. Indeed, unlike the latter, market discipline cannot be willed away.

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The limit of a 10 percent interest rate on credit card debt is a perfect storm, an unintended consequence, a territory for bad policy. Since that Friday night announcement of the president, inspired by the Sanders/Warren wing of political ideology, we have now seen support from the president for the Credit Card Competition Act. Here, more nuances abound, and more opportunities for shaking one’s head exist.

In this episode of Capital Record, David:

• Takes on the “credit card fees are usury” argument, some conveniently jump onto.
• Explains who is hurt the most by a government price control on credit card interest.
• Unpacks the Credit Card Competition Act.
• Reminds us of the most important law in economics -- “there’s no free lunch” -- accompanied by the most important question in economics -- “compared to what?”

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The president of the United States has ordered Fannie and Freddie to buy $200 billion of mortgage bonds (in a week where he has said and done a lot of things, some of which he is even allowed to do). On today’s Capital Record, David unpacks what this means, what it doesn’t mean, and why it doesn’t represent any solution to the housing affordability mess in which we find ourselves.

Show Notes:
The Saddest Part of This Recent Economic Lunacy

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