Making America Great Again: End Speculation on Public Measures

Let's make America great again by following the genius of the Constitution, James Madison, and end the trillion dollar speculations on public measures that earmark special interest groups, aka, crony capitalists, who sap our moral fiber while impairing consumer welfare.

Let's begin by having Congress rebuke the National Association of Convenience Stores' (NACS) for its current clamor for sanctuary from the vicissitudes of free enterprise through price controls on interchange fees--a throwback to the mercantile privileges of the British East India Company which provoked the Boston Tea Party and the American Revolution.

What made America great then was a celebration of free markets, a devotion to individual liberty, and scorn for wars not in self-defense that exclusively benefit the parasitic and paranoid military-industrial complex.

Moral philosopher and economist Adam Smith was gospel to the Founding Fathers. He instructed in 1775:

"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical."

Our Constitution was ratified in substantial part to overcome protectionist trade wars and legislation among and within States that impoverished the many to enrich the few. Madison elaborated on the reasons why the United States Congress today should tell the NACS to take a hike in Federalist 44:

"The sober people of America...have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less informed part of the community. They have seen, too, that one legislative interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding."

The NACS epitomizes what Madison and the American people execrated.

In 2010, its retail members whined to Congress about interchange fees they paid for the processing of debit transactions that lifted profits by providing customer convenience which boosted sales. The NACS did not argue that anti-competitive behavior among banks or debit card issuers had spiked debit card processing fees above a competitive level.

Hoping to cultivate good will and more from big-box retailers like Wal-Mart, Congress smuggled the so-called "Durbin amendment" (named after Senator Dick Durbin (D-Ill), into the Dodd-Frank Wall Street Reform and Consumer Protection Act. The amendment imposed price controls on debit card interchange fees. Predictably, few retailers passed on their cost savings in labor and security costs to consumers, and banks hiked various customer fees to offset shortfalls in debit processing fees charged to retailers.

What followed is exactly what Madison foretold: "[O]ne legislative interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding."

The Durbin amendment excluded price controls on credit as opposed to debit card transactions.

The NACS has thus returned to Congress insisting that the price controls that distort the market for debit card interchange processing fees should equally apply to processing fees for credit card transactions to achieve a wonderful symmetry in market distortions for both debit and credit card sales.

According to the NACS' lunacy, the next logical step after congressional imposition of price controls on processing fees for credit card transactions would be price controls on the entire economy to insure an equality of market distortions everywhere.

We have a journey of a thousand miles to return to the free enterprise championed by our Constitution. The first step should begin by repealing rather than expanding the Durbin amendment.