Friday, Socialist Vermont Senator Bernie Sanders used a post on X, the social media platform formerly known as Twitter, to announce that he was willing to work with the incoming Trump administration to accomplish mutually beneficial legislation.

I look forward to working with the Trump Administration on fulfilling his promise to cap credit card interest rates at 10%.

He received a quick reply from Missouri Republican Senator Josh Hawley. "An anti-usury bill capping outrageous credit card rates," said Hawley, "ought to be a top priority of the next Congress." //

In my view, the number of times the government has intervened in markets directly and produced the intended result can probably be counted on the fingers of one hand. The obvious problem with a return to the medieval system of slapping usury laws on lenders is that when interest rates spike, banks lose the ability to adjust their interest rates. This, by definition, creates a drought in the credit market, which is quickly felt by commercial enterprises that rely on credit card transactions. If one is hellbent on regulating credit cards to save people from themselves, then allow a certain rate against the Fed's bank rate. //

Years ago, the Fed sponsored a study of the impact of usury ceilings:

Economic research clearly supports the current legislative moves toward deregulation of usury ceilings. The evidence on the impact of usury ceilings shows that they have not achieved their objectives. According to the empirical studies surveyed, usury ceilings have significantly reduced the availability of credit and created hardships for those who were supposed to be protected. Ceilings have encouraged lenders to use credit rationing devices such as higher down payments, shorter maturities, higher fees for related non-credit services, which increase the effective interest rate. They have curtailed the amount of credit available to lower income and higher risk borrowers, harming primarily those individuals whom the ceilings are intended to benefit. Finally, the lack of uniformity in usury laws across states has distorted credit flows and economic activity, favoring those states and regions which are less regulated.

What is worse, a guy holding a credit card that carries a 30% interest rate or his car breaking down and losing his job because he can't get to work all due to some well-meaning Karen in DC deciding it is more virtuous for him to be destitute than enrich some bank?

Trump needs to back off faux-populist issues like this. I understand the sugar rush of applause as well as the next guy, but cutting off credit card access from banks doesn't mean that poor people won't pay exorbitant interest rates.

How much does a payday loan cost? //

We have two parties here, and only two — one is the evil party, and the other is the stupid party. I’m very proud to be a member of the stupid party. Occasionally, the two parties get together to do something that’s both evil and stupid. That’s called bipartisanship. —M. Stanton Evans //

DaleS an hour ago edited

The graphes don't go back that far, but I'm old enough to remember when the federal funds rate (the rate when banks borrow from each other) was well over 10%. What do you suppose happens to the credit card market when credit card holders can borrow from the bank at a lower rate than they can borrow from each other?

Even if you thought an anti-usury law was a good idea, it would be madness to peg it to a fixed rate. I believe every card I've ever had (ignoring promotional rates) has been set at an offset on prime. Pegging the maximum interest to Prime+5 would still allow the banks to offer credit cards as a product no matter where interest rates go -- but it would be to a far smaller group of consumers. Markets work better than government. Lowering interest rates for everybody means that good credit risks lose their rewards, and bad credit risks lose their credit. This would not be a good thing. //

Musicman an hour ago

The Founding Fathers created a government that required consensus to get anything done. But don't confuse consensus with "bipartisanship." Bipartisanship means each Party gets something it wants. And often that means the two most extreme elements of our body politic--the far right and the far left--get something they want. It's also called log rolling. It's too often a compromise that benefits Washington insiders rather than the country. It's why we have a 35 trillion dollar debt.

A consensus is where you can get more than a pure majority, say 60 or 70 % of the people behind something. Or in the case of a Constitutional Amendment, 75% (of the states). Trump can reach a consensus without giving the Dems--or at least their left wing base--a damn thing. He just needs to get most Republicans and independents, and then a slice of the Democrat Party behind whatever he does. That is how to build a lasting movement.