WILFORD: NATIONALIZING CREDIT CARD COMPANIES — LIBERALS’ LATEST GREAT IDEA

The Daily Caller | 1/23/2019 | Staff
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In their zeal to build up government and tear down private businesses, some progressive activists have taken to calling for greater taxation and regulation of a wide swath of industries. It’s a tale as old as time, but some are adding a twist.

Last week, Matthew Stoller, a fellow for the so-called “Open Markets Institute” tweeted:

Problems - Idea - Idea - Markets - Government

There are numerous problems with this idea, even setting aside the idea of “open markets” advocates calling for government takeovers of a private industry. For one, Stoller referred to a 3 to 5 percent “private tax” that retailers pay credit card companies — an interesting terminology for the cost of the service that credit card companies provide.

Since he believes that retailers should not have to pay any fee, the cost of operating this service would be borne by taxpayers. Instead of retailers and customers paying for something that they directly benefit from, you would be paying for it instead. In other words, the “private tax” he referred to would become a real tax paid to government.

Cost - American - Express - Operating - Expenses

And that cost would not be insignificant. American Express alone had operating expenses in excess of $28 billion in 2017, and while AmEx operates in other countries as well, there are ten other credit card companies with ten million or more cardholders. Make no mistake: nationalizing an industry of this scale would instantly create one of the largest single government programs in existence.

But the subtext of the tweet is a general misconception about credit...
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