An op-ed
I wrote for last Sunday’s Washington Times
talked about the battle over the interchange fees that banks and credit card
companies charge to retailers. The retailers, including some big chains, are
whining about the fees they have to pay and want the government to step in to
control how much the card companies charge them. This is another example of the
phenomenon described in CEI Warren Brookes Journalism Fellow Tim Carney’s book The
Big Ripoff, in which businesses lobby for big government when it favors
their bottom line. And given the experience in Australia when the government
imposed price controls on retailer fees, American consumers certainly will be
ripped off if the government gives in to retailer demands.

What the retailers are asking for is sort of a “net
neutrality” regime for credit cards. The credit card companies, on the retailer
side, would be considered a “common carrier.” However, as with “net neutrality”
for the Internet, this would leave consumers paying the full costs for
improvement and innovations in the system.