You might think that the Senate has enough to do attempting to save the country from another financial crisis. Measuring and regulating systemic risk, orderly liquidation of failing financial institutions, Freddie and Fannie, rating agencies--the list of critical issues is long and the problems are complex. However, significant regulatory reform is apparently not enough to keep our diligent Senators busy. A couple of weeks ago Senator Tom Harkin took the time out to propose capping ATM fees, and this past week the Senate approved an amendment put forward by Senator Richard Durbin to reduce the "swipe fees" that banks and other companies charge on credit and debit card transactions.
Unfortunately, I suspect a lesson on the failed history of price control measures of all sorts is not sufficient to overcome the impulse of our elected officials to pander to the basest instincts of their constituents. Surely, they know that attempting to micro-manage the complex business of financial institutions is not only doomed to fail the consumers and small businesses whom they are pretending to protect, but is also likely to generate a variety of unintended consequences. Nevertheless, they seem unable to resist the temptation to put forward proposals that they think will play well on Main Street.
It is exactly these kinds of proposals that destroy the faith of the American public in the willingness and ability of our elected officials to make the tough decisions that are called for. The only good news is that many of these amendments will die a natural death prior to the passage of the final bill.
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