Give them credit

Even as the administration hinders

It was Milton Friedman who once said it is one of man’s great mistakes to judge policies and programs by their intentions, rather than their results.

Oh, progressives have the best intentions, most of the time. They want everything to be unicorns and rainbows, even if they have to beat you senseless to get there. The latest example, and only the latest, comes from the Biden administration and its new rules for credit card fees.

The federal government (supposedly representing you, Gentle Reader) finalized a rule recently to cap most credit card fees at 8 bucks a month. Where regulators came up with $8 is anybody’s guess. Why not $7? Why not $9? Why not 6 dollars and 22 cents?

The new rule would “save” families $10 billion a year, the administration says. There should be dancing in the streets, right?

Except when progressive make such rules to help the rest of us, there is always more to the story.

The administration will tell you the new rule comes as Americans have run up their own credit cards to new records. (More than a trillion dollars at last count.) And since inflation has been so high the last couple of years, some folks have been living off their cards. So here comes Uncle Sam to help. Like it or not.

“For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers,” Director Rohit Chopra of the Consumer Financial Protection Bureau said in a statement. “Today’s rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers to boost their own bottom lines.”

And the reply from credit card companies, various chambers of commerce, and business folks with common sense:

■ The new rule will encourage some people to pay late, and pay late more frequently. Which will hurt their credit scores. And keep them from buying homes and cars in the future.

■ “The rule’s policy goals are, at best, consumer redistribution, not consumer protection,” the Consumer Bankers Association said in a statement. Even the CFPB acknowledges that credit card companies might raise their interest rates to make up the loss of revenue. As per usual in these sort of things, the credit card companies aren’t going to lose money. They’ll shift fees elsewhere, meaning that all those who pay their credit card bills on time will foot the bill for those who don’t.

■ Worse comes to worst, credit card companies will just start saying “no” to lower-income types who apply for credit cards.

■ All this might help the president, and even consumers, in the short run. But in the long run consumers will come out on the losing end.

Maybe the best testimony against the new rule can be found here: Sen. Elizabeth Warren cheered the news, according to the papers. That is a big signal that the idea isn’t a good one.

As The Wall Street Journal pointed out this week, doesn’t the government charge late fees for tax filings and other things? Is that “exploiting a loophole” too? Is that “harvesting billions” on the backs of poor Americans? Or does all that negative stuff just happen when private enterprise makes money?

Surely there will be those who think the $8 cap is great news. And next year when they’re denied a new credit card, they might not even realize that the $8 cap was a big reason why. But then again, that’ll be after the election.

It’s a big mistake to judge policy by intentions and not results. It’s also a big mistake to judge politics that way.