Tuesday, May 19, 2009

Credit Card Reform -- Obama Strikes Again

Chalk up one more blow to the poor consumer. Obama has proposed and the Congress will pass new rules for the credit card industry. The problem: the industry raises rates from time to time and especially on borrowers with poor credit. The solution: forbid the industry to raise rates (amid other restrictions on what card issuers may or may not do).

This is another solution from the folks who believe that spending more than you earn is the fault of the guy lending you the money. So lets punish the lender. Guess what? Punishing the lender is probably going to make the lender less willing to lend. And precisely who is it that the lender will be less willing to lend to. Yes, you guessed it!! The guy with the bad credit. He will be toast after Obama gets through.

I guess that's one way to stop people from getting in over their heads. Pass legislation that makes it a sure bet that no one will lend to them. Obama has already taken care of people that want jobs. His proposals involve so many employer mandates for employees that no rational employer is likely to hire anyone if he can avoid it. We have punished the mortgage lending industry, so the poor guy will no longer be able to get a mortgage. Now, we have have made sure that he/she can't get a credit card. Pretty soon we will fix the health care system so that he can't see a doctor or visit a hospital either.

We're solving a lot of problems in a pretty short space of time. This is real change!