The first rule of economics is: wage and price controls NEVER,  NEVER work. Just ask Richard Nixon and Jimmy Carter.

The second rule of economics is that politicians never learn lesson number one.

So we cringed when we heard the White House announce over the weekend that “credit card companies must lower interest rates to 10%” by January 20. Trump says the industry “abuses the public” and he will not allow it to continue.

How is this abuse? Just do the math on overdue credit card payments:

• • • 4% interest cost to carry the paper
    • 6% credit losses
    • 5% collection and administration costs

As we’ve said multiple times before: credit cards are now completely democratized with a record high 80%+ of households now having instant access to credit. Interest rate caps will drive that number down and reduce poor households’ availability to credit, and when unexpected expenses arise, what will they do?