Wednesday, June 08, 2011

Politicians quest to seize sunk capital

James DeLong makes an important point about 'regulation'.


Anyone who tracks DC-based blogs and journals has seen the PR and lobbying war between the electronic funds transfer industry (banks and credit card companies) and the major retailers over limitations on debit card fees contained in the Durbin amendment to last year’s Dodd-Frank financial reform bill.
A cynic might dismiss this as a classic Washington battle, with powerful economic interests warring in the Congress, egged on by the politicians who like to keep the outcome uncertain so they can keep collecting contributions from the lobbyists.
A deeper delve concludes that this view is actually not cynical enough, because it misses the bigger point, which is the attitude of Congress and government generally toward capital that has been committed to productive business uses—they see such sunk private capital as a political opportunity, since it can be seized and given away to favored constituencies.

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