Two of my outstanding colleagues over at the GMU School of Law – Todd Zywicki and Josh Wright – expose, in today’s Washington Times, several of the flaws that underlie Sen. Dick Durbin’s attempt to justify government control of debit-card interchange fees.
When this sort of political force presses against such a wide front, it creates “regime uncertainty” in the economy – a prevalent fear among investors and businesspeople about the future security of their property rights and their ability to reap adequate returns on risky long-term investments.
Once before, during the latter phase of Franklin D. Roosevelt’s New Deal, between 1935 and 1939, the government’s actions brought about substantial regime uncertainty. The effect was to discourage long-term private investment, delaying full recovery from the Great Depression. For the 11 years from 1930 through 1940, as a whole, net private investment was negative. Not until 1941 did annual net private investment exceed its 1929 amount.
Writing in the Houston Chronicle, James Griffin proposes – very sensibly – that off-shore drilling for oil is best regulated by private markets, a form of regulation that government has long hindered. (HT Steve Pejovich)