Tag: credit card reform act

‘Politicians’ Top 10 Promises Gone Wrong’

That’s the title of an upcoming FOX News Channel feature program with John Stossel, in which Cato Executive Vice President David Boaz and Director of Health Policy Studies Michael F. Cannon weigh in on some of the hidden, unforeseen, and unintended consequences of the attempts to deliver on promises our politicians make.

Politicians promised that:

  1. Cash for Clunkers would save the auto industry.
  2. Increasing the minimum wage would be good for the working poor.
  3. Title IX would end gender-based discrimination in college sports.
  4. Mega-construction projects like stadiums, arenas, and conference centers would create jobs.
  5. Changing the tax code would save small farmers and the environment.
  6. Credit card reform would save us from banking fees.
  7. Reforming the health care system would give us more affordable and more comprehensive care.
  8. Ethanol would reduce our dependence on foreign oil and save the environment.
  9. Home ownership for all would be good for America.

And the #1 promise politicians made that went awry?

Tune in to FOX News Channel this Friday, December 17, 2010 at 9:00 p.m. Eastern to find out. Use the #10Promises hashtag on Twitter during the program to follow the conversation.

Kindly note that while John Stossel’s programs normally air on the FOX Business Network, this feature program will appear on the FOX News Channel.

Credit Card Act Is Affecting the Job Market

Despite the economic stimulus and various financial bailouts, our economy continues to shed jobs.  One of the reasons for continued job losses is the decline in new hires, especially the lack of new hiring by small business.

As bank analyst Meredith Whitney discusses in the Wall Street Journal [$], all the major credit programs created by Congress and the Federal Reserve have been targeted at big corporations and Wall Street firms.  However, small companies, especially start-ups and partnerships, do not issue bonds in the debt markets, nor do they borrow from Goldman Sachs.  So these firms have been left out in the cold, as federal credit inventions have favored corporate America.

Adding insult to injury is that not only has Washington subsidized credit to large firms, it has taken actions that restrict the credit available to small firms and start-ups.  The prime example of this is the Credit Card Reform Act signed by President Obama in May.

As Whitney reports, “Credit cards are the most common source of liquidity to small businesses, used by 82 percent as a vital portion of their overall funding.”  In restricting the usage of credit cards and reducing the ability to risk-base price, Washington has eliminated the most important source of credit to small business.

Of course, being unable to project their future health care costs, or tax burdens (yes, they are going up, but by how much), many small businesses have either been forced to or chosen to sit on the sidelines of our economy.  Washington needs to recognize that Wall Street and corporate American are not the sum of our economy, if we hope to turn the employment situation around.