The latest Bloomberg Businessweek features two good editorials on a single page.
Those who’ve read Roy Cordato’s work on price controls will appreciate the first piece, which pans proposals to regulate the amount of money banks can charge for processing debit-card transactions.
Shenanigans aside, the big banks are in the right. Why should the government set the price for using a debit card? Most prices in our economy are set by the market—an arrangement that’s worked pretty well over the past couple of centuries. If 44¢ is more than this service really costs, surely one of America’s thousands of banks will take a deep breath and offer to do it for 42¢.
If Visa and MasterCard have enough market power to prevent that from happening, the answer is antitrust, not price controls. It’s too bad that America’s banks don’t have enough confidence in free markets to make an honest argument on their own behalf.
The second editorial pans pans the National Labor Relations Board’s ill-advised decision to penalize Boeing for deciding to build a new plant in Charleston, S.C.
Employers’ quest for low-cost labor has been devastating to American workers. Textile and apparel manufacturing has moved largely offshore, at a loss of more than 1 million American jobs. Automakers who once paid high wages are offering new employees $14 per hour. Boeing’s machinists understandably worry that the company’s move to South Carolina signals a future of declining wages.
However, the pain inflicted on individual workers by companies’ efforts to boost their competitiveness doesn’t necessarily make those efforts illegal. Before the labor board files a complaint, it should be obvious that the target of the complaint has crossed a legal line. No such transgression exists in this case. Rather than the company punishing the union for striking, it appears that the board is seeking to punish the company for opening a plant in a right-to-work state.
Regular Locker Room readers will recall George Leef’s discussion of this same topic.
