The Merchants’ Insincere Concern About Cross-Consumer Subsidies
In my first post I argued that consumers as a group would likely be made worse off as a result of artificially imposed reductions in interchange fees. This post considers a second line of attack—that even if consumers overall would be made no better off (or even worse off) as a result of regulating interchange fees, Congress should intervene in the name of “fairness” to regulate interchange fees. This “fairness” argument, however, is a red herring, especially when advanced by merchants purporting to speak for consumers. Indeed, the sincerity of the merchants’ concern is belied by their own behavior.