EDITORIAL: Proposed credit card deal has progressives aflutter
Two credit card giants agreed to a merger last week, and the usual suspects pulled out their progressive hymnals and reached for their smelling salts. It’s much ado about nothing.
On Feb. 19, Capital One announced a deal to purchase Discover Financial Services for $35.3 billion. At this point it’s unclear how the products each company offers might be affected. The deal would give Capital One — which already has access to the Visa and Mastercard system — the ability to also tap the Discover network. Supporters of the deal point out that this may put competitive pressure on Visa and Mastercard to reduce the swipe fees they charge merchants for every credit card transaction.
But leftists have an inherent animosity toward business in general and particularly to business mergers. Sen. Elizabeth Warren, D-Havana, took to X to lambaste the deal and to demand the federal government step in to scuttle the acquisition.
“The merger of @CapitalOne and @Discover threatens our financial stability, reduces competition and would increase fees and credit costs for American families,” Ms. Warren pumped out on social media. “This Wall Street deal is dangerous and will harm working people.”
It’s true that significant debt — particularly credit card interest — can be a drag on financial success. But Sen. Warren’s supposed concern for “working people” and “our financial stability” is worth a laugh. Before she limos over to the Justice Department to insist government lawyers put their hands around the throats of a deal that might increase competition in the industry, perhaps she should address her own role in the nation’s struggle with “credit costs.”
The national debt whirs past $34 trillion — more than double where it was ($16.2 trillion) when Sen. Warren was elected fewer than 12 years ago. Annual interest on the debt will soon exceed the nation’s yearly defense outlays. While an addiction to spending other people’s money is a bipartisan disease, she and her fellow progressives have rarely met a spending program they couldn’t embrace.
Sen. Warren would address the issue by confiscating more money from “the rich,” just like a shopaholic maxed out on his credit cards would prefer to open another line of credit rather than address his underlying problem.
The Capital One-Discover deal won’t create a monopoly. The combined company, The Wall Street Journal reports, would be the third-largest credit card issuer in the country, behind Chase and American Express. There’s no evidence this move will lead the new company to jack up interest rates, as the industry has plenty of players looking to attract consumers.
Sen. Warren grandstands over “credit costs for American families.” A child born in 2023 will have a $78,089 share of the national debt. Her priorities need some work.
