Visa and MasterCard agree to pay American Express $4 billion for allegedly violating antitrust laws.
“The original antitrust case was brought by the Justice Department in 1998. Justice accused the two bank card systems of not competing with each other and stifling competition by requiring that their member banks not issue other systems’ cards. American Express and Discover Card had claimed they were harmed by not being able to have their cards issued by the members of Visa and MasterCard. One of the major criticisms of antitrust policy is that often it shows little understanding of market evolution and instead – with its clout – helps determine the winners and the losers.”
California Governor Arnold Schwarzenegger slams proposals to open U.S. offshore oil fields to exploration.
“…the offshore areas currently banned from development likely contains a mean estimate of 18.92 billion barrels of oil and 85.79 trillion cubic feet of natural gas that are ‘technically recoverable.’ Yet the United States is the only developed country in the world that bans development of most of its offshore gas resources. This self-imposed ban has put our nation at a competitive disadvantage with Cuba and China. Cuba recently announced that it has negotiated lease agreements with China to explore oil and gas production just 50 miles off the coast of Key West, Florida. The United States can’t develop resources in the Florida Straits, yet Cuba and China can.”
Legislators fail to correct financial regulations that contributed to the subprime mortgage crisis.
“…federal and state regulations block competition with the rating agencies that fueled the mortgage crisis by giving ridiculously rosy ratings to junky mortgage-backed securities. Thanks to such regulations, they can do their job badly without paying much of a price. It’s the public and investors who take the hit instead.”