Sometimes the experts are so busy explaining why something can’t work that they miss why it matters.
Paul Krugman is a Nobel Prize-winning economist. He wrote a whole column this week about why Trump’s credit card rate cap won’t work. He’s got charts. He’s got history. He’s got references to Nixon. And he’s missing the point entirely.
Here’s what happened: Trump announced a 10 percent limit on credit card interest rates, effective January 20, lasting one year. Krugman’s response? “Posts on Truth Social do not have the force of law.” Congressional Republicans reportedly won’t pass the legislation needed. The whole thing is supposedly just midterm politics.
Maybe. But you know what else Krugman admits? Credit card rates are way too high. The spread between credit card rates and other lending rates “has soared since 2019” and is “extremely high by historical standards.” Credit card companies spend huge amounts on marketing to pull customers in, then use “market power to charge exorbitant interest rates.” The losers, Krugman says, are “vulnerable individuals and families who don’t have access to better sources of credit.”
So the problem is real. And Trump is the first president to actually say he’s going to do something about it.
The Expert’s Objection
Krugman spends most of his column explaining why Trump can’t do this. He compares Trump unfavorably to Nixon—“Nixon was a lot smarter than Trump”—because Nixon actually passed legislation for his price controls. Trump just announced it.
He notes that Republicans in Congress “won’t do that.” He mentions that Trump called Elizabeth Warren looking for support. He says the administration tried to shut down the Consumer Financial Protection Bureau last year, with budget director Russell Vought telling staff the bureau was “closed” and they should not “perform any work tasks.”
Fine. I’ll grant Krugman his points. The legal mechanism is unclear. Congress hasn’t acted. The same administration did try to gut the consumer protection agency—the one that forced credit companies to refund $1.8 billion to consumers in December 2024.
What The Experts Always Miss
But here’s what Krugman doesn’t understand. Regular Americans have been getting crushed by these financial institutions for years. Credit card rates at 25, 28, 30 percent while the banks make record profits. Late fees that pile up faster than anyone can pay them off. And what did the experts do? They wrote columns explaining why nothing could be done.
Now someone says he’s going to cap rates at 10 percent, and the expert response is to explain all the reasons it won’t happen. That’s the difference between people who analyze problems and people who try to fix them.
Krugman ends by warning Democrats not to help Trump unless he offers “something substantive.” He wants Trump to restore funding to the consumer protection bureau before he’ll support any rate cap. That’s Washington thinking. That’s why nothing ever changes.
Me? I’m going to wait and see what happens on January 20. Maybe the experts are right and it all falls apart. Maybe Trump finds a way to make it stick. Either way, at least someone is talking about the actual problem instead of writing columns about why solutions are impossible.
That’s called common sense. And I’m full of it.
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