Creeping socialism is a real concern when ever more power is vested in government. A proposed solution by a group seeking a change in the Arizona Constitution is probably worse than the problem itself.
The initiative proposed for next year’s state ballot would remove caps on any interest rates charged by a lender, whether a bank, a credit union or a pawnshop. Right now, the rate is capped at 36 percent for most loans. If the proposal stopped there, a legitimate debate could ensue. Why not, after all, let loans be subject to the same rules of consumer supply and demand as other business transactions?
The proposal, though, doesn’t stop there. It would, according to a Capitol News Service report, prohibit local or state governments from regulating any transaction price between businesses and customers.
As a Constitutional amendment, it would also wipe out existing laws that set any prices, though it specifically exempts the current state minimum wage law from elimination.
If approved by voters, the initiative could have a lot of consequences the public dislikes, no matter how fervently most believe in free-market economics.
The proposal would, for example, apparently eliminate a new law from last year that prohibited charges from credit companies when someone froze or unfroze an account. Those actions usually stem from some wrongdoing.
It would apparently undo agreements in place between governments and service vendors. How much might a trash company charge for recycling service or a campground concessionaire charge for camping?
How much might a towing company wish to charge to get a car out of their lot?
Not to say that any of these companies would go wild on pricing, but they apparently could.
The initiative is sponsored by the National Credit Alliance, which suggests why the emphasis is on interest rates. It’s the other parts that should scare voters away. Why mess with something that appears to offer only financial collateral damage to the public?
It’s early in the campaign, but so far the Credit Alliance initiative seems to have little to recommend it.
— Today’s News-Herald