The sight of merchants up on Capitol Hill demanding that the Feds regulate—read “make a lot smaller”—interchange fees reminds me of the saying: what goes around comes around. Wal-Mart should have learned this lesson. It was behind the massive class action that forced MasterCard and Visa to pay the merchants $3 billion. That class was “certified” only because the 2nd Circuit Court of Appeals adopted an extremely lax legal standard for deciding whether a class made sense (in an unusual move, that court actually reversed its position on this in late 2006).

Not long after that Wal-Mart got a dose of its own medicine when the 9th Circuit Court of Appeals also adopted class-cert lite in deciding that a massive class of Wal-Mart employees could proceed with an employment discrimination case. Other businesses should learn the same lesson: you can’t advocate price regulation and massive intervention into an industry out of one side of your mouth, and advocate laissez faire government policies towards your business out of the other side. Retail prices are gettin’ a bit high these days for some’s taste; maybe we should ask Congress to cap those prices too.

From an economic policy perspective it is hard to fathom anything much dumber that what Congress is considering. We have a pretty competitive payment card industry—perfect no, better than a lot of industries, yes. Into this industry Congress is proposing to establish—a cartel! The idea is the merchants get to negotiate as a group with MasterCard and Visa; Amex is out of the mix for now but don’t be surprised if someone includes them. Perhaps Congress could make sure the merchants pass the savings on to consumers by allowing a consumer cartel to negotiate with the merchants.