Both parties float bad ideas to combat cost

ANOTHER VIEW| CHICAGO TRIBUNE

Politicians all along the ideological spectrum are in agreement on the big issue now animating Americans: Stuff is too expensive.

President Donald Trump, after mocking talk of "affordability" as a "hoax" last year, has pivoted to proffering a slew of questionable, quick-fix policies to lower prices for Americans.

In Illinois, Democratic House Speaker Emanuel "Chris" Welch said, "Everything's about affordability and that's going to be our focus."

Fine and dandy. But where things start giving us pause is when these politicians get specific.

From Trump, we have his recent pronouncement that he backs a one-year cap on credit card interest rates of 10%. Current rates are roughly double that level.

Of course, that sounds on its face like a relief to those who pay interest on their credit card purchases. But if banks and other lenders are forced to slash their interest rates, they will sharply restrict what sorts of consumers they'll finance.

The only thing that will make a consumer angrier than the nosebleed interest rate is not being able to get one at all.

Sadly, Trump doesn't have a monopoly on this bad idea. Sen. Elizabeth Warren, the Massachusetts Democrat who's been a harsh critic of banks for decades, says she'd love to work with the president on a bill to cap credit card interest. Republicans and Democrats should work together, but this sort of bipartisanship we can do without.

In Illinois, Welch wants to give the Illinois Department of Insurance the authority to reject homeowners insurance rate hikes if they exceed a certain level.

Bloomington-based insurance giant State Farm jacked up its homeowners rates in Illinois by 27% on average last year.

But Illinois has one of the most competitive insurance markets in the U.S. thanks in no small part to its light regulatory touch on rates. Insurers should be more transparent with the public on their losses when substantially boosting their rates. But a crackdown is just as likely to reduce competition that keeps prices reasonable as it is to give consumers relief.

Where the politicians can improve our economic lives is by reining in their own impulses that contribute to making daily life more expensive.

For Trump, of course, the most obvious example is his insistence on imposing stiff tariffs on imported goods.

In the case of Welch and the Democrats in Illinois, their contribution to cost pressures arise in large part from a budget approach that leans heavily on revenue increases. Chicagoans will soon pay a 10.5% sales tax — the highest of any major U.S. city.

So whether you're a Republican or a Democrat, when you hear a politician talk about how much they feel your pain and how they're going to put the hammer down on (name your greedy industry or company of choice), we'd advise you to contemplate instead how your representative, senator, governor or president can change matters directly in their control to make your situation better.