Credit cards, AI and social media: snake oil and snake venom

No barbeque could be more appetizing, indeed exhilarating, than the grilling by Senator Josh Hawley (R-Missouri) of Bill Sheedy, senior advisor to the CEO at Visa, and Linda Kirkpatrick, the president of the Americas at Mastercard, at a Congressional hearing last November and viewable on YouTube. As apologists for extortionary credit card rates, astronomical swipe fees for retailers and other greedy practices of the industry, these are the most morbidly obese of "fat cats.”

Visa and Mastercard corner around 83 percent of the market, and, according to the National Association of Convenience Stores (NACS), "because credit card fees are a percentage of the total transaction cost, they multiply with every cent of inflation…. Retailers have no choice but to accept these cards, meaning they are stuck with whichever network is on the card. Visa and Mastercard set the prices and terms for the thousands of banks that issue their cards — even though the biggest fees, swipe fees, go to the bank that issued the card. Banks should compete on their swipe fee prices, but they don’t. This results in swipe fees increasing year after year and U.S. merchants and consumers paying more in these fees than the rest of the world. In fact, fees on Visa and Mastercard credit cards alone went from $26 billion in 2010 to more than $111 billion in 2024."

The Credit Card Competition Act (CCCA) has been undergoing legislative labor pains for long past their due birth date.

The bipartisan bill was sponsored by Sen. Dick Durbin (D-Illinois), and Sen. Roger Marshall (R-Kansas), a formerly practicing OB-GYN, which is a striking alliance, given that Marshall wants to scrap the Affordable Health Act, opposes expansion of Medicaid, rejects the crisis and doubts even the reality of climate change, and resists certain proposed additions to hate crimes legislation.

The CCCA targeted the Visa-Mastercard axis by seeking to give retailers more options among payment networks. It was an amendment to the GENIUS Act bill, which concerns regulation of digital currency. Its final version dropped both the CCCA, and a proposed rate cap of 10 percent on credit card APRs.

The banking lobby killed it on the grounds that consumers and financial outfits would suffer from added competition.

Hawley and Bernie Sanders (I-Vermont), ideologically an odd couple, had argued for a 10-percent interest cap on credit cards, rather than the current average of far over double that amount, which has the effect of increasing prices for consumers to whom the burden is passed on. As things are turning out, the big networks, and small debit-routers, are rejoicing that the ability of consumers to select and negotiate has been snuffed. 

They defend the usurious organized-crime reminiscent fees, by claiming that they protect security and the rewards to cardholders that those fees generate. They also offset the cost of fraud protections, they argue.

It is sometimes possible to sense that the information that is given to us is accurate, even if we don't understand it. But we must appeal to our Maker to show us t why and how credit card companies can charge rates of interest, abort all competition, and make rules that are so shamelessly avaricious. 

A few statistics will illustrate the exorbitance.

"There are an estimated 152,000 convenience stores in the United States, 60 percent of which are single-store operators. These businesses have seen a historic jump in their swipe fees with inflation and rising gas prices. Since 2020, overall card fees paid by the convenience store industry are up 84 percent. For many convenience retailers, the swipe fees they pay exceed their pretax profits. These fees represent their second-highest operating cost—less than labor but more than rent and utilities. On Visa and Mastercard credit transactions, the average rate paid in the U.S. was 2.25 percent of the transaction amount — more than 7 times what merchants pay in Europe and 5 times what merchants pay in China," notes NACS.

Because of our morbid addiction to illusion, it's easy to see why credit cards are so popular. It's less about convenience than it is their hold over our imagination. It makes non- existent money magically appear like a rabbit out of a hat. It gives people who connect status with prosperity the optical illusion that they have money to burn. 

It feeds into their "my wish is the world's command" fantasy.

Replacing the "you are what you eat" bromide is "you are what you can conspicuously spend, even if you can't afford it.” Credit cards are shrines and trophies of egotism.

"Nothing is real." Neither in Strawberry Fields nor the Constitution.

We are the sum of all the data aggregated against us by government and industry. It defines us and makes it easier to track us for surveillance and exploitation. All those megabits comprise our temporal souls. Our individual identities are involuntarily confessed and owned by their intrusions.

Credit cards are like sophisticated clinical squeeze balls for pain management. And in the end, we are the waste products of artificial intelligence.

Artificial intelligence is both a tool of freedom and a weapon of oppression. It is the closest we have come to reinventing fire. 

What heart disease and cancer are to mortality statistics, artificial intelligence and social media are to the viability of a healthy nation. But they keep us entertained, create jobs, spur invention and keep us guessing. And they can be repurposed as ammunition.

The U.S. embassy in London recently posted that "every visa adjudication is a national security decision." The same can now be said about every breath a citizen takes. 

The U.S. government now mandates that foreign students who apply to study at American universities must make their social media accounts public. The intensified screening is to forestall the renewed bedevilment of college campuses by outside agitators.

Getting into the "moral turpitude" business is always risky business, especially when it implicates free speech advocacy. 

Many of the leaders of both peaceful demonstrations and pogroms against Jews are foreign nationals who can have their visas revoked for such conduct, pursuant to law. But is the government misappropriating its instruments of enforcement?

Ideological screening is like a bulging aortic aneurysm in a nation.

Student "F," "M" and "J" visas will be scrutinized for "any indications of hostility toward the citizens, culture, government, institutions or founding principles of the United States." These are notoriously elastic classifications that may set precedent for future administrations of similar or different points of view to crush dissent.

"Requiring foreign students and faculty to self-censor their views about American foreign policy in order to stay in the country violates American principles of free speech and the First Amendment", says the Foundation for Individual Rights and Expression (FIRE). Hundreds of visas have already been canceled.

The government seems to equate restrictive Visa regulations with antibiotics that restrict the growth of pathogens in the academic stream. The problem is that regulations may be fatally mistaken when distinguishing "bacteria."

Let's junk at least the excesses of AI and social media and make America Luddite again.