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Yes, government regulation works!

(On the Commons) — In the November 7th New York Times business columnist Floyd Norris writes about the conclusions of a study of a 2009 federal law intended to force down the hidden fees credit card companies impose on their customers:

When Neale Mahoney, an economist at the University of Chicago’s Booth School of Business, set out to evaluate the effect of that law, he was confident he knew what he and his colleagues would find: It didn’t work.

“I went into the project with this sort of conventional wisdom that well-intentioned regulators would force down fees and that other fees and charges would increase in response,” he told me this week, comparing hapless rule makers to the carnival visitors playing the game known as Whac-a-Mole, where a mole springs up somewhere else as soon as one is knocked down.