Magical thinking is no way for Mamdani OR Trump to boost the economy

Demonizing greedy bankers and landlords is the last refuge of the poorly polling politician.

And, as affordability remains a leading issue among voters, President Donald Trump has regularly used rhetoric and ideas that mirror those of progressive Democrats like Zohran Mamdani.

Take the president’s recent idea for capping credit-card-interest rates at 10%.

Or rather, the idea that’s already proposed in a bill sponsored by Sens. Bernie Sanders and Josh Hawley.

“They’ve really abused the public,” the president said of credit-card companies.

“I’m not going to let it happen.”

This probably feels good to hear.

But if you find an APR on a new credit card offer “predatory,” definitely do not sign up for it.

You don’t owe the bank anything, and it doesn’t owe you.

An interest rate, though, reflects risk. It’s the entry price for obtaining credit.

If you have a good credit score, you get lower rates; a bad one, higher rates.

Capping the rate won’t eliminate credit risk factors, though it will likely shrink available money for people who need it most: lower-income and young workers, or anyone else trying to build up their credit.

President Donald Trump speaks after signing an executive order in the Oval Office of the White House on January 30, 2026, in Washington, DC. Getty Images

Lots of entrepreneurs and small-business owners also rely on credit cards to tide them over for a season or help with upfront capital.

And those who are denied cards will still need funds.

They’ll inevitably seek out other means of borrowing, probably at even higher rates.

Maybe they’ll go to payday loans and check-cashing places.

Maybe they’ll take second mortgages.

Mayor Zohran Mamdani announced new commissioners and answered questions about the city’s storm response at a City Hall press conference. William Farrington/NY Post

Maybe they’ll go to the black market.

There are those who argue that Americans already borrow far too much and that limiting access to credit would be good for them: Rest assured, these nannies almost surely own their homes and cars — purchases that become even more prohibitive for people unable to improve their credit scores.

Trump likes to explicitly threaten or jawbone companies into doing his bidding.

Bank of America, for example, is reportedly considering offering a credit card with interest capped at 10% to placate the administration.

Well, there’s no federal cap on what APRs banks can offer on credit cards; if providers want to undercut competition, nothing is stopping them.

Banks are businesses, after all, not charities.

But if banks lose out charging riskier customers lower interest rates to get on the good side of the administration, they’ll simply raise fees elsewhere, pull back on rewards and find other creative ways to make their reliable consumers pay.

Price-fixing never alleviates cost — it merely displaces it.

Take the socialist mayor of New York, Zohran Mamdani, as he “cracks down,” as one travel magazine referred to it, on “junk fees” in city hotels.

“Junk” is just a description of a cost that consumers and politicians have arbitrarily decided shouldn’t be paid.

But they will be: Hotels will almost inevitably raise prices elsewhere or decrease services to make up for it.

Economic magical thinking never dies, however, because it’s tethered to envy and anger rather than rationality.

Thomas Sowell points out that the typically “mundane” explanations for economic activity are “far less emotionally satisfying than an explanation which produces villains to hate and heroes to exalt.”

And there is no more convenient villain than a faceless, profit-mongering landlord.

Take another price-control policy championed by Mamdani: rent control, a practice that’s been failing to lower housing costs since Roman times, at least.

A slew of studies and empirical evidence find that rent control doesn’t work.

The vast majority of economists, both on the right and left, believe it’s a bad idea.

Still, most polls find that rent “stabilization” is supported by around 80% of New Yorkers.

Every generation, it seems, convinces itself it possesses the best technocrats and formulas to properly control economic activity to make it fairer and decent.

Mamdani is just another in a long line of politicians who play the role.

But Trump?

He should know better.

David Harsanyi is a senior writer at the Washington Examiner.