The Tyranny of the Status Quo, Iron Triangle Wins
More on Wal-Mart's announcement that it would withdraw its application, filed with the Federal Deposit Insurance Corporation, to establish an industrial loan company (ILC) in Utah, from American.com:
"For all the supposed sympathy on Capitol Hill for American consumers—and especially “working families”—they don’t count for much when an organized pressure group like the banking industry comes calling. Then, our representatives in Congress become very concerned about such fallacious and unintelligible principles as “the separation of banking and commerce” and are perfectly happy to leave working families behind. From its inception, the “separation of banking and commerce” has been nothing more than a means for banks to protect themselves from competition, and it was invoked again, by people who should (and probably do) know better, to oppose the Wal-Mart application to acquire an ILC. The withdrawal of that application means America’s working families, who are Wal-Mart’s principal customers, will have to pay more for what they buy at Wal-Mart, and should thank their representatives in Congress for this privilege."
In his book "The Tyranny of the Status Quo," Milton Friedman described the "Iron Triangle" as a) special interest groups, e.g. the banking industry, b) regulators, e.g. FDIC, and c) politicians. When consumers and pro-consumer companies, e.g. Wal-Mart, go up against the Iron Triangle, it's often a lot like "three foxes and a chicken taking a vote on what to eat for lunch," (paraphrased from H.L. Mencken).