This financial-regulation overhaul has brought out some really hackish behavior among some otherwise interesting pundits on the Left. Seriously: Dick Durbin decides that Wal-Mart is paying too much for debit-card service and thinks he can score some nice campaign contributions from the big-box stores by fixing the price, and all of a sudden writers such as Felix Salmon and Kevin Drum are talking about what a great idea this is, and how interchange fees have all along been this terrible evil way of robbing from the poor to give to the rich.

And while we’re on the subject, anyone care to explain what role interchange fees played in the financial crisis? Did Lehman Brothers collapse because it was getting gouged every time a client cleared a trade using his debit card? The support for this provision on the Left seems to stem directly from the support for this provision among influential Democrats. Since when do liberals care how much Dillard’s pays in debit-card transaction fees? Unless . . . are we on the cusp of obtaining an admission that, on occasion, businesses pass on their costs to customers and employees in the form of higher prices and lower salaries, and that taxes are a major cost?

Actually, we have obtained that admission from Drum, who floated a proposal the other day that we scrap the corporate-income tax in favor for a tax on fossil fuels and a financial-transactions tax. I haven’t thought about this proposal enough to have a firm position on it, but I like it at first blush. The corporate-income tax does create a drag on economic activity. Fossil fuels and high-frequency trading do have associated externalities that are perhaps not adequately priced at the moment. Like I said, otherwise interesting . . .

. . . but I just don’t get the support for interchange-fee price-fixing. The case that this is some kind of market failure seems to rest entirely on speculation that the banks are charging fees that don’t accurately represent the cost of clearing the transactions. Guess what? The components of my iPod cost a lot less than Apple charged me for it. Banks charge more in some areas where they have strong pricing power so they can compete on price in areas where they are not as strong. Complaining that fees don’t reflect costs is just not a grown-up argument.