American Express (and all the other schemes where the issuer is also the acquirer, i.e. Diners Club) aren’t capped.

The 0.3% cap however did kill Amex’s licensing model where they let other banks around Europe issue their cards, so they simply withdrew from those, as 0.3% is not enough to pay for the rewards.

Note that this is just interchange. Payment processors still charge merchants whatever they damn please.

Sure you feel one way. Other people feel another.

But it's also possible the correct answer doesn't depend on your feelings but on falsifiable theories.

Macroeconomic theory relies on a lot of spherical cows. In theory I don’t disagree with you, but in practice we don’t have the tools (yet) to do this type of economics in a scientific/falsifiable way.

You can't guarantee or even approximate a given input and output for a scenario like this.

But we also don't need to specify initial conditions exactly to do science.

I'm less convinced that the equations themselves are unknowable.

Politicians will screw up the implementation, businesses will engineer around it and the alternative solution might ultimately come out to be a better one in practice than in theory.

Trying to define economics by simple equations which you expect to define policy is a lost cause.

See e.g. Milton Friedman's comments about how flawed Hayek's economics are and how great Road to Serfdom is.

So my take on that speech is it's political rather than scientific.

In general I'm skeptical of arguments that something is unknowable unless they come with a rigorous proof or at least a well stated conjecture that has stood the test of time.

I get that this type of oversight is likely against some philosophical POV here but it's not like middlemen making money is an all-to-great and solitary goal a society should try to defend.