Helping the Mafia

Russ Nelson has a nice post on how Elliot Spitzer is helping the Mafia make money by going after people who charge high interest rates. Except that he makes a very common mistake and calls them interest rates. Conceptually/essentially the post is right on, but it is a basic error of language an economist should know.

However mortgage rates and Treasury rates [or other loan rates] are determined, neither of them are interest rates per se -- they are both nothing more than the yields of particular securities that reflect interest rates....Interest rates are an abstraction. They are, by definition, the opportunity cost of money across time -- and opportunity cost is a function, mostly, of expected growth rates and expected inflation.