| The Jewish tradition is to forgive all debts every seven years. We have turned that on its head, haven't we? Now a bad debt stays on your credit report for seven years.
St. Thomas Aquinas argued charging of interest is wrong because it charged for both the thing and the use of the thing. This does not prevent investment. What it stipulated was that in order for the investor to share in the profit he must share the risk. Simply to invest the money and expect it to be returned regardless of the success of the venture was to make money simply by having money and not by taking any risk or by doing any work or by any effort or sacrifice at all. This is usury.
Interest of any kind is forbidden in Islam. As such, specialized codes of banking have developed to cater to investors. Instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, there are no additional penalties for late payment.
Each U.S. state had its own statute which dictates how much interest can be charged before it is considered usurious or unlawful. National banks, federally chartered savings banks, installment plan sellers and chartered loan companies were exempted from state usury limits by the federal government with the passage of The Monetary Control Act of 1980. This effectively overrode all state and local usury laws. The beginning of the end.
Former Baptist minister and LBJ Press Secretary Bill Moyer teamed up with that liberal magazine Businessweek to look at the financial industry.
http://www.pbs.org/moyers/jour...
As more companies view low-income Americans as opportunities for profit, the "poverty business" is booming. Bill Moyers Journal and EXPOSÉ: AMERICA'S INVESTIGATIVE REPORTS follow a team of BUSINESSWEEK reporters as they track new corporate practices that some say exploit the working poor.
Payday loans abound in town next to Army and Marine bases, and their annual rates are astronomical. In my opinion they prey on the most vulnerable, and the fact that they target the spouses of those on tours of duty is shameful. But they have a very active lobby to stop regulation. Gov. Stickland in Ohio recently signed a new law capping their rate at 28%. No longer will lenders be able to offer two-week loans with a 391% annualized interest rate. In a move that will surprise no one:
http://www.cleveland.com/news/...
While some payday loan storefronts have already closed in Ohio, there are signs that others in the industry plan to fight the legislation, which takes effect in 90 days. Payday lenders recently retained former Solicitor General Ted Olson to study whether there are grounds for a constitutional challenge to the bill.
Mainstream financial institutions are helping to fuel this explosion in lending to the working poor. Wells Fargo & Co. and U.S. Bancorp offer their own version of "emergency" payday loans. Based on a 30-day repayment period, the $1 for every $10 borrowed results in an annual interest rate of 120%.
http://www.huffingtonpost.com/...
Back in September 2007 the unhinged Lanny Davis, Clinton apparatchik, said:
I believe Ted Olson would be an excellent choice for attorney general.
I bet John Pimp-My-Wife agrees. I, for one, am glad that Harry Reid disagrees.
As the economy sours I for one am hanging on to my ten year old Ford Escort wagon. With a five speed transmission, we can get anywhere from 34mpg to 38 mpg on the commute from Hedgsville, WV to Sharpsbug, MD. Have you noticed the increase in used car lots? Most have the price painted on the front window, or at least the down payment in big numbers. You know the price of a new car by the sticker, but haggling can mean paying something less.
One company thinks that is so 1980's. Byrider, with its clean orange and blue signs (that a whole science--think Tide bottles) sees this market as a source of untapped profits, selling expensive, highly financed products to marginal customers. Bank of America provides a revolving line of credit of $110 million for them.
The price of the used car depends on their analysis of what they calculate is the maximum you can pay. They call it their business model. The Attorney Generals of Ohio and Kentucky see something different. They have alleged in civil suits that "opportunity pricing" misleads customers. These suits were settled in 2005 and 2006 without Byrider admitting liability.
The Attorney General of California, recently settled with Jackson-Hewitt for $5 million. Jerry Brown (former seminary student) brought the suit stating that J-H pressured customers to use their Money Now loans. For about a 10% skim they get your refund two weeks faster; that works out to triple digit annual rates.
Blue Hippo sells $800 computers on installment payments that add up to over $1300 over nine months. The Attorney Generals in California, New York and West Virginia are investigating this company. Illinois Attorney General Lisa Madigan has filed suit. Which Attorney General candidate do you think would fight for you, Darrel Graw or Dan Greear?
After the Businessweek piece, Moyers had a discussion with Bob Herbert and Dean Baker. Mr. Herbert declared that the poor has lost the class war. Research show that 70% of the country lives paycheck to paycheck. How many are one paycheck away from being homeless? Their hands are invisible. Remember the halcyon days of unions penetration when one paycheck would support the nuclear family? Just because I am paranoid, does not mean they have not taken productivity gains and sold us down the river.
http://www.nytimes.com/2008/07...
Feeling No Pain
We should be getting chapter and verse about how badly the war in Iraq is hurting us here at home. We should be seeing charts and graphs explaining how ordinary Americans, now the hardest-working people on the planet, have been cheated out of their share of the extraordinary productivity improvements they've racked up over the years.
There should be a sense of urgency coming from the Democrats in this campaign, a clarion call compelling enough to rally the legions who have been treated unfairly and badly hurt in the nation's other undeclared war: the class war.
Mr. Baker excoriated Mr. Greenspan's tenure as Fed Chair during the run up of the credit crisis and housing bubble. I personally agree with his assessment that Greenspan looked the other way, denying the every bubble that happened on his watch. They come more often; the cycle is shorter. Cyclical vibrations brought down the bridge over the Narrows in 1948. As I proved at the picnic, bubbles burst, usually all over your face.
http://www.prospect.org/csnc/b...
Do Investors Miss Phony Profits?
It is worth noting that much of the profit reported in these years was fictitious. The financial sector accounted for close to 30 percent of corporate profits in these years. Much of their booked profit was for fees on transactions that subsequently led to huge losses. While the executives of these companies earned large bonuses based on these profits, the shareholders did not benefit unless they sold their stock before the losses were revealed.
I have listened to enough Congressional hearings to hear some Republicans blame the credit crisis on radical groups that perpetuate voter fraud, the elimination of redlining (loans based on zip code not credit risk) and the affordable housing fund. Gone is the Wonderful Life when George Bailey was the one to decide to give you loan because his bank would be the only institution to bear the risk, and therefore gain the profit. Ronald Reagan made his money not from his TV spots for Twenty Mule Team Borax, or his B movies, but in real estate. Now there are players in the shadows, protected by the economic descendants of Ronald Reagan of Palos Verde, the richest zip code in the United States.
http://www.nytimes.com/2008/03...
Even the vaunted Robert Rubin admitted he had no idea what they had unleashed on the country. Although he claims he had a non-operating role at CitiGroup, he did not understand obscure kind of financial contracts that caused the headache for his company in late 2007. His predecessor was also handsomely paid, but if I start on the ratio of executive to janitor compensation riff I'll be here too long.
I am so-o-o tired of hearing about the "invisible hand of the market". The invisible hand of the market is giving you the middle finger so this commoner is suspicious. Did it help sort out health care after 1994? What did James Madison say, "If men were angels, no government would be necessary"? Why does this argument from one of our founding fathers not also apply to the marketplace? Why is transparency in government and politics seen as good, but in economics it becomes "regulation" and we allow it to be painted as bad?
I hope that as the nature of this current crisis does not descend into partisan bickering, but a realization that some regulation is a good thing. Many on both sides of the aisle worked in Congress for twenty years to repeal The Glass-Steagall Act of 1933, the final nail was The Gramm-Leach-Bliley Act of 1999. Our own Bob Wise voted AYE; Pelosi's suggestion for VP Chet Edwards (D-TX) voted NAY. (1999 Roll Call 276 and 570--didn't think I'd miss that, did you?) As small airports lose service will anyone remember airline regulation had been used to set fares on popular routes to subsidize regional service?
Seeing the campaign coffers of Barack Obama being fueled by individual donations gives me hope. The changes in the laws I have obliquely referred to garnered Democratic votes. So, who are the We that can? What is the Change we believe in? The DLC backed candidate lost in TN-04 Democratic primary to the incumbent Steve Cohen. That a good first step, so Anne Barth replacing Shelley McCapito is our first step.
Traditional media is part of the establishment. Newt Gingrich are selling garbage and it is reported as a valid side of the discussion. Who was the most widely cited person about the housing market? David Lereah, the chief economist of the National Association of Realtors, so educate yourself. Maintaining the level of involvement is essential for us to be the change you wish to see in the world to quote Gandhi. We don't have to reinvent the wheel, but we have to not get tired in our struggle to push it uphill. As Camus points out in his Myth of Sisyphus, the realization of the absurd requires revolt.
As Carnacki reminded us from Austin last month:
Just as the Dean campaign showed many of his supporters that they have the power to create the America they want, I've tried to provide an instrument for West Virginians to feel empowered politically, a place where they can organize.
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Too many of our elected Democrats have made that hard to do at times. The answer is to not give up because some of them have let us down. The answer is to recognize that it's a long struggle to achieve the change we want - the change we need to make for ourselves and other Americans. And it's not just our own lives and futures riding on this.
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As Dr. Dean said, voting just gets you a D in his class. True participation as a citizen requires more.
Where the Progressive badge with honor. Stand for the democratic republic, efficiency in government, needed regulation, social justice and conservation. As the first reading says tomorrow God is in the tiny whispering sound. Our second grandchild due in six weeks depends on us. |
