June 09, 2009
If Not Now, When?

Who needs the Mafia when we’ve got Congress? Here’s a taste from William Greider. Go read it all in The Nation.

The much-celebrated “Credit Cardholders’ Bill of Rights” is a fresh example of how the Democratic Party tries to have it both ways — avoiding the tough votes while mollifying the folks. The credit card reform measure imposes new rules on the industry and does away with many of the most outrageous gimmicks bankers use to extract more money from debtors. Banks cannot raise interest rates retroactively on old credit card balances or pile on hidden fees or fail to give advance notice for rate increases. These and other changes are worthy.

The achievement seems less courageous if you know that Congress was largely ratifying the regulatory rules already adopted by the Federal Reserve last year. Or that the legislation gives the industry another nine months to gouge their customers before the new rules go into effect. Or that Visa and MasterCard, Citigroup and JPMorgan Chase are free to raise future interest rates to the sky — without limit. That is the industry’s intention, as bank lobbyists reported after the bill was passed.

One of the fundamental issues that party managers wished to avoid was the scandal of American usury. Usury is the ancient sin of charging inflated interest rates sure to ruin the borrowers. It is considered immoral by Judaism, Christianity and Islam because usury involves the powerful using their wealth to ensnare weak and defenseless borrowers. The classic usurer offers an impossible choice that debtors cannot easily refuse. If they reject the terms of the loan, they will not be able to pay the rent or buy necessities. If they accept the usurious interest rates, their debts will accumulate until they are bankrupted (at which point the creditors claim their property). No civilized society can endure in such conditions.

Usury used to be illegal in the United States but it was “decriminalized” in 1980 — the dawn of financial deregulation. A Democratic president and Congress repealed all interest-rate controls and the federal law prohibiting usury. Thirty years later, American society is permeated with usurious practices — credit cards charging 30 percent and higher, subprime mortgages and other forms of predatory lending, the notorious “payday” loans that charge desperate working people an effective interest rate of 500 percent or more. Businesses, especially smaller firms, are also prey to usury in less direct ways…



Posted by Jerome Doolittle at June 09, 2009 08:38 AM
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We now have one Democratic member of each House that has gone on the record saying that the financial industry "owns" the Congress. The only remarkable thing about that is their willingness to state the obvious in public.

The question that always sticks in my craw is "How do we change this?" How do we return (or establish if you actually study history) a government of, by and for the people? How can we tame corporations to be the servants of society rather than its masters?

Almost everyone can come up with several steps that must be taken to accomplish this, but I have yet to find anyone who can explain a way any of those steps can ever be taken in our political process. I fear we are heading toward Neomedievalism, or at best we will become a banana republic sans bananes.

Posted by: Charles on June 9, 2009 10:24 AM

But he isn't even wearing any shoes in the picture? How can you take someone seriously when he can't afford shoes?

Posted by: Mike Goldman on June 9, 2009 10:38 AM

Charles, when faced with Snowcrash, use Nam Shub. :)

Posted by: Mike Goldman on June 9, 2009 10:41 AM
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