printState-enforced egalitarianism in borrowing and lending has been a key component in the economic meltdown. But Barry the Bolshevik is intent on preventing any market corrections from taking place.
Financial institutions are attempting to reverse lending socialism. That means charging clients commensurate with the risk they pose to their lenders. Or not lending to the risky. Increases in late fees and in interest rates on existing balances, as well as requiring greater disclosure—these are all necessary, and to be expected, if a correction is to occur, one that incentivizes savings and solvency.
But not if Obama can help it. At Obama’s behest,
Both the House and Senate are considering a credit card “bill of rights” to limit the ability of credit-card companies to raise interest rates on existing balances and to require greater disclosure.
“These practices need to be stopped. … They cannot continue to use and do practices that are unfair to people,” Rep. Carol Maloney, D-NY, told CBS News.
Readers discuss “Survival On the Road To Serfdom.”
Update (April 25): The federal Frankenstein’s latest folly caught Peter Schiff’s attention, and is the subject of his latest column (great minds…). Writes Schiff:
“The bottom line is that credit card lending is a very risky business. The debts are unsecured and the probability of default is high, meaning big losses should borrowers choose not to pay. In addition, should a borrower file for bankruptcy, credit card debt is often the first to be discharged. Given the risks, interest rates need to be very high to keep lenders in business.
One way to keep a lid on rates for those who do pay is for lenders to weed out those most likely to default. This can be accomplished through higher rates. Not only does this discourage riskier borrowers from taking on more debt, but it gives lenders a bigger cushion to absorb losses. However, by interfering with card issuers’ attempts to better price risk and limit losses, the government will reduce credit availability.”
Obama has stated that the banks need to lend more and ease credit, now Larry Summers says we need to save more and quit being addicted to easy credit, do these guys even talk to each other? The longer government meddles in the economics of our country the worse they will make it. They need to come to grips with the concept that the best way to solve our economic crisis is to let the free market work. Once they realize this we have a good chance to be on the road to recovery.
Of course, it’s also possible that Obama doesn’t want the economy to recover. At least not until he can achieve the power he’s after.
At this point, I’m still not sure what to make of the man: he’s either an adamant communist, an empty suit, or something in between. Is he evil and crafty, or is he really stupid enough to think that all this spending will actually work?
I am sure of one thing, though. He desires maximum control.
“Obama has stated that the banks need to lend more and ease credit”
and we all know well it worked out when he was lobbying for the easing of home-loan criteria…
Dear Ilana,
I feel about the same as you do about the idiocy which rule us from DC and NY.
But considering that not everyone has a degree in English, i believe it is very detrimental to your writing ample use of words borrowed from foreign languages. [Where? It’s all in English.]
Of course if your audience is exclusively Harvard/Yale educated, i presume it would be OK. But there are many who are not, so …
[The Founders used the language to the fullest; I will not apologize for not writing to the lowest common denominator. My smartest reader is the older individual with a high school certificate and a curious mind. I believe most Americans can open a dictionary—online too—and learn to love THEIR language in all its glory. There are already enough dullards around like Bill O’Reilly who can’t write.]
I’ve tried desperately to find the quote that I used to have on by bedroom wall growing up about how some thoughts require more precise language to express, but how the reader often blames the author for using complicated words that he cannot understand. Does that sound familiar to anyone?
Ark, I get by on this site with my state college education, not that I don’t have to look up things occasionally. It’s fun learn, isn’t it? You surely don’t get that chance reading a local newspaper, MSN, or Newsweek.
[Thanks. I re-read the new column; no Latin words. Even where a good/big word is used, the lazy English hater can still understand the rest of the sentence.]
One of the sources of our problems are (immoral and unconstitutional) laws that favor credit card purchases over cash purchases. But, more fundamentally, WHY does ANYONE have a “right” to credit? And why should the US encourage John Q. Public to buy a plasma TV rather than save up for a possible layoff or unforseen event? And why would someone want to save money in a bank making loans to people who are in hock at riduculous rates and juggle credit card debt with even more credit card debt? Why do we take something that is borderline insane and now make it the law? And lastly, what does it take for people (or even banks and governments) to learn financial responsibility??
“State-enforced egalitarianism in borrowing and lending has been a key component in the economic meltdown. But Barry the Bolshevik is intent on preventing any market corrections from taking place.” Agreed: So what is in the offing for the US economy if this madness is pursued?
Note to Mr Pauli: “And why should the US encourage John Q. Public to buy a plasma TV rather than save up for a possible layoff or unforseen event?” Possible answer: Because plasma TV will enhance the hypnotic effect of the MSM “bread and circuses” needed to mesmerize the hoi polloi, thereby permitting the elites’ plans for a total makeover (takeover?) of our society to proceed virtually unimpeded?