The Economy

I’m pretty confident @BTExpress was saying that he regards interest as the devil FOR HIMSELF, which is absolutely a legitimate viewpoint. Frankly I admire him doing it that way. Nowhere did I see that he wants money lending at interest abolished for all.

 

I don't think title loan, cash advance, etc. type places should be legislated out of business, but I'm pretty sure there is a special corner in hell for those whose business model is to prey on desperate/stupid/poor people by giving them a loan they know can't be paid back on time and then giving them a bigger loan to pay off the first and an even bigger one to pay off the second and so on.

 

What do you think the short term interest rate should have been from 2010-2021 or so? I know you think that keeping rates at near zero were wrong because they create bubbles and distort investment decisions.

But I read Bernanke's autobiography and part of his latest book. Bernanke is almost apologetic about keeping interest rates so low. He argues two things. One of them is that if he kept rates at two-three percent that he risked the economy sinking into a recession, which is something that has not happened sine the end of the 2009-2010 recession?

Do you believe Bernanke is wrong and a recession was not a possibility? What policy do you think the Fed should have followed? Do you believe Bernanke is wrong and a recession was not a possibility?

 

What are your thoughts about those who wouldn't loan to those folks at all?

 

I don't see banks as predatory, if that's what you mean, because - for the most part - if they see someone who is a bad risk, they aren't going to give them the loan.
The place in the strip mall or former Pizza Hut/Western Sizzlin building, they lure them in and get them on the hook the same way I do a flounder. In both cases, the quarry winds up gutted and over hot coals.

 

In the richest nation in history, how did we become a society in which penury or usury are the choices available to those folks?

 

Where's that free bubble-up and rainbow stew?

 

I'd agree with this - after all we don't even teach home economics in Home Economics - but the payday lending business disproportionately targets minorities.

At least in part because of our long history of redlining financial services.

https://www.washingtonpost.com/news...years-ago-its-still-hurting-minorities-today/

 

I'm not really interested in defending that industry, but a lot of these diatribes against this line of business or that get me thinking ... "compared to what?"

 

It's real simple.
If I walk into my local bank and ask for $5 million loan to buy a beach house, they are going to turn me down because I could never repay it.
If some rube walks into a payday lender and asks for a $5000 loan to rent a beach house for a week, they'll knock each other out of the way to get his name on the dotted line, knowing he can never pay it back.

 

Your gig economy fact of the day: Uber has never come within a billion dollars of a profit.

 

I sense a lot of code talking on the last couple pages that will make a Navajo blush.