Time for a national usury law?

First Premier Bank has just introduced its new 79% interest rate sub-prime credit card. No, that's not a typo, and some experts expect to see more credit cards with sky-high interest. Which makes me again bring up the topic of a national usury cap. Thomas Geoghegan recommended such a cap last year, in his article in The American Prospect. He suggested a credit card interest cap of 12% and a law completely barring payday loans.img_1180 I have filed several class action suits against large payday lenders (here's a post on one of those suits). These lenders often argue that people need these 400% interest loans for short term emergencies. At what cost, though? In my experience, these lenders are commonly stretching out these "short term" loans for many months. People who borrow $500 will pay $2000 in interest over the year and they will STILL OWE THE $500. Many states allow payday lenders to charge in excess of 1000% interest. These loans suck the very life out of working class folks. They amount to financial crack cocaine, because people often end up taking out a second, and a third payday loan in order to pay off the first one. It's a terrible mess and it's ruining lives. That's why 13 states have passed laws making sure that payday lenders cannot operate in those jurisdictions. It's time for the other states, and Congress, to get with the program. To put this all in perspective, remember the stories about "loan sharks?" Those were the good old days. "Simple nominal annual interest rates on extortionate mafia loan shark debts averaged 250%." Syndicate Loan-Shark Activities and New York's Usury Statute, 66 Colum. L. Rev. 167, 167 (1966). And here's another irony. The Bible clearly holds that usury is a sin comparable to murder. Usury is prohibited by Exodus 22:25: "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.” Usury is also prohibited by Leviticus 25:35-37. In spite of these Bible quotes, if you want to find lots of payday stores and payday lenders, look for geographical areas where you'll also find conservative Christians. That is the finding of Steven M. Graves and Christopher Peterson, in a law review article entitled "Usury Law and the Christian Right: Faith-Based Political Power and the Geography of American Payday Loan Regulation," 57 Cath. U. L. Rev. 637, 640 (2008):

We conclude, with a high degree of statistical certainty, that states with powerful conservative Christian populations tend to host relatively greater numbers of payday loan locations per capita as well as a greater commercial density of payday lenders. These findings propound a tragic and sad irony. Those states that have most ardently held to their pious Christian traditions have tended to become more infested with the progeny of money changers once expelled by Christ from the Hebrew temple. Legislators in those states, who have effectively used biblical principles to shape their legislative agenda on social and cultural issues, have failed to consistently apply biblical principles to economic legislation.

All it would take for Congress to outlaw payday loans is to write up a bill, have a majority of members of Congress approve of it, and then refer it to the President to sign it. But that can't happen these days because the financial services industry pays our politicians huge amounts of money so that they WON'T sign these sorts of bills. And, of course, with regard to Congress, the banks "frankly own the place."

Continue ReadingTime for a national usury law?

How confusing it must’ve been –

A friend forwarded this from The Onion. Thought DI readers would appreciate the findings, including this:

Members of the earth's earliest known civilization, the Sumerians, looked on in shock and confusion some 6,000 years ago as God, the Lord Almighty, created Heaven and Earth.

According to recently excavated clay tablets inscribed with cuneiform script, thousands of Sumerians—the first humans to establish systems of writing, agriculture, and government—were working on their sophisticated irrigation systems when the Father of All Creation reached down from the ether and blew the divine spirit of life into their thriving civilization.

Continue ReadingHow confusing it must’ve been –

Drones, dollars, and the open-source insurgency

Yesterday, I wrote on the massive new $636 billion "defense" spending bill passed by the House of Representatives. An article in today's Wall Street Journal should make us further question the efficacy of this type of high-technology spending. A MQ-1 Predator drone costs some $4.5 million dollars each. They have a wingspan of approximately 48 feet, weigh 2,250 lbs. when loaded, have a range of over 2,000 miles, and have a ceiling altitude of 25,000 ft. They can be loaded with two hellfire missiles, making them available for a combination of reconnaissance, combat or support roles. The MQ-9 Reaper drone, the larger and more-heavily armored cousin of the Predator, cost about $10.5 million each. The Air Force maintains a fleet of 195 Predators (total cost ~$877.5 million) and 28 Reapers (total cost ~ $294 million). The New York Times reported earlier this year that they are flying 34 daily surveillance patrols in Afghanistan and Iraq, up from 12 in 2006. They transmit some 16,000 hours of video each month. Insurgents can spend $25.95 to purchase Skygrabber, a program available on the internet which allows them to intercept the video transmitted by these drones.

Continue ReadingDrones, dollars, and the open-source insurgency

U.S. House approves funding to maintain the empire

As distinct from other peoples, most Americans do not recognize -- or do not want to recognize -- that the United States dominates the world through its military power. Due to government secrecy, our citizens are often ignorant of the fact that our garrisons encircle the planet. This vast network of American bases on every continent except Antarctica actually constitutes a new form of empire -- an empire of bases with its own geography not likely to be taught in any high school geography class. Without grasping the dimensions of this globe-girdling Baseworld, one can't begin to understand the size and nature of our imperial aspirations or the degree to which a new kind of militarism is undermining our constitutional order. ---Chalmers Johnson
It is with the context provided by that quotation from historian Chalmers Johnson that one must understand today's news that the House of Representatives has approved funding today for defense maintaining the empire. The level of spending has been approved at $636.3 billion dollars-- nearly two-thirds of a trillion dollars(see related post on how much a trillion really is) to maintain our network of more than 800 military facilities in more than 140 countries around the world. That spending includes $128.3 billion for fighting our current wars, although Afghanistan is expected to require an additional $30 billion to fund the most recent troop increase.

Continue ReadingU.S. House approves funding to maintain the empire