Wednesday, October 22, 2008

Usury, usurious and using

I've been far afield in the past few days, slumming with the radical right, the radical left and the radically religious.

This last group intrigued me by responding to the credit crunch with the breathtaking concept of a Jubilee: forgiving all debts every 50 years. (Joseph Farah notes that a Jubilee year began on Yom Kippur-- missing the irony of Congress taking a break from its bailout deliberations for the occasion.)

Okay, really: I can't be saying shekels and sheep can be used to deal with a 21st Century economy. Not at all, but in Leviticus and even more in the 15th Chapter of Deuteronomy, there is an implicit recognition that borrowing is equivalent to slavery. The concept of bankruptcy hails from Leviticus by way of Merry Olde England and the U.S. Constitution.

And what is debt but a form of indentured servitude? Thanks to credit card companies and their paid minions the concept of usurious rates has disappeared. For the poor, the idea is to pay down the balance but never escape from the principal. Balloon interest rates and ARMs extended this concept to homeowners. Welcome to the squirrel cage.

The servant therefore fell down, and worshipped him, saying, Lord, have patience with me, and I will pay thee all. Then the lord of that servant was moved with compassion, and loosed him, and forgave him the debt. But the same servant went out, and found one of his fellowservants, which owed him an hundred pence: and he laid hands on him, and took him by the throat, saying, Pay me that thou owest. Welcome to the bailout. (It's fun to cherry-pick Scripture; you can justify just about any argument.)

There's an interesting discussion in the Christian Science Monitor, with a very telling statement from David Jones, president of the 177-member Association of Independent Consumer Credit Counseling Agencies: Creditors like to see a recent history of bankruptcy, he says, because it usually means an applicant has poor spending habits, has no debts, and is ineligible for bankruptcy for another five to seven years. In short, this applicant stands to be a near-term cash cow for the creditor.

I'm just noodling here. Capitalism is our State Religion. Usurious lending is parasitic, but it's so entwined in the body politic that any cure would kill the patient.


Lil' Hammerhead said...

I think some mild step by step cures will actually strengthen the patient in the long run. Shady interest practices need to be stopped, set regulations for minimum credit eligibility need to be in place, a fixed interest ceiling, a governmental avenue for assistance outside of the credit companies themselves needs to be in place (a credit consumer affairs with teeth), stricter regulations on financial institution to financial institution debt-selling, stricter debt reporting requirements for financial institutions.. among other things.

The habits of the nation.. the industry and individuals alike, needs to be changed. If not, we can simply look forward to this same problem reoccuring down the road.

KAP said...

I wasn't going anywhere with this other than trying to look at credit outside of the isms.

It is interesting that ordinary Chinese are savers. Their government gives them low wages, a pitiful interest rate and uses their money to support our debt habit, screwing them again by manipulating currency rates to keep exports high. Our institutions have a very sick relationship with theirs and we're the victims.

Lil' Hammerhead said...