Friday, October 03, 2008

'predatory' lending

As with readers at Scott Adams blog - I'm always a little irritated when I hear the term predatory lending. it sounds like a political strategy, to say that there is a problem but it isn't the fault of any significant part of the voters. that means you can sound like you are on their side even if you aren't really adressing the problem.

there seem two ways to look at it. the first is who is in the best position to determine if a loan should go ahead. As Scott notes that person SHOULD be the borrower in most cases. And in normal commerce it is, as the comments noted we don't get told at the local bar that we should buy less drinks so we can pay for the shopping tomorrow.

the second is who benefits unfairly. Well if I bought a house I cant afford and now was given assistance to stay in that house - it is probably me who is benefiting compared to the poor smuck who bought the rotten house that he could afford (with the same income), put up with all the mold and dampness and now finds him self no better off financially. To paint these people who spent far more than they could afford as victims rubs me the wrong way.

Frankly this overconsumpition is probably Americas's number one economic problem and the US system cannot bring itself to call it what it is.


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