4 thoughts on “Cracking down on payday lenders will hurt the poor”

  1. Posted 02/07/2013 at 13:24 | Permalink

    Perhaps part of the difficulty is that the UK government itself is suffering from a problem of solvency not of liquidity. My own ‘solution’ to that problem — an honest default by the government — appears not to meet with general agreement. Ministers may not fully appreciate some people’s urgent need for very short-term liquidity since they can solve any government liquidity problems simply by printing money. Another part of the difficulty may stem from ministers’ desire to be seen to be doing something about a supposed problem. As an advocate of laissez-faire I would much prefer governments to be seen to be doing nothing. At least then there’s a fair chance they wouldn’t be doing any harm.

  2. Posted 02/07/2013 at 16:50 | Permalink

    One could suggest that Government is hardly in a position to lecture anyone about the need, availability or cost of credit. Government led by political parties wastes vast amounts of money, seems almost incapable of managing it’s own spending commitments to meet a budget requirement, increases tax revenues when it wants to without any real consequence to itself, prints money when things get a little tight, and not only borrows money in the form of gilts but also sets borrowing interest rates.

    They have no concept of budgeting. Most MPs and senior civil servants have never experienced personal austerity. They’ve never had to make ends really meet. In addition they are addicted to the levers of power and believe that a reduction in the scope and reach of Government would lessen thier influence on society.

    If anything, Government should be forced to borrow money from Wonga.com. Then they might understand that borrowing really should be a short term tactic, and that Government finances, just like household budgets, must be sustainable within the available funds.

  3. Posted 17/08/2013 at 10:03 | Permalink

    ” ……that does not cause direct or immediate harm to anyone”

    Setting aside Utopia, some regulation laws or customs have always been required where human groups large enough not to all know each other personally have congregated. Unlike motorists, company directors, gun users, property owners, lawyers, accountants, doctors, in fact pretty much everybody, until recently, only the finance and banking professions have been free to do as much harm as they want with no real sanction. History (a much better source of actual human behavioural truths than economics) teaches us that elites given free rein will almost inevitably act so as to harm majority interests and hence majorities have historically acted to restrain them whether by popular movement and resulting law or failing that, by violence.

    I hope no-one still seriously argues (as many once did) that the seatbelt laws are a diabolical infringement of human freedoms. A society that allowed actors to cause indirect or contingent harm to anyone by anyone by any means at any time would not be a country I would chose to live in.

    Regulation of bankers and financiers to prevent any actual direct or indirect, or contingent harm to anyone is necessary and inevitable. The Road Code is not an evil, nor would a rational banking and finance code.

    At the moment banking and finance regulation is obsessed with barriers to entry in terms of qualifications and “experience” to get licensed, considerable set up costs, and expensive audit and supervision to minimise theft while permitting egregious risk taking, exploitation, and usury. The regulations would much better serve us all if they imposed clear behavioural boundaries to the laissez faire profit motive and promoted social responsibility with real prison time punishments for breach and then let everyone who wanted in to have a go.

  4. Posted 19/08/2014 at 02:34 | Permalink

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