The human face of all the devastation created by the credit industry is finally looming on the news. Yesterday, news media put the spotlight on Cleveland mayor Frank Jackson. His Honor is mad as hell at what home foreclosures and personal bankruptcies have done to his city, and he is suing 21 banks. The news cameras panned across the neighborhoods blighted by abandoned and looted houses. The costs to his city -- lost property value, lost tax revenue, growing crime in those neighborhoods, need to demo abandoned houses -- are devastating.
Way to go, Mayor Jackson. I'm not in favor of driving these banks into closure, because that will hurt the country even more. But I hope you get a judgment that requires these corporations to stop abusive lending and help rebuild your city. I hope some key executives are ordered by a wrathful judge to roll up their sleeves and work on cleanup crews as part of their sentence. They need to accept their share of personal responsibility for the misery.
It's time for Americans start fighting the bloodthirsty lending practices that have become legitimized in our country. Such practices used to be called "usury." That was a good old word of the ancient world, and it mostly referred to high-interest lending. Since ancient times the practice has been periodically condemned by thinking people -- but it always comes creeping back, because the opportunity to make a lot of money off a borrower's desperation is too hard for some people to resist. Today the word "usury" has somehow lost its force. So I prefer to use the phrase "legalized loan sharking."
Loan sharking is illegal, because these high-interest private loans to vulnerable individuals are often backed up by threats of blackmail or violence. Like, "If you don't pay, we'll come and break your knees." But hey, the legalized loan sharking of today uses a less direct kind of blackmail to get you to pay -- including the threat of lawsuits, bad credit and harassment by collection agencies. Broken knees or broken life -- they both hurt.
In my opinion, legalized loan-sharking includes not only the now-famous sub-prime mortgages, but also the high interest rates being charged on some credit cards, student loans, farm loans, and lines of credit for small business.
I'm amazed how these big corporations are allowed to parade their ads across our TV screens, alleging that they "care" about their customers -- that their high-interest services provide "freedom" and the "good life." If ever there was a truth-in-advertising issue, this is it. What these corporations really care about is having guaranteed and protected profits from American citizens (including growing numbers of young people) who obediently wear the invisible shackles of life-time debt.
Don't get me wrong -- I don't think that banks are evil. Banking and lending have been around since ancient times, in some form or other. They are a convenience for the commerce that is the lifeblood of every civilization. It's the abuses that are the problem -- the difference between 5 percent and 30 percent on credit-card interest. It's hard to understand how our government has allowed these abuses to become established as legal, even desirable. But then it's hard to understand a lot of things that our elected representatives are sticking us with.
Most of all, it's hard to understand why the average American has put up with the growing abuses. I have to include myself, as a user of credit cards and veteran of re-fi's. Many of us have gone along in a daily illusion that there's not a straight line of consequences between our personal check ledgers and what the Fed does. We've been party to a national fiscal policy that is not only fundamentally flawed but actually suicidal. Why? Because our economy is pegged on consumer "spend, spend, spend" with borrowed money. Sooner or later that pyramid of spending is going to collapse under the weight of compounding debt. But the warning signs have been there for several years now -- the hints from Life that we've been living in a bubble that is now bursting in a horrific way.
Fortunately the slowing spending of 2007 show that many of us are finally waking up.
The next story that news media need to do? Put a face on the Cleveland families and individuals who vacated all those ruined homes. What happened to them? Are they on the street now?
Oh, and what do the Presidential candidates have to say about their willingness to halt these abuses? We all need to know.
Copyright (c) 2008 by Patricia Nell Warren. All rights reserved.