Friday, January 11, 2008

Curse of Labourhome – Why Barack Obama lost in New Hampshire

Now the dust has settled, it is time to explain what happened. Last week I posted about Money Shop and Payday UK who have high street stores which target vulnerable “customers” with unsecured short term loans and charging up to 1330% APR.

I also posted these items on Labourhome and got some useful information. Labourhome commentator “Rwendland” pointed out that even in the land of the free; many US states limit the amount of interest that can be charged on loans. They are even called usury laws. Other countries also have such laws. In Canada they have a legal limit of 60%.

So there are precedences to ban this vile practice.

Redrooster” pointed out that there is a UK website called “debt-on-our-doorstep”, this is a bit out of date but it provides a lot of useful information about how excessive interest rates can be restricted by the state.

Finally, Rwendland also posted on Saturday a comment that pointed out that the Democratic front runner at the time, Barack Obama, had actually voted against a poplar congress resolution to “To limit the amount of interest that can be charged on any extension of credit to 30 percent” while his rival Hilary Clinton had voted in favour of it.

Of course, once this disclosure had filtered through across the pond – Obama was history. Such is the power of “Labourhome”.

6 comments:

Anonymous said...

Target the vulnerable? Can't these cretins work out that borrowing money they can't repay is their problem?

John Gray said...

Hi Anon
Many people who use these firms don’t have any choice, they are in desperate state and often have no alternative. They are not cretins and know they are being ripped off. The poor always are – they pay more for finance, more for their fuel, more for their shopping etc.

The real cretins are those in suits who sat on Northern Rock “risk panel”, invested in USA non-prime mortgages, the directors of Farepak, companies who defaulted on their pension schemes, Equitable life, the thieves who ripped people off in BCCI, Worldcom and Enron etc etc

Anonymous said...

I disagree...the economy has been buoyant, hundreds of thousands of immigrants can get work no problem. These cretins want to have the latest mobile, the latest trainers, go on holiday...save up first mate! But no they want Jam today.
Northen Rock...don't make me laugh..as we head into a recession with the greatest levels of debt of all the economies of the western world...what happened to "No more boom or bust"? and the Iron chancellor..? Oh Err...its nothing to do with us! its the US sub prime market...yeah right. Its going to be so funny listening to all the excuses..hearing the howls of anguish as they cut back on public service pay awards and funding. Great management, great foresight!

Anonymous said...

John....the country has been awash with money under lucky Gordons stewardship and some extremely foolish lending and borrowing has gone on unregulated. You are going to see a lot of people go to the wall now partly due to the approach that was taken to the money supply. Tough s***. They should have thought a bit more before they bought the latest moble, flat screen TV or trainers...if you can't afford it..dont buy it.

John Gray said...

Hi Anon
“I disagree...the economy has been buoyant....”

Yes, there are people who have over extended themselves, but we are not talking about credit cards or store cards. These loans are “advances” on salary or benefits. They are not for “holidays”, but often for basics such as kid’s clothes, unexpected utility bills or emergences. We’re talking about desperate people who have no meaningful choose. I keep meeting families who have never gone on a holiday with their kids.

We will see what will happen with the economy. I suppose 40 successive quarters of continual growth will have to end sometime.

John Gray said...

Hi Anon
“John....the country has been awash with money”

Pretty much the same reply as above. Except that I agree that we do need further and tighter regulation of credit. First step would be to limit interest rates to say 30%? (and even that is about 8 times the rate of inflation)