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Both Sides of the Fence

A Tosa resident since 1991, Christine walks the dog, cooks but avoids housework, writes and reads, and enjoys the company of friends and strangers. Her job takes her around the state, learning about people's health. A Quaker (no, they don't wear blue hats or sell oatmeal or motor oil), she has been known to stand on both sides of the political and philosophic fence at the same time, which is very uncomfortable when you think about it. She writes about pretty much whatever stops in to visit her busy mind at the moment. One reader described her as "incredibly opinionated but not judgmental." That sounds like a good thing to strive for!

You want to raise my interest rate to WHAT?!

Economy

One of my credit card companies just announced, and rather imperiously if you ask me, that they are raising my interest rate to prime plus 26.7%. This is more than double the current APR.

Can you say "usury"? 

The increase is not based on my actions, my credit rating, late payments, or any of the other sinister cautions in the fine print. If this is how they treat their good customers, how do they treat the "bad" ones?

 This card is with one of the companies that has been a winner in the financial industry collapse, one of the big fish companies that's eating sicker little fish and that's getting fed additionally by bailout funds. Apparently, I'm getting to help the company with my own personal bailout surcharge, on top of the one we'll all be paying in some mysterious ways for the government's handout.

According to Peter Russell, usury, or excessive interest,  "is wanting something for nothing. Lending money involves no input of human labor—apart perhaps from signing of an agreement and entering some data in a computer. Nor does the act of lending in itself produce anything. The borrower may well use the money to do something useful, but the lender has done nothing. Yet he or she still expects to receive something in return."

What's more, increasing interest rates necessitates an increase in money supply, which leads to inflation, which leads to. . . collapse when the bubble bursts.

Oh. Oops.

Of course they have lost my business. But that's not enough. It's time to regulate financial businesses more--and better.

As someone will surely point out, it's not just the big bad financial companies that should have to get used to lower returns. It's all of us who are investors and shareholders as well.  Somewhat painful interest rates can help us curb our worst material avarice. But let's also curb the financial institutions' insatiable greed by limiting interest to 18%, as it once was limited in Wisconsin. And we ought to be able to lock in at credit agreement sign-up interest rates, as we do with mortgages. Both reforms would bring some much-needed moderation back into the "system."

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