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March 16, 2014

Conservatives are constantly insisting that “We are a Christian nation” and that we must “return to old time values” if we are to survive as an ethical nation state and be a force for good for our people and the people of the world. For purposes of this essay, let’s agree that we must return to “old time values” if we are to be a force for good. Let’s talk usury, or the charge of excessive interest on loans or other such uses of goods and money on such old time practices as getting a loan for purchase assignment of indentured servants’ contracts or for buying such property as slaves prior to the 13th Amendment).
Any interest at all (much less usury) was condemned by early Christians and Muslims, but the rise of Italian trading and seagoing city-states such as Florence and Venice and the new thinking of the Renaissance ended that view in favor of controlled rates of interest, beyond which it was usury. That method of charging “rent” on money or other such goods expressed in money terms persisted until (some say) 1978 in this country, when “interest” as we know it (and not only with payday banks and loan sharks) became just another accounting item and therefore in a “free market economy” subject to charge based upon the capitalistic principle of “what the market will bear.” In other words, if you can charge 100% interest and get away with it, it’s legal. The fact (or so we are told) that the only people who would possibly agree to such a (formerly usurious rate) are desperate and poor is immaterial.
Strangely lost in what should have been a lively debate on the fate of usury, not only was there little if any such debate even as those of us who were not desperate and poor became victims of Wall Street’s brutal overcharges. Where were the conservatives (who were counting their dividends and other income from such usurious conduct) then? Did stealing miraculously morph into “free market” ideology? Were the conservatives more interested in Florentine money-grubbing than “returning to the old values of yesteryear” where usury was criminal? Did they sell out their values for mere mammon? Answer – Conservatives talk a good game about old time values but practice few of them. They are more the Show Me the Money types than Good Samaritans. Witness their current hysteria in opposition to raises in minimum wages, food stamps, taxation of those who feed their dividend accounts etc. etc. etc. Whatever happened to the “old time value” (both Christian and commercial) of non-usurious conduct? Could it have been lost in a sea of greed and phony excuses to justify its existence? Ponder history.
Usury laws that protected consumers until 1978 against greedy lenders were undone by a Supreme Court decision wherein the court warned Congress that it needed to pass new laws to protect borrowers. The money-changers quickly bought access to the votes in the Congress needed to see that no such new laws were passed, and the Congress, instead of protecting us consumers, dictated new rules that REWARD those who prey upon the poor. (Where were the conservatives? Guess.) We used to prosecute loan sharks; now we see their ads on TV. As pointed out by David Cay Johnston in his 2007 book, Free Lunch, “These new rules held Goldman Sachs and Lehman Brothers and Citibank exploit the poor, the unsophisticated, and the foolish. These lenders, or their fronts, can now charge rates and impose penalties there were illegal, even criminal a generation ago. These and other lenders engage in conduct that goes way beyond that of junk bond promoters who made a fortune pushing risk into corporate balance sheets.” Such promoters, formerly vilified as usurers, are now the darlings of conservatives. Mammon won; conservatives have found a way to camouflage loan sharking. Part II follows. GERALD E


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