Whatever the Market will Bear


John Wright


A small part of the book, Destiny, was used to express the responsibility of businesses and governments not to take absurd advantage of economically weak and educationally unwary segments of the population. A few examples were provided that identified some of the less enlightened businesses, by type and in a few instances by specific name. At that time, the worst of the cast of retail characters included such giants as Sears and Macys, and a variety of banks, who assess interest charges in the neighborhood of 24% per year on unpaid revolving charge or credit card balances.

Recently, a friend received an unsolicited credit line by mail from Household Bank, a Household Finance Company, or HFC® affiliate, with an attached check for thousands of dollars. All she was required to do was cash the check, and by so doing obligate herself to repay that easy loan at an annual percentage rate (APR) of 29.644%. She showed me the offer with a look of amusement, for neither of us had ever seen any "legal" offer quite so bad. Oh, I suppose one could do worse by visiting the local Mafia "shylock," but that illegal domain serves a very specialized market segment of first class losers.

Two thoughts came to mind: 1) HFC® affiliates don't engage in mailing humor, so they must actually expect enough suckers to bite to make the loan by mail campaign profitable, and 2) our governments are conspicuously absent in protecting the less knowledgeable segments of the population from shylock loan practices, otherwise known as usury. I could not in good conscience let this event pass without comment. The issues are fundamental to defining who we are as a nation at the action level, through our business practices and through our governments and the laws they pass.

We enslave our citizens! Uncontrolled, raw capitalism is our game, and the United States of America has once again become a slave nation. It has taken roughly fifty years for the world of consumer credit to evolve to its present state, and in that time interval those least educated have gradually become obligated, at a practical level, for lifetime financial servitude. All we had to do was make sure we could employ them securely in low income jobs, and then entice them with the easy loan carrot, knowing full well that they would never get the "financial monkey" off their back. Stand back from this environment far enough to observe its major sociological implications and you will see it for what it is. Compound the easy credit environment with the goods advertising that promotes subliminal "appearance of success" for purchasers and you have a perfect trap for the unwary.

Perhaps you reject the use of the word slave, on the formal basis that the individuals so obligated in the above paragraph had the right of choice in taking or refusing a series of loans they could never, at a practical level, repay. If you believe that, you are wrong, for you do not acknowledge that right of choice infers the ability to make a rational, educated, forward thinking decision. Do not play semantic games with me. The bottom line is that we have allowed opportunists to own the less educated population segments, financially.

What is the obligation of government to assure "fair" business practices on behalf of protecting the citizenry? We do it with pharmaceutical safety, we have advanced automotive safety laws, and we do keep a lid on the worst illegal business practices through organizations like the FBI and the Securities and Exchange Commission. Yet, our consumer credit and banking laws, and our lotteries, not to mention our advertisers, clearly show our governmental propensity to allow, indeed promote enslavement of the "working class." Superficially, however, we appear to be fair, for we do have equal opportunity laws, we do have a social security system, and we have pursued the tobacco industry with great fervor to end the scourge of tobacco related health problems.

The missing link in government is found in our failure to financially protect those who are not empowered to protect themselves. We allow certain businesses to harvest the labor of the less fortunate routinely and permanently. We found through experience that socialistic practices to support the less fortunate, like welfare, did not eliminate the fundamental problem of being comparatively weak in a society that respects only strength. Indeed, we learned that programs like welfare simply increased the population of the less fortunate, not their group level performance. So it appears that in the past twenty years we have reversed direction towards enslavement by providing very low income jobs and legalized enticements to extract even that income from those who do not know how to protect themselves.

It is difficult for me to look at these realities as a reasonable byproduct of capitalism. I understand the essential necessity of a free market, of competition, of the right to advance by the quality of one's performance. But here we are, again, running smack into the problem of checks and balances. Raw capitalism is every bit as bad as rampant socialism. Both create victims. It is now time to re-tune our raw capitalism practices in the banking and credit card industries, and in our lotteries and our advertising laws.

I offer the following thoughts. The maximum interest rate to be charged on all credit cards is a monthly variable rate exactly five percentage points above the federal prime lending rate. The same upper rate limit applies to all revolving charge accounts. The maximum combined credit amounts that banks and retail stores can legally provide to any individual or nuclear family, for any purpose, including home mortgages, will be 30% of the established household gross income, as determined from federal tax returns. Lotteries, if they are allowed to exist at all, will pay out 90% of all revenue, immediately and in lump sum, entirely tax free.

The above limits will not be popular with the unethical, despicable people who presently use the "legalized" schemes to enslave the unwary. The limits can be forced on those businesses and banks through state level proposition laws and later changes to federal laws, through your votes. Your stake in making this happen, even if you are not among the unwary, is readily seen as applied humanitarianism. It is the realization of a small but important part of the Destiny philosophy, which is dedicated to the advancement of the human race; all of us. What will you do?