Economics: PayDay Loans- Bastards or Black Sheep?

[Hanarchy Montanarchy]

Think about what existed before pay day loans. Every neighborhood had a loan shark and their money was expensive and their collection methods were punitive.

This pretty much sums it up.

"Payday Loans: Better than a Loan Shark." Very true.

Guess what makes them better.

Go ahead.

Better commercials.

[Martin Hash]

It's a worthy endeavor. Even got Hash to abandon his "luck" premise and convert him, now it is a preordained dynamic.

Yeah, DB's sophomoric "economics" talk, lifted from an imbecil, converted me.

p.s. What I really learned is that any ideology must be based on a base motivation if it's going to get any traction: greed, lust, envy. Logic is a poor last place.

[Hanarchy Montanarchy]

Payday loan businesses are basically charities, operating on razor thin margins to provide for under-serviced communities out of the kindness of their hearts.

The villainous practice of democracy should be banned, cruel as it is to these paragons of virtue.

[Fife]

Yes, indeed, competition among lenders and freedom to trade are really bad for poor people.

How much is Bank of America paying you, Martin and HM?

[Speaker to Animals]

So poor people should have no lending options..

[K@th]

I was in pretty dire straits about 15~ish years ago, and used Payday Loans a few times. Helped me eat something other than ramen. Tell you what - the fact that I had to use Payday loans was enough of a kick in the pants for me to get my shit together. Went into credit counseling, spent 5+ years paying off all my consumer debt. Now I'm sitting on a 800 credit score with almost no consumer debt. Just the house & car, really.

I have no issues with payday loans.

True story - I used to be a manager in a factory. Some of the factory workers used a weird savings system where they gave one person in their group $20 each paycheck. They rotated who that person was, so that every 10th paycheck, it was a windfall for one of them. It was a way to impose impulse control/savings on themselves; as they explained it to me.

[SuburbanFarmer]

I don't have a problem with them.

I can get micro-loans from my bank app though, at 3% (probably 3,000% if I kept rolling it over, but whatever).

[Martin Hash]

Hell, just look at it this way, it's taxpayers who pay for it, not the poor person: Payday Loans for Welfare Recipients

[SuburbanFarmer]

Everything is fine here.

[DBTrek]

Payday loan businesses are basically charities, operating on razor thin margins to provide for under-serviced communities out of the kindness of their hearts.

The villainous practice of democracy should be banned, cruel as it is to these paragons of virtue.

This sentiment highlights something I hope others will notice as we move through these topics - What is good economically and what is good politically are often polar opposites. This is a truism we can highlight countless ways.

Imagine for a moment that I’m running for office, and my platform is this:
“No more predatory payday lenders, a ban on exploitive price gougers, and more rent controlled housing for the people. It is time for the rich to stop abusing the poor!”

That’s fairly good politics. A lot of people will favorably react to that messaging because they have no love for “the rich” and they feel compassion for the poor.

But once the policies are in place, how do the poor actually fare?
Not well:

• • They lose their lenders.
  • During disasters all needed supplies are cleared out by the first people to reach them (aka being poor or rich matters little, being first counts)
  • A housing shortage commences (except for luxury housing which is typically exempt from rent control)

Popular political policies championed as protections for the poor can actually harm them. But that doesn’t matter to a politician. A politician needs votes, not effective economic policies. So it is important that voters understand basic economics in order to choose leaders with ideas that actually help them, rather than ideas that sound “right” but wind up hurting them.