The new God--Credit

One maybe should read this article with a jaundiced Eye, because the poor Credit Card companies will be losing only about what they intended to gouge from Cardholders in dollar terms, a Windfall which they had designed for themselves. The Government is really saying that they can only scam about half as much. These companies borrow their money in tranches which are written so they cannot be prosecuted if they can’t get the repayment Cash, then want to loan out this money at about four times what they themselves pay for it. Investors and Management of these companies think it is a great idea which the Government should not step on because of the rate of Return promised by the Schedule. These people are supposed to be Risk-Takers in the idealistic model of economics heralded by Economists, but it does not take a great amount of courage to invest a relatively small amount in Stock, to borrow a great amount of money at little Cost, and lend it at great Cost to Consumers. The really appreciated element is that these individuals have incorporated the business, so they cannot be personally threatened in any Bankruptcy proceeding by either the company, tranche owner, or Card Subscribers. Isn’t it nice to be protected by Government, if the Government would not limit their Usury by regulation!

I will present this Post with the intent of allowing the Reader to broaden his understanding of such Credit Cards, though I would hope Everyone has this primary grasp of such Credit already. A government-sponsored access to Transactional Credit may seem like a benefit, but what about Those who cannot generate a consistent flow of Income? It really is amazing how well Cash in Hand works, while most all other efforts fail to achieve the same simplistic beauty. Cash itself was the Transactional Credit originally designed to facilitate Trade, where once equivalence between Product values were hard to assess on the Spot. I, as a historian, often read tales of complaint about Trade caravans charging a very high finance Charge based upon distance from point of origin. Credit Cards are now trying to present a high Charge for Consumers’ distance from adequate Credit resources. The Complaints are basically much the same, and Government might be well-advised to simply take their Tariffs on the Trade, and not interfere in the operations; something which could lead to Everyone having less of the Good in question. Trade Wars are always fascinating, as Trade volume rarely declines, but Somebody always loses.

I like this Post for its ‘More is Less’ theme. I especially enjoy Rule 3 for its Stoicism. Rule 1 is somewhat redundant, as such lists only appear when We are in the midst of Recession. One always chooses a lifestyle away from family to get away from what makes them crazy, so Rule 2 may not be helpful. The World has declared that the USA has brought them to the Party, even if only by not buying at Our previous rates, so One might want to pass on Rule 4. Rule 5 has a caveat, most of Us have only 40 years to make Our pile, so the Rule must be discounted. Rules 6 and 7 must be understood by traveling to a poor country without benefit of Credit Cards. Rule 8 is nonsense, as Government cares about the Consumer; they being the only ones still paying Taxes. Rule 9 and 10 can be deposed in the same manner: One needs a place to stay and One hunts a Job, or One eventually has to revert to Rule 2. lgl