Freeman Editor Sheldon Richman is a guest on the Glenn Beck Show today. The topic is “Fascism v Socialism”. Sheldon will be at the top of the show, which commences at 5:00 pm Eastern time on Fox News.
12 Comments »
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I think that would be a good move for the consumer. I just closed a credit account because the interest was raised to 26.99%. The account was owned by CitiCorp. Why did they just raise the rate? Anyone care to guess? Weren’t CitiCorp and BOA a couple of the bank corps that had lots of the toxic loans? They have to recoup their losses some way and what a better way than to put it to their middle and low income customers.
A cap needs to placed on credit accounts to protect the consumer. Otherwise, the interest rates would continue to rise. And why should the consumer have to pay for the bad decisions of management?
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It may be a good idea for the consumer in the short run. What happens in the long run is less clear and probably less favorable. Faced with price controls (which is exactly what this proposal is), credit providers will undoubtedly offer less credit. Less creditworthy customers, those who typically pay higher rates, will have fewer options.
And yes, it’s socialism.
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Gator60, even people with good credit histories are facing even higher interest rates. You can look for them to head to the north side of 30% in the coming months.
So, you didn’t say why it is ok for the consumer to pay for the poor banking practices made by the bank corp management. Do you happen to remember when the interest rate never went above 15%? I do.
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Dan,
Interest rates are increasing because the supply of loanable fund is either decreasing or the demand for credit is increasing. In either regard the price for credit (interest rates) must be allowed to increase to meet either a supply decrease or a demand increase. Otherwise we have a real credit shortage. The effects of a price ceiling, if they set the price below the market price, are shortages. What good are interest rates set at 15% if hardly anyone can borrow?
Alex
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How about saving for a change?
Instead of being upset at banks for interest rate fluctuations, how about having your capital to invest rather than borrowing.
Or if the banks are charging too much find a private lender or investor
now that’s free market! 8] -
Credit card consumers can do what I do, refuse to apply for cards with high interest and close your account with any agency that raises your rate to unacceptable levels.
Of course, if the inflation rate gets high enough, you won’t find any credit at low rates.
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Sheldon, sorry you didn’t really get any time. I hope you get re-invited –if you want to deal with it. I was wondering, did Beck really not realize that he was quoting you? That said, you might want to see –if you haven’t already– how he redid the intro based on his new knowledge.
Best,
Edward -
This is getting out of control! The economics of whether a price control on interest rate is obvious but should be irrelevant. This is another assault on Individual freedom. We are heading towards full blown Fascism in record speed, all in the name of protecting the consumer. If “Consumer protection from the free market” is now mainstream rethoric, then Karl Marx has surely won this battle!
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As an old friend of FEE (e.g., I met Mr. Baetjer when he spoke at Williams College about 1983) I was pleased to get your email about our man Sheldon Richman to be on Beck’s show. Unfortunately, I didn’t see the email until just now, and I usually don’t get out of work in time to see Beck at 5PM. Judging by Krueger’s comment, it may not have gone as well as we might hope for, but it’s a step in the right direction. I’m surprised we don’t get more such invitations. Maybe O’Reilly and Hannity will find out about us from Beck. IMHO, Beck is honest and has good intentions, and we ought to encourage him to push in the right direction. BTW, has anyone from FEE been up the Hudson to talk to my old buddy, Alan Chartock, at WAMC? They are very politically active there, and could use all the help they can get:-)
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Transcript from the show is linked here…
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crud… pasted wrong link, please forgive.
http://www.foxnews.com/story/0,2933,512218,00.html
transcript link.
Categories: 
US Senator Bernie Sanders, a self-described socialist, has introduced legislation to “require any lender in this country to cap all interest rates on consumer loans at 15 percent, including credit cards.” Do you consider such initiatives to curtail the powers of financial institutions to be socialist in nature, and what would be the positive and negative effects of such actions.
1 April 2009 at 11:58 am