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Archive for January, 2022
January 31st, 2022 at 5:17 pm
NM House Bill Targeting Consumer Lending Would Harm Vulnerable Consumers It Falsely Claims to Protect
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Whenever governments at any level artificially cap interest rates on consumer installment loans, they claim to be acting on behalf of vulnerable and lower-income Americans.

For straightforward reasons according to the laws of economics, however, such efforts only end up counterproductively harming the very people they allegedly help.

Sadly, we’re witnessing yet another effort tempting that destructive spiral in New Mexico, where the House of Representatives Consumer and Public Affairs Committee has approved by a narrow 3-2 margin H.B. 132, a proposal that would cap interest rates on consumer loans.

Making matters worse, the Committee even gutted funding for financial education in New Mexico, thereby evading reference to the House Appropriations Committee, in deceptive fashion to rush the bill through.

At a simplistic level, government laws regulating lending services and capping repayment rates may seem helpful to Americans struggling paycheck-to-paycheck.  But the real-world impact only eliminates a source of reliable, legal short-term loans to get them through temporary emergencies.

According to a 2018 Federal Reserve System Board of Governors study on the economic wellbeing of U.S. households, nearly 40% of American families don’t possess sufficient savings to cover even a $400 emergency expense.  Alarmingly, that same study noted that 51% of military service members live paycheck-to-paycheck.

Because of their credit profiles, credit cards aren’t always a viable option for such people, and traditional bank loans aren’t an option due to the small amounts at issue.  Whereas higher-income Americans with stronger credit history can borrow from banks, use assets they possess as leverage or access savings amounts, American consumers with lower credit scores and insufficient savings cannot.  In fact, according to the Fair Isaac Corporation, some 46% of consumers possess credit scores below 700, meaning that traditional bank loans aren’t possible for them.

That’s where consumer finance loans come in, providing a critical life preserver for lower-income Americans and New Mexicans.

In such circumstances, struggling Americans can access the money they need for short-term emergencies via consumer finance loans.  But under H.B. 132 as contemplated by the New Mexico House, consumer finance lending will only become economically unsustainable and therefore less available.

In turn, the unintended consequence will be more people seeking out illegal loansharks, suffering overdrafts, or simply being unable to cover their temporary costs.  As the World Bank aptly summarized, regulatory and legislative proposals like H.B. 132 lead to “increases in non-interest fees and commissions; reduced price transparency; lower number of institutions and reduced branch density; and adverse impacts on bank profitability, in addition to the lack of access for smaller and riskier borrowers.”

Obviously, that quickly ends up punishing the very people that legislation like H.B. 132 claims to protect.  It only threatens to make consumer finance lending more difficult, more expensive and less available.

 

January 28th, 2022 at 2:08 pm
Here We Go Again: Some In Congress Seek to Further Demonize Oil and Gas Industry
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Here we go again.  House Oversight and Government Reform Committee members want to once again summon oil and gas companies to Capitol Hill. After making a show with energy CEO’s last October, they now want to fill the stage with company Board members, including activist Exxon Mobil Board Member Andy Karsner. Committee leaders are adding to the partisanship by preemptively threatening to subpoena Board members if they don’t show up.

This is just the latest round of political theater from Committee Democrats. The last “Big Oil” hearing featured the same four energy producers for a 6-hour marathon that was more political grandstanding than it was oversight. Their playbook is clear: demonize American energy producers, silence industry input and play to their political base.

We’ve seen this movie before, here’s the trailer:

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January 24th, 2022 at 12:44 pm
Image of the Day: Americans Remain Highly Positive Toward Free Enterprise and Business Over Government
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In what sometimes seems like an era of constantly expanding government and demonization of free markets, a recent Gallup poll offers refreshing news – Americans overwhelmingly view free markets positively, especially relative to the federal government:

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Political candidates would be wise to emphasize this in an election year 2022, and elected leaders would be wise to translate Americans’ preference into concrete action.

January 10th, 2022 at 10:11 am
Image of the Day: Biden, Pelosi and Schumer Faceplanted On Jobs in 2021
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On the heels of Friday’s unsettling jobs report from the Labor Department, we can now judge the performance and promises of Joe Biden and the Pelosi/Schumer Congress against actual reality.  They promised 10.3 million jobs would be created in 2021 if their massive spending and regulation blowout passed, versus 6.3 million jobs if their agenda wasn’t passed.  So how did it turn out?  Their agenda was passed, but only 6.1 million jobs were created as the U.S. economy slowed and struggled to recover from the Covid dip, as AEI’s Matt Weidinger highlights.  They apparently made things worse, not better, illustrating the sardonic adage, “Don’t just do something – stand there.”

Biden Jobs Performance: Worse Than Doing Nothing

Biden Jobs Performance: Worse Than Doing Nothing

 

January 3rd, 2022 at 9:01 am
Hypocrisy: Pay Attention to What Leftists Do, Not What They Preach
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By now you’ve probably seen the images exposing Alexandria Ocasio-Cortez (D – New York) vacationing maskless in Florida despite constantly maligning the state as some sort of death-ravaged hellhole under the leadership of Governor Ron DeSantis, and her even more hilarious rationalization when called out on her hypocrisy that it’s all because “Republicans are mad they can’t date me.”   Right.

Well, she’s hardly alone in her hypocrisy.  Take a look at the updated state migration data from Mark Perry at the American Enterprise Institute (AEI).

Americans and businesses ‘vote with their feet’ when they relocate from one state to another, and the evidence suggests that Americans are moving from blue states that are more economically stagnant, fiscally unhealthy states with higher tax burdens and unfriendly business climates with higher energy and housing costs and fewer economic and job opportunities, to fiscally sound red states that are more economically vibrant, dynamic and business-friendly, with lower tax and regulatory burdens, lower energy, and housing costs and more economic and job opportunities.”

 

What Leftists Do Versus What Leftists Preach

What Leftists Do Versus What Leftists Preach

 

Do as leftists say, not as they do, right?