Monday, February 15, 2010
Corporate Looting: Usury As A Weapon in Modern-Day America
Usury is a sin (according to the Catholic church). It has been condemned by writers for thousands of years, and most civilizations have made it illegal. But not ours. We concern ourselves with our neighbors' sex lives, but if our neighbor works in a credit card company charging 25%, or 50%, or even 80% interest on loans, that's okay. But it really isn't okay to exploit the misfortune of others.
Here's a good quote from an article below, discussing usury, from a Catholic encyclopedia, giving a religious view on the subject:
"Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day."
"Dr. Funk defined it as the abuse of a certain superiority at the expense of another man's necessity; but in this description he points to the opportunity and the means which enable a man to commit the sin of usury, rather than the formal malice of the sin itself. It is in itself unjust extortion, or robbery."
"The sin is frequently committed. In some countries are found the exaction of interest at 30, 50, 100 percent and more. The evil is so great in India that we might expect legal provisions to fight against such ruinous abuse. The exorbitant charges of pawnbrokers for money lent on pledge, and, in some instances, of persons selling goods to be paid for by installments, are also instances of usury disguised under another name."
Most states have usury laws, which are laws that prohibit anyone from charging an excessive or unconsionable rate of interest on a loan. Generally the maximum interest that can be charged is around 10 - 12% per year. So why is it that the credit card companies charge grossly in excess of that amount?
Because they bribed the politicians to write laws saying that they are exempt from the usury laws. All of the rest of us are subject to the law. But the corporations bribed the Congress, and the government of each state, to pass a special law saying that the credit card companies are not subject to the usury laws, and they can charge however much they want.
This would be shocking in the most backward, corrupt military dictatorship in the world. But in a modern-day democracy, it is unspeakable. Most civilizations have protected the people by having usury laws, to prevent the rich and powerful from taking advantage of those with few resources. But not our country. In our country, the people's basic rights are sold off by our politicians for money, bribes and kick-backs, and we end up with fewer personal rights than people had thousands of years ago.
This week-end, several news media reported about a credit card company now charging 80% (79.9%) interest on all charges on its card. This credit card company is located in South Dakota (probably because they have laws which shelter criminals like this corporation from consumer rights). The name of the credit card company is Premier Bankcard. Of course they are claiming that they have to charge 80% to cover their costs of business and the "risks" of issuing credit cards. The fact is they are simply greedy, lawless, and eager to pick the bones of the near-bankrupt citizens of this country.
Of course it's even more awful when you realize that most of these credit card companies borrow money from the federal government at around 0% interest. As of December, this same company was only charging 9% interest on their credit cards. I'm guessing the unemployment and foreclosure rates have gone up so far that these vultures decided to move in for the kill, set a new higher bar for the obscenity of U.S financial businesses.
The only reason we do not have usury laws which apply to financial businesses is because of corruption. The big financial businesses pay bribes to our politicians to get them to vote on laws saying that credit card companies do not have to obey the usury laws.
If we had usury laws capping interest at 10% for credit cards, many Americans would have thousands of dollars more per year in their pockets, money paid as interest which keeps them from ever getting out of debt. It's like the old coal-mining towns: people worked full-time (now two adults work full-time instead of just one), they get shelter, food, clothing in very limited amounts, but at the end of the month the company takes all their money, and they never get ahead, they just go deeper in debt every month. That is what we have in America today.
This is from New Advent, a website which includes writings on the history of the Catholic Church, and its historical position on different issues. Below is a discussion of the Church's view on usury, or excessive rates of interest charged on loans. I've only included this as evidence of the fact that ancient societies, thousands of years ago, had rules against usury. It often was seen as a religious issue -- a sin -- a prohibition of taking such extreme advantage of your neighbor, a prohibition against greed. Of course in our country, Greed is good.
In the article INTEREST we have reserved the question of the lawfulness of taking interest on money lent; we have here to consider first, usury as condemned by all honest men.
Plato (Laws, v. 742) and Aristotle (Politics, I, x, xi) considered interest as contrary to the nature of things; Aristophanes expressed his disapproval of it, in the "Clouds" (1283 sqq.); Cato condemned it (see Cicero, "De officiis, II, xxv), comparing it to homicide, as also did Seneca (De beneficiis, VII, x) and Plutarch in his treatise against incurring debts. So much for Greek and Roman writers, who, it is true, knew little of economic science. Aristotle disapproved of the money trader's profit; and the ruinous rates at which money was lent explain his severity.
On the other hand, the Roman and Greek laws while considering the mutuum, or loan for consumption, as a contract gratuitous in principle, allowed a clause, stipulating for the payment of interest, to be added to the bond. The Law of the Twelve Tables allowed only unciarium fenus, probably one-twelfth of the capital, or 8.33 per cent. A plebiscitum, lex Ganucia, 412 a.u.c. went so far as to forbid all interest whatever, but, at a later period, the Roman law allowed interest at 1 per cent monthly, or 12 per cent per annum. Justinian laid down as a general rule that this maximum should be reduced by half (L. 26, I, c. De usuris, IV, 32). Chaldea allowed interest on loans (cf. Law of Hammurabi, 48 sqq.). No absolute prohibition can be found in the Old Testament; at most, Exodus 22:25, and Deuteronomy 23:19-20, forbid the taking of interest by one Jew from another.
In the Christian era, the New Testament is silent on the subject; the passage in St. Luke ... A certain number of authors, among them Benedict XIV (De synodo diocesana, X., iv, n. 6), believed in the existence of a Patristic tradition which regarded the prohibitory passages of Holy Scripture as of universal application. Examination of the texts, however, leads us to the following conclusions: Until the fourth century all that can be inferred from the Fathers and ecclesiastical writers is that it is contrary to mercy and humanity to demand interest from a poor and needy man.
The vehement denunciation of the Fathers of the fourth and fifth centuries were called forth by the moral decadence and avarice of the time, and we cannot find in them any expression of a general doctrine on this point; nor do the Fathers of the following centuries say anything remarkable on usury; they simply protest against the exploitation of misfortune, and such transactions as, under the pretence of rendering service to the borrower, really threw him into great distress.
The question of moderate rates of interest seems scarcely to have presented itself to their minds as a matter of discussion. The texts bearing on the question are collected in Vermeersch, "Questiones morales de justitia" II, n. 359. The councils condemned in the first place clerics who lent money at interest. This is the purpose of the 44th of the Apostolic Canons; of the Council of Arles (314), and of the 17th canon the First Council of Nicæa (325). It is true that a text of the Council of Elvira (305 or 306) is quoted which, while ordering the degradation of clerics, would also have punishment inflicted on laymen, who obstinately persisted in usurious practices; but the mention of layman is of extremely doubtful authenticity. It may then be said that until the ninth century canonical decrees forbade this profit, shameful as it was considered, only to clerics.
Nevertheless, the 12th canon of the First Council of Carthage (345) and the 36th canon of the Council of Aix (789) have declared it to be reprehensible even for laymen to make money by lending at interest. The canonical laws of the Middle Ages absolutely forbade the practice. ... [Th]e Third of the Lateran (1179) and the Second of Lyons (1274) condemn usurers. In the Council of Vienne (1311) it was declared that if any person obstinately maintained that there was no sin in the practice of demanding interest, he should be punished as a heretic (see c. "Ex gravi", unic. Clem., "De usuris", V, 5)....
Theologians and canonists of the Middle Ages constructed a rational theory of the loan for consumption, which contains this fundamental statement: The mutuum, or loan of things meant for immediate consumption, does not legalize, as such, any stipulation to pay interest; and interest exacted on such a loan must be returned, as having been unjustly claimed. This was the doctrine of St. Thomas and Scotus; of Molina, Lessius, and de Lugo. Canonists adopted it as well as the theologians; and Benedict XIV made it his own in his famous Encyclical "Vix pervenit" of 1 November, 1745, ...
While Luther, Melanchthon, and Zwingli condemned loaning for interest, Calvin permitted interest on money advanced to rich persons; ...
Economists generally uphold the theoretical lawfulness of interest on loans. For a long time civil law was in agreement with canon law; but as early as the sixteenth century, Germany allowed interest at 5 percent; in France, on the contrary, interest on loans was forbidden until the Decree of 2 and 3 October, 1789. ...