Invisible Hand and Usury
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Rob Kirby has timely and useful reminder about what is wrong with usury
Profits from usury do not arise from any substantial labor or work but from mere avarice, greed, trickery and manipulation.
In addition, usury creates a divide between people due to obsession for monetary gain.
Most importantly, usury commodifies biological time for profit, which is linked to life, considered sacred, God-given and divine, leading to excessive worrying about money instead of God, thus subjugating a God-given sanctity of life to man-made artificial notions of material wealth....
The secular version of this insight would focus on the first observation: profits which do not arise from substantial labour or work, being the product of trickery and fraud, inflict costs and damages on the rest of society.
It is not merely that the fraud robs certain individuals - fraud can threaten the viability of civil society.
Les Stewart, writing at his blog Franchise Fool, points out "a very good article called Turning a Blind Eye: Wall Street Financing of Predatory Lending by Kathleen C. Engel and Patricia A. McCoy"
One central observation that Engel and McCoy make in their paper on predatory lending and the securitization of the mortgages is this: "Securitization also exacts significant tolls on municipalities by fueling predatory lending. When borrowers, saddled with onerous loan payments, lose or cannot maintain their homes, cities must contend with abandoned and deteriorating properties, which strain city resources and threaten the vitality and stability of neighborhoods."
The same point about fraud is made by the Wall Street Journal today:
"Budget troubles are déjà vu for many Californians. In the aftermath of the dot-com bust, falling incomes and stock-market losses created a $38 billion budget deficit, and the ensuing furor sparked a recall election that brought current Gov. Arnold Schwarzenegger to power.
Today's budget troubles are potentially even worse than in the late 1990s: Falling home prices have reduced property taxes on which local governments depend, at a time when the state is cutting aid to municipalities.
Also, the credit crunch has made it harder to sell bonds to fund longer-term capital projects such as roads and schools."
This is why fraud concerns us all, not because it merely engages our sympathies for the victims.
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