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Are payday loans all evil? I thought so too, until I listened to a very interesting Freakonomics podcast which showed it to be more than just black or white: ht

• dublinben 10y ago
  Instead of accepting the 'need' for usurious loans, we should resolve the underlying problem. Nobody should be in a financial situation where they 'need' one of these loans.
  • cylinder 10y ago
    How do you ensure that? Even if you give people a basic income they can mismanage it and end up needing a loan.
    • kevin_thibedeau 10y ago
      Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles.
      • AnthonyMouse 10y ago
        > Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles. In this case the problem isn't the banks. It's that given the choice between paying $10/month for banking service and "Free* Banking" with escalating fees for trifles, people pick the second one and the bank that offers the first one loses customers. But payday loan companies are lenders, not savings banks. The problem there isn't transaction fees, it's interest rates. And that isn't a problem you can solve unless you can somehow reduce the number of people who default on their loans. And most of the ways to do that are worse-than-the-disease solutions like restricting bankruptcy, garnishing wages, debtor's prison, etc.
      • lujim 10y ago
        That was a good podcast. It mentioned how when legislators took on payday lenders, the lenders just went out of business. There just isn't a reasonable way to provide low cost loans that have a high default rate. It's like trying to outlaw gravity to prevent plane crashes. You are free to open a low cost lending operation in a rough neighborhood, but you will go out of business in a matter of weeks.
  • home_boi 10y ago
    Isn't that what insurance is for?
  • fiatmoney 10y ago
    Nobody should ever "need" food. We should stop advertising potatoes.
    • pessimizer 10y ago
      We should definitely stop advertising loans for potatoes at a 600% interest rate.
  • lujim 10y ago
    Nobody should 'need' a hospital either. We should be able to prevent every disease and accident. The devil is in the details though.
• smt88 10y ago
  No product is evil at the right price, as long as it provides value to the person buying it. My issue with this story is that Google announced something that seemed like they were being ethical, but they have a clear conflict of interest. They're squashing competitors. This is why it's so dangerous for an opaque, private corporation to control so much search traffic. They pretend to be impartial, but they police themselves, so there's little chance that they really are impartial.
  • vonklaus 10y ago
    yeah. I have been making this case for ~1 year. Let me tell you, it has been wildly unpopular around here.