7 ms·

I do not believe that. For one, those high interest rates and markups can often exacerbate the problem.

klipt 9y ago
But for a lower rate, you can lend your money to someone much less risky. Why buy a 1% junk bond if you can get 1% government bonds? The real long term solution is good public transit, so poor people don't have to go into debt to commute.
- xyzzy_plugh 9y ago
  I don't buy it. The poorest often work the worst hours, such as late at night, and might travel the furthest. I've never seen a transit system anywhere that solves that problem. If I'm coming home at 3am I don't want to transfer buses 4 times.
  - krath94 9y ago
    Everything you just said supports the person you're replying to's argument about a better public transit system. What's next, Bernie, do you believe that car ownership is a "right"?
    - nkrisc 9y ago
      Here's the thing, all rights are arbitrary and granted by people to people. Some are easy to agree on (right to life) and some are more contentious (right to bear arms) but all are intended for the benefit of society. If it would be in the best interest of a functional society to grant the right to reasonable transportation to everyone, then it is something we ought to consider. Some things that were previously considered rights are no longer necessary or desirable as society advances (the right to own slaves) while other things that were not previously considered rights (guaranteed access to the internet) might start to make sense as our world changes around us.
      - FussyZeus 9y ago
        Point of order: The right to own slaves was just the right to own property, the slaves were just declassified as property. There are very few instances where rights have changed based on how you describe, because the societal inertia is incredibly hard to overcome. That being said, I do agree with everything you're saying.
        nkrisc 9y ago
        Fair point. Then instead maybe it makes more sense to consider the inverse: the refusal to grant the right of autonomy to certain people. You also bring up a good point that there are currently few instances where this has occurred, but that's sort of my point, that past standards are not always applicable to the future.
  - TulliusCicero 9y ago
    Whether you buy it or not, all over the world public transit systems effectively provide transportation for many, many poor people. Yes, they don't cover every possible use case, but perhaps we shouldn't let the perfect be the enemy of the good?
  - klipt 9y ago
    I suspect self driving taxis/buses will solve this problem. If you don't have to pay drivers overtime, there's little reason not to run them all night. Transit will ultimately become a ubiquitous utility like running water.
    - dpark 9y ago
      Maybe once we get self driving buses. Self driving taxis don't help unless costs plummet. Poor people don't take taxis a lot due to having no money.
      - icebraining 9y ago
        There's a town in the US which has replaced its buses with subsidized "ride sharing".
        aianus 9y ago
        One in Canada too. $5 off every Uber ride within Innisfil, Ontario, courtesy of the municipality. Way better than a bus.
      - lb1lf 9y ago
        Then again, taxi rates should go down once you no longer need to factor the driver's wages into the equation. Also, insurance should be cheaper and running costs ditto (presumably, the bulk of autonomous vehicles will be electric) Besides, in some markets taxis ARE the cheaper option if you don't need a car very often - when living in Norway's #2 town about a decade ago, the annual road tax, insurance, leased parking space &c added up to a cost equivalent to more than 200 4-mile taxi rides. And that is leaving depreciation and maintenance out of it...
  - samstave 9y ago
    In thinking about "minumum basic income" perhaps all public transit should be free? Bart, muni, caltrain, amtrak, etc -- thos should be 100% subsidized by taxes. We have a gas tax that is so high in california it hasnt even done anything for our roads and infra. You hae one of the biggest companies in the world (chevron) based out of richmond, ca (one of the poorest cities in CA) paying nothing in taxes... the basic income argument is bullshit, and politicians are freaking morons given that they cant take the freaking hammer to corps so large that due to their financial extraction from basic human living (movement) that this problem will never be solved. capitalism is a brainwashing technique, not a basis for a human economy. I am not saying that we should be communist - but we shouldnt complain about problems without understanding the ripple effect of so many other problems and wwhen they reasonate together, such as not taxing gas corps, but increasing "gas tax", yet not using the gas tax properly -- then having public transport agencies in corruption quagmire - the world is basically fucked. Why do bart train drivers work 4 days a week, yet make over 125K/year for baby-sitting an automated train, then go on strike for more money when the trains are filthy and smell like piss? Why do they have the "train of the future" when not a single new train car "of the future" has a power port/USB port? (yes I looked and spoke to them about it. Why hasnt any bart/muni operator ever been forced to go on a field-trip to some other major metropolis to see how efficient, clean, modern travel infra works? Why are we spinning our retarded wheels on automated driving when we need to fix public transport? Its a complicated issue - but only corruption and greed are truly preventing progress, as the corruption and greed results in us not taxing the fuck out of gas - and investing in very robust transportation systems that should be subsidized by general taxes. How about we just say that if you make less than $50K per year, ALL transport is free -- THEN you have greater opportunity to find a job >$50K and can start paying for your rides.
rayiner 9y ago
There are dozens of lenders out there for car loans, plus dealership financing arrangements, etc. It's an extremely competitive market. If market economics has any real world validity at all, it's to show that interest rates on marginal borrowers are appropriately priced.
- CPLX 9y ago
  That assumes a lot of things which can't be assumed, information symmetry among them. There's nothing in market economics that insists on the theoretical impossibility of predatory subprime lending.
  - rayiner 9y ago
    Information asymmetry happens when one side of a transaction inherently has more information about a product than the other side of a transaction. E.g. when it comes to food, the producer inherently knows more about the product than the consumer. A loan is pretty much exactly the opposite. All the information the seller has is conveyed to the buyer in the form of the loan terms.
    - CPLX 9y ago
      That's obviously facile. Information asymmetry is not just about information contained within the four corners of a contract, but also about information that is not. A market participant who engages in a very small number of borrowing transactions over a lifetime by definition has less available information than a lending institution. For what it's worth I have a degree in economics, and in my experience I almost invariably hear this sort of characterization of economic systems as simple and Newtonian from people who are generally unfamiliar with contemporary economic theory. The economy is a complex adaptive system that has a penchant for reaching inefficient local maxima. Not every market clears. It's quite plausible that subprime lending is one such example, a theory that is also well contained within the general heading of "market economics".
- s73ver_ 9y ago
  Or that they've all colluded. How many subprime lenders are there? How much competition is in that market?

But for a lower rate, you can lend your money to someone much less risky. Why buy a 1% junk bond if you can get 1% government bonds? The real long term solution is good public transit, so poor people don't have to go into debt to commute.

xyzzy_plugh 9y ago
I don't buy it. The poorest often work the worst hours, such as late at night, and might travel the furthest. I've never seen a transit system anywhere that solves that problem. If I'm coming home at 3am I don't want to transfer buses 4 times.
- krath94 9y ago
  Everything you just said supports the person you're replying to's argument about a better public transit system. What's next, Bernie, do you believe that car ownership is a "right"?
  - nkrisc 9y ago
    Here's the thing, all rights are arbitrary and granted by people to people. Some are easy to agree on (right to life) and some are more contentious (right to bear arms) but all are intended for the benefit of society. If it would be in the best interest of a functional society to grant the right to reasonable transportation to everyone, then it is something we ought to consider. Some things that were previously considered rights are no longer necessary or desirable as society advances (the right to own slaves) while other things that were not previously considered rights (guaranteed access to the internet) might start to make sense as our world changes around us.
    - FussyZeus 9y ago
      Point of order: The right to own slaves was just the right to own property, the slaves were just declassified as property. There are very few instances where rights have changed based on how you describe, because the societal inertia is incredibly hard to overcome. That being said, I do agree with everything you're saying.
      - nkrisc 9y ago
        Fair point. Then instead maybe it makes more sense to consider the inverse: the refusal to grant the right of autonomy to certain people. You also bring up a good point that there are currently few instances where this has occurred, but that's sort of my point, that past standards are not always applicable to the future.
- TulliusCicero 9y ago
  Whether you buy it or not, all over the world public transit systems effectively provide transportation for many, many poor people. Yes, they don't cover every possible use case, but perhaps we shouldn't let the perfect be the enemy of the good?
- klipt 9y ago
  I suspect self driving taxis/buses will solve this problem. If you don't have to pay drivers overtime, there's little reason not to run them all night. Transit will ultimately become a ubiquitous utility like running water.
  - dpark 9y ago
    Maybe once we get self driving buses. Self driving taxis don't help unless costs plummet. Poor people don't take taxis a lot due to having no money.
    - icebraining 9y ago
      There's a town in the US which has replaced its buses with subsidized "ride sharing".
      - aianus 9y ago
        One in Canada too. $5 off every Uber ride within Innisfil, Ontario, courtesy of the municipality. Way better than a bus.
    - lb1lf 9y ago
      Then again, taxi rates should go down once you no longer need to factor the driver's wages into the equation. Also, insurance should be cheaper and running costs ditto (presumably, the bulk of autonomous vehicles will be electric) Besides, in some markets taxis ARE the cheaper option if you don't need a car very often - when living in Norway's #2 town about a decade ago, the annual road tax, insurance, leased parking space &c added up to a cost equivalent to more than 200 4-mile taxi rides. And that is leaving depreciation and maintenance out of it...
- samstave 9y ago
  In thinking about "minumum basic income" perhaps all public transit should be free? Bart, muni, caltrain, amtrak, etc -- thos should be 100% subsidized by taxes. We have a gas tax that is so high in california it hasnt even done anything for our roads and infra. You hae one of the biggest companies in the world (chevron) based out of richmond, ca (one of the poorest cities in CA) paying nothing in taxes... the basic income argument is bullshit, and politicians are freaking morons given that they cant take the freaking hammer to corps so large that due to their financial extraction from basic human living (movement) that this problem will never be solved. capitalism is a brainwashing technique, not a basis for a human economy. I am not saying that we should be communist - but we shouldnt complain about problems without understanding the ripple effect of so many other problems and wwhen they reasonate together, such as not taxing gas corps, but increasing "gas tax", yet not using the gas tax properly -- then having public transport agencies in corruption quagmire - the world is basically fucked. Why do bart train drivers work 4 days a week, yet make over 125K/year for baby-sitting an automated train, then go on strike for more money when the trains are filthy and smell like piss? Why do they have the "train of the future" when not a single new train car "of the future" has a power port/USB port? (yes I looked and spoke to them about it. Why hasnt any bart/muni operator ever been forced to go on a field-trip to some other major metropolis to see how efficient, clean, modern travel infra works? Why are we spinning our retarded wheels on automated driving when we need to fix public transport? Its a complicated issue - but only corruption and greed are truly preventing progress, as the corruption and greed results in us not taxing the fuck out of gas - and investing in very robust transportation systems that should be subsidized by general taxes. How about we just say that if you make less than $50K per year, ALL transport is free -- THEN you have greater opportunity to find a job >$50K and can start paying for your rides.

rayiner 9y ago

There are dozens of lenders out there for car loans, plus dealership financing arrangements, etc. It's an extremely competitive market. If market economics has any real world validity at all, it's to show that interest rates on marginal borrowers are appropriately priced.

CPLX 9y ago
That assumes a lot of things which can't be assumed, information symmetry among them. There's nothing in market economics that insists on the theoretical impossibility of predatory subprime lending.
- rayiner 9y ago
  Information asymmetry happens when one side of a transaction inherently has more information about a product than the other side of a transaction. E.g. when it comes to food, the producer inherently knows more about the product than the consumer. A loan is pretty much exactly the opposite. All the information the seller has is conveyed to the buyer in the form of the loan terms.
  - CPLX 9y ago
    That's obviously facile. Information asymmetry is not just about information contained within the four corners of a contract, but also about information that is not. A market participant who engages in a very small number of borrowing transactions over a lifetime by definition has less available information than a lending institution. For what it's worth I have a degree in economics, and in my experience I almost invariably hear this sort of characterization of economic systems as simple and Newtonian from people who are generally unfamiliar with contemporary economic theory. The economy is a complex adaptive system that has a penchant for reaching inefficient local maxima. Not every market clears. It's quite plausible that subprime lending is one such example, a theory that is also well contained within the general heading of "market economics".
s73ver_ 9y ago
Or that they've all colluded. How many subprime lenders are there? How much competition is in that market?