The Hightower Report

CASHING IN ON PAYDAY LOANS

The Bible tells us Jesus drove the money changers out of the temple (for charging less, by the way, than we're now assessed on our Visa and MasterCard bills).

Credit-card rates of 20% or so are ridiculous – but what should we call an interest rate of 400%? "Rip-off" is too nice of a word. "Gouging" fits, but even it can't convey the raw greed embodied in such a usurious rate for the use of money. Charging 400% should be called "criminal," but lobbyists for the quick-cash industry have monkey-wrenched state usury laws to make such loan-sharking legal in 40 states.

Worse, this legalized theft targets vulnerable, low-wage working people – those living paycheck to paycheck who can least afford to have their pockets picked. They typically are given a loan of $300, minus an upfront fee of about $50. Two weeks later, the full $300 is due. Often, they can't pay, so they take out another high-interest loan and are sucked even deeper into this lending whirlpool.

These "trapped borrowers" have become a lucrative profit center for the lenders who, by the way, are not fly-by-night, back-alley operators but well-manicured executives with a gloss of corporate respectability. These quick-cash purveyors have about 24,000 flashy storefronts across the country, making them even more ubiquitous than Starbucks. They rack up $40 billion a year in revenues, maintain PR firms to perfume their practices, create political funds to grease necessary skids, and deploy armies of lobbyists to legalize their usury.

The good news is states are beginning to rein in these payday hucksters by capping their interest rates at a merely outrageous level of 36%. For more information, connect with the Center for Responsible Lending: 919/313-8500 or www.responsiblelending.org.

OUR LEADER SPEAKS

It would be nice to think that your president is in touch with reality – or at least in shouting distance of the real world where the rest of us reside.

We know George W. lives in a bubble, but it still was a bit shocking to hear him say at a recent press conference that he had no idea gasoline prices are shooting toward $4 a gallon: "That's interesting; I hadn't heard that," declared our leader. Then, just to drive his cluelessness home, George informed us that America is not headed into a recession. This came as a surprise to many of his own economists, who have been saying just the opposite, and it was a laughable prognostication to America's workaday majority, which has been mired in a real-world recession for months.

Even Bush has had to admit there has been a "softening" of U.S. economic growth, which led him to put forth a stimulus package of tax rebates last month. The rebates are to prompt you and me to rush out and buy more stuff made in China. This will certainly be stimulating to the Chinese economy. Most analysts, however, don't see it doing much for our economy, but Bush won't hear of doing anything more. "We've acted robustly," Bush declared, using one of his favorite big words.

The nation's governors, who reside a bit closer to terra firma than George's ideological fantasyland, disagree. They've urged him to provide a real economic boost by turning Americans loose to work on repairing our country's deteriorating roads, bridges, schools, water systems, and other pieces of crucial infrastructure. This would create good jobs at good wages. "No," our leader responded robustly. Various Bushites then fanned out to explain that, in Bush World, infrastructure should be handled through privatization and tolls, not through public action.

It's that sort of thinking that has earned a record-low 24% job-approval rating for George's presidency.