The Dangers of Bipartisanship
Thursday, August 7th, 2008 By Marc KilmerI have never understood those who decry gridlock. I’ve always thought that if the two parties are fighting in Congress or the General Assembly it means they aren’t passing laws to take our money or restrict our freedom. As the latest example of bipartisanship in Columbus shows, when Democrats and Republicans team up, it’s usually going to mean that you end up with less money in your pocket or less freedom to make your own choices.
Democratic Governor Ted Strickland and Republican legislative leaders John Husted and Bill Harris are joining up to fight efforts to overturn the ban on payday lending. Of course, they claim that it’s not a ban, it’s just a “reform.” Yeah, just like Washington, D.C., didn’t ban handguns — it just made them impossible for people to own. If you enact a law that makes it unprofitable for a business to make a profit, it’s a ban, pure and simple. To deny that the payday lending law is a ban is to either be completely ignorant of the law or a liar.
Considering their statements on payday lending, I’ll give Strickland, Harris, and Husted some credit and conclude that they are merely ignorant. Those who have supported this ban have consistently shown they have no idea about how payday lending works, who uses payday loans, how to calculate a simple percentage rate, or anything about the basics of the lending market.
For instance, Governor Strickland said, “We are led to believe that the average borrower takes out between 11 and 12 loans per year because once they become trapped in this borrowing cycle, they are trapped.” Yes, some anti-payday lending folks have produced a shoddy study that says this. Unbiased researchers who have looked at this issue, however, find there is no evidence to support this claim. It’s amazing to me that legislators ignored the variety of academic studies on this issue that blow holes in the myths peddled by the mis-named Center for Responsible Lending and seemed to legislate based simply on the CRL’s flawed “studies.”
Of course, we tried to expose this ignorance by bringing in an actual economist who has studied this issue. Dr. Tom Lehman testified twice before the General Assembly and pointed out the flaws of the CRL material as well as exposing the myths of the anti-lending forces. For his effort he was ignored.
But I guess it’s too much for legislators and the governor to actually be, you know, leaders on this issue. Yes, payday lending has a reputation that many find distasteful. However, looking behind appearances on this issue reveals a reality that is no different from any other loan. Legislators, however, turned a blind eye to the facts about payday lending and a bipartisan majority voted to ban — not reform — payday lending. It is a shameful abdication of duty for legislators of both parties.
Tags: Regulation
