Posts tagged with: subprime lending

The latest issue of the Journal of Markets & Morality is now available online for current subscribers. This issue features the timely and challenging article, “Subprime Lending and Social Justice: A Biblical Perspective,” by William C. Wood, professor of economics at James Madison University and director of JMU’s Center for Economic Education. Prof. Wood notes that within the context of Christ’s call to love our enemies as well as our neighbors, “Christians cannot be complacent about credit markets even if they appear to be economically efficient as voluntary transactions.”

The concern for the poor and love of others that Wood observes particularly in the New Testament is also a major theme of the new Scholia translation. Wolfgang Musculus, a second-generation reformer and major biblical commentator of the early modern era, penned his commentary on the book of Psalms in 1551. Here for the first time is Musculus’ full commentary on Psalm 15 translated into English in conjunction with the exegetically-related appendices on oaths and usury. With regard to the question of usury, in his introduction to the Scholia Jordan J. Ballor writes, “Musculus’ reflections on usury in Psalm 15 are significant because they represent a stream of Protestant thought that largely has been ignored by economic historians.” Musculus himself contends that lending at profit to the least among us “is not only condemned as inhuman by the laws of Christ but also by the laws of nature. For it is plainly inhuman to pursue a profit from the sweat and calamities of the poor.”

Also in this issue:

The editorial by executive editor Stephen Grabill, “Hope Amid Financial Calamity,” and article abstracts of current issues are freely available to nonsubscribers (you can sign up for a subscription here, including the very affordable electronic-only access option). And as per our “moving wall” policy of two issues, the most recent publicly-available archived issue is volume 10, number 2 (Fall 2007).

If you are a student or a faculty member at an institution of higher learning, please take the time to recommend that your library subscribe to our journal. If you are in interested layperson or independent scholar, please consider subscribing yourself.

Blog author: mvandermaas
Friday, March 7, 2008
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Surely these are the words of a disciple of Hayek or Friedman, right?

Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior…

…The real question for policy makers is how to protect those worthy borrowers who are struggling, without throwing out a system that works fine for the majority of its users (all of whom have freely chosen to use it). If the tub is more baby than bathwater, we should think twice about dumping everything out…

…Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next…

… I’ve come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.

Why do we think we are helping adult consumers by taking away their options? We don’t take away cars because we don’t like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don’t operate mindlessly in trying to smooth out every theoretical wrinkle in life.

The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.

Give up? How about George McGovern?

Ed Morrisey, writing at Hot Air, notes:

I find it fascinating that McGovern has transformed himself from a statist to a free-enterpriser simply because he left office. That isn’t a coincidence, and it explains why politicians tend to “grow in office” towards state-based solutions. After McGovern had to stop justifying his existence as a legislator, he discovered that legislators don’t need to intervene in the markets anywhere near as much as he presumed while in office.