Given the abject failure of the War on Poverty -- as Ronald
Reagan said, "Poverty won" -- now Democrats apparently have
decided to go right for the heart of the problem, by making war
on the poor.
That's the only plausible explanation for S.500, the "Protecting
Consumers from Unreasonable Credit Rates Act of 2009," introduced
earlier this year by Sen. Dick Durbin (D-Illinois). The bill
would limit interest rates in such a way that pawn shop owners say
it would drive them out of business. Currently under
consideration by the Senate Banking, Housing and Urban Affairs
committee, this legislation could only make sense to someone who
(a) knows nothing about pawn shops, and (b) knows nothing about
economics.
Having once been a penurious college student and struggling rock
musician, I had a lot of dealings with pawn shops back in the
day, and respect the straightforward nature of their business.
You have an amp or a guitar and need money, you hock it until you
can afford to get it back. And if you don't redeem it, the pawn
shop keeps it and sells it (thereby providing a source of cheap
second-hand guitars and amps for other struggling musicians).
The pawn shop business is very easy to understand, and if
the interest rate seems exorbitant to middle-class folks and
liberal do-gooders, maybe it's because they don't understand how
grateful pawn shop customers are for the service. Who else offers
on-the-spot credit to those who might otherwise have no
source of quick cash?
It is idiotic that, on the one hand, Democrats demanded
that taxpayers bail out the mortgage industry, while on
the other hand they are trying to put pawn shops out of
business. Given President Obama's
promise to "save or create" hundreds of thousands of new jobs
over the next 100 days, do Democrats really want to destroy an
entire industry, one that provides emergency financial
services to so many of the poor people whom the Democratic Party
claims to represent?
Here's hoping S.500 dies quietly in committee. Otherwise, once
the Chinese get tired of buying U.S. debt, the federal
government could have no place else to turn.
