President Obama and his fellow Democrat travelers are applying the malpractice that led to the housing bubble in the mortgage industry to a new industry: credit cards.
Credit card companies are in the midst of a significant upsurge in default rates. Learning from mortgage lenders’ past mistakes, the companies are adjusting interest rates and payment terms to reflect the risk associated with unsecured lending to risky borrowers. That is, the riskier you are (no job, bankruptcy, low income, etc.), the less likely you are to repay your debt. Therefore, you should have a lower credit limit and a higher interest rate in order to reflect the greater likelihood of default and non-recovery. Simple logic, and exactly what a responsible lender should do, right?
But not so fast. President Obama and Congress have decided that credit card companies should be required to maintain interest rates at current levels, no matter the risk to the lender. What does this mean for the average borrower? It means credit is going to dry up except for the very best risks. When the inevitable consequences of Congress’ poorly thought out scheme occur, look for Congress to require credit card companies to extend credit to subprime risks, a la the Community Reinvestment Act. It’s coming, just you wait and see. ‘Puter’s always right, after all.
And don’t get ‘Puter wrong. If credit card companies are being deceptive and/or abusive with teaser rates, or their disclosures are not easily understood, fix the problem. But the FTC already has the necessary authority to do so. Congress’ proposal is a solution in search of a problem.
Always right, unless he isn’t, the infallible Ghettoputer F. X. Gormogons claims to be an in-law of the Volgi, although no one really believes this.
’Puter carefully follows economic and financial trends, legal affairs, and serves as the Gormogons’ financial and legal advisor. He successfully defended us against a lawsuit from a liquor distributor worth hundreds of thousands of dollars in unpaid deliveries of bootleg shandies.
The Geep has an IQ so high it is untestable and attempts to measure it have resulted in dangerously unstable results as well as injuries to researchers. Coincidentally, he publishes intelligence tests as a side gig.
His sarcasm is so highly developed it borders on the psychic, and he is often able to insult a person even before meeting them. ’Puter enjoys hunting small game with 000 slugs and punt guns, correcting homilies in real time at Mass, and undermining unions. ’Puter likes to wear a hockey mask and carry an axe into public campgrounds, where he bursts into people’s tents and screams. As you might expect, he has been shot several times but remains completely undeterred.
He assures us that his obsessive fawning over news stories involving women teachers sleeping with young students is not Freudian in any way, although he admits something similar once happened to him. Uniquely, ’Puter is unable to speak, read, or write Russian, but he is able to sing it fluently.
Geep joined the order in the mid-1980s. He arrived at the Castle door with dozens of steamer trunks and an inarticulate hissing creature of astonishingly low intelligence he calls “Sleestak.” Ghettoputer appears to make his wishes known to Sleestak, although no one is sure whether this is the result of complex sign language, expert body posture reading, or simply beating Sleestak with a rubber mallet.
‘Puter suggests the Czar suck it.