Is It the Stupid People Who Stand in the Way of Freedom?

Amanda Marcotte takes a gratuitous jab at libertarians in a post about subprime lending. “Do libertarian ideologues long for the return of the poorhouse?” is the caption under the picture that heads the post. Then the post has nothing to do with libertarians. It’s about lenders exploiting the working poor. And Republicans. Leave libertarianism out of it, please.

It’s too bad folks get in over their heads financially. It’s not as if the lenders are keen on having their debtors default. They’re gambling on making a return on folks with marginal credit, and they have assumed the risk that they will get hosed. In large part, that’s why the cost of credit is higher for poor folks. It’s a greater risk, so the return had better be higher.

When folks decry lending to the working poor, they are really saying that the working poor shouldn’t have the options offered to them because they are too stupid, unlike Amanda, to be trusted to make decisions for themselves. It’s not as if every sub-prime borrower is going to default or that an unexpected percentage of sub-prime loans will be bad. Most such borrowers will have been given a welcome opportunity to buy what they want, and it will turn out OK, albeit at a higher cost in interest than more affluent borrowers.

It’s not class warfare. It’s not even predation, unless you count every transaction with the poor as predatory. I reckon Amanda would be on board with preventing convenience stores in poor neighborhoods from selling 40s of malt liquor and lottery tickets. And fast food places should tell would be customers who appear to be too poor that it would be cheaper to cook at home. Furniture rental and check cashing services? Close ‘em down! Some of the customers might get in over their heads.

Thank God the poor have Amanda Marcotte to look after them and tell them what to buy and when and on what terms.