Now that he has helped plunge the country into a financial abyss through ObamaCare, Paul Krugman of the NY Times has devoted his attention to strangulating financial markets. On Wednesday he repeated a common theme of the Left—that we need more protection from “predatory lending.”
This idea of predatory lending is sort of weird, isn’t it? It means that if I apply for a loan that is over my budget, whoever gives it to me is a predator. What if we extended this idea to other realms of life?
What about predatory dating? Some people mistakenly assume that Tiger Woods is a sexual predator. But predatory dating would say that women involved were the predators, since they gave him the sexual services he wanted. He was just unfortunate enough to be victimized over and over again. In fact, any woman who accepts a date from a man she shouldn’t be with (even if she doesn’t know he is a creep) is a predator.
Then we could have predatory charity. If I give money to a charitable organization that ends up mismanaging its funds and going under, that makes me a predator, since I gave them the money.
Or how about predatory complements? If I tell a friend that he is actually a better basketball player than he is to make him feel good and he goes out and gets schooled in the local pickup game, then I am predator.
There are lots of ways I’m probably a predatory consumer. Any time I let someone make me a sales pitch that I turn down, I’m a predator. Or if someone offers a bid to do home repair work for me and he doesn’t make sufficient profit, I’m a predator.
Dang. I used to think if someone making $40K a year buys a $300K house that something funny is going on, that the mortgage company must be defrauding its underwriter or that the applicant must be misrepresenting something important. Didn’t almost all such people taking out these kinds of loans know, deep down, that something was very fishy and that they were in over their heads? But, no, getting in over your head just makes you a victim.
Now, this is not to say there hasn’t been serious fraud in this industry—by borrowers, lenders, underwriters, and the financial institutions that securitized these bad loans and foisted them on a market where people were too greedy to carefully assess their risk.
Punishing fraud is good. But is the role of government to protect the greedy from themselves?
I guess I’ll buy that new Porsche after all. I’m such a victim.