Trickle up policy.

[SwimExpert]

Because it is a market failure. It is the kind of problem that the market can't solve correctly.

Your mistake is assuming that it's a problem.

 

[CultureCitizen]

Let's say Im a working class guy. My car breaks down. I need $350 to fix it. Today. What are my options? Credit card? Nope. Bad credit. Bank loan? Gettouttatown! Banks wont deal with guys with bad credit. Pawn? That's 22% a month too.
Now, if I dont have a car, I cant get to work. If I dont work I dont earn money. If I dont earn money I cant pay rent or buy food. I will be on the street homeless and hungry unless I get that car fixed.
So what is it worth to have it fixed? $20? $40? The answer is basically whatever it takes. So if I have to pay $35 to have the money now rather than in 2 weeks that's well worth it.
People dont understand the issues here.

Bad credit or low income.
They deserve access to credits with a fair interest rate nevertheless.

 

[CultureCitizen]

Your mistake is assuming that it's a problem.

Ok , change problem with scenario.

 

[SwimExpert]

Your mistake is assuming that it's a problem.

Ok , change problem with scenario.

If you really did make that change in your perception, you'd grasp that businesses are charging what they can, because people choose to buy. Nobody deserves access to credit cards at whatever interest rate. If you want a credit card, choose one of the many available, and figure out a long term plan to convince the company that your business is worth the kind of features you would like. If they can't make money off of you, they have no obligation to do business with you.

Nowadays there are several credit cards that work very well for bad credit, and don't have to carry any interest if you don't rack up a bunch of debt you can't pay off. If someone has a credit problem, they should get one of those and put it in their sock drawer for emergencies.

 

[CultureCitizen]

Nobody deserves access to credit cards at whatever interest rate. If you want a credit card, choose one of the many available, and figure out a long term plan to convince the company that your business is worth the kind of features you would like. If they can't make money off of you, they have no obligation to do business with you.

Nowadays there are several credit cards that work very well for bad credit, and don't have to carry any interest if you don't rack up a bunch of debt you can't pay off. If someone has a credit problem, they should get one of those and put it in their sock drawer for emergencies.

Look, you can't really argue that banks are good assesing risks allways, or that banks know what they do or that the market can auto regulate the market, not after the morgage crisis.

Again grameen is a non for profit insitution which serves a purpose: giving credit to people who need it.
Nobody starts with a 10,000 loan. Most of the loans are very , very low $300. And increase as the customer creates a good credit rating.

 

[The Rabbi]

Let's say Im a working class guy. My car breaks down. I need $350 to fix it. Today. What are my options? Credit card? Nope. Bad credit. Bank loan? Gettouttatown! Banks wont deal with guys with bad credit. Pawn? That's 22% a month too.
Now, if I dont have a car, I cant get to work. If I dont work I dont earn money. If I dont earn money I cant pay rent or buy food. I will be on the street homeless and hungry unless I get that car fixed.
So what is it worth to have it fixed? $20? $40? The answer is basically whatever it takes. So if I have to pay $35 to have the money now rather than in 2 weeks that's well worth it.
People dont understand the issues here.

Bad credit or low income.
They deserve access to credits with a fair interest rate nevertheless.

And they will be happy when you write checks to them at low interest rates. Please post an email address so I can send people your way.

 

[The Rabbi]

Nobody deserves access to credit cards at whatever interest rate. If you want a credit card, choose one of the many available, and figure out a long term plan to convince the company that your business is worth the kind of features you would like. If they can't make money off of you, they have no obligation to do business with you.

Nowadays there are several credit cards that work very well for bad credit, and don't have to carry any interest if you don't rack up a bunch of debt you can't pay off. If someone has a credit problem, they should get one of those and put it in their sock drawer for emergencies.

Look, you can't really argue that banks are good assesing risks allways, or that banks know what they do or that the market can auto regulate the market, not after the morgage crisis.

Again grameen is a non for profit insitution which serves a purpose: giving credit to people who need it.
Nobody starts with a 10,000 loan. Most of the loans are very , very low $300. And increase as the customer creates a good credit rating.

Just because banks sometimes muff risk assessment does not mean they always muff risk assessment. Total fallacy.

 

[CultureCitizen]

Just because banks sometimes muff risk assessment does not mean they always muff risk assessment. Total fallacy.

That would be a fallacy worth at least one trillion USD.
Nice try

 

[The Rabbi]

Just because banks sometimes muff risk assessment does not mean they always muff risk assessment. Total fallacy.

That would be a fallacy worth at least one trillion USD.
Nice try

That was incoherent. Even for you.
OK, you arent capable of serious discussion here.
Next.

 

[CultureCitizen]

Just because banks sometimes muff risk assessment does not mean they always muff risk assessment. Total fallacy.

That would be a fallacy worth at least one trillion USD.
Nice try

That was incoherent. Even for you.
OK, you arent capable of serious discussion here.
Next.

Oh , I am , but how do you want to measure "sometimes" .
How much money has been going to rescuing banks just in the US, not just the bailout, but also all those unknown assets who went to the FED through QE.

That is only the US, Europe banks are in a similar situation and banks through LA have already gone through a similar process ( de-regulation , bust, regulation).

The moral : let the banks become too big to fail , lower the regulations and the markets will fail.

FAQ Grameen Bank - Bank For Small Business

"Grameen Bank is owned by the borrowers and it is based on trust. It does not require any collateral from its borrowers. Since the bank does not wish to take any borrower to the court of law in case of non-repayment, it does not require the borrowers to sign any legal instrument."

Now, a question : if a middle class person can get a loan for a decent intrest rate, why shouldn't poor people be allowed given the same oportunity ? Granted, while the middle income person might be granted a 100,000 loan , the poor one will probably get only a 300 or 500 loan.

 

[The Rabbi]

Just because banks sometimes muff risk assessment does not mean they always muff risk assessment. Total fallacy.

That would be a fallacy worth at least one trillion USD.
Nice try

That was incoherent. Even for you.
OK, you arent capable of serious discussion here.
Next.

Oh , I am , but how do you want to measure "sometimes" .
How much money has been going to rescuing banks just in the US, not just the bailout, but also all those unknown assets who went to the FED through QE.

That is only the US, Europe banks are in a similar situation and banks through LA have already gone through a similar process ( de-regulation , bust, regulation).

The moral : let the banks become too big to fail , lower the regulations and the markets will fail.

FAQ Grameen Bank - Bank For Small Business

"Grameen Bank is owned by the borrowers and it is based on trust. It does not require any collateral from its borrowers. Since the bank does not wish to take any borrower to the court of law in case of non-repayment, it does not require the borrowers to sign any legal instrument."

Now, a question : if a middle class person can get a loan for a decent intrest rate, why shouldn't poor people be allowed given the same oportunity ? Granted, while the middle income person might be granted a 100,000 loan , the poor one will probably get only a 300 or 500 loan.

Your first point is simply absurd.
Second point: It has nothing to do with poor vs middle class. It has to do with lousy/no credit vs good credit. And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.
Anyone can understand that a 22yr old kid with a Mustang Boss and 2 DUIs and 5 speeding tickets and an accident will not pay the same car insurance as a 40 year old woman with a minivan and a 100% driving record. Lending is the same principle.

 

[CultureCitizen]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

 

[The Rabbi]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

You're talking about a banking system in Bangladesh, where the culture and everything else is completely different from the American culture? Yeah, that's a non starter.
Why doesnt some enterprising person come here and offer low interest loans to poor people? They would own the market, right?

 

[CultureCitizen]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

You're talking about a banking system in Bangladesh, where the culture and everything else is completely different from the American culture? Yeah, that's a non starter.
Why doesnt some enterprising person come here and offer low interest loans to poor people? They would own the market, right?

There are plenty of single mothers in the US which could put a loan to good use to start a small business , get trainning to get a job or even get a used car....in fact, I've just found there is a branch of grameen in the US

Grameen America

It's a lot smaller than Grameen Bangladesh ( 43,000 debtors) , but I hope it thrives.

 

[The Rabbi]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

You're talking about a banking system in Bangladesh, where the culture and everything else is completely different from the American culture? Yeah, that's a non starter.
Why doesnt some enterprising person come here and offer low interest loans to poor people? They would own the market, right?

There are plenty of single mothers in the US which could put a loan to good use to start a small business , get trainning to get a job or even get a used car....in fact, I've just found there is a branch of grameen in the US

Grameen America

It's a lot smaller than Grameen Bangladesh ( 43,000 debtors) , but I hope it thrives.

That would be great. But it doesnt address the customers of payday lending.

 

[CultureCitizen]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

You're talking about a banking system in Bangladesh, where the culture and everything else is completely different from the American culture? Yeah, that's a non starter.
Why doesnt some enterprising person come here and offer low interest loans to poor people? They would own the market, right?

There are plenty of single mothers in the US which could put a loan to good use to start a small business , get trainning to get a job or even get a used car....in fact, I've just found there is a branch of grameen in the US

Grameen America

It's a lot smaller than Grameen Bangladesh ( 43,000 debtors) , but I hope it thrives.

That would be great. But it doesnt address the customers of payday lending.

Well, if it grows enough it will. Poor people will be able to get a fair credit from Grameen instead of the vultures that run the payday lending business.
Grameen America is about 100 times smaller than its Bangladesh counterpart. It will probably never become as large, mostly due to the fact that poverty is not as pervasive in the US .

 

[The Rabbi]

And poor people disproportionately have bad credit. IN part this is because they make poor choices in life, which is part of why they remain poor.

Ok Rabbi,
So how come the grameen bank continues to exist ?
It is non profit but it has earnings.
It hasn't recieved donations since 1995
It doesn't charge high interest rates.
If poor people disproportionately have bad credit Grameen should be broke or rescued, instead their defaults are only 5% which is below the average of many banks.

The only difference I see is that 95% of the debtors of Grameen are woman. So at least I am sure that poor women are not bad creditors ( given the evidence I can't really vouch for poor males).

You're talking about a banking system in Bangladesh, where the culture and everything else is completely different from the American culture? Yeah, that's a non starter.
Why doesnt some enterprising person come here and offer low interest loans to poor people? They would own the market, right?

There are plenty of single mothers in the US which could put a loan to good use to start a small business , get trainning to get a job or even get a used car....in fact, I've just found there is a branch of grameen in the US

Grameen America

It's a lot smaller than Grameen Bangladesh ( 43,000 debtors) , but I hope it thrives.

That would be great. But it doesnt address the customers of payday lending.

Well, if it grows enough it will. Poor people will be able to get a fair credit from Grameen instead of the vultures that run the payday lending business.
Grameen America is about 100 times smaller than its Bangladesh counterpart. It will probably never become as large, mostly due to the fact that poverty is not as pervasive in the US .

Which is why payday lending is a huge business, right?

 

[CultureCitizen]

Which is why payday lending is a huge business, right?

In the US, yes. In Bangladesh, I am quite certain payday lending practices have been mostly erradicated.
Also ,consider Grameen USA is a relatively new bank.
But the point of this thread is not whether this is a proffitable business or not, but whether certain practice increases the net output of the economy and promote wealth distribution (tickle up). In this case Grameen bank does, both in the US and in Bangladesh.

 

[The Rabbi]

Which is why payday lending is a huge business, right?

In the US, yes. In Bangladesh, I am quite certain payday lending practices have been mostly erradicated.
Also ,consider Grameen USA is a relatively new bank.
But the point of this thread is not whether this is a proffitable business or not, but whether certain practice increases the net output of the economy and promote wealth distribution (tickle up). In this case Grameen bank does, both in the US and in Bangladesh.

As does payday lending.
What was your point again?

 

[CultureCitizen]

As does payday lending.
What was your point again?

As does payday leanding do exactly what ?
Improve weath distribution ... not certainly not!
Increase economy output in a better way than a series of fair loans with a 95% rate of repayment. I don't think so . It might give a temporary boost to the economy, but it will not have a long lasting effect.