Defining predatory lending so broadly and so idiosyncratically seems like a bad way to start a discussion about income inequality.

Apple's finance division is in Nevada. The money's already in the States.

I dont see how your first sentence implies the second.

This is not to say I agree with awval on the benefits of repatriation and i am inclined to point out that the 5 trillion number is a combination of holdings held both abroad and domestically.

Well, we certainly can focus on the worst loans first, but society-wide, the difference between earning a modest profit on auto lending and making obvious-scam loans ("get your title back with TitleMax!") is only one of degree.

Good post. I'm suggesting that the answer to this question is "most." Within America, it's obviously true. Globally, I'd guess that the U.S. "upper-middle class"--the aspirational class, the 15%--would be hurt by such a transfer. Moreover, I don't think you have to get to full equality to achieve genuine fairness.

Incidentally, you might enjoy a Google search for "global wealth pyramid."

>99% off the top of my head.

Why? This definition of high interest seems just as subjective (and freighted with moral assumptions) as mine.

I think that many of us can agree that the idea of competition is good and in many cases it can produce good results. What I'd like to see is competition to remain, but for it not to be a literal battle to survive. In other words, people would have basic health care, food, and shelter, without ever having to worry about paying for it. While still maintaining plenty of healthy competition in other areas to push things forward, science and technology and all that jazz.

Usurous interest rates reminds me how the congressional rep for payday lenders used to head the DNC.

None of that sounds right. Regardless, the growth of inequality in the US chart matches up very poorly with the shrinking inequality in the world chart from 1945 on, suggesting the causes are not the same.

The difference is that his definition is market driven whereas yours is not.

For example let's say current mortgage rates for a prime borrower is 4%. A bank can come along and try to charge 6% all it wants but it won't get any business.

There are multiple problems with interest rate pegged directly to current inflation rate. How do you account for risk premiums with risky borrowers or are all borrowers considered the same?

Even worse, you are neglecting the reverse effect of interest rate on inflation. What do you think happens to prices once borrowing becomes essentially free?

I think the effect of payday lenders on the poor is similar to the effect of legalized gambling on the poor.

So?

Making gambling illegal impinges on the freedom of tens of millions of people, most of whom are playing for fun. That's a big cost.

Restricting the mafia and Deborah Wasserman Schultz from getting rich off of 400% interest rate loans isn't a big cost.

Given that the relative inequality in first world nations continues to widen, that those are the places where tertiary reactions are most evident (hai Brexit! hai Trump!), and that first world stability is absolutely essential for maintaining 3rd world development, it's just a wee bit disingenuous to point to India or wherever and pretend that we're not facing a global time bomb. If Western Civ goes down the whole world goes down, and there are some alarming trends indicating that possibility, which are rooted at least partially in growing inequality.

Most people who borrow are responsible borrowers and avoid loan sharks, pawn shops, and payday loaners.

The reason most gamblers play for fun is due to the lack of proximity of gambling. If gambling was legalized across the board, I am skeptical this would hold.

At the very least, if you are anti pay day lending, you should be also anti lottery (addictive, ease of access, low payback rates, predominately played by the poor).

This is correct. The other thing that the guys pointing to lower worldwide inequality is that intranational inequality has much more effect on instability than international inequality.

While the poor in 3rd world countries might have improved their quality of life compared to the poor of first world countries, why should they care if they witness everyday the growth of the super rich in 3rd world countries? The inequality within 3rd world countries transitioning to first world countries are often more stark than the inequality within the US.

Where are casinos not everywhere? 1980?

It is horrific that the government does the lottery.

This line of thinking you're engaging in is puerile.

Are you under the assumption that I am pro pay day loans because that isnt true.

I am also strongly anti lottery fwiw.

Casinos arent everywhere. Sure, they are in many states but there are limits and except in a few cases, casinos are not in most population centers. If casinos are as prevalent as lotteries are, i think there can be a lot of problems.

Federal government revenue as a percentage of GDP has remained consistent post WWII, rising and falling pretty much inline with economic growth. What has changed a lot is the mix. A much higher proportion of the Federal government revenue comes from FICA today than in yesteryear.

I'm guessing zero.

Student loans and TitleMax differ in degree only if you accept the premise that all lending (or maybe consumer lending?) for profit is a morally questionable, and probably long term net negative, transfer of wealth from the haves to the have nots. That's hardly self evident.

maybe I'm naive, but it certainly feels like student loans and the ability to take out a mortgage have contributed positively to my ability to build savings, at least if the but for world had been exactly the same except I would have had no access to consumer credit.

Whether student loans have as positive an impact as, say, free college would have is a different and closer question, and probably depends on who would bear the incremental tax burden of providing for free college.

Also, people with incomes of $1+million take out mortgage loans all the time. It seems facially ridiculous to call those loans predatory.

Honestly, this whole view of consumer credit feels very Old Testament, which makes me think that I must be missing your point.

FWIW, I don't work in lending, or even finance. I have no personal skin in this debate.

Just a side note, but you guys are talking about different things.

He was talking about the mean income among the bottom 50%, top 5% etc. You quoted the median income and the 95% percentile income.

While I didn't verify his numbers it looks like you could very easily both be quoting correct figures.

What's your point? That it's entitlements?

Another point that would make, assuming true, is that FICA could be lowered and the difference made up for with higher income, estate, and property taxes.

Assuming a progressive tax scheme I don't think it's a close question.

It is very Old Testament, candidly. If Borodog yelling "taxes = theft" counts as "political" commentary, so does this mode of moralizing. Again, feel free to ignore it. I thought my implicit suggestion that gay marriage doesn't matter would be the controversial point.

By "Old Testament", I meant "lacking subtlety" and "not particularly relevant to the modern world."

Here's my problem. I agree with you that income inequality is a huge problem, both domestically and globally, but I don't agree that consumer lending of the non-TitleMax variety is a main driver of income inequality. And you can't make it a main driver merely by using the word "predatory" to describe lending (like low interest auto loans) that 99% of people would regard as inoffensive.

In other words, I think your real focus should be on taxation, sustainable job creation, the safety net, and whether certain things (like college and health care) should be free.

Describing all consumer lending as predatory just diverts attention from where the focus should be.