Mark Twain was in town recently with some additional insights into the passing American scene. He started off with a look back in time at a serious example of how the government failed to protect the consuming public when it could have easily done so:
Back in the early days of the Reagan administration (1980-82), America saw a rise in interest rates far exceeding anything previously experienced. In an environment where, for example, New Jersey and New York considered usurious any bank or credit card company charging in excess of 12% or 13% on loans or credit balances, interest rates climbed to over 20% for a time. Mortgage rates soared from an historic 6% on a conventional 30-year mortgage to rates as high as 19.5%. These dramatic increases caught the credit industry and the borrowing public by surprise. How could lenders continue to survive under conditions where they would need to pay high interest rates on the reserves they needed to borrow if they were subject to the lower usury ceilings limiting what they could charge end-use borrowers? The lenders quickly went to work on the respective state legislatures and convinced the legislators to eliminate the longstanding usury ceilings. At the same time, the lending industry came up with a creative mechanism, the variable-rate concept, to protect their interests in the event borrowing costs remained high. This concept allowed the lenders to peg what they charged borrowers to their own cost of funds; the higher that cost went, the more they could charge borrowers. What the legislators failed to implement were protections for the consuming public in the event, which was in fact the case over time, lender costs dropped to pre-crisis levels (and even lower!). Failing to reimpose some kind of limit to what the lenders can charge has resulted in a huge windfall for these companies as the spread between the rates they currently pay on their reserves (2%) and the maximum rates they charge borrowers (26% on revolving credit lines) is clearly usurious! Government undoubtedly should reimpose usury ceilings or some sort cap on what the lenders can charge.
Twain had this take on current events: “I thought I’d never see another civil war in America, yet from election day 2016 on I’ve seen civil strife on an unprecedented level with street demonstrations by supporters of the losing opposition rejecting the outcome; these events have been followed by a media civil war (CNN vs. Fox New) that still rages three years after it began with no sign of letup. Supporters and opponents of the president are truly at loggerheads with ad hominen attacks on political opponents dominating the public airwaves and private debates and conversations. “Uncivil discourse,” is what Twain calls it. What disturbs him the most is the failure on the part of many to ignore historical facts whenever they don’t support one’s argument, and the projection on one’s opponents of motives that are false.
Twain illustrated that point with the following exemplary history lesson in his words “for all who are objective”: Interference with the U.S. electoral process is not the novel clandestine undertaking opponents of the Republicans would suggest. In 1919, the Soviet Politburo openly created the Comintern or Communist International with the express intention of fomenting discord throughout the world’s capitalist societies (especially the U.S.), subverting the electoral process of those countries and supporting fifth columnists who would actively promote the political and economic interests of the Soviet Union to the detriment of America. To posit without proof that American politicians in 2016 actively promoted those foreign interests overlooks the fact that the Russians have been openly and actively seeking the overthrow of our way of life for the previous 23 presidential election cycles. On a second level, the bald assertion that the Republican president is somehow in league with the Kremlin is the height of irony in the face of the Red Scare of the 1950s; at that time it was the Republicans who were finding communists and their sympathizers lurking behind every crisis in Washington while the Democrats (party members, fellow travelers and free speech patriots alike) were calling out the Republicans for their base, unproven accusations and raising constitutional defenses of the First Amendment while pleading the Fifth! Today, ironically, the roles have been flipped, as the shadowy enemy is claimed to be in league with the GOP, which shouts its denials. No one in 1950 would have dreamt it possible that the Democrats would ever be mounting such a challenge to a Republican incumbent in the White House.
Joseph Rotenberg, a frequent contributor to the Jewish Link, has resided in Teaneck for over 45 years with his wife Barbara. His first collection of short stories and essays entitled “Timeless Travels: Tales of Mystery, Intrigue, Humor and Enchantment” was published in 2018 by Gefen Books and is available online at Amazon.com. He is currently working on a follow-up volume of stories and essays.
