Before the COVID pandemic hit, America was experiencing robust economic growth. Some of the biggest beneficiaries were minorities who saw wages rise and unemployment drop to historically low levels. Opportunity is a big part of the American dream, and more and more Americans are living that dream.
But once the pandemic struck and lockdowns hit head-on, the once robust economy began to contract rapidly. It meant record unemployment, job losses and financial hardship that emerged almost overnight. Now that the economy is in a slump, most Americans are facing economic uncertainty, with minorities and the working class among the hardest hit.
Progressives see the current situation as the perfect time to deploy their untested ideas and present them in terms of benefit to minorities and others who have been “left behind”. For example, the National Consumer Law Center’s website complaints he fights for economic justice and against predatory installment loans. It might sound good if the facts and results don’t matter. But the truth is, this George Soros-backed group seems more focused on denying options to consumers and small businesses than promoting anything that could be called fairness and opportunity.
Limiting options rarely benefits the proverbial little guy. The rich can afford to operate in a world filled with big government mandates and limitations, because they have the resources to find workarounds and lobby for exclusions to benefit them. But the little guy does not have these advantages. What the little guy needs are opportunities, although government regulations rarely extend freedom or opportunity.
So if you are struggling because of the pandemic and have decided to start your own small business or even rebuild it after it was destroyed by the lockdowns, you may need to access funds to realize your dreams. But if you’ve been unemployed for 18 months due to big government shutdowns, or have bad credit or don’t have collateral to secure the loan, how do you borrow money from traditional sources? If you are rich, you have thousands of options for getting financing. But if you’re a working-class, inner-city minority entrepreneur, you have far fewer practical options.
If the extremist left and groups like the National Consumer Law Center are successful, those struggling to rebuild themselves after their jobs or businesses are destroyed by the pandemic will have even fewer options. On a very practical level, narrowing the options to those who are trying to build a better future comes close to telling them that they cannot have a better future.
Obviously, going to a loan shark is not a good idea. But there are banking options that will give new entrepreneurs a chance. The extremist left, however, wants to shut them down, in fact forcing the desperate to turn to a loan shark. The reality is that they claim to protect consumers from what they call high interest loans and they are using a mathematical trick to advance their state nanny policies that close options.
For example, if I borrowed $ 5,000 from an online lender, then paid off the loan two weeks later and paid a fee of $ 500 for the unsecured loan, the “annual percentage rate” would be 300 %. A 300 percent rate sounds horrible and if it was a 30 year mortgage secured by your home, it would. But for a modern day Henry Ford, such an unsecured loan – for which you provide no collateral – could be a dream come true.
If the extremists have what they want, however, and are able to cap the APR at 24% or less, the lender will have to agree to loan you $ 5,000 for a fee of no more than $ 46. So effectively these extremists say you can’t borrow money because who in their right mind is going to lend you $ 5,000 unsecured for only $ 46?
The truth is, if your situation allows you to borrow money at a lower rate, you would. But if your situation doesn’t allow for better terms and you have a dream that you would like to fund to get things started, paying a $ 500 fee isn’t a bad option.
That’s the problem with busy left-wing extremists – they always think they should make choices for you and you can’t be trusted to make wise choices. Ultimately, poor and minority communities pay the price.