©1999 - 2012
Edward D. Reuss
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The Democratic Party Presidential Debate between Hillary Clinton and Barack Obama had an exchange between the two candidates that was astounding. At one point in the debate, Senator Clinton observed that Senator Obama had not voted to cap the interest rates charged by the financial industry to no more than 30% per annum!   Senator Clinton voted to cap the rates. Whether the bill was passed by both houses of Congress and signed by the President is not really important to this article. There were no follow up questions by the moderator, and neither candidate seemed to indicate that 30% per annum interest rates for credit cards was a problem. Neither candidate protested such usurious interest rates. 

Just a thought:  If  homeowners who are stuck with those sub-prime mortgages are losing their homes in foreclosures, how long will it be before holders of credit cards with 30% interest rates will not be able to pay those monthly bills?  You may well ask: How many of us hold credit cards with that high an interest rate?  To answer that question, I checked the disclaimer form that came with my latest credit card offer in my mail.

The offer was for an Annual Percentage Rate (APR) of 13.49% variable.   Under that offer was the disclaimer: Default APR: 31.49% variable .  See explanation below*.  Below it read: How can your actions trigger the default APR?  One of the reasons was that the card holder “does not make the minimum payment when due”. So, if the card holder is late with a credit card payment, he will “trigger” the 31.49% rate.

I always thought that I was knowledgeable about the Penal Law of the State of New York. . The Penal Law specifically states that interest charged over 25 per cent per annum is the crime of Criminal Usury.  I labored under the naïve understanding that loan sharks, organized crime, and other predatory types were prohibited from giving usurious loans.  I believed that our financial institutions were prohibited from engaging in predatory lending.  I was mistaken.

Recently, I was browsing in a book store and noticed a bookcover with the title: “Maxed Out”.  The cover showed a gold credit card dangling from a fishhook.  The full title of the book is  Maxed Out, Hard Times, Easy Credit, and The Era of Predatory Lenders, by James D. Scurlock.  A reading of the book was a revelation regarding credit cards.  This book exposes the way our financial “captains of industry” were able to use their influence with members of Congress to pass legislation enabling them to engage in lending practices that can only be termed “predatory”.  Webster’s dictionary defines the word “predatory” as: excessive or exploitive in amount or cost, as out of greed or to take advantage of consumers or patrons.

Click here to order this book:

What was really frightening about the book was how the United States Supreme Court repeatedly decided in favor of such legislation.  In a series of such decisions, State criminal usury laws have, in effect, been declared null and void by the Supreme Court of the United States of America.  The New York State Penal Law section on Criminal Usury should be deleted from the text. 

So while the Chairman of the Federal Reserve, Benjamin Bernanke, and the Treasury Secretary Henry Paulson testify before the Senate Banking Committee and lament the most recent “bubble” of the subprime lending debacle,  they never seem to take responsibility for its causes.   Question: Where were they when the greed of the house flippers was running rampant?  What is their opinion of the usurious interest rates charged by the credit card industry?   Where were they when our children attending our universities and institutions of learning were being loaded down with debt in their freshman year?  Where are they now as the currency of the United States of America is being destroyed?  

I wrote a piece entitled: Globalization - Giving Away the Store?” in which I wrote about how our “captains of industry” have done just that. 

Debt is destroying the lives of  Americans.  The credit card industry must be regulated again by the people through their elected representatives in Congress.   The law must be changed to protect us from our own financial ignorance or recklessness, and yes, greed.  In the end, we all pay for such ignorance and recklessness and greed.    The global corporations who sell their products here in the United States, but maintain off-shore headquarters to avoid corporate taxes must pay their share of doing business here.   That is the cost of being allowed to market their goods in the greatest economic marketplace in the world.  

The Free Trade economic theorists will always repeat the thoughts of their dead apostle of the Laissez-Faire school of capitalism,  Adam Smith .  Historians know that once Great Britain eventually adopted Smith and free trade in the 19th century, the United States of America cleaned their economic clock.    Even Otto Von Bismarck’s united Germany surpassed the British Empire in steel production by the late 19th Century.   How did the USA accomplish this?   I shake to use the phrase “protectionism”.  By placing tariffs on foreign goods coming into this country,  we gave our young nation a chance to compete against the British Empire and France.  

When I graduated from high school, I worked for Shearson Hammill and Company, at 115 Broadway.    In those days, most workers in the Wall Street area took a lunch hour break. When I recall those times, it seems almost surreal to contemplate that Wall Street workers could actually leave their offices for a lunch.  In today’s workplace, I would not be surprised to hear that workers were being fitted with catheters to enable them to urinate without leaving their work cubicles.   At any rate, in those genteel years of long ago,  I would pick up a sandwich and a soda and go into the churchyard of Trinity Church at Broadway and Wall Street.  I always had an interest in history and would read the names on the tombstones in the old churchyard.  

 Alexander Hamilton, the first Secretary of the Treasury of the United States of America is buried there.    It is fitting that Hamilton is buried in Trinity Churchyard.  He, more than anyone else must be credited with bringing prosperity to millions of Americans since the founding of our country. Yet, we seem to have forgotten him and his economic theories.  We have his image on our ten dollar bill, but there is no great memorial to him in Washington D. C. We can’t visit his great home or plantation such those for Washington, Jefferson, and Madison.  We have his obscure tombstone in Trinity Church where we can eat our lunch. Yet, I believe his memorial is our very economic system.

                 Photo Courtesy of the US Park Service

 (Note:  Since publishing this article,  the writer learned that the Hamilton Estate known as “The Grange” is being moved and restored by the U.S.National Park Service.  Hamilton’s Grange on Convent Avenue in Manhattan is being relocated into St. Nicholas Park which was orignially part of his estate. To read about this, go to:

When will the financial industry realize that our “consumer driven” economy has reached the critical point where the average worker is “Maxed Out” with credit card debt?    When will those who are responsible for the economy of the United States of America realize that we can no longer allow the predatory lending practices of our financial institutions?  When will Congress and our entire government stop this insanity?  As we read daily of the mess that the subprime mortgages have caused to the entire housing industry,  when will they act to regulate the lending institutions?  We are being told that our savings are at an all time low, yet, our banks give a pittance in interest for savings deposits, yet charge obscenely high interest rates for bank issued credit cards.  Why have credits cards been exempt from regulation?  In effect, the sky is the limit for credit card interest rates.  The 30% interest cap on credit cards is laughable.  It is time for those in Congress to show some backbone and challenge those who lobby on behalf of these predatory and usurious interest rates.

 To keep abreast of the latest news effecting our economy, I recommend the following web site:  http://patrick.net/housing/crash.html  

To read how workers fared under the greed of so-called “laissez-faire capitalism” espoused by Adam Smith, read a book that was a favorite of President Theodore Roosevelt.   Teddy was the Police Commissioner of the NYPD for a time and he would walk the streets of New York with Jacob Riis,  a journalist and police reporter for the New York Tribune.  He also was the author of a social commentary “How the Other Half Lives” On those walks with Jacob RiisTeddy Roosevelt saw first hand how poverty destroyed the lives of the poor. He saw the ghetto conditions of New York City in which crime flourished.    Riis became a lifelong friend of Teddy. When Teddy became President of the United States of America, his actions against the “Robber Barons” of his day reflected his experiences as the Police Commissioner and Governor of New York
Click here to go to  “HOW THE OTHER HALF LIVES”

Click here to read about Jacob Riis:





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