Credit and a little history

If we don’t start weaning ourselves from this credit addiction thing, we as a people and as a nation are seriously fucked. Oil addiction is a bad thing, but credit addiction is worse. Think of the two as heroin or gambling. The guy who started his gambling addiction the day Keith Richards started using heroin hit the Hudson in cement overshoes back in the sixties, whereas Keith is on track to turn 100 any day now. Credit gets you nowhere. It steals from your future and kills off options. It forces you out of choices about your future; without a mortgage, car loan or credit card debt, you could give two weeks notice and join the Peace Corps. With all the debt mentioned above, you are stuck for at least a few years, more likely many, especially given the real estate catastrophe.

As usual, the conventional wisdom was wrong. They said you had to get a credit card because a good credit score is the economic pot of gold, the ticket out of Palookaville, the grand prize. Then you had to use the card to keep improving your credit score. Then you need a condo, a townhouse a house. (Since when doesn’t it take love to make a house a home? I’m sticking with house.)
An entire industry evolved to convince people that credit scores were the point of their entire economic lives, and that taking on more debt made them better and better people.

Unfortunately, those who forget the past are condemned to repeat it. For thousand of years, debt was a shameful thing, taken on only in dire need or foolishness. “Neither borrower no lender be” said Ben Franklin, known when I was a kid as a pretty wise dude.

There’s a famous old cartoon print from an earlier economic bust, showing two merchants, one of them haggard and thin, in shabby clothes next to a safe full of moths and worthless IOU’s. Below him it states, “I sold on credit.” In the second panel, a fat, well-dressed merchant sits next to his safe stuffed with cash. Below him reads, “I sold for cash.” Credit is and has always been a dangerous thing, especially when used unwisely.

There’s a tradition in ancient Jewish history called Jubilee. Now we use it to describe a wingding or a dessert, but the original meaning has everything to do with debt, but with a dash of justice and mercy thrown in. Every 7 years, all debts were forgiven. Imagine that, if you will. On the one hand, you get out of jail, er, debt free. On the other hand, how much lending would you do if it wouldn’t count less than seven years later?

On a completely different note, before the Christian Bible became an entirely owned division of the Religious Right™, there was a sin called “usury”.

The Prophet Ezekiel includes usury in a list of “abominable things,” along with rape, murder, robbery and idolatry. Ezekiel 18:19-13.

Jews are forbidden to lend at interest to one another. Exodus 22:25; Deuteronomy 23:19-20, Leviticus 25:35-37.

Dante’s Inferno places usurers at the seventh level of hell, one down from murderers.

How did we get from there to a nation whose Bankruptcy Reform Act is a gift to the vast predatory lending industry? This cruel Act actually stifles new business creation by criminalizing failure at a start-up company.

My first company, Wilder Systems, basically put me into bankruptcy. It ended up being successfully sold, but I was long gone. Later, I was responsible for starting dozens of companies and possibly creating thousands of jobs. If I’d been facing today’s tougher bankruptcy laws, I’m not sure I could have gone through with it. I fear we are scaring our next generation of entrepreneurs from giving it a go because the Republicans threw a gift to an enormously wealthy industry that feeds on greed and ignorance based on a business model that the Bible calls a crime as bad as or worse than murder. In his only known act of violence, Jesus threw out the moneylenders.

Is it me or is the hypocrisy just stunning?