Educating the Simple Child, Richard Eskow, Yet Again

Doofus Major Richard Eskow proved himself to be the simple child again today, in yet another bumbling screed over at the Huffington Post. Readers of this column know that his previous essay was filled with illogical pronouncements and an interpretation of philosophical and Scriptural texts worthy of an 8th-grader.

Did Mr. Eskow address the rebuttals that tore apart his arguments? Of course not. So like the 8th grader who’s had his fanny smacked for bad behavior, he waves his hands and says, “No no no! Let me try this!” Not surprisingly, Mr. Eskow again demonstrates he has no journalistic credentials. He cherry-picks data to support his case and quotes an organization that is a well-known PR front for an entity that created the exotic mortgages that cratered this economy.

Then again, Mr. Eskow doesn’t even qualify as a citizen-journalist. He’s a Senior Fellow at a far-left wing think tank, and a “policy writer.” Apparently, he is also a musician. What he apparently lacks, however, is the ability to use the internet to find some very simple facts. Yes, facts. Or maybe he just doesn’t want to discuss facts because he’s an ideologue, and facts are contrary to his perspective.

However, it is a Godly endeavor to educate the Fool, so I shall attempt to do so further with Mr. Eskow.

He states in yesterday’s column:

Payday loans weren’t created to help underserved populations, but to exploit helpless people. Payday lenders are deeply connected to traditional banks, who freeze out certain customers so they can be preyed on by usurers.

First, note how the Fool sticks to his claim of usury, ignoring that this argument had already been debunked in my previous column. I guess he was too busy plugging his ears screaming, “La la la, I am not listening to someone with a superior intellect who makes logical and coherent arguments.”

Nor are payday lenders “deeply connected to traditional banks.” His argument is that because Wells Fargo provides credit facilities to payday lenders, that this constitutes some kind of sinister conspiracy. Mr. Eskow believes that – let me get this straight – banks didn’t want to directly charge customers usurious rates even though they could if they wanted to, so instead they froze those customers out so they would go to payday lenders, so that the banks could make less money by lending at traditional bank rates to payday lenders.

Yes, that makes perfect sense.

Apparently, Mr. Eskow believes that if an institution chooses not to offer a service to the public because it is unprofitable, a business that steps in to fill the gap is deemed to have a “deep connection” to the former. Using this infallible logic, because Ruth’s Chris Steak House doesn’t serve chicken nuggets, McDonald’s is deeply connected to the steak industry.

Is anyone else ready to apply the clown makeup to Mr. Eskow’s face?

Mr. Eskow then asks a great question:

Shouldn’t people be free to enter into contracts with one another, even if the terms seem outrageous to others?

Of course, the answer is yes. People should be free to do so. They should be free to make the credit choice that they freely choose to enter into. It is their choice. However, Doofus Major’s answer is revelatory. It should frighten all Americans who want freedom to choose their own source of credit, and it proves exactly why the elitist liberal agenda is anti-American.

Mr. Eskow says “no.” No, a person should not be free to enter into contracts with one another. Instead, Mr. Eskow wants government to restrict people’s freedom. Mr. Eskow believes that people are too stupid, too unsophisticated, or too uneducated to make decisions all by their lonesome. He has outed himself as the classic Nanny Statist – the true Fascist who insists – insists – that he knows better, that he’s protecting consumers when they never asked for his help.

Of course, Mr. Eskow believes this because he has never set foot in a payday loan store, never talked to customers, never talked to American entrepreneurs who own 65% of storefronts in this country, never had to live paycheck to paycheck, and has never lacked resources for short-term credit.

Yet, he knows better. By logical extension, he also knows just how many hamburgers you should be permitted to eat, how much electricity you can use to cool your home in the summer, how many times you may flush your toilet, how much alcohol you can consume in a year, and how many times you can break wind before it become a hazard to the ozone layer.

Mr. Eskow is a policy wonk with no background in economics, who spends his days planted in a desk chair pontificating about people he knows nothing about. And yet, while he rambles on incorrectly about usury, he thinks nothing of banning liquor stores or restricting the number of vodka bottles a person can purchase. Nevertheless, whereas payday loans provide short-term lifelines to people, alcohol serves no useful or productive purpose whatsoever, and causes far more social and economic harm than a defaulted payday loan ever could.

Let us now place the big floppy shoes on Mr. Eskow’s feet.

We’re not done. Insisting that he further demonstrate a lack of journalistic research skills, Mr. Eskow claims that because Bank of America owns 2.07% of QC Holdings, that this makes them a “major shareholder.” I should think that a Doofus Major would recognize that the adjective “major” refers to an amount vastly in excess of 2%. Still, forever determined to prove himself an idiot, he then cites a now-obsolete arrangement between out-of-state banks and payday lenders – an arrangement outlawed by the FDIC in 2005. Would somebody please teach the dunce in the corner how to research properly?

Or let’s just put the pretty red clown nose onto Mr. Eskow’s face.

Mr. Eskow, in his zeal to avoid a direct challenge to his disproven theories, still insists that people are forced to roll over loans. Again, Mr. Eskow, I’m going to make this really easy for you. Advance America. Form 10-K. Read it. Ninety-four percent of all loans are paid off on time, a statistic common across the entire industry, and available in every single annual report – if you bother to read it.

Mr. Eskow is so intent on proving his point that he attacks industry-funded studies while failing to mention that his own sources are themselves payday loan opponents – who seek to capture the market for short term lending by driving other lenders out of business. I have, on multiple occasions, along with investigations by folks at BigGovernment.com, proven the Center for Responsible Lending is a PR front for the Self-Help Foundation, founded by Herb and Marion Sandler, and also by John Paulson, that pillar of consumer protection.

But you don’t need several independent, non-partisan, non-industry-funded studies to tell you what should be obvious to anyone with a brain. Banning payday loans makes things worse for the consumer. Payday loan customers know what choices of credit are available, and they repeatedly choose short-term cash advances for a reason: it works for them. Americans are smart, Mr. Eskow. They are not mentally challenged when it comes to researching the best deals on anything, including credit. They are, apparently, more adept at research than you are. The reason the number of storefronts grew as it did from 1990 to the present, was because the product was popular and it served a need. If any of your arguments were valid, the payday loan customer base would have been cannibalized years ago. People who find themselves trapped in the mythical cycle of debt would not return to experience that again. There would be no customers left to trap.

Instead, six million people per year freely choose payday loans, and get through their short-term emergencies as a result. You would rather send them into the arms of the very banks you complain about, which is what would happen when you eliminate this option.

Let me just add that as a policy wonk, Mr. Eskow is also a complete failure. States already have the power to set usury rates. Payday loans are permitted in states due to usury exemptions already granted by state legislatures, who – guess what – also understood the need for the product, and passed that legislation in more than 40 states over the past 20 years. And yes, many of those states were controlled by Democrats. Mr. Eskow wants the CFPA to oversee what is already regulated – yet another layer of useless bureaucracy and government intervention where it is neither wanted, nor needed.

And on that note, we stuff Doofus Major into the clown car with the other ideologues, and kick it off the cliff. Wherever it lands is bound to be better than where it started.

Correction: In my previous article, I erroneously noted W. Allan Jones as the CEO of Checksmart. Mr. Jones is the CEO of Check Into Cash. I, at least, own up to my mistakes.