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Tuesday, September 18, 2007

Usury: the greed that dares not speak its name

Last night, Paul Barry on Four Corners did a program on the Mortgage Meltdown in the USA. Scary, dreadful stuff in the Land of the Free and the Home of the Brave. Miss Eagle was very struck by the comment by a black female interlocutor who pointed out that urban decay had been evident in black communities for a very long time but now there is some attention being received because, with the collapse of sub-prime mortgages, urban and sub-urban collapse now invades white communities.

To date, Australia has seen only small tidal effects from the tsunami swamping the USA. However, the Land of Oz has problems of its own with low-doc and no-doc home loans. Home loan defaults are on the rise.

A few years ago, Australia had a Productivity Commission inquiry into gambling. This probably came about because of representations by Tim Costello, CEO of World Vision, to his brother, Peter Costello, Australia's Treasurer.

Miss Eagle asks if we could see a Productivity Commission Inquiry into usury and its impediment in the market place and its role in the dysfunctionality of human relationships, individual lives, and dysfunctional communities. Such an inquiry should take into account:
  1. The level of interest rates on housing, credit, credit cards, and all forms of lending of money.
  2. Fees charged in relation to accounts held in and by financial institutions and in relation to the lending of money.
  3. Pay day lending
  4. Predatory Lending
  5. Pricing in all financial institutions
  6. The true cost of Private/Public Partnerships in the provision of public infrastructure
  7. Commissions, fees, and other forms of remuneration in and by financial institutions
  8. Trading in and financing of debt
  9. The social implications and adversities related to money and credit lending
  10. Innovative financial practices of social utility and benefit

Usury is an ancient human and communal problem. The Abrahamic religions - namely Judaism, Christianity, and Islam - have always found usury problematic. Perhaps, Islam has held out longest against usury and has institutionally made provision in response to Qur'anic prohibitions. However, life moves on and people, times, and situations change. Now, in Australia, we are seeing changes within the Islamic community. See here and here.

Of course, it takes a great naivete to imagine that the upper echelons of oil-rich Islamic societies have had nothing to do with usury in some form or another. Instance the connection of the House of Saud with the Carlyle Group. The Papacy no longer rails against usury and has its own bank. And did Frank Lowy look to Old Testament injunctions against usury on his way to taking the Westfield Group to its premier position as the world's largest retail property group by equity market capitalization?

So our ancient wisdom stories have warned against usury, warned against the actions of the rich against the poor. 21st century people, communities, and nation states have not become any smarter, any more moral than their 8th century BCE, 30CE, or 500CE counterparts.

We need to call usury for what it is. We need to name greed for what it is. We need to put people before money, and the community ahead of the corporation. If the predatory lending tsunami continues as the forecasts tell us it will, it can be as devastating as - and possibly more devastating than - World War II. The social fall-out over time will be horrific. As individuals were are not prepared for this. As communities we are not prepared for this. And the world is certainly not prepared for a diminution in the power and strength of the USA and its economy.