Wednesday, September 02, 2009


Megan McArdle asks, "Can we really protect consumer finances?," pointing out that such regulation only serves to limit the consumer credit options available to those at the margins. And never was there a better point on the subject as this:

For some people this is an argument for laws that make it unprofitable to loan money to people who are likely to default, aka those living on marginal incomes. The problem is, there are two groups of people among the poor: those who will be made better off by credit, and those who will be made worse off.

Big government types would love to think you can have the best of both worlds, but the sad truth is that you can't. You can either have the government step back and allow the credit industry to help some folks while others screw themselves or you can have the government step in and have the government regulate credit, preventing some folks from getting hurt, but also standing in the way of those who could be helped by readily available credit.

Libertarians will always come out on the side of choice, keeping the government in the background and allowing individuals to make their own decisions. If you're for regulation, so be it, but just recognize that's all about protecting the folks who would be hurt and standing in the way of those who would be helped.


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