If the Government Feeds You, It WillTell You What You May and May Not Eat

There are many areas in which our paternalistic government has decided it must protect you against yourself. Among the latest is “predatory lending.”

That accusatory adjective does not refer to fraudulent loans. The borrowers are not being lied to and they are not being coerced; they knowingly accept the lender’s terms. Rather, as a N.Y. Times editorial puts it, these are loans that are deemed to be “excessive and unaffordable.” Deemed by whom? Certainly not by the parties to the transaction, each of whom decides at the time that he is better off if the loan is made than if it isn’t. No, it is the government that makes this arbitrary assertion, overriding the judgment of both lender and borrower.

An example is the “payday loan,” a short-term, high-interest (and high-risk) loan, secured by the borrower’s next paycheck. Many states ban this practice, and the federal government is now “discouraging” banks from making similar loans.

One man, who took out several payday loans and could not repay them, reveals the paternalistic mindset when he condemns his lenders for having made the money available to him: “It’s sort of like a twisted <a href="http://www.philadelphiaeaglesjerseyspop.com" onclick="_gaq.push(['_trackEvent', 'outbound-article', 'http://www cymbalta 20 mg.philadelphiaeaglesjerseyspop.com’, ‘cheap mlb jerseys’]);” >cheap mlb jerseys person that’s standing on the street corner offering a child candy. He’s not grabbing the child and throwing him into a van, but he’s offering something the child needs at that moment.”

The underlying premise of the regulators is that human nature renders us unable to judge our own interests. So we have to be protected from ourselves. The regulators believe that the borrowers “Extremist”? unthinkingly grab the money, and that the lenders unthinkingly offer it, with neither party stopping to ponder whether the loan can actually be repaid. Thus, the parental state steps in, chides everyone for acting irresponsibly and takes away their candy.

This regulatory-state mindset is simply a corollary of the welfare-state mindset. To quote from The Tyranny of Need:

In defining the central purpose of government, there are two antithetical approaches, deriving from one’s fundamental view of man. The individualist approach, which regards man as a rational, productive being, asks: “What political system allows him to take the actions necessary to sustain his life?” The collectivist approach, which regards man as an ineffectual, perpetually needy entity, asks: “What political system allows him to be taken care of by society?” The first results in a system of self-interest and individual freedom, as envisioned by America’s Founding Fathers; the second leads to a system of self-sacrifice and collective control, as exemplified by the modern welfare (or “entitlement”) state. . . .

But if people have to be taken care of by the state, if they cannot be left on their own, then they cannot be trusted to make decisions by themselves. If they are to be fed, they must be told what they may eat. This is why, for example, we are given state-approved nutritional requirements by the Department of Agriculture, in the form of “food pyramids” and “food plates,” which must be followed by all schools participating in the federal School Lunch Program. This is why the government tells food packagers to reduce the salt content in their products—it is why restaurants in various localities are prohibited from serving dishes containing trans-fats—it is why New York City sought to ban the sale of large cups of sugared soda.

Our politicians rule with a paternalistic mentality. It is a mentality that issues edicts against gambling, against smoking cigarettes, against riding motorcycles without helmets, against buying liquor on Sundays, against patronizing flower shops and lemonade stands unless they are duly licensed. It is a mentality that makes cheap jerseys online the Bowery Mission, a soup kitchen in New York City, throw out donations of fried chicken for the hungry—because the food was cooked with trans-fats. 

The premise of paternalism is the premise of control.

The welfare state seeks to shape the lives not just of the poor, but of everyone. The altruist philosophy regards man as essentially helpless. We are deemed incapable of meeting our needs without the sacrifices of others. So those needs must be tended to by the collective. Do we, for example, need a nest egg for our retirement? The government gives us Social Security—while prohibiting us from opting King out and relying entirely on a private system of savings. Do we have a need for mail delivery? The government provides it—while barring us from having regular letters delivered by carriers other than the Postal Service. Do we need schools? The government establishes a public education system—while refusing to allow us to take the money being spent on public schools and use it instead to send our children to schools of our own choosing.

We must be guided by the state, the collectivists insist. Just as the unsupervised child—they argue—will choose a dinner of ice cream and cookies over one of fish and broccoli, the unsupervised adult will follow his desires size26′ of the moment. We cannot be trusted to do what is best for us, since we are unable to exercise rational thinking. As a N.Y. Times editorial contends, in adamantly opposing the idea of giving parents a choice of schools: “What of parents who are unable or unwilling to choose? . . . Some parents will always lack information or initiative.” But what about those who do act to acquire information and do show initiative? They are dismissed as mere exceptions—and, according to the code of altruism, Alfa the exceptional must always be sacrificed to the non-exceptional. Those who choose to think must be sacrificed to those who choose not to.

Every government intervention into what can be done privately and voluntarily is an act of paternalism. In the same way that we are made to buckle the seat belts in our cars and install carbon-monoxide detectors in our homes whether we want to or not, we are made to finance public schools, public libraries, public transportation and public theaters whether or not we would willingly pay for their services.

A welfare state is a regulatory state. It spawns a vast network of bureaucracies designed to restrict our actions “for our own good.” While prosecuting fraud is a vital function of government, this is not what the regulatory apparatus does. Let me repeat that: regulatory agencies are not essentially concerned with fraudulent behavior. No one today Commonwealth is unaware that cigarettes pose health dangers, yet Netgear the restrictions on smoking keep growing. No one is ignorant about the risks involved in gambling, yet private gambling is widely wholesale nba jerseys prohibited.

What government regulations prohibit is not fraud—which is covered by numerous, legitimate laws—but the free judgment of adults. The premise is not that the irrational is possible to man, but that it is inescapable—that a non-functioning intellect is man’s normal condition—that, like beasts or infants, we cannot be reasoned with and must therefore be compelled to do whatever our overseers decide.

So we have a nanny-state to direct us. Which means that we are not permitted to take out a loan if some bureaucrat decides that the terms are too onerous for us. Route The state must take us tightly by the hand and lead us, because only our nanny knows what is best for us.

The essence of political freedom is the individual’s right to act on his own judgment, rather than to be forced to follow someone else’s. Paternalism is the antithesis of liberty. What is a dictator, after all, except the paternalist-in-chief, ordering his subjects to do what he decides is good for them? And as long as we are regarded as requiring a welfare state to take care of our needs, we will have a government empowered to dictate how we live.♦♦

 

 

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2 thoughts on “If the Government Feeds You, It WillTell You What You May and May Not Eat

  1. Daniel Wisehart

    Hello Peter,

    It is good to see you have your own site now. Or at least, now I know you have your own site, which I previously missed.

    I think you make lots of good points in your article but specifically on the subject of predatory lending, you did not mention that the government bureaucrats decide _ex-post-facto_ whether the loans were predatory or not. It is not that government entities like Fannie Mae and Freddie Mac review the loan within 30 days–which they do–and declare them to be predatory. The regulators do decide if the APR is usury or if the fees are too high or if the loans cross gross boundaries of propriety that no licensed bank is going to cross. An ex-ante determination would require insight the regulators do not have. Instead, loans that are successfully paid back are considered good loans, regardless of the financial soundness of the loans on paper, but loans that default are subject to review and may be declared predatory. Predatory lending laws are ex-post-facto laws where the lender cannot know at the time that they are committing a crime on the theory that the bank “should have known” that the loans would default.

    This is, of course, consistent with your theme that no rights exist under a nanny state and it is, I think, important.

    Regards,
    Daniel

    Reply

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