Worth Reading - 6/1

The reasons that someone who is poor might need fast cash and not be able to get it are often not the result of personal sin or outsized wants. Unexpected troubles of all kinds beset everyone, but the effects are more detrimental for the poor than the rich or even the middle class. The reality that need and resources are not always co-located is made manifest especially for the poor, even with strong networks of relationships. Friends and family may be immensely willing to help, but what if they don’t have the financial capital to do so? Banks don’t tend to extend small loans. Options to get financial help quickly are limited when you’re poor.

The payday lender trade association, Financial Service Centers of America (FiSCA), explains how they exist to solve this problem by describing payday loans as “small, short-term cash advances, which are a popular source of credit for Americans.”

Popular is an understatement. The Center for Responsible Lending notes that for every Starbucks in the United States, there are more than two payday lending storefronts.

FiSCA states that their members offer products to “bridge the need for small dollar, short-term credit when other options are limited, too expensive or unavailable.” And FiSCA describes their customers as those “who often are living paycheck to paycheck.”

One might argue that the free market exists to offer ready alternatives for moments like this. But that’s less than half of what should be said. Christian philosophers and economists have long argued that free markets are to be just markets. Within just markets, businesses rightly uphold their responsibilities as they seek to satisfy legitimate human needs and contribute to human flourishing as they profit. When rightly ordered, businesses operating in free markets impose limits on their own practices and operations such that their relationship to the rest of society’s institutions and to human beings reflects the end of satisfaction, rather than the more familiar word maximization regarding the making of profit. Rightly ordered businesses choose practices that reject profiting from the exploitation of human beings.

Despite their altruistic talking points, predatory payday lenders fail to meet these criteria.
Missions is brewed in a pot of extremely high expectations. Missionaries undergo a brutal screening process by their organization. Church missions committees pepper them with interview questions on strategy and effectiveness. If you want to be chosen, that’s what you’ve got to prove.

Then, once missionaries are approved, signed, sealed, commissioned, and their picture spread all over foyer walls and refrigerators across the country, they are thrust out into the world to show off their strategy and effectiveness. After all, they’ve got scores of donors behind them who want to see the return on their investment.

I don’t know if that’s true, but that’s what it feels like.

So when the strategy doesn’t work (since it usually doesn’t the first time around), and there is very little effectiveness to be seen, what then? What do they tell people? When a missionary spends three months planning an event, and only three people show up, should he be upfront about it? When the church doesn’t get planted, or when the planted church falls apart, or when the exciting new believer has been stealing from you....what then?
I have so much and give thanks so little. God has blessed me tremendously in all areas of life, and I return thanks to him so sparsely and so half-heartedly. This is my conclusion as I continue reading through John Flavel’s classic work The Mystery of Providence. In chapter 4 Flavel instructs the reader to acknowledge the hand of God in and behind our daily work. Along the way he offers every Christian 4 cautions related to vocation:

4. We want to be family friendly, but Joe Carter explains why many "family friendly" provisions for employers end up not being so friendly to families:

Three of the most basic principles of economics are that people are price-sensitive, risk-averse, and that they respond to incentives.

If you raise the price of a good or service people will, in general, tend to buy less (price-sensitive). If you give a person a choice between a certain outcome (“I’ll pay you $50 for nothing”) or a higher payoff on an uncertain outcome (“I’ll pay you $100 or nothing based on a coin-flip”), they’ll generally take the less risky option (risk-averse). And if you give people a way to get a lower price without any risk, they’ll generally prefer that option (response to incentives).

Each of these principles seems intuitive, even obvious. Yet for some reason when you combine them to create a public policy people are shocked to find it can have “unintended consequences.