According to an excellent article in Harper’s Magazine (April 2009) – Infinite Debt by Thomas Geoghegan – the key to our current financial meltdown and economic crisis can be summed up in one word:
Most analyses of the economic crisis focus on the housing meltdown and/or the lack of proper bank regulation. These are true – but not the whole truth.
Geoghehan goes to the heart of the matter and points the finger of blame for our current financial and economic crisis on the dismantling of usury laws which resulted from the 1978 Supreme Court decision in Marquette National Bank v. First Omaha Service Corp (national banks may charge the interest at the rate set by the state “where the bank is located” regardless of the laws in the state where the bank is actually lending money).
“We dismantled the most ancient of human laws, the law against usury, which had existed in some form in every civilization from the time of the Babylonian Empire to the end of Jimmy Carter’s term.”
Geoghegan traces how “with the collapse of anti-usury laws, we have also seen the deregulation of virtually everything else bankers do” and how our economy has since become based – not on manufacturing innovations but – on banking innovations (e.g. derivatives, etc) resulting in economic deterioration.
According to one authority (see http://www.alastairmcintosh.com/articles/1998_usury.htm )
regarding usury “[a]mong its most visible and vocal critics have been the religious institutions of Hinduism, Buddhism, Judaism, Islam and Christianity. To this list may be added ancient Western philosophers and politicians, as well as various modern socio-economic reformers.”.
Could our society’s violation of this “moral law” be the cause of our current economic crisis?