Thomas Sowell, a senior fellow at the Hoover Institution and famous economist, stood up for payday loans today. In eloquent fashion, he dispelled the common myths that have been perpetuated by the media, critics, politicians and "miscellaneous other busybodies" as he calls them.
He tells how politicians typically use words in their rhetoric to magically transform reality into something we believe is reality. The new movement, however, is to use numbers and statistics, as they appear more objective and concrete than words.
It's about time someone else sees the truth and speaks up about it. How many posts on this one single blog have you read to dispell the notion that payday loans are abusive? How many times have I said APR is a terrible measuring tool for short-term loans.
Does Blockbuster say movie rentals are $1,500 a year? Do hotels say they charge $36,000 a year? No, they charge by the night, because that is the typical denomination of time used in their services. Yet two week loans are measured by how much they cost in a year?
The most interesting part of this whole article was the statistics you don't see. Politicians and consumer advocates love to shove the APR of payday loans in your face. Do they know what payday loans are for? To pay rent, the bills, for medication, and other expenses for people who may live paycheck to paycheck.
Of course, every critic of payday loans lives far more comfortably than the common consumer of payday loans, so its not like their word can even be trusted on the matter. But why don't they ever tell you how many renters avoided late fees, how many people's power was not turned off, or how much needed medication was purchased with the aid of a payday loan?
Nope, you never hear those. And you likely never will. The media is strongly behind the anti-payday loan movement. Don't expect them to report the facts anytime soon. Not that our media normally reports the facts anyway...
Don't be misled by payday loan statistics. Numbers, like words, can be shaped to say whatever you want them to.