Usury and Mark Scores

If you have not yet reached the stage of bankruptcy or foreclosure, then you have the option to petition your lenders to voluntarily rescind their interest claims.

Salem-News.com

(EUGENE, Ore.) - On July 1, 2007, a new law came into effect in Oregon which placed a cap on the maximum interest rate that could be charged by “payday” lending operations.

Payday loans are quick cash operations that charge outrageous interest rates to desperate and foolish borrowers. Payday loans are an extreme example of the general operating principals of the major banks in the U.S.

The maximum annual percentage rate legislated by the State of Oregon for payday loans is 153.77%.

The modus operandi of the major banks in the U.S. is fraud. The principal they operate on is to take as much as they can get in all circumstances.

The difference between a mortgage loan at 5% and a payday loan at 150% results from the economic theory of “profit maximization through market segmentation and product differentiation.”

The instrument of market segmentation employed by the major banks is private consumer credit scores.

It can immediately be observed that a “credit score,” as maintained by a predatory lending institution, is nothing more than an internal system for determining the maximum potential profit that can be extracted from an individual.

A wealthy individual who has never used a consumer credit product gets a lower score than a person with zero assets and large debts who makes their minimum payments on time.

In this day and age consumer credit use is ubiquitous and the majority of the population has been forced into the predatory lending system.

Private credit scores, created and maintained by predatory lenders, have been pushed into all aspects of life. They are used to determine whether or not a person can rent a home. They are used as a criteria for obtaining employment. Access to essential utilities such as electricity, water, and communications services is often predicated on a private credit score.

The linking of credit scores to the essential necessities of life makes them a powerful tool of coercion.

The widespread use of credit makes it possible to impose an economy-wide system of variable pricing. Traditionally, prices for goods and services are fixed, supposedly at an efficient price determined by market forces.

Economic theory states that a fixed price will not yield maximum profits, because all of the people who would be willing to pay more than the fixed price for a good or service will be able to purchase it for less than what they would be willing to pay.

Variable pricing, on the other hand, leads to maximum profits, because it allows for charging people what they are willing to pay, as opposed to a fixed price that may be lower than what they are willing to pay.

When credit and usury are added to a system of fixed prices the result is a system of variable pricing.

With credit and usury, the ultimate cost of a good or service is not the fixed price on the price tag, but the total cost, after taking into account interest paid.

A T.V. that costs $1000 dollars in cash may cost $1500 if paid for at interest. It may cost $1200 or $2000. In fact, the price is totally variable, entirely dependent on the amount that can be extracted from the purchaser.

The same principal applies to land, housing, cars, utilities, and even jobs.

What credit scores and widespread usury make possible is a system of variable pricing with a truly perverse criteria for establishing prices: the wealthiest pay the least, and the poorest pay the most.

The credit scoring system incentivizes people who play by its rules by rewarding them with lower prices for everything they buy.

In general, the wealthier you are the less incentive you have to borrow, and so a wealthy person will never pay a 150% interest rate. Fraudulent banks, which are based on the principal of taking as much as possible, adjust their rates accordingly, and offer the wealthy rates that they will pay, in the range of 3-5%.

On the other hand, a person facing foreclosure or eviction is in a position of extreme financial distress, which can be used as coercive leverage to force them to accept a rate of 150%.

It can be observed that credit scores first create the conditions of coercion, by charging higher prices to the poor, and then exploit those coercive forces by charging ever higher rates of interest. The result is a downward spiral into the trap of poverty.

Credit scores, as I have stated previously, are numerical estimates of the potential exploitability of individuals by predatory lenders. “Mark score” would actually be a more accurate description of their function.

The credit scoring system is reinforced by the variable pricing system that it makes possible. Individuals with better credit scores pay lower prices for goods and services than individuals with worse credit scores, which makes them relatively more prosperous.

Better credit scores, better jobs, and lower prices translate in consumable income, which in turn can be spent of all of trinkets of a consumer society: big houses, big cars, big televisions, etc.

What is important about consumption of goods is that it is an indicator of social status. The link between usury and consumption makes it possible to take an absurd value system (“mark scores”) and persuade people to internalize it.

Good marks are rewarded by usurers with lower rates for borrowing that translate into lower prices for goods and services, which in turn translate into more expendable income. As a result, good marks accumulate indicators of social status, and consequently gain a relatively high social status.

Once the credit scoring system is translated into observable real world social conditions, it is given validity, and internalized by everyone in society.

The valid question then is: what are the consequences for society of determining social status on the basis of an individual’s potential exploitability by fraudulent banks?

A subsequent question is: what are the consequences for democracy (essentially a popularity contest that is largely driven by debt based social status indicators) of allowing society to be stratified along the lines of the banks’ mark scoring system?

The later question has been answered by the bankers themselves. They refer to this system as “market democracy.”

Market democracy is, according to the bankers, a form of democracy where individuals exercise their rights through their spending choices. Votes in a market democracy are allotted on the basis of disposable income: one dollar, one vote. Disposable income, as I have shown, is a direct function of the mark scoring system.

Thus, market democracy establishes very narrow boundaries for decision making, and allots votes on the basis of an individual’s fidelity to the market system. Market democracy is, in fact, not democracy at all, but a self-referential totalitarian system.

Every “vote” (spending choice) in a market democracy is subject to coercive pressure and serves to reinforce the market system. If an individual spends their money in a way that is contrary to the market system, they are punished by having their access to credit and money reduced, subsequently reducing their voting power within the market democracy system.

Market democracy, being based on usury and a corrupt system of allocating money and credit to market adherents, is inherently corrupt. Widespread social adoption of this system serves to insinuate fraud, bribery, and coercion into all other areas of commerce and civil society.

Usury is fraud, pure and simple. This has been affirmed throughout history by all philosophers, law makers, and economists of any significant standing.

(See: History of Usury Prohibition)

Consequently, the widespread adoption of usury as an organizing principle for society can only lead to disastrous results.

To this end, Thomas Jefferson wrote to John Taylor in 1816:

“The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens.”

Letter to John Taylor

The morals of the citizens that Jefferson observes being swept away are their common decency and humanity. Then as now, the wealthy say that they deserve their status, that they are being rewarded for their good deeds, and that the poor deserve their punishment.

So what if some poor bozo pays a 150% interest rate? They deserve what they get. Is it my fault that through their laziness and stupidity they have found themselves in such a predicament? Such is the argument proffered by those who esteem themselves to be superior, even though their superiority is a figment of their imagination, created and sold to them at a price by usurers who profit to the detriment of us all.

Indeed, usury is a blot on the Constitutions of our State and National governments, as Jefferson describes it, which will end in their destruction if not amended.

The fraud of usury has for so long not only been unchecked by government, but actively encouraged and endorsed by government, that individuals, businesses, and government bodies themselves are all now crippled by usurious debt and its corrupting influence.

Competent governmental policy making has become virtually impossible in the face of corruption so pervasive that it has become an accepted part of our system of governance.

In the face of rampant and widespread bribery our society has taken to calling bribery “lobbying,” as if by a change in terminology we can wish away its corrosive influence on our governance.

However, a change in terminology is not a change in conduct, nor does a change in terminology make a bit of difference in the natural results of an action.

You can call jumping off a cliff “short term flight” but the end result will be the same.

The corruption of government by bribery follows naturally from the corruption of society by usury. Usury shifts wealth within society to the most corrupt, and provides usurers with the bribe money they use to buy government officials.

Our modern economic system incorporates usury on an unprecedented scale. The system of credit (“mark”) scoring has, over the course of decades, re-stratified the mass of society along absurd lines, that serve no purpose other than to propagate the frauds of the people who created and profit from this system.

The solution to this problem is very simple: ban usury and treat lobbying for what it is, bribery.

A government that opposes a limit on “acceptable usury” of 153.77% per annum only makes a fool of itself. The correct limit is 0%, and any diversion from this is doomed to failure.

Even if the limit were 3%, the usurer would only turn around and with their ill gotten gains begin to bribe politicians until the limit was raised. This is a given, in that usury is fundamentally corrupt, and thus anyone who is involved in this corrupt practice will only increase in their corruption if they are rewarded by it.

As a society, we should reject usury entirely. The simplest way to go about this is to presume all contracts based on usury to be fraudulent, and thus null and void.

There is no way for the government to prevent people from entering into fraudulent contracts, but it is a simple thing for the government to refuse to enforce fraudulent contracts.

Recognizing usury as fraud and thus ending government enforcement of usurious contracts would put an end to a great deal of the corruption in our society over night. Fraudulent bankers would be reduced to their former and proper status as petty criminals and con artists. Absent the police power of the State to use as the big stick in their collection efforts, most of their scams would collapse.

The legal precedents for such a policy are extensive, ancient, and unanimous. No one can claim that our legal system allows for the enforcement of fraudulent contracts, nor can anyone deny that according to all relevant precedent usury is fraud.

Consequently, any contract containing a usurious element should be presumed to be fraudulent. If there is a substantial legitimate element to a contract, then this should be upheld, but the usurious portion of a contract is null and void by definition.

This is the law of our land. There need be no specific prohibition on usury in private contracts, because usury is fraud by definition.

Whatever precedents that can be pointed to, upholding usury, are of no merit. Under the rules of our system of law, precedent governs. The ancient precedents confirming usury as fraud carry far more weight that the ramblings of some backwoods justice who has been given a robe and a paycheck in order to sign off on a corrupt ruling.

If you are suffering under excessive usurious debts and facing bankruptcy or foreclosure, then you should do some research into usury and talk to your lawyer about seeking to have your usurious contracts invalidated. If your lawyer needs help figuring out what the actual law is, then don’t hesitate to provide them with the documentation they need to enlighten themselves.

If you have not yet reached the stage of bankruptcy or foreclosure, then you have the option to petition your lenders to voluntarily rescind their interest claims. Notifying your lenders that you have determined their interest charges to be fraudulent can play a role in having those interest charges invalidated at a later date.

Ultimately, rights must be asserted. Fraudulent banks operate on the principal of taking as much as they can get. As long as you pay them, they will be happy to take your money.

Unless you assert your rights as an individual who has been defrauded by an illicit scheme, you will never receive justice and redress.

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Salem-News.com Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications.

Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance.

You can write to Ersun at: warncke@comcast.net