Latest Online Edition  Read Here

Darn the Luck Featured

On a recent Planet Money podcast, attorney Chi Chi Wu of the National Consumers Law Center said that bad credit is often the result of bad luck. Among the incidents of bad luck she catalogs as medical expenses, divorce and job loss. Are all of those really bad luck, though?

The podcast describes how the credit reporting agencies used to include in their reports hearsay about a consumer's mental state. Congress put an end to this practice, but should they have? It seems to me some of this hearsay leads to Wu's bad luck. We're the financial crisis was the result of banks extending to credit to people who proved bad risks. But we're also told that denying people credit or charging for risk is bad. So which is it? As Thomas Sowell once said, there are no solutions in economics, only trade-offs.

Rate this item
(0 votes)
More in this category: « Always? Win-Win »

Ted Craig

  • No Solutions
    The older I get, the more I'm convinced people don't want solutions. They don't want their problems, but there is a difference between that and solutions. Solutions are hard. They…
  • No, They Didn't
    Yesterday's WSJ had an article on plans by Mahindra & Mahindra to start selling vehicles in the U.S. There was no mention that we've seen this show before and it…
  • Breaking Up Isn't Hard to Do
    The latest issue of The Chicago Reader had an article on the divide between downstate Illinois and metropolitan Chicago. The upshot of the article was that downstaters benefit more than…
  • If These Trends Continue...
    My parents owned a copy of Linda Goodman's "Star Signs." Astrology and fortune telling were all the rage in the late '60s and early '70s. Jeane Dixon was a regular…
  • Is Kinder and Gentler Really Better?
    Today's WSJ has an article about the new breed of baseball managers. It says these guys are more concerned about communication than they are about strategy. The days of the…
  • There Oughta Be a Law
    You can make all the laws you want, but there are always two problems with any law. One is how will they be enforced. The other is that criminals, by…
  • Berko the Clown
    This is what Malcolm Berko, an investment columnist, says about Credit Acceptance: "Credit Acceptance Corp. (CACC-$282) has lending contracts with thousands of grubby dealers who run grimy used car lots…
  • Tech and Tariffs
    There are three ways for an American worker to lose a job: they can be replaced by a worker in another country, they can be replaced by a worker from…
  • Taxing Matter
    In his book about the mortgage crisis, Wall Street analyst Barry Ritholtz exonerated the mortgage interest deduction from blame. His reasoning was that the deduction had been around for a…
  • There's a Difference?
    Activists have pushed rules against payday lending that would basically end the practice. They don't like bail bondsmen, either. You might say, "I don't like these people either. What do…