Did you say usury!

- Mark Thoma links to Ken Rogoff's measured embrace of the idea of usury laws. He also mentions Islamic finance. It's interesting - the right has gone bananas over whispers of sharia law, but they don't seem to have latched on to the discussion of Islamic finance that has been going on in economics for a while now.

- A couple days ago we had an event at the Urban Institute on refund anticipation loans (RALs). We just released several reports on RALs and several other high-price, small-dollar credit products (pawnshop loans, payday loans, etc.) - I co-authored a couple of them. Anyway, in this talk Chi Chi Wu - one of the panelists (not from the Urban Institute) - mentioned usury laws. Keynes argued that usury laws are generally considered ill advised, but they do have at least something to them if you have a liquidity preference (rather than a pure loanable funds) theory of the interest rate. I'm not saying "let's cap interest rates". I'm saying, with the proper historical context, this body of thought is not as goofy as it first sounds. I leaned more towards Bob Weinberger and especially Melissa Koide's position during this talk than I did towards Chi Chi Wu and even my colleague Brett (although he mostly stuck to the numbers). The video for the event is here:




Video streaming by Ustream

By the way - that's me in the front row to the right of the woman in the black and white plaid jacket. That's Nancy Pindus, another Urban Institute researcher and a co-author on one of the reports that came out of this project.