George McGovern On Personal Finance: Freedom Means Responsibility

A key quote from this morning’s Wall Street Journal: "Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior."  
That’s from an op-ed signed by former Senator and Democratic presidential candidate George McGovern, weighing in on the pages of the Journal to condemn the paternalism that seems to dominate discussion of personal finance. The piece covers multiple topics within personal economics: mortgages, health insurance, and payday lending. It comes down on the side of financial freedom on all counts, but the strongest words are reserved for those who rail against payday lending:

Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next.

Researchers from the Federal Reserve Bank of New York went one step further and laid the data out: Payday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy. Net result: After a lending ban, the consumer has the same amount of debt but fewer ways to manage it.
It’s powerful stuff – click here to go to the Journal and read the whole thing.