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In a followup to an article discussed previously here on SoylentNews:
Bloomberg has a three-part series on the use of an obscure legal document that unscrupulous lenders are using against small businesses.
- In Part 1 - I Hereby Confess Judgement, (the part discussed earlier on SoylentNews,) they go into detail on what the predatory lenders are doing to small businesses using a document known as a "Confession of Judgement" to extract court wins from small businesses without a trial.
- In Part 2 - The $1.7 Million Man, they go into how a debt collector became NYC's top earning official.
- In Part 3 - Rubber Stamp Justice, the article describes how the courts are involved, and what some of them are doing to prevent this abuse.
After the story was released on Bloomberg, the New York State Attorney General's office opened a formal investigation last month.
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Predatory Lending is Crushing Small Businesses (continued)
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Everything you know is wrong!
(Score: 1, Insightful) by khallow on Tuesday December 04 2018, @01:44PM (13 children)
Like enforcing unjust and arbitrary asset seizures for and against parties who don't even reside in the region governed? That sort of legitimate purpose?
On the latter part, government itself is the primary cause. After all, there's "too big to fail", secure rent-seeking, and a variety of comfortable entitlements for those who don't want to plan for the future.
(Score: 5, Interesting) by Thexalon on Tuesday December 04 2018, @04:38PM (12 children)
Your first error in logic is leaping from "One particular use of government power is wrong" to "All use of government power is wrong". And even in this case, you're being over-broad: In a world where there's no asset seizure procedure organized by some universally agreed-upon body, what exactly do you do if somebody owes you money and doesn't pay? We know what happens in current markets without government controls, like loan sharks and drug gangs, namely shots are fired and people who just happened to be in the wrong place at the wrong time get killed.
Your second error in logic is your ongoing belief that no corporation ever seeks out monopoly power without government help, even though that's exactly what companies like Standard Oil did back before monopolies were illegal. As for rent-seeking, that effort is at least as old as Marcus Crassus, and it's not like there have never been periods of relative anarchy in the intervening 2100 years.
As far as I can tell, your argument goes something like this:
1. Bad stuff happens.
2. Government usually exists when documented bad stuff happened. That this might be due to the simple fact that humans have almost never been simultaneously without government and with writing is immaterial.
3. Ergo, all bad stuff is government's fault. Never mind that there are lots of other non-government actions that may have caused bad stuff to happen.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0, Troll) by khallow on Tuesday December 04 2018, @05:40PM (4 children)
You're the only one making that leap, just as you built up that pointless straw man of "government action never has a legitimate purpose". Libertarianism wouldn't have serious support in the first place, if that was what it was about. Instead, it's the egregious abuses of government that drive the belief and have made it popular. This whole mess of the story is driven by government.
After all, even if I've signed my rights to a court away, it shouldn't be legal for the lender to go to a remote court system under a different set of laws and steal my savings based on some flimsy pretext, counting me to be unable to fight back because of the cost of initiating a lawsuit in a distant venue.
But it is because New York can't pressure me directly, but they can pressure the banks who do business in New York to comply.
(Score: 3, Insightful) by Joe Desertrat on Tuesday December 04 2018, @10:38PM (3 children)
Libertarianism has support among most of its followers simply because they believe they could get away with something they currently can't. Like most political belief systems, the reality is far different from the fantasy.
(Score: 0, Flamebait) by khallow on Tuesday December 04 2018, @10:44PM (2 children)
Like taking out a loan without having your savings seized on the other side of the country by a flimsy pretext processed by the right, convenient government venues? We must be terrible people for wanting to get away with that!
I want to get away with freedom. What's wrong with that?
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @11:48PM (1 child)
It is called getting people elected to fix the bad laws, not deciding that all government is bad because it restricts your ability to do literally anything you want. The blanket statement "taxes are theft" is the kind of generalization that gets people to roll their eyes and lump you in with the crazies. I'm not sure if I've seen you specifically say that, but it is the Libertarian mantra.
(Score: 1) by khallow on Wednesday December 05 2018, @03:21AM
It's called a straw man argument. Libertarians are well-known for acknowledging that there are natural restrictions of rights when they conflict with other peoples' rights.
Not everyone does that and the blanket statement is far from the straw man in your first sentence.
(Score: 2) by curunir_wolf on Tuesday December 04 2018, @05:50PM (6 children)
Standard Oil is always used as the poster child for why we need a big, powerful central government to keep corporations in check. But is that the real story? What did Standard Oil really do?
Well, in 1865, when Rockefeller’s market share was still minuscule, a gallon of kerosene cost 58 cents. In 1870, Standard’s market share was 4%, and a gallon cost 26 cents. By 1880, when Standard’s market share had skyrocketed to 90%, a gallon cost only 9 cents — and a decade later, with Standard’s market share still at 90%, the price was 7 cents. So why break up Standard Oil? It seems the folks the government was "protecting" wasn't really the consumer, was it? Because Standard Oil was helping them, not gouging them as the story goes.
"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." - H.L. Mencken
I am a crackpot
(Score: 2, Interesting) by khallow on Tuesday December 04 2018, @10:47PM
Let us note this wasn't merely coincidence. Standard Oil gained market share in the first place because it was cheap. And over the course of those years, it created a massive, efficient system for extracting, shipping, and processing petroleum.
(Score: 2) by dry on Wednesday December 05 2018, @04:51AM (4 children)
So the take away is that when a gallon of kerosene should have cost a few pennies, Standard Oil charged 7 cents a gallon. Or perhaps Standard Oil only charged 7 cents a gallon at a time when it cost 8 cents a gallon to produce to make sure there was no competition.
Without a lot more information, it is hard to say what the market price for a gallon of kerosene would have been with competition. All you're pointing out is that kerosene got cheaper as industry became better at extracting it and refining it, which with how common crude oil was and how fast technology advanced, is to be expected.
(Score: 2) by curunir_wolf on Wednesday December 05 2018, @11:27PM (3 children)
Well, I could have provided a LOT more information, but this didn't seem the right forum for all that. The fact of the matter is that there was NO legitimate reason for government intervention into that market at the time. It didn't help consumers, because they were getting kerosene at the best possible price, primarily due to the efficiencies introduced by Standard Oil. With those efficient processes known, it was easy for competitors to come along and charge similar prices. There was no evidence of Standard Oil (or ANY company, EVER, other than government-owned enterprises) that sold at a loss to drive out competition and later raising prices when the competition is gone.
If you're really interested in the truth, and not just spreading myths to support tyrannical and useless big government regulation, I would refer you to John McGee and his excellent articles in the Journal of Law and Economics. You can also check out the research of Ronald Koller on the history of federal predation cases. He found NO evidence of a monopoly supported by predatory pricing in 80 years of the Sherman Anti-trust Act.
And as for the government "solution," did it actually work? Well, it certainly made the Rockefellers richer than ever in the succeeding years after the breakup. And after it was broken up into 33 companies, it now exists as just three: ExxonMobile, Chevron, and BP.
I am a crackpot
(Score: 2) by dry on Thursday December 06 2018, @02:56AM (2 children)
Well, according to Eliot Jones https://archive.org/details/trustprobleminu00jonegoog/page/n6 [archive.org], we have statements such as,
As well as the problems with transport,
Now, I don't have time or inclination to spend tons of time researching your experts and other experts about Standard Oil, but the courts did decide they used their monopoly position in predatory ways.
More recently, I did experience how MS used their monopoly in predatory ways and didn't like seeing competition killed, even when they had a better product, due to unethical and illegal business moves.
Generally, since there has been successful prosecutions on anti-trust grounds, businesses have been much more careful, which has been a benefit and likely results in much less abuses.
Personally I'm pretty anti-authoritarian, whether it is government or private business. Government at least here, is limited by a Constitution and the fact that it is easy to replace through elections. When private business gets abusive, it is much harder to do much about it, with government seeming about the only solution. You can look at actions of the Pinkertons as an example of how private police can function, and a long history of private businesses being very abusive, to the point of cutting off workers arms when they weren't productive enough and the business can get away with it, such as Columbus on his 3rd trip desperately trying to raise the funds to pay of his investors.
Best is if the different forces largely cancel each other out.
(Score: 2) by curunir_wolf on Thursday December 06 2018, @10:45PM (1 child)
Elliot Jones and Ida Tarbell wrote extensively about Standard Oil. They had an axe to grind, both of them, against Standard Oil, and their writings have been discredited in the years since. The assertions by both of them have been proven false. Even the quotes you provided are conflicting - was Standard charging too much or too little? He seems to argue both. But Standard was successful ONLY because of efficiency and the purchase of verticals. Even with a large market share, competitors were many and nimble, and they HAD to keep prices low to remain competitive.
It's not that I think there is no role for government in regulating large businesses, only that most of those efforts, in retrospect, cause more harm than good. How did Netscape fare with the government going after Microsoft? Does Microsoft behave better now? Consider what the real change was. Microsoft went from pretty much ignoring Washington, to devoting a huge budget to lobbying and campaign contributions. In fact they became the largest corporate investor in lobbying. So it was nothing but a bureaucratic shake-down that helped no one.
When people wake up to this myth that government protects people from corporations, and realize that the big government / corporation bureaucracy is actually a partnership designed to screw everyone else, then at least we can start to do something productive about it.
I am a crackpot
(Score: 2) by dry on Sunday December 09 2018, @03:57AM
Hmm, looking, I can't find any evidence of either being discredited. Elliot Jones seems to have mostly disappeared from history and all I can find is praise for Ida Tarbell along with "The History of Standard Oil".
As for the quotes, it's pretty simple, low prices when there is competition and high prices when there is no competition. Whether that was abusing their monopoly, I don't know, but could well be. Even today, these problems continue. My ISP charges all different rates depending on Province and how much competition there is. I pay a $100 for 250 GBs, in some Provinces, it would be $40 for unlimited from the same company, due to competition.
As for the MS anti-trust case, Netscape was really the wrong underdog in the fight. DrDOS, Lotus, even OS/2 would have been better cases to show the anti-competitive behaviour. And then when the government changed and let them off, it showed them the power of having the right type of corruption. IBM is a better example as they tried like hell to honour their agreements from their anti-trust case.
You're mostly right about the government/business synergy, especially bad in places like the US where people are really tribal and vote for their people no matter what and the best that can be hoped for is that one parties people stay home.
Here the parties have usually worried more about the voters. The party that orchestrated the free trade bullshit that saw all our good jobs head south got annihilated in the next election, reduced to 2 seats and the party no longer exists at the Federal level. Imagine if America had reacted to NAFTA like that, your politicians might pay more attention to the voters instead of the lobbyists.
Unluckily, that's changing in this age of popular-ism, instead of politicians running on promises to do good government, it is divide and conquer, vote for my team no matter what, and that does not lead to good government, rather bullies getting power and being more interested in bullying then doing what is the best for the people.