“While it’s become fashionable to blame payday lenders for all of society’s ills, it is preposterous and irresponsible to blame a $300 loan for the nation’s mortgage crisis.”

There are plenty of good, fact-based explanations of why this nation is facing a tough economic road ahead.  Here is an excellent one from the NewsHour on PBS that uses an interesting technique to explain the mortgage crisis.  But no one (not even the Center for Responsible Lending–before this Reuters story that is) has asserted that payday loans have anything to do with the mortgage meltdown.

Some key quotes:

Carey bases his article almost entirely on anecdotal evidence and on statements by activists with an axe to grind: apart from the borrowers themselves, every single person or group quoted in the article is at the left end of America’s political spectrum. Carey also confuses cause with effect, ignoring the possibility that homeowners facing foreclosure may already be doomed financially by the time they head to the local money mart for a payday loan.

To sum it all up, the groups that Carey treats as impartial experts, are anything but. These are the same groups that coined their own neologism –the “unbanked”—to describe those who lack bank accounts, as if conducting transactions using financial institutions were somehow a basic human right.

And journalists wonder why the American public doesn’t trust them. 

Memo To Mainstream Media

“If you want to constantly attack payday loans, then abandon any pretense to journalistic objectivity. The articles recently published about this matter, all of them vilifying the practice of payday lending, fail even the most basic standards of decent reporting. Where are the testimonies – yes, such accounts readily exist – from people who need these short-term loans? This evidence in support of payday loans, narratives from people of diverse economic backgrounds (additional memo to MSM: payday loans are a source of relief for individuals of all incomes), never seems to make it into articles from, say, the New York Times or Washington Post. The reason: the proverbial media establishment wants to destroy payday lending. Save that agenda for the editorial page. In the meantime, reporters need to uphold the standards of their profession — which means writing balanced pieces that respectfully offer data from the other side. And here’s another “radical” suggestion: newspapers should spend less time on this blatantly political cause, and focus their energy on some genuinely incompetent financial institutions. A crazy idea, I know.