So, according to Tribune Business, the Prime Minister of The Bahamas thinks "Banks 'complicit' on "unchecked consumer debt".
In a recent speech at Royal Fidelity's Bahamas Economic Outlook conference, Mr. Christie noted a few things about banks that concern him. Some of them are listed below, with a brief remark about each of them.
1. There's far too much consumer debt
Response: On this point we can agree. Far too many people take out loans for what might be considered frivolous things like vacations etc. But these are choices people make.
2. Banks are getting richer with excessive interest rates
Response: Banks provide a service at a cost. Consumers are not stupid and weigh the cost of borrowing against what it is they want to do with their money. If the interest rates are excessive, wouldn't that turn customers away and make them save more?
3. Debt is turning people into modern day slaves
Response: Here again people make choices to turn themselves into slaves to debt. The danger is Government signing salary assignments for its associates. These graphic illustrations are to make us believe banks are bad. Presumably being a slave to taxes and debt by the State is acceptable?
4. Salary assignments forcing people to take just a few dollars of their pay each month
Response: So the PM admits salary assignments are a problem, but it's the banks fault, not the government policy that would allow an associate to put themselves into this bind?
5. Entrepreneur's with "solid business plans" can't borrow money
Response: Of course the track record of "solid business plans" not working out and the company going bust is legion. Just ask The Bahamas Development Bank. But this does not preclude wealthy Bahamians (the political class) establishing their own fund to assist entrepreneurs with their personal amassed wealth?
A quick search of this site… reveals a litany of complaints by politicians of all stripes about how bad banks are. Seldom if ever do they place any responsibility on the consumer. Why do you think that is?
And the solution offered by the Minister of Finance (he's Prime Minister too) is a new law that will "ensure that banks and consumers are protected."
There you have it, another utopia will be created by a "Lending Act".
It is curious that the country's excessive debt problem only received a cursory comment according to a press release about the PM's speech. But I guess it was not about his epiphany that government policies have us all in a real mess. It was about making voters believe he has a magic wand and banks are bad.
Of course we shouldn't consider ourselves slaves to the whim and taxes of the State.
