Friday, December 2, 2011

Schadenfreude for Christmas

Schadenfreude means "enjoyment obtained from the troubles of others."

I heard on the news that, for the Christmas season, banks are sending out credit card offers to people with questionable credit. People who wouldn't normally be bankrolled are being given the opportunity to spend money on gifts they couldn't otherwise afford. Is this not an example of unbridled capitalism? Pope John Paul II warned the "all-consuming desire for profit and the thirst for power at any price with the intention of imposing one's will upon others... are opposed to the will of God and the good of neighbor" (Sollicitudo Rei Socialis § 37).

The goal of the creditor is to risk lending money to make money. Credit is based on risk. The risk needs to be smaller than the reward, on average, or the creditor is essentially throwing money away. To determine risk, a potential borrower's financial history is necessarily investigated. Why the investigation? I answer that with: "Glory to God in the highest, and on earth peace, good will toward men" (Luke 2:14).

The creditor should have good will towards the borrower. The creditor has a serious obligation to turn away any person who is stasticially bound to fail the obligation of repayment. Furthermore, I think the creditor must "resolve never to place an obstacle or a stumbling block in a brother's way" (Rom 14:13), such as not offering loan packages that could destroy the borrower -- like variable rate mortgages that can skyrocket.

Part of the subprime mortgate crisis from 2007 was clearly the banks reveling in borrower schadenfreude. Haven't they learned yet?