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From his Economic View column in the NYT, Tyler Cowen writes:

There has been plenty of talk about “predatory lending,” but “predatory borrowing” may have been the bigger problem. As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications, according to one recent study. The research was done by BasePoint Analytics, which helps banks and lenders identify fraudulent transactions; the study looked at more than three million loans from 1997 to 2006, with a majority from 2005 to 2006. Applications with misrepresentations were also five times as likely to go into default.

This fact, however, falls upon the deaf ears of the Democrats, all of who touched upon the issue in Tuesday’s Nevada debate:

Edwards said, “We need a national law cracking down on predatory and payday lenders that are taking advantage of our most vulnerable families.”

Clinton argued that, “…because of the way the interest rates are going up, and many of the fraudulent and predatory practices that got people into them in the first place…” we need to extend credit and loosen bankrupcy laws for those in trouble.

Obama agreed, “Hillary’s exactly right, but we’ve got to modify some of the fraudulent practices, predatory lending practices.”

It sounds wonderful to the economically illiterate, but this season’s buzzword–“predatory” lending–does not so much as pass the smell test. The fact is that the phenominan–if you can call it that–is easily explained by the price system. If the price of credit goes down, and lenders have access to a greater supply of funds then demand from consumers goes up as they are able to borrow more then they previously could. With more credit, consumers are able to buy higher end goods, which they otherwise wouldn’t have access to–such as homes–and the price for those goods grows.

In reality, neither the lenders nor borrowers were “predatory.” Each demanded more credit as credit became cheaper. Unfortunately for both, the credit bubble burst and they are suffering the consequences of unsustainable financing. But the fact remains, it makes no sense to call either party “predatory” considering they both got screwed. And I believe that is the point that Professor Cowen would ultimately make.

In the same column, Cown spoke on lethal cold fronts:

Spells of extreme cold kill over 27,000 Americans each year, or about 700 people each very cold day. Heat waves may receive more publicity, but it turns out that cold periods — days with an average temperature below 30 degrees —have more significant and longer-lasting effects on human mortality. More people die in cold periods than in homicides.

Extreme cold brings cardiovascular stress as human bodies struggle to adjust to the temperature; many of the deaths in these periods come through heart attacks. Heat waves tend to kill people who were already weakened and would have died soon anyway; cold periods bring additional people to the verge of death.

When retired people move to a warmer state, their life expectancy rises dramatically. In fact, 8 to 15 percent of the increase in American life expectancy over the last 30 years comes from people moving to warmer climates, according to research done by two economics professors, Olivier Deschenes at the University of California, Santa Barbara, and Enrico Moretti, at the University of California, Berkeley.

Much is made of how a warming trend could hurt us, but, not only do I assume that those are under the most severe of scenarios, not much is made of if and how warming can help. Not only do many more humans die from the cold than from the heat, but productivity also flurishes when it is warmer. For instance estimates generally hover around the consensus that warming and greater CO2 has contributed to a 15% growth in crop yields since 1950.

This wisdom regarding warming is certainly unconventional, but it is worth discussing openly. I believe the reason we never hear about it is that global warming skepticism is strongly condemned by the mainstream.

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The On Predatory Borrowing and the Benefits of Global Warming by New School Politics, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.