On the one hand, most Americans are naturally skeptical of government regulation of open markets. On the other hand, very few Americans doubt the wisdom of banning, or at least aggressively regulating, public commerce in some especially dangerous products recreational narcotics, child pornography, and weapons grade plutonium are all
Starbucks’ growth is thus a good yardstick against which to measure payday lending because that growth has been so widely heralded. One commentator called Starbucks rise to prominence “[n]ot unlike the cultural blitz of personal computing.”103 Many believe that Starbucks was the most explosively successful American retail company in the second half of the twentieth century. Still, this growth pales in comparison to the growth of payday lending outlets in the wake of slackening usury limits. By 2005 the seemingly ubiquitous 8569 Starbucks locations were dwarfed by an estimated 22,000 payday loan outlets. Once usury laws were lifted, payday lenders poured into American neighborhoods like water over a breached dam.
Our data merely report a simple—but nonetheless important—geographic fact: there tend to be more payday lender locations in areas where conservative Christians live and control government. We leave it to others to explain why this relationship exists. Nevertheless, we believe one causal observation is plain from our data.Irrespective of the religious tendencies, it is clear states that continue to impose and aggressively enforce traditional American usury law do not have significant payday lending industries. Thus, one necessary but not sufficient causal explanation of the correlation between payday lender density and conservative Christian political power is legal: most conservative Christian states have abandoned their traditional usury limits. Indeed of the fifteen states ranking highest on our measure of conservative Christian political power, fourteen have legislation explicitly authorizing payday lending. Two of these states have no usury limit whatsoever149 and the remaining thirteen have crafted arguably misleading statutes that authorize interest rates of over 350 percent.
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