There are three categories of payday loan opponents.
 
The first category, which I refer to as “Mercenaries”, are entities that fight to put payday lenders (PDLs) out of business because these entities provide competitive products.  Anyone can understand why the Alleged Center for Responsible Lending manipulates the truth in order to put a competitor out of business.  When it comes to business, even the most underhanded of strategies is considered fair.  If one can manipulate a stupid and/or opportunistic politician to outlaw payday loans, so much the better.   
 
The second class of opponents are the “Earnestly Misguided”.  These people are often members of an “interfaith coalition”, who inaccurately cite Scripture as their way of opposing “usury“.   I have a degree of compassion for these folks because they honestly believe they are doing right, but are woefully uneducated about economics, the basics of supply and demand, and how short-term credit behavior really works. 
 
The third class of opponent are known as “Ideological Slaves”, which is comprised of people who have no working knowledge of payday loans, but buy into the claptrap sold by the Mercenaries and the Media surrounding the “high interest rates”.   Maybe they’ve read a biased article or two, but they have never used a PDL nor do they know anyone who has.  Nevertheless, they take a firm stance against this “legal loan sharking”.
 
How is that, even when the Earnestly Misguided and Ideological Slaves are presented with solid facts about PDLs, they rarely seem to change their minds?  There are basic psychological reasons for this.  People don’t like to be wrong.  People don’t like to admit they made a mistake.  People don’t like it because it creates cognitive dissonance, which is an uncomfortable feeling caused when presented with an idea that is contradictory to another one that is closely held.
 
People have a very basic drive to reduce cognitive dissonance.  So they will either alter their existing belief, or reject one of the contradictory ideas.  It is much easier to do the latter than the former.   After all, if you alter your existing belief, then you were wrong to endorse the first, and nobody likes to admit they were wrong.  It harms your pride and self-image.  In other words, it is an attack on the ego.
 
The ego is that part of us that says, “I am”, and it affirms whatever reality it perceives.  Thus, if an Earnestly Misguided person is opposed to PDLs, then his ego affirms it.  Even worse, whatever state the ego senses as being in, it extrapolates as a permanent condition.  So if an Earnestly Misguided person decides they are opposed to PDLs, then the ego will attempt to maintain this point of view forever.  The ego will never permit contradictory ideas to be fairly considered, and the person will reject them. The Earnestly Misguided thus also becomes an Ideological Slave, controlled by the ego.  Much as they believe they are a person of “independent thought”, they are sadly just the opposite.  Even worse, they don’t even recognize they have given up freedom of thought.
 
Here’s a case in point.  I corresponded with Ann Rasmussen of the Virginia Interfaith Coalition on the issue of payday loans.  I had provided my usual litany of reasons why PDLs are necessary and useful.  She mistakenly sent me a reply meant for her Pastor, in which she asked him if she should respond to me.  She said that I seemed to be making some of the same points as made in “the Morgan report”.  This refers to the study by Donald Morgan  and Michael Strain for the New York Federal Reserve.  The study unequivocally concluded that, “Compared with households in states where payday lending is permitted, households in Georgia have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate. North Carolina households have fared about the same. This negative correlation—reduced payday credit supply, increased credit problems—contradicts the debt trap critique of payday lending, but is consistent with the hypothesis that payday credit is preferable to substitutes such as the bounced-check “protection” sold by credit unions and banks or loans from pawnshops.”
 
The data and conclusions of this study are quite clear, yet Ms. Rasmussen’s ego prevented her not only from accepting these scientific conclusions, but her syntax and tone indicated that she had summarily dismissed the report and would never give it another thought.   Perhaps as a final insult to the concept of freedom of thought, she had to ask her Pastor whether or not to respond, rather than make that decision herself.
 
She did respond, with words generated by a tyrannical ego that made the same tired and factually inaccurate arguments all opponents use.   Her Pastor even shot me a nasty note saying that they had better things to do than to engage me on this issue.  Guess the Pastor didn’t like the feeling of cognitive dissonance, either.
 
This is why it is generally fruitless to try and convince any of these opponents of how wrong their position is.  I say “generally” because there are those people who can be swayed.  Perhaps their ego has not entirely taken over.   Perhaps you catch them at the right moment.   Thankfully, the editor of this blog, Simon Barrett, fairly considered the arguments presented and reversed course on the need and value of payday loans.
 
His is a great example to follow, not just on the topic of payday loans, but on all beliefs.  Don’t become an Ideological Slave. 

Lawrence Meyers

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