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New Study Shows How Overregulating Short-Term Lenders Harms Consumers

We at CFIF have consistently highlighted the peril of federal, state and local government efforts targeting the short-term consumer lending sector.

Less than two years ago, we specifically sounded the alarm on a New Mexico law artificially restricting interest rates on short-term consumer loans.

Well, a new study entitled "A New Mexico Consumer Survey:  Understanding the Impact of the 2023 Rate Cap on Consumers" that surveyed actual borrowers confirms our earlier warnings:

Key findings include:

•Short-term,small-dollar loans help borrowers manage their financial situations, irrespective of the borrower’s income.

•The rate cap has failed to improve the financial wellbeing of New Mexicans, specifically those who had previously relied on short-term, small-dollar loans.


November 27, 2023 • 03:57 PM

Liberty Update

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Remember When California Was the “Golden State?” Print
By Timothy H. Lee
Thursday, October 31 2019
It’s as if California has become a third-world country within our national borders.

Have you heard about the hottest (no pun intended) can’t-miss pickup line in California singles bars these days? 

“Hi.  I’ve got electricity.” 

Or how about the latest billboard ad campaign from Texas, luring businesses and residents desperately fleeing California?   

“Move to Texas.  We’ve Got Electricity!” 

It all triggers a rueful question:  When was the last time you heard anyone refer to California as “The Golden State” in a non-ironic manner? 

Until leftists commandeered political control, California was considered a land of sunshine, fresh starts, fantastic weather, economic opportunity and endless recreation and entertainment.  Through the 1980s, Ronald Reagan’s cheerful optimism and beaming smile served as a metaphor for the state that he governed before becoming president. 

And before that, the Mamas and the Papas famously sang, “I’d be safe and warm, if I was in L.A.” in 1965’s “California Dreamin’.”  It was the land of surfers, Disneyland, Hollywood, Orange County and sportscars. 

Today, what immediately comes to mind when one thinks of California?  In recent weeks, probably blackouts.  It’s as if California has become a third-world country within our national borders. 

And that isn’t simply a conservative’s or libertarian’s biased preconception. 

The Los Angeles Times, not exactly a redoubt of free marketeers, ran an article entitled “Who Wants to Leave California?”  Its reporting would depress anyone maintaining residual affection for what California once was: 

Just over half of California’s registered voters have considered leaving the state, with soaring housing costs cited as the most common reason for wanting to move, according to a new poll.   Young voters were especially likely to cite unaffordable housing as a reason for leaving, according to the latest UC Berkeley Institute of Governmental Studies poll conducted for the Los Angeles Times.  But a different group, conservatives, also frequently suggested they wanted to leave – and for a very different reason:  They feel alienated from the state’s political culture. 

The findings come amid the slowest population growth in California history – underscoring shifting immigration patterns, declining birthrates, and the economic strains that make it harder for some to afford living here.  One in five Californians pay more than 50% of their income for housing, according to the state Department of Finance. 

That depressed resident sentiment matches actual demographic facts.   Since 2007, fully 1 million more Californians have left the state than entered it, which is unprecedented in its history. 

This month, power blackouts have swept California due to bureaucratic mismanagement of the state’s primary utility, Pacific Gas & Electric (PG&E).  For years, PG&E has been compelled to pursue counterproductive “green” energy boondoggles and social justice initiatives instead of actually maintaining its power grid or boosting efficiency for residents.  As a consequence, it has opted for intentional blackouts for millions of residents, threatening businesses and health, in order to avoid catastrophic wildfires from deteriorating equipment. 

Ironically, California residents pay utility bills approximately double those of neighboring states.  Even more ironically, California politicians have steered residents toward electric vehicles, which now can’t operate or evacuate fire zones due to power blackouts. 

Moreover, as The Wall Street Journal reports, California’s dystopian maladies extend far beyond high utility bills and blackouts: 

Los Angeles made news earlier this year because of a typhus outbreak.  Rat infestations, linked to homeless camps, were discovered at City Hall.  In June the city reported that its homeless population had grown by 16% over the past year.  Since 2017 it has risen 17% in San Francisco and 43% in Alameda County, which includes Oakland.  California’s homelessness rate is the nation’s highest, and its growth in recent years has coincided with a conscious decision by the state to go easier on criminals – a disproportionate number of whom are homeless. 

Not even the most deranged leftist would attribute California’s decline to conservative politics.  The state has been ruled almost completely by the far left for decades, and even the nominal Republican Arnold Schwarzenegger only survived by capitulating to political opponents and adopting their agenda. 

Meanwhile, as their home state literally burns, California political figures like Speaker of the House Nancy Pelosi and Congressman Adam Schiff remain more obsessed with their latest Wile E. Coyote impeachment scheme than their state’s slow collapse. 

Leftists protest whenever Venezuela or Cuba are cited as examples of what socialist governance inevitably brings.   But we needn’t even look beyond America’s borders, as states like Texas and Tennessee flourish while states like California and Illinois wither and their residents flee. 

The most maddening aspect is that many residents who flee places like California take their political habits with them, in turn corroding the flourishing states to which they move.  Wash, rinse, repeat. 

Nevertheless, the fact that nobody refers to California as “The Golden State” anymore provides just the latest cautionary tale confirming the inescapable failure of leftist governance. 

Notable Quote   
"The Biden administration has outpaced other recent presidents in issuing significant regulations that place a financial burden on taxpayers, according to a report from the Competitive Enterprise Institute.Under President Joe Biden, the federal government completed 89 economically significant rules in 2022, defined as those with at least a $100 million economic impact, which is higher than any point…[more]
— Will Kessler, Daily Caller News Foundation
Liberty Poll   

What grade would you give the Biden administration thus far regarding all aspects of its approach to the Hamas/Israel conflict?