The current financial tsunami had its roots, most people agree, in the overleveraging of the American consumers, who bought houses they couldn’t afford, vacation condos they couldn’t afford, and a lifestyle that could be supported only as long as banks flooded the market with easy credit. People may disagree on who is mostly to blame- greedy banks or greedy (or dumb) borrowers, but everyone agrees that consumers were way over their heads and that a good bucket of cold water is long overdue.
It is disheartening, therefore, to see a major credit-card issuer (Chase) advertising the joys of living high on plastic to the strains of a hard-driving jingle whose lyrics go like this:
I want it all
I want it all
And I want it now!
What are these guys thinking? Don’t they know what’s going on in the land? Where are those indignant Congressional committees, the committees that posture before the TV cameras and huff and puff about Fannie and Freddie and regulators and golden parachutes and overpaid executives? Do they watch television? Do they know that people are still being urged to borrow, borrow, borrow? I still get solicitations from credit-card issuers, some of them with checks that have my name printed on them. I should rush right out and cash these checks, they tell me, even though they don’t have the foggiest idea of my financial situation.
Today a press release announced that the Federal Government will buy $3.55 billion worth of stock plus warrants in Capital One Financial, one of the most aggressive of the credit-card pitchmen. (“What’s in your wallet?”) The Government will not buy stock in fast-food restaurants or semiconductor makers or struggling software companies, most of whom need the help, but it will buy stock in Capital One, which may use the $3.55 billion for more TV ads and more direct mailers to lure more pigeons to take out credit cards they shouldn’t have.
People were so burned up the first time the bail-out was floated that their anger caused the House to defeat the bill. A few days later, Hank Paulson and Ben Bernanke frightened Congress into passing the legislation. Hank and Ben, the Great Facilitators.
We certainly don’t want to kill the credit-card economy, do we? Is this a great country or what?
