Unsurprisingly enough, credit card defaults are on the rise. This industry is marked by less oversight and more shadiness than the mortgage industry, which is saying something. Now American Express is asking for a government handout, since AMEX depends on banks’ buying securities backed by credit card debt in order to make money. Banks, of course, are trying not to choke on the credit cards debts they already have without incurring more, which leaves AMEX begging Uncle Sam for money.
But let’s see here: if Uncle Sam helps out AMEX, it allows AMEX to float more credit card debt. Is this what our economy needs? Maybe credit card debt should dry up a little bit, especially since Americans abuse cards so badly. Sure, an illiquid credit securities market may make it harder for some Americans to refinance or consolidate some credit cards, but that is still no substitute for paying the bloody cards off and not incurring more debt, and ready access to new credits cards will probably just make it easier to avoid making the hard decisions.
In short, having the federal government go with more deficit spending so that Americans can get into more credit card debt sounds like a perfect recipe for destabilizing our currency and economy even more. No doubt it will be wildly popular on Capitol Hill for that reason.
If you, like me, are trying to wrap your head around the causes of the current financial crisis, you might find this presentation helpful (crude language warning). It’s a Google Docs slideshow with humorous stick figures talking to each other. But you know how sometimes you laugh at Dilbert strips and think, “Ha-ha! I know jerks like that”? You may feel the same way about this one. Except these jerks brought our economy to its knees.
I have Comcast cable internet. When it works, the speed of the connection is great. But there are just too many times when it doesn’t work. Moreover, Comcast has some of the worst customer service I have ever experienced—on the phone, in person, via the web.
But now, with internet usage on the rise, instead of adding more infrastructure or otherwise improving what it offers, Comcast would rather just limit its service. Thanks. Thanks a lot.
A good response from John McCain would have been something like, “Damn straight! And it’s time to wean the American people from their dependence on the government, restore their civil liberties, get them back in the driver’s seat, and foster individual responsibility, independence, and innovation!”
Instead, McCain’s campaign just illustrated Gramm’s point with a whiny response:
John McCain travels the country every day talking to Americans who are hurting, feeling pain at the pump and worrying about how they’ll pay their mortgage. That’s why he has a realistic plan to deliver immediate relief at the gas pump, grow our economy, and put Americans back to work.
Say what?! I’m not economics expert, but last I checked the Fed’s willy-nilly printing money out of thin air contributed to the weak dollar, which in turn contributed to inflation – not the other way around. And people wonder why I don’t trust the Fed…