You Have Debt, Not Credit

Anyone besides me who winces every time the occupied White House announces that it is making the world safe again, for loans? The whole emphasis of the $700 Billion Bailout is on getting banks out of the hole they've dug so we can start getting into debt again.

Salaries and savings are the forgotten value system, since your financial community makes money on getting money and lending out that money rather than enabling us to support ourselves. The financial institutions are not interested in your saving up to buy what you need, and making a decent wage. In the past eight years, the salary has become an antique, instead it's just making that loan that is the whole ballgame. Those quaint actuarial tables, anyone remember them? You put a certain amount down, and you had a certain salary, you qualified for a loan. It's that 'qualify' aspect that kept our economy healthy. Its demise has been the death of our economic rational behavior, meaning financial houses pushed past the line in the dirt and became fantasy land. Our economy became the dirt.

It isn't just in mortgage loans, now in the spotlight, though, that we have gotten deep in the hole. Credit card debt is now the last resort for overstretched consumers. Naturally, it is being pitched at us all as the perfect answer to any temporary need. If you already have shown you're susceptible, you're special game.

Singling out even struggling American consumers like Ms. Jerez is one of the overlooked causes of the debt boom and the resulting crisis, which threatens to choke the global economy.

Using techniques that grew more sophisticated over the last decade, businesses comb through an array of sources, including bank and court records, to create detailed profiles of the financial lives of more than 100 million Americans.

They then sell that information as marketing leads to banks, credit card issuers and mortgage brokers, who fiercely compete to find untapped customers — even those who would normally have trouble qualifying for the credit they were being pitched.

These tailor-made offers land in mailboxes, or are sold over the phone by telemarketers, just ahead of the next big financial step in consumers’ lives, creating the appearance of almost irresistible serendipity.

These leads, which typically cost a few cents for each household profile, are often called “trigger lists” in the industry. One company, First American, sells a list of consumers to lenders called a “farming kit.”

This marketplace for personal data has been a crucial factor in powering the unrivaled lending machine in the United States. European countries, by contrast, have far stricter laws limiting the sale of personal information. Those countries also have far lower per-capita debt levels.

The companies that sell and use such data say they are simply providing a service to people who are likely to need it. But privacy advocates say that buying data dossiers on consumers gives banks an unfair advantage.

“They get people who they know are in trouble, they know are desperate, and they aggressively market a product to them which is not in their best interest,” said Jim Campen, executive director of the Americans for Fairness in Lending, an advocacy group that fights abusive credit and lending practices. “It’s the wrong product at the wrong time.”

With this activity making fortunes for CEO's who are getting the whole world in over its head, it is past time to stop. We are about to get rid of the wildly unrealistic administration that has brought us to ruin. Attention to jobs for Americans, domestic building of infrastructure and industry, and solid financial practice is overdue.

When the present irresponsibility has proved itself as big a disaster as it has, a complete reversal of the loan/debt culture should be a first push for the coming administration. A living wage would make a great start.