credit app offer

So here I am just now, reading on the Washington Post site about the credit card companies all reducing their unsolicited offers of credit:

The fourth-largest U.S. credit card lender [American Express]has already announced this week it would cut about 7,000 jobs, or 10 percent of its worldwide work force, in order to save $1.8 billion in 2009.

The article also says that American Express in particular is being investigated by the Justice Department for potential illegalities in merchant surcharges.

And right then, guess what happens? I get a popup window from American Express inviting me to take advantage of 0% interest for up to 12 months.

amexad.jpg

This is crazy but not surprising. I have to say that I’ve been waiting for the economic crash we are having since sometime before 1996, after I saw two things:

First, a tv ad for a bank showing a car being driven through one of those straight-line courses where you have to weave around cones–but the car drove right over the cones, scattering them. The bank’s pitch was, and I quote from memory, “We break the rules for you.” My immediate reaction was “No! Who wants a bank that breaks rules, that is out of control careening down the road? We want our banks to be serious believers in and observers of financial rules & laws. We want our money to be safe!”

Second, merchandise at a local chain marked with tags that said, “Want me? Buy me!” and the picture of a credit card. Great, go in debt with impulse buying, over and over.

I remember seeing both of these things before we moved from Portland in 1996, years before President Clinton signed the Gramm-Leach-Bliley Act in 1999 which is so often referred to as the start of the deregulation which permitted banks to act like carnival hucksters and drunken sailors, throwing our money around. The irresponsible financial behavior of institutions really did begin before 1999, as a December 1992 NY Times opinion piece shows when it quotes a bank promotion:

Apply for a loan now, and you’ll automatically be entered in our FREE LOAN GIVEAWAY. You could win a FREE LOAN — borrow up to $15,000 and NEVER pay it back!

The NY Times piece was occasioned by banks pressing Clinton for deregulation at an economic conference earlier in December 1992. According to the author,

Bankers promised to pump billions of dollars of new loans into the economy if only you [Clinton] would ease the amount of reserves banks are required to hold and waive other costly regulations. The new loans, they argued, would jump-start the sluggish economy — and not cost Congress a dime.

Does this sound familiar? Now it is the taxpayer and future generations of taxpayers who are “pump[ing] billions of dollars” into the banks emptied by lending out the money they had, to people who can never pay it back. And again the motivator, the political justification, is that it will “jump-start the sluggish economy” (although now “sluggish” has been replaced by even scarier words).

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