Tuesday, April 28, 2009


The article below is in response to a particular article printed in the Monday edition of our biggest local (Gannet) paper, The Burlington Free Press, but it also applies to any of the interventionist talk that is going on out there.  Are you pissed off by credit card companies screwing you...well take a read and let me know what you think!

The larger question is whether we want government to take this role.  Conventional "wisdom" or perhaps pattern would suggest that we do; that for some reason after seeing the rates go up or the fees go up we feel entitled to the money that is not ours and instead of simply doing away with the credit card and cutting it up, we want some one to come and save us.  Look around at where else this behavior is evident.

As much as I despise SOME credit card companies and as sure as I am about SOME companies having malicious intent I am sure that all and, in fact, the majority are not malicious but simply responding to the business market.  Common sense dictates that it's not a good thing to alienate customers and when looking from a business perspective it's clear that these companies are in a highly risky business.  I think it is less clear the roles these credit card companies play in the small business world.  They are often the lender of last (or first) resort and supply credit where it would otherwise be unavailable.  It is surely a valuable resource.  But it also can be a danger to those that borrow or spend frivolously.  Who is more to blame, those that overspent or those that supplied the funds.  There can be no need and no creation of credit cards if individuals, FIRST, didn't want to spend more money than they have and THAT is the issue.  

As Peter Schiff wrote, what will happen if/when the government decides to "intervene" with the credit card companies, injecting non-business, non-logical, emotional responses to the business models, the companies will simply wilt and lose their ability to lend to consumers.  Maybe this is a good thing, maybe not, it doesn't matter.  What matters is that this is what will happen, is this what we want?  Also this is not consistent with the goals stated by our government and the Fed to loosen credit markets and get people spending again...this contradiction is also THE ISSUE.

The issue of Sanders and Welch and anyone else getting on board with government intervention is NOT a solution to the problem but an emotionally stunted response to an effect, not the cause, of overspending.  What is happening and what will continue to happen until we begin to look at the true causes of our problems will be people like Welch and Sanders feeling more and more justified in taking power from the people and putting it in the hands of the government.  Where are the people who don't want that?  Where are the people who think that making more laws only makes more criminals?  Where are the people who are intelligent enough to see that it is OUR responsibility to run OUR lives and that the more "we" scream and yell about some person or company doing something TO us the more we invite a bigger person or company (or government) to do even more TO us.

The only good, and it's a powerful good, coming out of this juvenile banter from our juvenile politicians and juvenile public is that it becomes crystal clear, to those that want to see, those that are willing to see and accept responsibility, it become CRYSTAL clear where this is going.  As a greater man than me once said "In a democracy, the people will get the government they deserve." (alexis de tocqueville - 1831)

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