(11-08-2016, 08:30 AM)Dan Wrote: http://www.forbes.com/sites/neilhowe/201...ir-charge/
Quote:Earlier this month, Goldman Sachs debuted an online retail service designed to offer loans to consumers searching for an alternative to credit card borrowing. The move adds yet another competitor to an industry already struggling to add new customers. Late in the economic cycle, credit card companies usually rely more on interest payments than on additional debtors. But today’s frozen credit cycle has experts worried that credit cards are experiencing all the costs (defaults) with none of the benefits (revolving interest charges). Worse yet, a large share of Generation-X and Millennial consumers simply doesn’t use or trust credit cards.
The credit card industry encompasses a wide range of players who assume various roles in a transaction. First, there are the issuing banks—like Citigroup, JPMorgan, Bank of America, and Capital One—that issue credit cards to consumers. Then there are the acquiring banks (overlapping with the issuing banks) that process payments on behalf of the merchant. And finally there are the networks—Visa, MasterCard, American Express, and Discover—that act as middleman skimmers between the issuing and acquiring banks...
http://www.forbes.com/sites/neilhowe/201...ir-charge/
In the 1950s (the 1T) credit cards were for upper-income people who traveled frequently on company business or were part of the high-end "Jet Set". "Jet Set"? Motorcoach travel is now more pleasant for the same amount of time used. Does anyone really enjoy airline travel? That's another change. If the working class borrowed, it went to a finance company... an entity that no longer exists, or it might have taken a short-term loan from the local bank (the giant banks have squeezed them out of existence) with a part of one's 'retirement savings' as collateral for a home-improvement loan. Workers may have gotten credit cards then known as charge-plates with limited usefulness (only at one department-store chain, or one petroleum merchant).
The gigantic number of credit defaults reflects that the common man is over-extended. Having a student loan of $50K so that one can be a school teacher instead of a domestic servant might be reasonable, but figure that the school teacher with such a loan to pay off isn't going to have much in savings by age 40.
But oh, have I digressed. We have yet to get through the Crisis Era, and at this minute (9 AM EST) we may not know how much of the rest of it will be shaped even twelve hours from now (it is Election Day, 2016, quite possibly the most important Election Day since 1860).
Did the finance companies better manage working-class borrowing than do the credit card companies? I have credit cards; I have never dealt with a finance company. But the finance companies worked well before Bank Americard and Mastercard started issuing general-use charge cards to the proles who had had to go to a finance company to finance the purchase of an appliance, a pet, or a band instrument.
Generation X and Millennial adults have been overworked and underpaid most of their adult livs on the assumption that profit is the sole virtue in economic life, and that the enrichment and pampering of economic elites constitute the measure of economic success. Such is a 3T attitude, and it has persevered well.
I will be able to say much more about the politics of the creditor-debtor relationship (which I see as nearly the most consistent division of political orientation in human history) after the dust settles on the 2016 election. Creditors tend to be on the Right, and away from the center, to reactionary ideologies, to the extent that they control debtors. Debtors tend to be to the Left.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.
