WSJ: The 'Democratization Of Credit' Is Over

Wall Street Journal:

The recession has forced a financial reckoning for Americans across the income spectrum. The pressure is especially acute for the low-income Americans who relied on borrowing for daily expenses or to gain the trappings of middle-class life. Shifting credit practices over several decades had enabled them to live beyond their means by borrowing nearly as readily as the more affluent.

Read the whole story: Wall Street Journal

Comments

[BernankeMadoff]

10:49 AM on 10/13/2009

The government has put the same punch bowl out that got us into the mess in the first place. More debt and consumption and don't worry about paying it back. (Berbnanke= Greenspan II)

Good articles: http://pie.im/af30

If this is change we can believe in, count me out in 2012. Obama should not have reappointed bernanke.

[yappnmutt]

04:50 AM on 10/13/2009

the banks have sucked the middle class dry so now what are they gonna do? if there is no credit for the middle class then there is no consumer driven economy. if there is no consumer driven economy who's gonna drive it? wall street is deluding itself with its own grandeur. this is not going to end well for the usa.

[Theou]

12:27 PM on 10/13/2009

yappnmut, that is an excellent post.
I would like to see answers to your questions. However, I think it more likely that we all shall endure the consequences of non-answers.

[pavroviandog]

02:37 PM on 10/12/2009

Reaganomics 101: create easy credit so you won't have to raise wages. That was the double poison injected by the "supply" "trickster-trickle-down" economics that the ruling class salivated over.
So, screw the worker, don't increase his wages (the REAL engine of economic health), and pacify him by providing him easy credit so he can have the ILLUSION that he is living well as he BUYS all that unnecessary junk made in China. To summarize: a win-win-win on all fronts for the corporatist cartels
and the financial-industrial-complex.

[tuberider]

02:04 PM on 10/12/2009

The meek shall inherit the, uh...debt.

[Frank Fitton]

12:38 PM on 10/12/2009

Mistakes were made by both sides in the lending game, but the credit card companies side was much more insulated and able to survive their mistakes. People that weren’t making that much money, and had relied on credit now find themselves saddled with debt and without the money to pay for it.

Credit card companies gave people that couldn't budget the rope, and naturally they hanged themselves with it.The situation was just one that set people up for disaster. The bottom had to fall out on this thing at some point, it was just inevitable. It’s going to be a slow climb back out of this whole, but eventually I believe it will happen. The only thing we can hope is that people learn from these mistakes and try and pass on the lessons to their children. Our financial climate has changed, and right now what were seeing is a transitory period. It’s not an enjoyable thing to have to go through, but I have hope that a stronger, more secure culture based on a strong foundation will one day emerge.

Check out my blog on the end of our credit card democracy at... http://www.thedebtgazette.com/2009/10/credit-card-democracy/

[jelly450]

09:11 AM on 10/12/2009

I agree with most of the post here WSJ is trying to paint the poor as mostly young people that over spent and bought shoes, food and liqueur. However, I want to know what community college she went to that cost 26K? that's 13K per year

[RRoadrunner]

07:55 AM on 10/12/2009

Another example of how the victims are the culprits. What the article does not mention is there is a billion dollars industry that specifically targets low income people and swindles them. The victims are responsible to a degree but those preying on them are the worst of the worst. In this economic downturn they need to suffer the consequences for their predatory and irresponsible actions.

[PhilipTaylor]

07:12 AM on 10/12/2009

We now have the Tyranny of Big Banks who are flush with $23.7 Trillion from our Government, but they hoard it as they have $Tens of Trillions in Toxic Derivatives hidden "Off-Balance-Sheet!"

[ILuvBubbles]

06:07 AM on 10/12/2009

Let me know when the republicaderegulations are over.

[AmazingChicken]

01:17 AM on 10/12/2009

Seem to be lots of folks disagreeing. Count me among them. Poor folks aren't the only ones being foreclosed on, latest HP article on the subject indicated top end is 30%, low end is 35%, leaving the middle in...the middle percentage. We are ALL getting screwed here.

WSJ is plainly partisan on this one. Doesn't hurt to have Rupert tugging at the editorial apron strings I guess.

[brooklyncitizen]

10:27 PM on 10/11/2009

Well it is the WSJ , afterall. Nice spin on poverty.

[Antiks]

09:59 PM on 10/11/2009

Folks, the WSJ is a POS newspaper. There's a recent article on Paul Krugman's blog that explains how the WSJ has been wrong on EVERYTHING important economically.

[Philclock]

10:17 PM on 10/11/2009

Paul Smugmann? That partisan twit is your reliable source?

Excluding Mother Jones, The Nation, Robert Scheer, David Korn and other assorted lefties, who else do you have to "prove" your point?

[Antiks]

11:32 PM on 10/11/2009

I don't need anyone else to prove my point. I didn't even reference those other four, you did. Nice try, but I'm not taking your bait. How are the calluses on your knuckles doing?

[Beck rocks]

06:03 AM on 10/12/2009

Which gives Krugman a perfect record...he's consistently wrong.

[Antiks]

07:43 PM on 10/12/2009

With a name like yours you have no credibility. Anyone who follows Beck and thinks highly of him is a t00l.

[ILuvBubbles]

09:29 PM on 10/11/2009

Who was responsible for credit ratings? Derivatives? Its so easy to blame the poor and defenseless.

[textynn]

11:34 PM on 10/11/2009

Yeah but now the upper classes are getting a taste of the formula that makes poor people. Im not glad about what is happening in this country. But I am glad that people are starting to realize that poverty is a well tended formula that the upper classes put much effort into maintaining. People are actually starting to catch on.

[AmazingChicken]

01:18 AM on 10/12/2009

Fanned.

[ILuvBubbles]

06:10 AM on 10/12/2009

Yeah it was the upper class that brought Lehman Brothers, a 150 yr-old financial institution, to it's knees! NOT THE POOR OR MIDDLE CLASS!

[leevntheus]

06:06 PM on 10/11/2009

Why all the bluster? This is the CALCULABLE conclusion to 100 years of fractional reserve monetary system.

Except when the end came, no one suspected or was ready for the plot the bankers had ready to get over the top and start again.

All as power was transferring and fear was widespread.

Steal the trillions, refuse to disclose where it went, and tell everyone to trust the swindlers.

Leave the crooks intact and even put some of the managers of the scheme in charge of managing out of the crisis and into the next 30 years of ponzi scheming accounting skullduggery.

[sonofsamphm1c]

06:22 PM on 10/11/2009

There is no conclusion to fractional reserve. It goes on forever. Granny used to by a loaf of bread for a nickel. On my goodness, what hose job! In 1969 my dad bought a new Mercedes Benz for $6,699. It's the end of world.

Or not.

[Eres]

02:46 PM on 10/10/2009

While there most definitely are many people who have abused credit to live far beyond their means to satisfy compulsive spending, but there are also equally as many people who have had to use credit cards as a means for meeting basic needs.
When wages are stagnant if not dwindling, health care, education, housing and other basic living costs have spiraled out of control two working adults, with one job each, can no longer provide adequate financial support to for a family. Combine that with the fraudulent practices of our banking system (arbitrarily raising credit card interest rates and hammering customers with excessive fees) how can those already compromised stay afloat?