Who Will Protect Us From The Other Creditors?
In recent days, the Federal Reserve Bank introduced proposed regulations to assert more control over credit card companies. Interestingly, while the Fed is interested in controlling how investment banks borrow and invest, it is less interested in how consumers borrow and invest. In its view, the evil of credit is not that consumers borrow more than they can afford, but that the credit card companies are ruthless in expecting prompt payment, and charging penalties for failure to abide by the agreement. It is true that credit card companies are ravenous when it comes to charging penalty interest, and regulation there would be appropriate so that credit card companies do not have the right to gouge at interest rates surpassing the profit ration of oil companies. Yet, the Fed misses the point, and perhaps highlights the one virtue of penality interest. The high rate of credit should force the consumer to live within means. Seemingly it does not, and that is what takes me to another Thomas Friedman column.
America is living on someone else's dime and as a consequence it is unable to continue adequately the programs and resources that made the country great. Rather, it is those countries from who we borrow that now can take the initiative, and do, to innovate and grow. The thrust of the Friedman column is that we do not have a leader willing to confront the problem, and to make us more aware and responsive to it. Hope should not be of a magic bohemia where we never get sick, we never grow old, and we never die; hope should be the impetus to recognize the shortcomings of our behaviour so that we can realistically address our conduct so that in an efficient and pragmatic fashion we can achieve what we dream.
![[info]](http://p-stat.livejournal.com/img/userinfo.gif){kind=small}
hbgold) wrote,
