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the free market

the secret history of the credit card

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It's one of the most wonderful times of the year for the banking industry's most lucrative business: credit cards. In the coming weeks, millions of Americans will reach into their wallets and use plastic to buy an estimated $100 billion in holiday gifts. But at what cost?

bigger than enron

here are two great frontline docos that explore the nature of the free market in the US. i just thought they were worth mentioning here given some of the recent topics and the seemingly never-ending comments that markets are always fantastic devices that should exist free of government constraint.

i find the differences between the (regulated) australian credit card system and the (unregulated) US system to be an excellent case in point regarding the necessities of proper government intervention in marketplaces.

i am also curious to know who would protect the consumer from private industry in a society where governments ('structures of coercion'), are dismantled by the citizenry.

Credit card companies might be scum...but it's not like a card is a necessity for survival. If you choose to use their product, you agree to their terms. Enron is a different case however. It was run by blatant criminals who lied about their books and defrauded millions of people. Fraud is a serious crime under any capitalist system and government certainly has a role to play in protecting people from it.

I'm the biggest free market person in the world, but I've always acknowledged that government is necessary to prevent theft and violence.

Re: the free market

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Originally posted by pkcRAISTLIN i find the differences between the (regulated) australian credit card system and the (unregulated) US system to be an excellent case in point regarding the necessities of proper government intervention in marketplaces.

The U.S. system is unregulated? How so? Congress just passed additional credit card legislation yesterday!

Re: Re: the free market

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Originally posted by Shakka The U.S. system is unregulated? How so? Congress just passed additional credit card legislation yesterday!

ok, at the time of the articles i mean. and in relation to people's opinions that have been cropping up here lately that a mostly unregulated market is the the greatest thing since sliced bread.

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Originally posted by Capitalizt If you choose to use their product, you agree to their terms.

thats a superficial understanding of the actual problems raised in that documentary.

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Originally posted by Capitalizt Enron is a different case however. It was run by blatant criminals who lied about their books and defrauded millions of people.

that's just the name of the documentary; it covers entire industries of enron-like companies and private accounting firms. its not as if enron were an exception to the rule.

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Originally posted by Capitalizt but I've always acknowledged that government is necessary to prevent theft and violence.

well, your definition of theft in any case

Re: the free market

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Originally posted by pkcRAISTLIN the secret history of the credit card

Sounds like a conspiracy type of a documentary to me, LOL

I recommend watching a documentary called Maxed Out.

I wonder where credit card companies get their own credit.

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Originally posted by Krypton I wonder where credit card companies get their own credit.

Capital One bought Southcoast bank a few years back which gave them access to much cheaper credit via customer deposits. Visa and Mastercard don't actually have any credit risk--they're just transaction processors. The banks that stick the Visa/Mastercard logo on their credit cards provide the capital. I'm not sure about Discover and/or Amex. They probably raise some in the debt markets or just generally in the capital markets. Owning a bank is always a good way to access cheaper credit than going to the capital markets though.

...unless you were hoping I'd say they just charge it!

This is my opinion of it all...

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When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -Napoleon Bonaparte

Government, people, borrowers are borrowers, no matter what form they may take. And they are slaves to their lenders.

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