In a recent column entitled, “One Candidate and the Economy," Michelle Singletary, the personal finance columnist for the Washington Post, reports a conversation with Democratic presidential candidate Hillary Clinton. Clinton’s comments show that she is aware of the larger role of credit card and other commercial debt in the ongoing foreclosure crisis and general economic downturn. One of her most useful points is the need for financial education and improved financial literacy. Without blaming the victim, she recognizes that there is a serious problem of personal indebtedness and the need to help people get out from under.
This kind of article is not surprising from Michelle Singletary. She is one of the most level-headed personal finance advisors on the scene today. In a sea of useless financial advice, Singletary is an oasis of sound judgment.
Tuesday, January 22, 2008
Clinton & Singletary on the Economy
Subscribe to:
Post Comments (Atom)
3 comments:
It should be noted here that Clinton did not vote on the 2005 bill. It was a GOP darling and would have passed even if she had taken a stand, but I find retrospective political positions more than a little disconcerting. (Clinton is a pro at this.) Also worthy of note is that the bill was disingenuously couched in the language of "Consumer Protection" when it was in fact pushed through after seven failed attempts over the course of nine years, primarily as a result of over $100 million in lobbying efforts by the credit card industry-- who coincidentally were among the largest contributors to Bush's reelection campaign.
I applaud you in your efforts to make sense of bankruptcy both from an individual, "psychological" perspective while also keeping your eye on the larger picture and considering the increasingly pressing need for macro-economic change. This wouldn’t be an epidemic if it was truly an individual phenomenon. Sadly, the present attempts to avoid a recession encourage the kind of short-sighted deficit spending that lies at the root of the problem. Not only is the government blaming the victim, it is ensuring that the victimization continues.
In terms of financial literacy, I also think that lenders and credit card companies should be required to make their offers as transparent and understandable as possible. In the realm of scientific research on human subjects, scientists are held to high standards in terms of making their informed consent clear and at a reading level that all participants can understand. It's time that financial institutions are asked to bring the "fine print" into large print and allow the consumers to have a clear understanding of what they are getting in to.
I heard Elizabeth Warren on NPR the other day saying that as recently as ten years ago the average credit card agreement was one page whereas now it is over thirty pages of "absolutely incomprehensible text."
In signing the bankruptcy reform act in 2005, Bush said that credit card companies should be required to disclose payment expectations and penalties “up front,” and that people “should not be trapped by a provision in fine print"-- but clearly no progress has been made toward that end.
Post a Comment