December 12,2008
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Shoring Up the Credit Card Industry, Pt.4 –
– Satisfying the Powers that Be.Previous...
fourth category, loss of Wall Street's confidence in the market is a bigger problem. As unfair as it may sound, the credit card industry will continue to be buffeted by Wall Street analysts for as long as the unemployment crisis remains. For the longest time, the industry did well for themselves by providing an income substitute, as wages remained stagnant over the ‘W' era. In that time, the costs of critical resources like healthcare, gasoline and heating fuel went through the roof. The credit card industry was there to answer the call. Until the well dried up (credit card debt was hopelessly out of control), people could still get to work, heat their homes to 60 degrees and secure a modicum of healthcare.As the walls caved in from the weight, the credit card industry is now in the crucible. Without wages and credit used up, our consumers have little or no wiggle room left to pay those debts. They will need good-paying jobs to provide the conditions for the credit card industry that Wall Street demands of them. Meanwhile, the employment market is bankrupt. Jobs are not forthcoming.
The last category, Loss of consumer confidence, is the most illusive. In the past, consumer confidence was abused by a government that promised them the economy was fine. On that misplaced faith, the consumer retained confidence and kept buying with credit cards in lieu of adequate pay for years. Each year was worse then the previous, but not enough to get the serious attention that would demand change. When the breaking point finally came, our nation, having been duped by the Whitehouse, quickly recoiled from the shock. Just in time for the Christmas season, consumer confidence shut down. As the American consumers change their lifestyles and adjust to the new order, they may become more confident in themselves and their ability to survive extreme hardship. At that time, they will be ready to relax their fears a little and go out shopping again. Hopefully they'll retain some of their hard-earned wisdom.