Rochester Institute of Technology
Founder and President of the Responsible Debt Relief Institute and Research Professor of Consumer Finance at the Rochester Institute of Technology; author of Credit Card Nation: The Consequences of America's Addiction to Credit and editorial advisor to the film In Debt We Trust
What Does It Mean to Be Poor in America? America's middle class is shrinking. The latest census classifies almost half of all Americans as either poor or "low income." As jobs disappear and government programs are cut back, more people are having trouble paying their bills and even buying food. As they lose ground, credit card debt is on the rise. Still, some conservative critics say the term "poor" mislabels those who aren't seriously deprived. Has the suffering reached anything like the levels of the Great Depression? Are the ranks of the poor expanding, or have definitions merely changed? Note: This story was informed in part from sources in the Public Insight Network. You can find out more at https://www.publicinsightnetwork.org .
What Does It Mean to Be Poor in America? America's middle class is shrinking. The latest census classifies almost half of all Americans as either poor or "low income." As jobs disappear and government programs are cut back, more people are having trouble paying their bills and even buying food. As they lose ground, credit card debt is on the rise. Still, some conservative critics say the term "poor" mislabels those who aren't seriously deprived. Has the suffering reached anything like the levels of the Great Depression? Are the ranks of the poor expanding, or have definitions merely changed? Note: This story was informed in part from sources in the Public Insight Network. You can find out more at https://www.publicinsightnetwork.org .
The American Dream and Extended Credit Despite the recession and unemployment near 10 percent, Americans are still accumulating more debt. Solicitations for credit cards doubled last year. Lenders and retailers say the American Dream -- a big home, a big car and college — makes consumers willing to go into hock. They also see signs of "frugality fatigue." Others contend the law itself is rigged to favor indebtedness, with incentives that reward debt and discourage saving. Why are people spending money they don't have? Is it good for the economy? Is the government setting the right example?
The Credit Card Economy Comes Home to Roost Credit card companies offered high limits and low interest rates to millions of US consumers. Then came the Great Recession. When we first broadcast this program in March, companies were reducing credit lines, jacking up rates and closing accounts — and they're still at it. Credit card reform was passed and signed into law, but Congress gave the industry nine months to end most of the outlawed practices. So what you hear today will be valid through this year's Christmas season. We can still ask, who's looking out for consumers?
The Credit Card Economy Comes Home to Roost The credit card industry has extended $5 trillion in available credit.” So far, only $800 billion is currently owed. But, as more and more people look to credit cards as a way to coping in tough times, “easy credit” is becoming a thing of the past. What happens when an industry that extends “easy credit” in good times has to contract? Is anyone looking out for consumers?
The Credit Card Economy Comes Home to Roost Credit card companies made big money by extending balances and reducing interest rates to millions of US consumers. But times have changed. Now, when other businesses are desperate for customers, credit card companies are reducing credit lines, jacking up rates and even closing accounts. But, when their “best” customers charge a lot but pay back only a little, how do they decide who to get rid of and who to keep on the hook? What happens when an industry that extends “easy credit” in good times has to contract? Is anyone looking out for consumers?
Drop in Consumer Prices Raises Deflation Fears Consumer prices took a dive last month, the biggest monthly decline in 61 years. Pollsters say falling prices make people hopeful, and that's good for the economy. But last month's record decline has raised another concern. Is it a warning sign that America could be hit with deflation? Robert Manning, Research Professor of Consumer Finance at the Rochester Institute of Technology, is author of Credit Card Nation : The Consequences of America's Addiction to Credit.
Predatory Lending and Shrinking Buying Power There may be fewer paper towels in the package than there used to be, but you're still paying the same price. The same is true for dog food and trash bags. "Hidden inflation" in supermarkets is just one sign of how consumers are affected by a troubled economy, even though they don't notice. Bear-Stearns brokerage house was bought up before it collapsed, as was the sub-prime lender Countrywide . Now the Congress and President Bush are protecting Fannie Mae and Freddie Mac . The next bubble to burst may be in the credit-card market. What's next for low-income retirees, recent college graduates and first-time home buyers? If you've got some money, is this the time to invest?
The Economic Fallout of Chronically High Oil Prices Two hundred dollars a barrel for oil and $6 a gallon for gasoline--next year. That's according to experts at Goldman Sachs. Many authorities believe those rising numbers won't ever be coming down and that this is the time for the US to wake up and do something about it. As Congress waits for a new president who might have an energy policy, there's talk of an uprising by angry consumers. Meantime, the International Energy Agency, a multi-national organization based in Paris, is making its first attempt to comprehensively assess the condition of the world's oil supply . Final results are expected this coming November. But the agency's already worried since aging oil fields and diminished investment may indicate that supply won't meet demand 20 years from now. Has oil reached its peak? Will Americans agree to sacrifice the environment for oil? If there‘s a market for alternatives, will it be ready in time?
A Recession on the Horizon? In the past few days, the word "recession" has worked its way out of the business sections onto the front pages of newspapers and the covers of magazines. "Everyone knows…another recession is inevitable sooner or later. Some indicators now suggest that it might be sooner." The New York Times, the Wall Street Journal and the Financial Times are headlining stories about a coming recession. Back in August, the Economist asked, does America need one? The sub-prime mortgage crisis and the end of easy credit are putting a damper on consumer spending, which has been driving the economy. Does that mean recession's inevitable? Could it be stopped or at least postponed? Would there be benefits to getting it over with sooner rather than later?
California catastrophe The fires rage on in our own backyard, and in Northern California, encompassing tens of thousands of acres each. In L-A and Ventura Counties, the Woolsey Fire has scorched everything in its path. To the north, in Butte County, the Camp Fire has charred and destroyed even more acreage, of trees, brush and everything else, north of Sacramento, and the town of Paradise is a scene of utter devastation and heartbreak.
Who will get displaced by a new Santa Barbara police station? The city of Santa Barbara says it needs a new police station, but building one means displacing either farmers or lawn bowlers. The Woolsey has not only destroyed hundreds of homes and forced thousands of people to evacuate, but it’s displaced a diverse mix of wildlife. And a new contemporary art exhibition takes a deep dive into the most famous art heists in history.