I have a new post up at Global Comment.
It seems each time the news turns to the financial sector there is a company or industry that’s failing. While economists examine what it means to the economy as whole, ordinary Americans sit in fear that tomorrow will bring a pink slip. While we have a tendency to speak about economics in abstract terms, it has a real world-effect on the average Joe Six-Pack that both Democrats and Republicans wooed ardently during election season.
The witch-hunt goes for a business or entity to blame for the current crises goes on. One of the culprits Anderson Cooper named as responsible for the meltdown was the American consumer. He reminded us of the large homes, financed shopping trips, auto loans and lack of saving. He suggested that it was the American desire for possessions, combined with an easy credit system, that played a huge role in this collapse.
What Anderson neglects to factor into his analysis is why the consumer lives on credit. It is not always a case of wanting to get the latest toy or cute new pair of shoes. Many homeowners have been forced to refinance their homes to pay for medical expenses or college tuition for their children. The availability of credit on demand has allowed companies to gain large profits without increasing the wage of the workers that labour to create their wealth.
With the ability to purchase what is needed with credit rather than cash, many did not see reason to stand behind their unions as they fought for gains. What is the necessity of organizing if your needs are technically being met? It wasn’t until the economic fallout that people have come to realize that credit does not offer a real safety net.