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The headline in Salon reads: "Generation bankrupt: They got hooked on credit cards when the good times seemed forever. Now the bills are due."
Great. My generation gets yet another lamentable label: generation bankrupt, generation in debt, hangover generation.
Gen X just doesn't cut it anymore; we who began our era as slackers, then morphed into workaholic entrepreneurs believing naively that we could create a brand new economy. We were wrong. If you believe the rumors, we single-handedly brought the economic market to a screeching halt.
Now we find ourselves in an abyss of debt. We're slackers, once again, through no fault of our own. We're addicts: Like alcoholics, we need credit to live the good life. We are the victims of circumstance.
It's downright appalling how we have been victimized by the huckster credit card companies. They figured out, right around the time my generation was hitting puberty, that giving away easy credit would, in the long run, make them a hell of a lot of money. If you give a 19-year-old kid a credit card with a $1,000 limit, he will max the card on CDs and pizza within four months, and pay the bare minimum back at 18 percent, in perpetuity. That's a pretty good return on investment. And the more outstanding credit he has, the higher his credit rating will be, and the more credit he'll get. It's brilliant.
Being obediently ravenous consumers, we bought clothes and CDs and lattes and dinners at nice restaurants, and we charged it all. Everyone I know did this. By our mid-20s, many of my friends owed $20,000 or more. (I consider myself lucky: I completely destroyed my credit by age 24, and haven't had a credit card since. I have been one of the very few living within my means; which means I lived pretty much in abject poverty.)
Most of my friends have been playing the transfer game for years. They get a preapproved gold card in the mail with a low, low, 0 percent rate (for the first two months), and continually transfer their balances to these new cards. Those in the best circles of the credit card world receive an astounding deluge of offers for new credit cards, all preapproved, with a check made out to them for their first cash advance.
One of my friends has come to the apparent end of the road on that game; one late payment and the finance charge skyrockets to 25 percent. A phone call to customer service reveals that she is no longer a "preferred customer" and they don't really give a damn if she cancels her card and tells her friends never to bank there. She still owes them a couple thou at 25 percent interest.
Then I hear the stories that make me believe we are, in fact, a generation of idiots: those of people day-trading on their credit cards. They take out that cash advance to open their E-Trade account. They transfer their balances to new 0 percent credit cards in an elaborate game of precise timing, where upwards of six credit cards might be in use at a time. They borrow even more through the brokerage (margins, calls, whatever they're called). It's all very thrilling until the market completely crashes and they're left holding the bag. Portfolios in the half-million-dollar range suddenly dropped to zero, margins were called, and credit card balances suddenly stood in the six figures. I'm no expert, but it sounds an awful lot like gambling to me.
Around tax day, I heard stories about all the corporate minions who exercised their stock options and, for reasons too complex for me to grasp, suddenly found out they owe $2 million in taxes, their stock is worth nothing and even bankruptcy won't protect them from Uncle Sam. (Again I must consider myself lucky: I am the only person in San Francisco who walked away from my options, watched them skyrocket to $90, kicking myself the entire while; and then -- just when I would have been able to exercise them -- saw them plummet to $1.30 and remain there.) But these poor folks, how could they ever have anticipated this? They were probably just following the advice: "Exercise your options and then hold on for a year." The tax laws are outdated. They'll never be able to pay it back. It's not their fault.
These are the people now scrambling to file bankruptcy before the new bankruptcy reform bill is signed into law.
It's in Congress now, a bill that would make it difficult for you and me (us middle-class folk) to declare bankruptcy and hide from our debts -- specifically, our credit card debts. It gives credit card companies first dibs (except for child-support payments) and means that all of us filing for bankruptcy will actually have to sell our cars and homes just to pay off those nasty credit card companies.
Salon, in an uproar over this bill, declares:
"In pushing bankruptcy reform forward, the [banking] industry's closest allies in Congress, including bill sponsors Rep. George Gekas, R-Pa., and Sen. Charles Grassley, R-Iowa, argue that consumer irresponsibility is at the root of the overwhelming number of filings. Grassley has gone so far as to declare that the recent rise in bankruptcy filings is 'the result of the eroding moral values of some people.'"
Imagine: We consumers are being held responsible for our own purchases and debt? Ridiculous! Fault the credit card hucksters, who market to us relentlessly and shamelessly, tickling our desire for more, more, more! According to the Consumer Federation of America, in the third quarter of 2000 alone, credit companies mailed out 2.5 billion solicitations, extended 13 percent more credit than a year earlier and enjoyed profits at a five-year high. These are the very banks who were behind the bankruptcy reform law, Salon shrieks in protest.
Really, is that a surprise to anyone, that the banks are lobbying to protect themselves from credit card holders who cannot pay? Their interest does not make their claims false, any more than an environmental group's natural interest and lobbying for clean rivers makes their claims false. The banks may throw credit at us indiscriminately, but it doesn't follow that we should not be held liable for our spending.
Fault the excessively consumerist society we live in, fed by the movies and advertising! Everything we see on television, in movies, in ads, portrays a fantasy world that none of us can afford to live in, but each of us aspires to.
As Lyndon B. Johnson said, "There are plenty of recommendations on how to get out of trouble cheaply and fastly. Most of them come down to this: deny your responsibility." And this from the liberal's liberal, the man to whom our current welfare system owes its existence.
Yes, we should blame the whole darn mess on Lyndon Johnson and his liberal ideals, which were corrupted into hedonistic pursuits of instant gratification even before we were born. Is it any wonder we are bankrupt financially, morally, spiritually? We're living the American Dream. The nature of our consumerist society is to perpetually show us just how far off the mark of perfection we are: We should be pretty and thin and drive the right car and live in the right house and wear the right clothes. The message is that you are imperfect, but you can buy more things to make yourself better. You can buy your identity. That makes you no longer a person, but a thing. You throw away your self-respect through mindless consumerism, but damn it, you can buy your self-esteem. And that does, indeed, make us worthy of our new label.
"I can resist anything except temptation." -- Oscar Wilde
-- Elizabeth Hopp