D9

Alec Bruce
In Focus

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Speak Up

The envelope looked harmless enough: about the size and shape of a birthday card, displaying my name in black ink. Clearly, I thought, here was another note from a fan wishing to thank me for transforming his understanding of the world.

It wasn't.

The blue-trimmed flyer inside began with a heartfelt, "We miss you", and proceeded with a long, desperate, wounded plea to "bring me back into the fold" of a well-known credit card company.

Apparently, I've been neglecting my duty to spend money I don't have, with plastic that charges a mere 19 per cent interest, on trinkets I don't need. Indeed, because I haven't used this particular card in over a year, the good folks at Fuggetaboutit Credit Inc. now want to know what they've done to deserve my shoddy treatment of them. Don't I love them anymore?

This reminds me of the time I received a letter from a major Canadian bank insisting that I drop by one of their friendly branch offices and negotiate a Diner's Club loan for a house, a boat, a winter vacation, or anything else "a man of my obvious taste and discernment" might desire. I almost fell for it -- but, in case I failed to mention, I was only 10 years old at the time.

What, I wonder, is Fuggetaboutit's excuse? Don't these guys watch television or read the newspapers? Haven't they seen the writing on the crumbling wall of the post-apocalyptic consumer society they're at least partly responsible for creating?

For years, nay decades, individuals have been warned about the use of credit to fund that which should be properly covered by cold, hard cash. Unless you have the coin in your pocket, the wisdom goes, don't whip out the plastic. And if you do find yourself financing a king's lifestyle on a pauper's wages, retire your balance as quickly as possible, or, at worst, pay more than the minimum amount due every month. Failing this, my feckless friend, go straight to fiscal purgatory, lick your wounds, smarten up, and vow to forever mend your ways.

Indeed, once upon a time not too long ago, bankruptcy was the sturdy handmaiden of financial rehabilitation. If you were unlucky enough to find yourself calling a cold-hearted, court-appointed trustee "Dad", and begging him to raise your allowance, your chances of getting new credit were about as likely as you watching the Statue of Liberty take a leak in the Hudson River. It was, in short, a deeply humbling, edifying, experience.

Not anymore. Over the past several years, the availability of credit has outstripped the measures once employed to ascertain "credit-worthiness". In the United States (but, increasingly, in Canada, too), consumers have been able to run up insupportable debt loads, declare themselves insolvent, and, within months of their legal discharge, apply for, and receive, brand new tickets to ride the merry-go-round all over again.

And the most vulnerable among us have become the prime patsies in a targeted campaign engineered by credit issuers around the world: minimum-wage workers lured by the no-money-down prospect of home ownership through mortgagers in league with credit card companies; and college and university students susceptible to the pitch that government loans are more expensive than the "interest-free" introductory offers available through the likes of Fuggetaboutit Inc.

What, you may ask, is in it for the fat cats saddled with all this bad paper? That's just it: they've not been saddled. Debt, like everything else in our increasingly deregulated society, has become "commoditized". Poisoned notes have been sold by one financial institution to another, leveraged against the value of other assets -- essentially real estate. As long as the housing boom continued, the marketable (read: speculative) worth of these assets escalated, erasing the liabilities accrued from credit defaults, and, predictably, justifying the issuance of ever-more sub-prime mortgages and questionable credit accounts.

The problem, as we now know, is that these were all paper-tiger transactions. And we are, all of us, finally paying the price of institutional avarice and stupidity. The proposed $1-trillion bailout of Wall Street is just the beginning. Soon, it will hit Main Street on both sides of the international border.

So what, then, do I say to credit card companies who write me letters proclaiming that they miss me?

Get over yourself. I have.

n Alec Bruce is a Moncton-based journalist. His column appears in this space every Tuesday and Thursday. He can be reached via www.thebrucereport.com