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Book Reviews (back to books)

The Washington Monthly

"Manning's comprehensive approach to the causes of credit-card debt is far more compelling than the simple notion that aggressive marketing campaigns and solicitations alone have propelled the trend of credit-card-based lifestyles...Manning insightfully traces many of the changes that have led to credit-card debt as a mainstay of consumer culture..." May, 2001

The Joe Bob Report

"... [T]he most stunning indictment of corporate America since Ida Tarbell's expose of the Standard Oil Trust more than a hundred years ago."

Electronic Privacy Information Center (EPIC)

Dr. Robert D. Manning, Credit Card Nation, The Consequences of America's Addiction to Credit (Basic Books, 2000).

As Congress considers amendments to our country's first federal privacy law, the Fair Credit Reporting Act, there is almost no discourse about the problems presented by credit card debt in our nation. Even the Brookings Institution avoided a critical analysis, and instead knelt at the foot of the industry, praising it and coining the phrase "the miracle of instant credit." (Vatican sources later informed us that Brookings nominated Visa and MasterCard for canonization.) The orthodoxy that credit could only do good deeds prevailed through the entire debate, and critics of companies that routinely lend their victuals to the improvident at 20 percent interest, compounded, somehow seemed unpatriotic.

Indeed, the credit industry has been successful in creating a cultural sea change in the United States, linking access to credit with American values, argues Robert Manning, a professor at Rochester Institute of Technology. The industry has shifted individuals' values from a puritan work and save ethic, to one where many manage high-interest debt. The danger is that many Americans are at heightened risk of personal bankruptcy. Credit card companies have also sought safe haven in states with weak consumer protection laws, allowing them to circumvent regulations designed to shield individuals against usury. As a result, common life events such as divorce, losing a job, or undergoing medical treatment can easily plunge a family into serious trouble. Identity theft also is exacerbated, as the industry has resisted laws that would help prevent issuance of credit to impostors.

Portions of the book addressing credit marketing on college campuses are compelling. The credit industry markets heavily to college students, who often have no credit history and no income. They also provide more cards and higher credit lines if the student "maxes out" accounts. This business model actually works because students will "juggle" credit by using their educational loans to pay the monthly balances. The result is that a large number of students enter the workforce under high-interest debt. Meanwhile, credit companies whitewash the problems by pumping funding into industry-friendly think tanks, such as Georgetown University's Credit Research Center. Manning's book presents a well-footnoted and cogently-argued case against one of the most powerful industries in the world. I highly recommend it, and after reading it, I smote mammon itself by cutting up all of my credit cards.

--Chris Jay Hoofnagle


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