Book Reviews (back
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
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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