As home foreclosures continue to soar across the U.S., due to factors such as the sub-prime loan crisis, some credit card companies such as Capital One are noticing some strange financial trends by American consumers. A survey of those whose mortgage payments are at least 90 days overdue found out that 70 percent of these persons continue to make their credit card payments on time. It seems that many value using their credit card compared to having a roof over their head.
It is indeed a strange circumstance that only 30% of credit cards users who are headed towards a possible home foreclosure crisis are in such bad financial straits that they stop making their credit card payments. The fact that 70% of users in serious financial trouble continue to make their credit card payments is the complete reverse of the old way of thinking where the importance of a home to live in was the most important.
It is also interesting to note that in a new book from Alan Greenspan he admits that he knew that the sub-prime loan industry was going to create a major economic crisis back as far as 2005. So where was his action at the time?
Alan Greenspan's all-too-gentle handling of the major mechanisms of American capitalism has failed to prevent many recessions and other economic downturns before. When the economy proved some real growth, then Greenspan slowed it with new interest rate hikes, rather than let it grow and continue to create jobs, helping to create a permanent class of unemployed American workers which industrialists could use to keep wages down for working people.
American capitalism offers some great potential gains to some, but only misery to some others with no real power in the system to prevent themselves from becoming a victim of issues such as a tightening of the job market, production downturns or the victims of shady sub-prime loan operators.
Today, oil hovers near the $80 a barrel mark, which is certain to shortly translate into higher energy and gas prices, creating a whole new set of economic problems for the working class of the U.S.
Note: Wizbang Blue is now closed and our authors have moved on. Paul Hooson can now be found at Wizbang Pop!. Please come see him there!