NYT Article on Credit Card Debt

The NYT has an outstanding series on debt ("The Debt Trap"). Today's article was about ballooning credit card debt in Turkey (Landler, "Credit Cards Tighten Grip Outside U.S."). Most European citizens, until recently, used debit cards, not credit cards, so Turkey's acceptance of credit cards is unusual. 

Here are some facts from the article:

http://www.nytimes.com/2008/08/10/business/worldbusiness/10card.html 

1. Outstanding credit card debt in Turkey ballooned to nearly 18 billion dollars in 2007. 

Before any Americans start gloating, here is a link to our consumer credit numbers--and yes, that's in billions of dollars, and percentage-wise, we're in the same boat as Turkey, a country that recently had to pay over 15% on its bonds/Treasuries to get buyers: 

http://www.federalreserve.gov/Releases/g19/current/ 

(The Federal Reserve tracks outstanding revolving consumer debt in its "G19" release. What is revolving consumer debt? It's mostly credit card debt. The G19 stats include all outstanding balances outstanding, including balances from people who pay off their debt at the end of the month, not just those who have continuous balances.) 

2. Cute Turkish proverb re: risk-taking: "Stretch your leg only as far as your blanket." 

3. South Korea at one point, prior to nationalizing some banks/issuers, had a 28% default rate. South Korea had 148 million credit cards. South Korea's population at the time was only 49 million people. 

Unrelated note about our FBI and wonderful national security people: the same 8/10/08 NYT has an article about closing the anthrax case (page 17). We now know the perpetrator/terrorist was probably an American-born Christian. The FBI, in its infinite wisdom, reflexively targeted Muslims, in this case, Pakistani-born residents, including one American citizen. (Makes sense. We all know Pakistani Muslims have a long history of using anthrax in America, right? Wait...) The FBI apparently asked these suspects, who worked for the city, "What do you think about 9/11?" (Because if you're a terrorist with half a brain, this is the question that will get a confession or relevant admission about anthrax.) Here's a chilling line about how the FBI works:

[A]n [FBI] agent pointed a gun through an open window at [the suspect's] home while others knocked down the front door as his wife was cooking in the kitchen. 

Here's where it gets really tragic. Two of the Pakistanis were non-citizens. Their visas expired, and they had to find work abroad. As for the remaining Pakistani-born citizen suspect, every time he traveled to Canada to see his brother, he was searched and interrogated for up to two hours, and his name was put on a watch list. 

Congrats, FBI. With friends like you, who needs enemies to sully the name of America? 

As for Bruce Ivins, the white American-born Christian-raised anthrax suspect who killed himself, may you burn a slow death in the lowest levels of hell. 

I am of course specifying Ivins' racial and religious background. Aren't racial and religious traits relevant in understanding why people commit evil acts? More important, has President Bush declared a War against Chemicals yet? Do we need a new security agency to handle these chemical issues? There are millions of chemical compounds just waiting to be unleashed on Americans. Should we petition the government to open a Department of Chemical Security? Something must be done. Perhaps we should spend billions of taxpayer dollars restricting chemicals from entering the hands of American-born citizens to prevent future terrorist incidents. For more information, or to register your comments, write the government at 

Attn: George Orwell 

Ministry of Peace 

1984 Ave. 

Washington, D.C. 20500 

And don't forget: War is Peace. 

For more on this topic, check out this earlier post:

http://willworkforjustice.blogspot.com/2008/06/terrorism-socialism-and-danger-of.html

WSJ Review, 7/29/08

Just when I'm ready to throw in the towel on the WSJ's steadily "dumbing down" of content and language and subscribe to the LA Times or NYT, it comes out with a fantastic issue. Here are the highlights:

1. One, a great quote from John Adams I'd never seen before, reminding Americans they are a republic, not a true democracy (Letters to the Editor section):

"Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide."
-- John Adams, Letter, April 15, 1814

2. A reference to Frederic Mishkin's final speech as a Federal Reserve Board (FRB) employee:

http://www.federalreserve.gov/newsevents/speech/mishkin20080728a.htm

All FRB speeches in 2008 can be found here:

http://www.federalreserve.gov/newsevents/speech/2008speech.htm

Mishkin advocates for more FRB transparency and a publicly stated inflation target:

"By establishing a transparent and credible commitment to a specific numerical inflation objective, monetary policy can provide a firm anchor for long-run inflation expectations, thereby directly contributing to the objective of low and stable inflation."

Common sense stated simply and persuasively. Sigh. Why can't the FRB hold onto to someone like this? If the Dallas FRB's Fisher leaves, we won't have any inflation hawks left.

3. An article on Turkey's current turmoil caught my eye. Basically, Turkey has mandated secularism. At one point, it outlawed head scarves. This strict separation of religion and citizenry has caused internal turmoil, as more Turkish citizens demand free exercise of religion reminiscent of the original Americans. Turkey seems to have gone too far, because by outlawing certain religious aspects, it has intruded into its citizens' personal lives. Still, it bears noting and repeating: Muslims in the U.S. have greater religious freedom than in many Muslim countries. On the other hand, Malaysia and Indonesia, as prosperous Muslim countries, are good examples of how to run a religiously-inclined state.

4. Speaking of Indonesia, few people know Indonesia is an OPEC member. However, like Iran, Indonesia is experiencing difficulty with very low domestic oil prices, and needs to import more and more of it. As a result, Indonesia's power grid relies somewhat on coal. The problem is Indonesia's privately owned coal companies can get more money exporting coal (33% more, apparently) than selling it domestically. As a result of the difference in pricing, Indonesia's power grid is becoming inconsistent, like Enron's refusal to power California, causing state-wide problems. Hence, the question: should Indonesia pay more to the private coal companies, or does a state have an interest in demanding lower prices because power is a necessary item for its citizens? The coal companies may not pay much in taxes and do benefit from being in Indonesia, with its low labor costs, rich resources, and wonderful people.

 I tend to believe in regulation of essential items, such as food and energy, but of course, the question is always, "How much regulation?" One cannot make the usual argument that regulation should be extended up to a point before the coal companies leave and do business elsewhere. Resource-rich countries have more leverage because of the finite nature and necessity of many natural resources; in other words, services may be regulated differently than natural resources because services, unlike natural resources, are usually more fungible. In any case, an interesting discussion can surely be had about this topic.