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An Interesting Thought From Charles Geisst Regarding Consumer Debt
By JLP | September 14, 2009
I’m reading a very interesting book (interesting if you like reading and learning about business history) by Charles Geisst called, Collateral Damaged: The Marketing of Consumer Debt to America
Although it seems hard to believe, there was a time when consumer debt was virtually non-exsistent. According to Geisst, consumer debt really took off after World War II:
“After surviving as a prohibition for years, the charging of interest underwent a profound change after World War II. A dramatic increase in population provided for easier credit for the masses, especially in the United States, and a relaxed attitude toward indebtedness in general. A subtle shift occurred. What previously had been known as the more onerous term “debt” now took on a positive note. Those in debt were referred to as having “recieved” credit. The newer version of the old concept made it more palatable to be in debt because now the borrower was being extended credit, as if being given a gift. Personal and corporate indebtedness grew to levels never anticipated fifty years before.”
There’s no doubt that “credit” has a lot more positive ring to it than “debt” does. People began taking out longer-term mortgages and financing big ticket items like cars and appliances. Once people started getting into debt, it was hard to get out.
Anyway, I thought it was interesting how the public’s perception of something can change dramatically in just a few years.
Thoughts?
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Topics: Consumer Debt | 5 Comments »
September 14th, 2009 at 11:41 am
It is a bit scary, but isn’t that why companies go to the expense of having marketing departments?
-Rick Francis
September 14th, 2009 at 4:09 pm
There is a great need for consumers to pay closer attention to every message being thrown their way. From “clean coal” to “good credit,” these terms are polluting the way we look at issues that dramatically affect our lives.
September 15th, 2009 at 10:19 am
I’ve always thought of ‘credit’ as something that I have, I’ve earned, and tied to my good name.
However, I use up my ‘credit’, when I go into ‘debt’. I exchange my credit, for debt — as I pay off the debt, I get my credit back.
At least, that is the way I’ve been taught. Which is why it bothers me when I hear that FICO lowers your credit rating when you close a credit-card account. My credit goes up (not down) when I eliminate a liability like a credit card.
Anyhow, the author is right — times have changed. Credit-cards were unheard of 60 years ago. People used to actually BUY things. Now people have banks buy them things, in exchange for perpetually servitude.
September 15th, 2009 at 11:15 am
I also think, due to our Government buying into the deficit spending mentality, it has created a culture of debt in our society.
September 15th, 2009 at 7:40 pm
Debt is leverage. I’m all in favor of that. But goverment policy that makes it possible and attractive for people to take on debt that they cannot afford to service is wrong. That’s how we got into this mess-not lack of regulation.