The Credit Economy

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

Megan McArdle shares a horror story of her own about a mistaken tax lien that attached itself to her credit report for years like a barnacle from hell, but then adds a comment:

It is terrifying the power that these bureaus have assumed over us — when my bank made an error on my car loan, my first worry wasn’t that they’d upped my payment by $60, but that the subsequent late charge for an undersized loan payment might show up on my credit report.  This was only slightly less panic-inducing than thinking that it might show up as a shadow on a chest x-ray.  The bank fixed its error immediately and cheerfully.  (And may I commend the Navy Federal Credit Union to all who are eligible for membership).  I doubt Experian would have been so accomodating.

But maybe it’s worth remembering that the tyranny that credit scores exercise over our imagination have everything to do with the fact that we’ve built a society so utterly dependent on credit.  If you didn’t need a credit card, an auto loan, and probably a mortgage to be considered middle class in this society, these opaque and unresponsive bureaus wouldn’t be the most important source of information about us.

It is terrifying that these bureaus have such fantastic power to go around saying anything they want about us with virtually no oversight.  But I’d take issue with the closing paragraph here.  I don’t know quite how Megan intended it, but I’d argue that there’s nothing per se wrong with the fact that modern economies are so dependent on credit.  Widespread use of credit really does make life more convenient, really does make banking more efficient, really does enable useful advances like online shopping, and really does allow easier access to goods and services that would otherwise be difficult to get hold of.  Used in moderation, it’s good stuff.  I sure don’t want to return to the days of hauling around travelers checks whenever I fly off to Europe.

Speaking for myself, my jeremiads against the credit-industrial complex have never been meant as an attack on widespread access to credit itself.  Used reasonably, credit cards are a boon and credit reporting is a necessary part of providing credit responsibly in a big, complex world.  That said, credit is critically important to everyday living now, and that means that it needs to handled fairly and transparently.  And that’s all I want from these folks: if you make a mistake, you clean it up.  If you can gather negative information automatically, you can also gather positive information automatically.  If you offer a loan at a given rate, then that’s the rate.  If you charge fees and penalties, they should be at least vaguely related to the actual cost of the service, not made into a profit center designed to squeeze an endless income stream from the very customers most vulnerable to fine print and slick marketing.

That’s all I want.  It’s not so much, is it?

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate