Collateral Damaged: The Marketing of Consumer Debt to America by Charles R Geisst

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Synopsis

Sometime in the 1970s and 1980s, the use of credit cards, which had begun as a convenience, began to grow into an addiction. Collateral Damaged: The Marketing of Consumer Debt to America explains how a nation of savers became a nation of consumers and how Wall Street used consumers' addiction to spending to create the "toxic securities" that threaten to bring about the collapse of the global economy. Geisst looks at the policy implications of the credit crisis and describes how the United States can get its fiscal house in order.

Publishers Weekly

In this exhaustive study of the credit card industry, Geisst (Undue Influence) delivers a scathing critique of the routine practices that led to the current consumer debt crisis. He details the origins of credit cards, a path pioneered by merchants bent on making loyal customers, including Sears Roebuck, which established a consumer credit business in 1911, followed by General Motors and Ford opening finance divisions to facilitate car purchases. The banks followed their profitable example, creating finance subsidiaries through their parent holding companies. The book highlights the sweeping financial deregulation in the 1980s and 1990s, the backdrop of the rise in credit card offers, adjustable rate mortgages and, ultimately, the current poor state of consumer financial affairs. Geisst calls for additional regulation of securitized financial products, the establishment of a consumer credit protection agency and reinstatement of usury laws to cap exorbitant credit card and adjustable mortgage interest rates. Given the crippling debt load that many Americans now carry, this important discussion of the troubling marriage of consumer credit and mortgage lending is long overdue. (Aug.)

Biography

Charles R. Geisst, a professor of economics at Manhattan College, has published 18 books on finance and economics. His books, including Wall Street: a History, have been on the Wall Street Journal, BusinessWeek, and New York Times bestseller lists.