Something Everyone Should Know About the Financial Crisis

I realize that people don't come to this blog for public policy analysis. But yesterday, while getting my taxes done, it came to my attention that my very intelligent and well-informed accountant didn't know an important piece of history regarding our economic situation. So I thought I'd use a normally blog-post-free Sunday to pass along the info.

Here it is.

In 1933, Congress passed the Glass-Steagall Act, which limited the types of investments commercial banks could make. According to Investopedia, the act's proponents argued that the law was needed because "commercial banks took on too much risk with depositors' money." They believed that these risks led to the Great Depression.

In 1999, legislation introduced by Republican Phil Gramm and referred to as Gramm-Leach-Bliley repealed those provisions of Glass-Steagall.

The D-Word

The D-Word

I know I said I was offline, but I became so obsessed with a word today that I had to blog about it.

Unlike my usual posts, this is not inspired by a word that I’ve been hearing. It’s about a word I HAVEN’T been hearing. Ben Bernanke hasn't said it. President Bush didn't say it when he made an emergency-feeling address to the nation tonight. None of the congressional leaders dealing with this financial crisis have said it, either.

In talking about our financial crisis, the Federal Reserve Chairman Bernanke has said several times that we are staring down a possibility so dire that it justifies a $700 billion bailout of mishandled financial firms. The threat, he said, is recession.

But, funny thing that. Some experts and pundits have been arguing for at least a year that we are already in a recession, or something close to it.

So is it possible that the real threat is so dire that our leaders, Bernanke, Bush and Barney Frank included, are literally too afraid to say it? That the real threat starts not with an R but with a D and is best known for a Great one we had 60-odd years ago?

And is it possible that this word, if spoken by certain high-ranking officials, could almost will itself into existence?

Let’s hope not.

Before I Go Dark: Banking and the Art of the Nebulous Sentence

I have to stop posting for a few days. I'll be back soon. But first ...

I've been doing more copy editing in the last year. As a result, my attention to words, sentences, and their meaning has improved. Basically, I get paid to stop and wonder: Did that sentence make sense? Was it clear? Did it do the best job possible of enlightening the reader?

I enjoy the work, but I'm just now beginning to realize the full value of keeping this particular mental muscle in shape.

A postcard I got in the mail yesterday served as an eye-opener. The postcard was from a bank with which I have a credit card account. I don't use this credit card anymore. The bank pissed me off two years ago when they sided against me in a charge dispute. (CompUSA had, without notifying me of their plans, erased my hard drive and then charged me $209 for the honor. The bank said that I failed to demonstrate that CompUSA's tech desk was staffed by primates.)

Because I don't use this credit card anymore, the bank's announcement probably would not have affected me. The problem was that, from their wording, I had no way of knowing:

At BankyBank (name changed to protect me from the dangers of announcing who I bank with), we're always looking for ways to enhance your BankyCard experience. That's why we're pleased to introduce a new feature for your credit account this fall. If you receive this offer, it means you can borrow at a lower APR than the standard purchase rate you pay on your credit accounts, with repayment in predictable monthly installments.

If you accept this new feature by using the check offer, your minimum monthly payment will increase by the monthly installment to which you agree. If you do not want to receive the offer for this new feature, please call the customer service number on the back of your card.

That's all it said. There was nothing else written on the postcard.

In other words: We're doing something to your account and we refuse to tell you what it is. Oh, and only people who wade through this nonsense will realize that silence equals consent.

I called the number of the back of my card. After wading through the computerized menu system, I got a woman on the phone. I told her the situation.

She asked, "What is the offer you're referring to?"

That's exactly the point, I said. I have no frickin' idea. When she finally figured it out, she started on a spiel about the benefits of this new feature. Not what the feature is, mind you -- just its pluses.

I cut her off. I'm quite sure, I said, that the feature has benefits. I just resent your company foisting it on me without a word about the potential costs or even a basic explanation of what the hell it is. I ended by issuing the clear instruction: Don't make any changes to my account.

She assured me that they would not alter my account in any way, however, it may take up to 30 days for them to make the change.