At first she thought it was all a mistake.
“The interest rates started really going
up, and I couldn’t figure out why,” she remembers. By the time she read the fine
print buried in her credit card agreements, it was too late. “Where I could
manage everything before and make
progress, I suddenly couldn’t make any.”
Before long, Wilson was losing sleep,
crying constantly, and binging on peanut
butter sandwiches for comfort. On the
advice of a friend, she reluctantly approached a credit-counseling agency,
which put her on a budget and negotiated lower rates for her debt. Now Wilson
makes one payment every month to the
counseling agency, which, in turn, pays
the credit card companies. She has shed
$13,000 in debt in 12 months and she can
sleep again, but only by refusing to think
about all the little things that could go
wrong before her cards are paid off five
years from now. She has learned that
thrift—not a high credit score—is the key
to her financial security.
CAR TOON B Y STEVE SANFORD
Banishing the Beast
What will it take to restore faith in the
markets and in our market-driven
economy? Two things: regulation—and
self-regulation.
For banks and Wall Street, regulation
means playing by a new set of rules.
(Some might say any rules at all would
be a good start.) That the party was final-
ly, irrevocably over was apparent last
October when the former maestro of the
credit markets admitted to Congress
that he had relied too much on the sys-
tem to regulate itself. Said former Fed-
eral Reserve chairman Alan Greenspan:
“Those of us who have looked to the self-
interest of lending institutions to protect
shareholders’ equity, myself especially,
are in a state of shocked disbelief.”
For individuals, self-regulation means
developing a new mindset—one closer
to the attitude children of the Depres-
sion grew up with—that says if we don’t
have it, we don’t spend it. That’s admit-
tedly tough advice to follow when prices
are rising and your income isn’t.
But do we have a choice? On this one
point everybody agrees: to relieve the
fear that holds the economy hostage,
