Foreign Affairs: The Dollar and the Deficits

Foreign Affairs
November/December 2009
Volume 88, Number 6

The Dollar and the Deficits: How Washington Can Prevent the Next Crisis
by C. Fred Bergsten, Peterson Institute for International Economics

iie.com - Peterson Institute of International Ecomomics

Tufts.edu (pdf)

Frontline: The Card Game

The Credit Card Game
Tuesday, November 24, 2009, at 9 P.M. ET on PBS

As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.

Watch the full episode. See more FRONTLINE.

In The Card Game, a follow-up to the Secret History of the Credit Card and a joint project with The New York Times airing Tuesday, Nov. 24, 2009, at 9 P.M. ET on PBS (check local listings), Bergman and the Times talk to industry insiders, lobbyists, politicians and consumer advocates as they square off over attempts to reform the way the industry has done business for decades.

"The card issuers could do anything they want," Robert McKinley, CEO of CardWeb.com, tells FRONTLINE of the industry's unchecked power over consumers. "They could change your interest rate. They could impose an annual fee. They could close your account." High interest rates along with more and more penalty fees drove up profits for the industry, Bergman finds, as the banks followed the lead of an aggressive upstart: Providian Bank. In an exclusive interview with FRONTLINE, former Providian CEO Shailesh Mehta tells Bergman how his company successfully targeted vulnerable low-income customers whom Providian called "the unbanked."

"They're lower-income people-bad credits, bankrupts, young credits, no credits," Mehta says. Providian also innovated by offering "free" credit cards that carried heavy hidden fees. "I used to use the word 'penalty pricing' or 'stealth pricing,'" Mehta tells FRONTLINE. "When people make the buying decision, they don't look at the penalty fees because they never believe they'll be late. They never believe they'll be over limit, right? ... Our business took off. ... We were making a billion dollars a year."

Harvest for the World

All babies together, everyone a seed
Half of us are satisfied, half of us in need
Love's bountiful in us, tarnished by our greed
Oh, When will there be a harvest for the world

A nation planted, so concerned with gain
As the seasons come and go, greater grows the pain
And far too many, feelin' the strain
Oh, When will there be a harvest for the world

Gather every man, gather every woman
Celebrate your lives, give thanks for your children
Gather everyone, gather all together
Overlooking none, hopin' life gets better for the world

Dress me up for battle, when all I want is peace
Those of us who pay the price, come home with the least
And nation after nation, turning into beast
Oh, When will there be a harvest for the world

Yeah, yeah
When will there be
I wanna know now now
When will there be a harvest for the world
A harvest for the world

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