There is a big misconception in the United States and around the world that the Economy of the United States is free market capitalist. To believe that the United States has a free market economy is utterly naive and ignorant of economic facts. The interest rates are not a result of demand, supply, and risk but are artificial due to market interference by both the Federal Reserve and the US Government. Major companies are not successful due to their intelligent business practices but because of government contracts they receive, regulation they lobby for, government subsidies they receive, and bailouts that eliminate their risk while compensating for their losses. All these anti-free market variables are not new but have dictated American business for over a century.
The anti-free market economy is not the result of one party as both Republicans and Democrats have supported and continue to support legislation that attacks free market principles. Through big government incentives, regulations, subsidies, and bailouts, both parties have destroyed the free market and created an economic mess that rewards financial irresponsibility, creating an environment in which it is difficult for the responsible to compete.
Even the universally idolized conservative and pro-free market President Ronald Reagan implemented significant anti-free market policies. With his Executive Order 12631 President Reagan ensured that the US does not have a market system based on supply and demand but one that is heavily influenced by Government and the hidden agendae of those who are represented by the President’s Working Group on Financial Markets.
It is beyond obvious that the United States does not have a free market and that its economy is not capitalist. Whether “China Does Capitalism Better than America” was debated by Ian Bremmer, Minxin Pei, Orville Schell,a and Peter Schiff in New York during an Intelligent Squared debate hosted by Robert Rosenkranz and moderated by John Donvan.
The largest police union in Greece has threatened to issue arrest warrants for officials of EU Nations and those of the International Monetary Fund (IMF). The police union threatened to issue those arrest warrants as much of the population is at unrest due to the very unpopular austerity measures that the IMF and officials of larger EU economies are expecting of Greece. The Greece population also fears that they would lose their National Sovereignty.
“Since you are continuing this destructive policy, we warn you that you cannot make us fight against our brothers. We refuse to stand against our parents, our brothers, our children or any citizen who protests and demands a change of policy,” said the union, which represents more than two-thirds of Greek policemen. We warn you that as legal representatives of Greek policemen, we will issue arrest warrants for a series of legal violations … such as blackmail, covertly abolishing or eroding democracy and national sovereignty”
Given that Greece joined the European Union in 1981 and the Eurozone in 2001, it is ironic that now the Greek population is worried about losing their sovereignty. By accepting to become part of the European Union, Greece dissolved its monetary system and directly opted to lose whatever sovereignty it had left.
As Mayer Amschel Rothschild said:
“Give me control of a nation’s money and I care not who makes its laws.”
Welcome to reality Greece. You aren’t the only people who are starting to worry about their sovereignty long after giving it away. Americans still wrongfully believe they are a sovereign Nation despite having given their power over the monetary system to a private banking cartel in 1913.
Newt Gingrich, who served as Speaker of the House from 1995 to 1999, is one of the front runners in the Republican Primaries for the 2012 Presidential Nomination. As a Republican, he is following the hypocrisy of the many GOP party members who claim to support small government, free markets, balanced budgets, and personal freedoms yet have a history of supporting the contrary. The facts are out there but many self-proclaimed conservatives rather ignore Gingrich’s history, his support for debt ceiling increases, his support for socialism, his anti-free market views, etc and ignorantly believe his contradictory promises.
Newt Gingrich Supports Government Health Care Mandates
The official Newt2012 website states that Gingrich would:
“Repeal and replace Obamacare with a pro-jobs, pro-responsibility health plan that puts doctors and patients in charge of health decisions instead of bureaucrats.”
This once again proves that Gingrich supports government interference in the health care industry. A free-market proponent would not have the government implement a health plan, they would repeal Obamacare and eliminate other regulations that prevent competition and freedom of choice. Further, in 2003 Newt Gingrich supported “The Medicare Prescription Drug, Improvement, and Modernization Act of 2003” which was one of the biggest Federal Welfare Expansions since the 1960s. This increase in Medicare coverage allows Pharmaceutical companies to increase their profits while the increase in socialized benefits further contribute to the National Debt. That is neither fiscally conservative nor pro-free market.
In an interview with Meet the Press on May 15, 2011, Gingrich reaffirmed that he supports Government mandates in the health care industry by stating “all of us have a responsibility to pay – help pay for health care”. That is in agreement with the big government individual mandate that President Obama and the left supports. Connecting all the dots of Gingrich’s actions and statements on health care, WTF Finance comes to the conclusion that a Gingrich repeal of Obamacare would result in a replacement that continues to be anti-free market, supports socialism, and allows the health care industry to profit from government guarantees and the inevitable bailout. This is not surprising given that Newt Gingrich has a history of supporting big government policies that reward irresponsible and unsound financial business practices, as was the case with Fannie Mae and Freddie Mac.
Newt Gingrich Profits From Fannie Mae And Freddie Mac
While GOP Presidential candidate Ron Paul correctly forecast the Housing Bubble in 2002 and consistently criticizes the anti-free market institutions Fannie Mae and Freddie Mac, Newt Gingrich has a history of supporting and profiting from these two Government Sponsored Enterprises that socialize the housing market. Gingrich was also a paid consultant for Fannie Mae and Freddie Mac. The Associated Press reported that Newt Gingrich received approximately $1.5 Million from the two GSEs:
“Gingrich’s history at Freddie Mac began in 1999, when he was hired by the company’s top lobbyist, Mitchell Delk. He was brought in for strategic consulting, primarily on legislative and regulatory issues, the company said at the time. That job, which paid about $25,000 to $30,000 a month, lasted until sometime in 2002. In 2006, Gingrich was hired again on a two-year contract that paid him $300,000 annually, again to provide strategic advice while the company fended off attacks from the right wing of the Republican Party.”
Gingrich’s support for these two flawed financial institutions continued in 2007 when the politician reaffirmed his support for socialism in the housing market during a Wall Street Journal Interview:
“While we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself…when you need government to help spur private enterprise and economic development….It’s not a point of view libertarians would embrace, but I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism”
From Newt Gingrich’s actions and statements it is clear that he neither understands nor supports free markets. It is obvious that Newt Gingrich does not understand the root cause of the housing bubble and how government interference distorted the demand and supply variables contributing to the financial mess.
Newt Gingrich’s Statement On Strong Dollar Policy
Newt Gingrich’s official website states that a strong dollar policy is part of his plan for economic and job growth:
“Strengthen the dollar by returning to the Reagan-era monetary policies that stopped runaway inflation and reforming the Federal Reserve to promote transparency.”
Woodrow Wilson established the Federal Reserve by signing the Federal Reserve Act of 1913 into law. By doing so, neither the President of the United States nor its Congress have any control over the monetary system or monetary policy. Monetary policy is set by the quasi-private Federal Reserve System that Wilson established. The hypocritical big government policies of President Reagan devalued the US Dollar as his deficit spending policies contributed to the US debt. In 1995 Newt Gingrich stated in Claremont, NH that he is a big fan of FDR and Woodrow Wilson. How can a supporter of big government politicians and deficit spending be serious about a strong US Dollar policy?
Newt Gingrich Supports Socialism
Newt Gingrich has made it clear that he is a proponent of socialism. He stated that “all of us have a responsibility to pay – help pay for health care” and by supporting Fannie Mae and Freddie Mac he also supports Socialism in the Housing Market, as that is the function of those two Government Sponsored Enterprises. Anybody who can identify themselves with the policies of President Franklin Delano Roosevelt to the extent that Newt Gingrich does clearly supports Socialist policies and has no problem spreading the wealth.
“The greatest Demcratic President of the 20th century and by my judgment the greatest President of the 20th Century…FDR is the greatest Political Leader of the 20th Century”
Newt Gingrich On Debt Ceiling
Newt Gingrich is talking about a strong dollar and the importance of balancing the budget. But what does he truly believe when it comes down to it? Throughout his political career Gingrich supported costly big government bureaucracies and policies that put the United States into greater debt. Newt Gingrich has a history of voting for debt ceiling increases, as he did on June 4, 1980 when he voted “Aye” on House Vote #935.
A Newt Gingrich Presidency would continue the big government policies that FDR, Carter, Reagan, Bush, Clinton, Bush, and Obama, etc. have put in place. Gingrich promises small government, balanced budgets, fiscal discipline, a strong dollar and free markets but his political history and love for big government politicians and policies indicate otherwise. The fact that Gingrich receives so much support from the Republican base illustrates that both Republicans and Democrats share the same big government ideologies.
The fact is that Bank Of America has written down a significant amount of so called “A” paper debt. Contrary to popular belief, “A paper” is not significantly better in quality than subprime, given that A paper clients over the past decades relied on deficit spending and credit availability as much if not more so than the subprime demographic. A paper clients just like their subprime client counterparts rely on maintaining their debt payments with the acquisition of more debt. The only difference is that A paper clients often had Real Estate debt that was linked to more expensive housing. Why would that make a difference? Since banks such as Bank Of America were greatly mismanaged and heavily leveraged, they could not afford to foreclose on the expensive properties since the A paper loans were greater in value and not covered under the Insurance of the Federal Housing Administration. WTF Finance reported in the past how this is exactly the reason why upper income housing has not deflated in value as much as it should have – the Jumbo loan RE market was heavily manipulated as financial institutions such as Bank of America opted not to foreclose and instead legally cooked their books with the help of changes in accounting regulations.
Without the changes from mark to market accounting regulation to mark to whatever bubble value you want to mark it to, Bank of America would have been exposed as the insolvent company it truly is – it would have been “Bear Stearned”. Those changes in accounting regulation in late February of 2009 allowed Bank of America and other financial institutions to report phantom profits due to their creative Enron-like accounting gimmicks that were made possible with the implementation of anti-free market accounting regulations by the U.S. Government. While the naïve and clueless believed that the financial conditions of US companies improved, readers of WTF Finance were educated that the stock market rally of 2009 was merely an illusion of a fundamental recovery, only made possible and ignited by those accounting changes.
Finally last month, Bank Of America was downgraded by S&P and also by Fitch. Needless to say, both downgrades aren’t realistic enough as both credit rating agencies still give too positive of a rating for Bank of America and other financial institutions. Bloomberg reports:
“Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.”
Bank of America sure has friends in high places as the quasi-private Federal Reserve would like to relieve Bank of America of its bad business decisions and contracts, namely the trillions of bad paper that Bank of America has written down and still holds in the form of toxic derivatives.
If it weren’t for the anti-free market policies Bank of America and other financial companies could not engage in nonsensical business practices without having to face serious consequences for the irresponsible business decisions that they made. Only in a manipulated environment can a financial institution write bad business, reward its executives and employees with unmerited bonuses while passing the losses onto others.
Without the changes in accounting regulation to the “Enron Accounting Standard” in March 2009, Bank of America would have been exposed as the insolvent institution it is. The record profits that Bank of America reported starting with the 1Q 2009 were solely made possible with accounting gimmicks. These phantom profits allowed Bank of America to issue more shares as the financial and economic clueless wrongfully believed that the finances of Bank of America et al. improved fundamentally. With the next round of financial bailouts in the form of derivative purchases by the Federal Reserve, the story of Prank of America will continue…
While the hypocritical right and the left agree that expansion of government is the solution, comedian Goerge Carlin (RIP) never held back and spoke the truth. George Carlin understood that the media and education system are used to sway public opinion and that laws and regulation are put in place by the powerful corporations, with the help of the politicians, to enrich themselves. Laws and regulation are put in place to the benefit of corporations; they reduce their risk, increase their profit, eliminate their competition, etc. Thank you for speaking the truth George Carlin.
But there’s a reason. There’s a reason. There’s a reason for this, there’s a reason education SUCKS, and it’s the same reason it will never, ever, EVER be fixed.
It’s never going to get any better, don’t look for it, be happy with what you’ve got.
Because the owners, the owners of this country don’t want that. I’m talking about the real owners now, the BIG owners! The Wealthy… the REAL owners! The big wealthy business interests that control things and make all the important decisions.
Forget the politicians. They are irrelevant. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.
They spend billions of dollars every year lobbying, lobbying, to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want:
They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. Thats against their interests.
Thats right. They don’t want people who are smart enough to sit around a kitchen table and think about how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago. They don’t want that!
You know what they want? They want obedient workers. Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shitty jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? They’ll get it. They’ll get it all from you sooner or later cause they own this fucking place! Its a big club, and you ain’t in it! You, and I, are not in the big club.
By the way, its the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care! Good honest hard-working people; white collar, blue collar it doesn’t matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means, continue to elect these rich cock suckers who don’t give a fuck about you….they don’t give a fuck about you… they don’t give a FUCK about you.
They don’t care about you at all… at all… AT ALL. And nobody seems to notice. Nobody seems to care. Thats what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick thats being jammed up their assholes everyday, because the owners of this country know the truth.
Its called the American Dream,because you have to be asleep to believe it.
In December 2008 President Bush announced the bailout of General Motors. The Republican President made it clear that he does not understand the importance of free markets as he stated it was important to intervene and prevent a failure of the US auto maker. President Bush claimed that
“Chapter 11 is unlikely to work for American automakers at this time…American consumers understand why: If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available, and you question the value of your warranty. And with consumers hesitant to buy new cars from struggling automakers, it would be more difficult for auto companies to recover…”
The Republican President clearly showed his ignorance and lack of economic knowledge. Bush also stated that “I’ve abandoned free-market principles to save the free-market system.” Only an economic illeterate fool would believe that the market is only important as long as prices increase and people increase their paper net worth. The market works perfectly well when corrections take place as this allows unsustainable, irresponsible, and financially unsound business practices to fail. Intervening in the process only allows the financially and business unfit to survivie. That not only comes at the cost of the bailouts but at the cost of fundamentally sound businesses that cannot compete with their subsidized competitors. Market interference eliminates rationality and fundamental sustainable businesses in the long term.
The Republican Bush administration initiated the nearly $20 billion bailout for the auto industry while placing substantial orders of new government vehicles which directly helped the automakers. Nearly three years after the bailout and after shareholders lost their investments in General Motors, the bailed out company now uses the restructuring to its advantage by telling Americans that it will not repair the defective rear spindle rods on 400,000 Cheverolet Impala’s that are affected by the manufacturing error. Reuters reported:
“NEW YORK, Aug 19 (Reuters) – General Motors Co (GM.N) is seeking to dismiss a lawsuit over a suspension problem on more than 400,000 Chevrolet Impalas from the 2007 and 2008 model years, saying it should not be responsible for repairs because the flaw predated its bankruptcy.
The lawsuit, filed on June 29 by Donna Trusky of Blakely, Pennsylvania, contended that her Impala suffered from faulty rear spindle rods, causing her rear tires to wear out after just 6,000 miles.
Seeking class-action status and alleging breach of warranty, the lawsuit demands that GM fix the rods, saying that it had done so on Impala police vehicles.
But in a recent filing with the U.S. District Court in Detroit, GM noted that the cars were made by its predecessor General Motors Corp, now called Motors Liquidation Co or “Old GM,” before its 2009 bankruptcy and federal bailout”
With the markets in a steep downturn since the US credit downgrade announcement by S&P, many traders and investors carefully listened to the FOMC meeting in anticipation of an announcement that the Federal Reserve would interfere in the markets through credit injection. Bernanke didn’t confirm the much anticipated next round of Quantitative Easing. Instead the Fed chairman released a statement in which he admits that the economic recovery is not as strong as previously anticipated:
“Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity. Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions. More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate. The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.”
With the FOMC meeting at 2:15pm the markets sold off rather rapidly as no announcement was made about QE3. Failing to confirm a capital injection in combination with the negative economic growth outlook resulted in new session lows for stocks. It wasn’t until the DJIA reached a session and week low of 10603 around 2:45pm that money flooded to the markets. Within the last 75min of market activity the DJIA gained 639 pts to close at a day high of 11,242. That begs the question, where did that injection of capital come from? The President’s Working Group on Financial Markets? Or did the “policy tools” to promote price stability by any chance include the next round of Quantitative Easing unannounced?
Fannie Mae, the Government Sponsored Enterprise that guarantees home mortgages, is seeking its next round of government bailout funds. Fannie Mae reported its financial earnings statement on August 5, 2011, reporting a loss of $2.9 billion for its second quarter. In the first quater of 2011 Fannie Mae lost $6.3 billion.
“Our net loss and total comprehensive loss for the second quarter of 2011 were both $2.9 billion. In comparison, we recognized a total comprehensive loss of $6.3 billion in the first quarter of 2011, consisting of a net loss of $6.5 billion and other comprehensive income of $181 million. We recognized total comprehensive income of $447 million in the second quarter of 2010, consisting of a net loss of $1.2 billion and other comprehensive income of $1.7 billion (primarily driven by a reduction in our unrealized losses due to significantly improved fair value of available-for-sale securities).”
The government loan gurantees through Fannie Mae and Freddie Mac greatly contributed to the artificial low interest rates which were a significant contributing variable that made the housing bubble possible. These reported losses are greatly understated as Fannie Mae and the financial industry in general are allowed to use Enron type accounting evaluations since the change away from mark to market accounting in Spring 2009. Without marking its assets up to bubble values the losses of Fannie Mae would be multiples greater.
According to Reuters, Fannie Mae asked the Government for an additional $5.1 billion in bailout funds. The additional bailouts is needed as Fannie Mae continues with non-sense business practices in order to price fix Real Estate values, provide bailouts to individuals and banks, while continuing to provide artificial cheap financing to borrowers that wouldn’t qualify without the Government as guarantor. This socialized credit subsidy has been supported by the majority of Democrats and Republicans while free market proponents warned of the costly consequences.
There’s much talk about the debt ceiling these days. Many hypocritical self-proclaimed conservatives are all of a sudden concerned about the financials of the United States, they label the left as the party of deficit spending while conveniently not mentioning that they too voted all along for increased spending and budget deficits. Will the United States default on its debt if it doesn’t raise the debt ceiling? That’s a difficult question to answer as it depends on how the US manages its revenue and how it prioritizes the debt payments.
Fact is that the both parties have continuously voted for growth in government, increased government spending, and approved of debt ceiling increases. Having increased the debt ceiling an average of once per year over the last decade and 100 times since 1940 it is evident that neither party has a problem with deficit spending.
People ask the question “What would Ronald Reagan do?“. Well, big government President Ronald Reagan would increase the debt ceiling once again, as has been done 18 times during his terms as President of the Untied States. Listen to big government hypocrite Reagan as he addresses the Nation on a radio broadcast:
There’s no reason to increase the debt ceiling unless the United States wants to continue with the same big government deficit spending policies. Although there is political “gridlock” it is obvious that both parties have absolutely no intention of ever balancing the budget as they otherwise wouldn’t have implemented many costly government programs over the recent years and negotiate measly $30 billion cuts of the budget. The debt ceiling doesn’t need to be raised. The Government needs to learn to live within its means and being responsible that would include using current tax revenues to maintain and pay down the debt while reducing the size of Government to an affordable level.
Bloomberg reports that the US Consumer is in the best financial state since 2006 as the average FICO Credit Score rose to 696 in May.
“The ratio of consumer-debt payments to incomes is the lowest since 1994, and delinquencies have dropped 30 percent in two years, Federal Reserve data show. Improving credit quality gives households the ability to lift borrowing as concerns ease about rising gasoline prices, hard-to-find jobs and falling home prices.”
Is the U.S. consumer truly more creditworthy than in the past? The official credit scores and the consensus of the economists would make you believe that. WTF Finance doesn’t believe that the U.S. consumer is truly more creditworthy than in the past. The U.S. consumer benefits from the tremendous market interference by both the U.S. Government and the quasi-private Federal Reserve System.
Millions of homeowners in the United States are not paying a mortgage and live mortgage free while also not having to pay rent. This is a direct result of the changes in accounting regulations in March of 2009 as WTF Finance reported so many times in the past. By marking the assets and liabilities up to bubble value instead of market value, banks have the means and legal ability to cook their books. This is nothing short of Enron style accounting.
Not foreclosing allows the banks to keep their non-performing assets and liabilities on their books at artificially inflated book values. No, it doesn’t make business sense but it makes accounting sense as not foreclosing allows the banks to not realize those losses. This accounting gimmick is at the root of this “economic recovery” since Spring of 2009. Consumers are artificially rich again not because of home equity lines of credit as in the past, but because many no longer have the monthly expense of maintaining their home debt.
By not paying their mortgage, homeowners have the ability to pay their car loans and maintain their credit card debt. This creates an environment in which the U.S. consumer appears to be in better credit standing. It’s this artificial credit environment that is at the root of improved consumer credit scores.
Not surprisingly, many economists believe that the American consumer has fundamentally improved their credit scores. The same economists who now believe that the American consumer is more credit worthy wrongfully believed during the housing bubble that the Ameircan consumer was in great credit standing. Then as now, Americans only have the ability to maintain their credit standing as long as outside artificial variables allow them to do so. During the housing bubble it was rising home values that allowed Americans to tap into their home equity in order to maintain their lavish lifestyles and credit scores while five years later it is the bailouts and home debt forgiveness that allows them to maintain their credit cards and auto loans.
Fundamentally nothing has improved. Only a fool would believe that the U.S. Consumer is fundamentally more credit worthy than in 2006.