The Giant Pool of Money was and remains the best discussion of the financial meltdown I’ve heard or seen on any medium. Congratulations on doing that show.

A while back I heard George Soros on both this show and others and he talked about many other bubbles coming, including a credit card bubble. I agree that we have yet to see the credit card bubble burst and if and when it does the results might be worse than the mortgage bubble.

Because credit cards are virtual money they make all of the concepts that come with using them abstractions that blur the meaning of carrying debt. Couple this with out of control consumption and you have a recipe for disaster.

As someone who lives pretty conservatively (my wife and I carry no credit card debt) it’s tough to watch others go wild with spending on expensive cars and big flat screen TVs knowing that many of them will carry credit card balances on those purchases for years. Of course it’s their right to be in debt but if their debt causes a meltdown that, like the banks, needs to be bailed out by the government, that’s my tax money doing the bailing.

I’m not defending predatory credit card companies but it doesn’t matter what the interest rate is on a card if you pay the balance every month.

Reminds me of the man in The Giant Pool of money who had no job yet got a $500,000 mortgage. He even said that he would not have given himself a mortgage. The question is, why did he go through with it if he knew he couldn’t pay it back? It’s not just the mortgage company at fault here, it’s also the person who took the loan. Not just the predatory credit card company but also the people who charge more than they could ever pay back.

Those of us watching this credit card bubble coming from the sidelines are quite nervous about it and resentful as well because even during this economic downturn many folks continue to bury themselves in debt.

Will the financial markets regulation bill as currently drafted prevent a repeat of the crisis we are living through?

Often, solutions to one problem contain the seeds for another one. What problems might emerge from the President’s bill if the current draft were to pass?

What role did the media (commercial and public) play in the financial crisis?
-Carl

Please talk about the role of debt in bringing down the automotive industry and the relationship, if any, that “poison pills” to prevent takeovers played in driving the debt up, as well as bank profits.

charles

Richard –

As somebody who fell into debt early in life (19, in fact, the targeting of college students by credit cards is disgusting), I can appreciate the low debt lifestyle you live. But remember this – the wide availability of credit is part of what has kept wages stagnating for decades. In turn that has perpetuated the need for debt for the lowest wage workers, whose salaries haven’t kept up with the cost of living. Many people who carry debt (and lots of debt) didn’t buy flat screen tv’s. They bought textbooks (me), or groceries, or gas, or clothes for their kids.

A word of thanks from the staff to Richard, “Surfside,” Carl, Charles, and Frances. We’ll try to get some of this on air tonight at the taping.

We keep hearing inflation is going to come back due to the Fed pumping all the money into the system. Do you agree, and how do we prepare for this?

JoeTaxpayer

Has your reporting/interviewing process changed as your knowledge of the subject and the current crisis has grown? If so, in what way?

What’s the “end game” for the Federal Reserve? How will they undo the various stimulus programs and signal a return to higher rates?

I have noticed that in nearly every economic analysis I read or hear about, there is an underlying assumption that actions that lead to growth are considered good, whereas those which do not are considered bad. But why must we have growth at all, and is it realistic to expect that the world financial system can grow indefinitely?

As a biologist, I find my instincts about how complex systems operate are completely opposite of an economist’s: economists call the lack of growth stagnation and view it as a bad thing; biologists call that homeostasis, and see it as a sign of a healthy system. Conversely, what economists call growth, and view as good, biologists might call cancerous, and see as an unsustainable disease. I realize the same principles that apply to living systems need not apply to world markets, but nonetheless, I have never heard of a good explanation for why we must always strive for continued growth in the economy.

I’m very excited. My two favorite NPR podcast merge for a segment together. I can’t wait to download it.

Onto my question: I seem to hear a bit of negativity regarding the stimulus plan and jobs. Terms like jobless recovery are being used and the unemployment numbers are grim. However, aren’t job rates increasing in some science and engineering sectors? I certain hear more stories of consulting firms and even law firms increasing their scientific resources as well as an uptick in research grant approvals.

If that’s the case, then it seems the stimulus programs that encourage projects in energy research and even education funding/retraining are directly addressing the jobs issue. Why do I hear such harsh criticism?

@ Frances: Absolutely. I agree with you and I certainly did not mean to say that everyone carrying debt is carrying it irresponsibly.

I do think, however, that virtual money has allowed many people to create a disconnect between buying things and paying for them. That disconnect is one piece of the problem.

In the excellent piece, The Giant Pool of Money, a man with no job and few assets easily gets a mortgage for $500,000 and then quickly defaults on it. As he said on the show, he would not have given himself the mortgage. The question remains, why did he take it?

Some debt is impossible to avoid but some debt is the responsibility of the person borrowing the money.

THANKS FOR THIS OPPORTUNITY TO POST THIS QUESTION. NEXT YEAR, MAY/2010, I WILL BE FINISHING MY BA – ECONOMICS/POLITICAL SCIENCE. WHERE DO YOU THINK I SHOULD START LOOKING FOR A JOB, WHERE THESE SKILLS CAN BE APPLIED?
THANKS AGAIN.

With the Federal Government receiving stock for TARP and other program monies. How is the Government going to vote those shares of stock? The argument could be made that the Feds should vote against management proposals.

Why is the plan for financial regulation so vague? There’s mention of lot’s of little tweeks, but given that most of the agencies that will be tapped got things wrong, why should we believe they will get it right now?

Also, there is no revamping of the bond rating agencies, who are part of the culpable parties – why is this?

Q: where are all the jobs Obama is supposed to make? He’s good at spending money, but he’s not good at creating jobs, from what I see.
Q: when will he revoke the ‘retirement funding’ of past presidents? This is no longer necessary; past presidents are not in danger of gowing broke, unlike the rest of us.
Q: when will he cap government management wages? Front line workers are tired of hearing how much the upper levels are getting; makes my stomach clench.
Q: when will California wake up and smell the coffee? The B-word is lost on these dreamers.
Q: when can I get a good night’s sleep again?
Q: when can we stop hearing about PS, TBTF, GS, and all those irritating phrases that mean nothing except no one can think of anything original?
Q: when will I be able to retire, IF EVER? I do the right things according to Them, and Those People are getting bailed out while I’m just getting bailed?

Am I the only one who thinks Planet Money isn’t very good and that the hosts are kind of dumb?

Nowadays, it is so hard to find a decent job after graduation even internship because there are some got unpaid. And due to the crisis right now, I found out about bloodbanker.com which they have all the information all of the Blood center in the United States where you can get paid $50/hour to donate blood!. This is really helpful even if it’s just a part time job and the bottom line of this is to save lives. As we all know, Blood bank shortages kill tons of people all the time and it is time to spread the word about blood donation and give blood, you will never know when You might need blood.