Posts Tagged ‘Consumers’
Probably the last thing anyone wants to read is yet another book that attempts to explain why the financial crisis happened. Most of the territory, from the plausible to the incomprehensible, has been covered and recovered ad nauseam. That said, there is a strong case that Atif Mian and Amir Sufi have actually contributed a new and worthwhile line of thinking in their House of Debt.
The most interesting thing I took away from my reading of their book was that the mortgage crisis hit lower wealth households the hardest, by a substantial margin. In most cases, the wealth of lower income groups is mostly tied up in their homes and their equity was completely wiped out as home prices fell. As these lower income groups have a “higher propensity to spend” income, this severe negative wealth effect had – and continues to have – a dramatic dampening effect on economic growth. As a byproduct, this consequence of the financial crisis also exacerbated the already growing wealth disparities in the country.
If Mian and Sufi are correct, then many of the public policies to shore up the financial system in response to the crisis – decried by both conservatives and liberals – were off target. Most notably in their view, the greatest error of both the Bush and Obama Administrations was failing to enact true mortgage relief for underwater homeowners. Failing to do this created a self-reinforcing cycle of default, falling home prices, lower consumer spending, slower growth and job loss that continues to depress the economy to this day.
This recorded telephone call of a consumer attempting in vain to cancel his Comcast service is lighting up the Internet, and creating a PR nightmare for the company. While this sounds like a parody but apparently is not, the experience seems not that different from ones I – and according to Yahoo Finance, most other consumers – have had with the cable company’s customer service reps of late.
Crumbs announces it is suspending operations and closing all its stores. According to Google Trend, cupcake interest appears to have peaked in early 2012. I am frankly surprised that the fad lasted as long as it did. Red Velvet indeed.
The Red Cross is denying a request to disclose how it spent $300M in donations after Superstorm Sandy. The charity has hired top law firm Gibson Dunn to defend their claim of “trade secrets.”