NYT writes about a radio personality worth hearing:
Well before the new bankruptcy law that went into effect on Oct. 17 made it harder for most Americans to wipe out credit-card debt, [Dave] Ramsey was waging a one-man crusade against leveraged spending. At 45, he has worked for more than a decade promoting his vision of personal growth through fiscal restraint. "The Dave Ramsey Show" is broadcast for three hours each weekday on more than 260 radio stations, attracting some two million listeners a week, mostly from the Southeast and the Midwest. Ramsey rejects debt in nearly every form (credit cards, auto loans, 30-year mortgages, home-equity loans), advising followers to pay for every single purchase (oatmeal, bath towels, dishwashers, even a split-level) with cash. He reserves one day a week for callers to join him in screaming the words "I'm debt free!" . . .
As an evangelical Christian, he insists that his followers make regular donations to churches or other charitable organizations. When I asked Ramsey about the wisdom of preaching philanthropy to those not yet back on their feet, he replied: "One way to bust the pity party is to be a giver. Giving breaks loose the whining child inside you." . . .
Implicit in Ramsey's teachings is the notion that debt is a moral weakness, a failure to embrace Protestant values of industry and restraint. To a degree, Ramsey is resurrecting an idea that until the 1950's remained central to American life: owing money was sinful. A popular story about a young girl named Lizzie, written by Irving Bacheller in 1911, depicted how vain and mindless spending manages to erode the moral fiber of an entire town. Yet as Daniel Bell argued in his classic 1976 text, The Cultural Contradictions of Capitalism, America's postwar transition from an economy of production to one of consumption depended on families living beyond their means. The language of "installment selling" carefully avoided the word "debt," thus removing any moral taint from the notion of borrowing.
Even so, 30 or 40 years ago, Ramsey's proselytizing would have found few adherents not just because shame about borrowing money was still built into the social fabric but also because borrowing money wasn't quite so easy to do. Before the 1980's, credit in America was dispensed sparingly, but in 1978 a Supreme Court ruling in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation paved the way for banks to export interest rates beyond state borders. This meant that a lending institution in South Dakota could now grant loans at 24 percent to someone living in New York or in one of the many other states where the ceiling on interest rates was far lower. At the same time, banks began aggressively developing their consumer-product divisions, making high-limit cards available to those of moderate means. For anyone with a marginal credit rating who might miss just one or two payments, interest rates can quickly reach 30 percent.
