Credit access and social welfare: The rise of consumer lending in the United States and France

Politics and Society

Volumn 40, Issue 1, 2012, Pages 9-34

  Trumbull, Gunnar ^a  

^a HARVARD BUSINESS SCHOOL   (United States)

Author keywords

Credit; France; Household finance; United States; Welfare state

Indexed keywords

EID: 84856427673     PISSN: 00323292     EISSN: 15527514     Source Type: Journal    
DOI: 10.1177/0032329211434688     Document Type: Article

References (85)

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2. Robert Reich, Aftershock: The Next Economy and America's Future (New York: Knopf, 2010).
3. Home equity loans that were expensive by the standards of home mortgages were relatively inexpensive relative to other forms of consumer credit, so households rolled credit card debt into second and third mortgages. Note
4. Herman Schwartz, Subprime Nation: American Power, Global Capital, and the Housing Bubble (Ithaca: Cornell University Press, 2009), 100.
5. Alan Greenspan and James Kennedy, "Sources and Uses of Equity Extracted from Homes," Oxford Review of Economic Policy 24, no. 1 (2008), 120-144.
6. Richard A. Brown and Susan E. Burhouse, "Implications of the Supply-side Revolution in Consumer Lending," St. Louis University Public Law Review 24 (2005), 369.
7. Brian K. Bucks, Arthur B. Kennickell, Traci L. Mach, and Kevin B. Moore, "Changes in U.S. Family Finances from 2004 to 2007: Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin 95 (2009), A37-A50.
8. Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton: Princeton University Press, 2010), 219.
9. Dennis Jacobe, "Commentary: Home Equity Loans May Present Subprime Redux," Gallup (12 December 2007).
10. Rosa-Maria Gelpi and François Julien-Labruyère, The History of Consumer Credit: Doctrines and Practices (New York: St. Martin's Press, 2000).
11. Usury was a staple of editorials in the Catholic newspaper La Croix for much of the postwar period.
12. Jeanne Lazarus, "L'épreuve du credit," Sociétés contemporaines 76 (2010), 17-40.
13. Michel Renault, "La vente a crédit s'acclimate en France," Le Monde (29 November 1962).
14. Greta R. Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance (Cambridge: Harvard University Press, 2011).
15. Gerald F. Davis, Managed by the Markets: How Finance Reshaped America (Oxford: Oxford University Press, 2009).
16. Sean Harris Vanatta, "A Crisis of Credit: Jimmy Carter, Citibank, and the Political Economy of Consumer Credit, 1958-1985," masters thesis in history at the University of Georgia, Athens, Georgia, 2011, 93.
17. Joseph Nocera, A Piece of the Action: How the Middle Class Joined the Money Class (New York: Simon and Schuster, 1994).
18. Joseph E. Stiglitz and Andrew Weiss, "Credit Rationing in Markets with Imperfect Information," American Economic Review 71, no. 3 (1981), 393-410.
19. Akos Ronas-Tas, "Consumer Credit in Transition Economies," in V. Perez-Dias, ed., The European Experience in Comparative Perspective (London: Berghahn Books, 2009).
20. Bruce G. Carruthers and Barry Cohen, "Noter le crédit: classification et cognition aux Etats-Unis," Genèses 79 (2010), 48-73.
21. Tullio Jappelli and Marco Pagano, "Information Sharing, Lending and Defaults: Cross-Country Evidence," Journal of Banking and Finance 26, no. 10 (2002), 2017-2045.
22. Jean-Christophe Largarde, Rapport á l'assemblée nationale, no. 2034 (19 January 2005), 7.
23. Martha Poon, "Scorecards as Devices for Consumer Credit: the Case of Fair, Isaac & Company Incorporated," The Sociological Review 55 (2007), 284-306.
24. Lendol Calder, Financing the American Dream: A Cultural History of Consumer Credit (Princeton: Princeton University Press, 1999).
25. Alain Chatriot, "Protéger le consommateur contre lui-même: La régulation du crédit à la consummation," Vingtième siècle 91 (2006), 95-109.
26. Maurice Roy, "La guerre des cartes est déclarée," L'Express (4 March 1968).
27. Jan Logemann, "Different Paths to Mass Consumption: Consumer Credit in the United States and West Germany during the 1950s and 1960s," Journal of Social History 41, no. 3 (2008), 544.
28. Rajan, Fault Lines; Reich, Aftershock; Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton: Princeton University Press, 2010).
29. Schwartz S, Subprime Nation.
30. Robert H. Frank, Luxury Fever: Money and Happiness in an Era of Excess (Princeton: Princeton University Press, 1999), 45.
31. Russell Sage Foundation Accession, Library of Congress, Box 16, folder 1933, Legislative Campaign, Report of the Chicago Better Business Bureau, April 6, 1933, p. 2.
32. France Direction Travail, Saisie-arrêt sur les salaries (Paris: Imprimérie nationale, 1899), 19.
33. Calder, Financing the American Dream.
34. The first monts-de-piété were formed in Italy, beginning in 1462, where they were formally sanctioned by the Pope as a tool to fight poverty.
35. Gelpi and Julien-Labruyère, The History of Consumer Credit, 121-123.
36. Yannick Marec, "Au Carrefour de l'économie et du social: L'histoire du mont-de-piété de Rouen (1778-1923)," Le Movement Social 116 (1981), 68.
37. Alfonse Desjardins, The Cooperative People's Bank (New York: Russell Sage Foundation, 1914), 4-5.
38. Ange Blaise, Des monts-de-piété et des banque de prêt sur gage (Paris: Pagnerre, 1856), 267-68.
39. "Report from the Select Committee of the House of Commons on Pawnbrokers," The Quarterly Review 155 (1883), 131.
40. Gelpi and Julien-Labruyère, Histoire du crédit à la consommation, 165, 170.
41. French Economics Ministry, Rapport du groupe de travail sur la réforme du credit á la consummation (March 1979), 9.
42. Gelpi and Julien-Labruyère, Histoire du crédit à la consommation, 165, 318.
43. Shelly Tenenbaum, A Credit to Their Community: Jewish Loan Societies in the United States, 1880-1945 (Detroit: Wayne State University Press, 1993), 97.
44. New York Times (27 April 1930).
45. Tom E. Savage, "Banks and Consumer Credit," Bankers' Magazine 146, no. 3 (1943), 201.
46. David H. Rogers, Consumer Banking in New York (New York: Columbia University Press, 1974), 28.
47. The Morris Plan of Industrial Loans and Investments (New York: Industrial Finance Corporation, 1915), 19.
48. The U.S. Federal Reserve at the time was required to target the interest rate on government debt, rather than prices. An agreement in 1951 gave the Fed independence and allowed it to focus monetary policy on inflation.
49. Britain adopted a similar policy in 1952.
50. American Federationist (April 1933), 345-346.
51. Cetelem Historical Archives, Paris, France. (This archive has not yet been catalogued-and was recently integrated into the corporate archives of BNP-Paribas.) UFB, 'Notes sur le financement des ventes crédit aux Etats-Unis,' December 1952, 8.
52. J. Albert Woll, "Organized Labor Views of the Loan Shark Problem," Law and Contemporary Problems 19, no. 1 (1954), 99.
53. Edward J. Lally, "Coal Strikers," Wall Street Journal (31 October 1949).
54. Edward J. Lally, "Coal Country Slump," Wall Street Journal (27 November 1946).
55. Edward J. Lally, "Coal Country Slump," Wall Street Journal (27 November 1946).
56. Edward J. Lally, "Meet the Miner," Wall Street Journal (10 April 1948).
57. Wall Street Journal (19 June 1959).
58. Lally, "Coal Country Slump."
59. Price V. Fishback, Soft Coal, Hard Choices: the Economic Welfare of Bituminous Coal Miners, 1890-1930 (Oxford: Oxford University Press, 1992), 136.
60. Lally, "Meet the Miner."
61. Price V. Fishback, "Did Coal Miners 'Owe their Souls to the Company Store'? Theory and Evidence from the early 1900s," Journal of Economic History 46, no. 4 (1986), 1018.
62. Thomas G. Andrews, Killing for Coal: America's Deadliest Labor War (Cambridge: Harvard University Press, 2008), 220-221.
63. Fishback, Soft Coal, 136.
64. Lawrence R. Lynch, "The West Virginia Coal Strike," Political Science Quarterly 29, no. 4 (1914), 656.
65. New York Times (5 September 1882); Wall Street Journal (3 May 1912). Over a hundred years later, this sort of loan guarantee was still being used by the National Education Association to support teacher strike actions. From December 18, 1989 to February 28, 1990, the NEA's National Education Employees Assistance Fund (NEEAF) loaned $1.28 million to the TerreBonne Education Association Federal Credit Union as collateral on loans to striking members of the Louisiana Education Association. $27,236 ended up having to be written off. Myron Lieberman.
66. Charlene K. Haar, and Leo Troy, The NEA and the AFT: Teacher Unions in Power and Politics (Rockport, Mass.: Pro-Active Publications, 1994), 92.
67. Wall Street Journal (19 June 1959).
68. Michael K. Drapkin, "Strikebound Town," Wall Street Journal (30 November 1967).
69. Archives of the Banque de France, Paris, France. Records of the Conseil national de credit (CNC), box 283, Comité national du Crédit, Comité du crédit a court terme, Décembre 1953-Juin 1961, Meeting of the Comité du crédit a court terme (9 January 1954), 13-14.
70. Max Léon, "Rien à Payer," Humanité (3 July 1956).
71. Bulletin du conseil économique (24 October 1956).
72. Michael K. Drapkin, "Strikebound Town," Wall Street Journal (30 November 1967).
73. Marjorie Anne Beale, Mort à crédit: the Credit Department Store and the Parisian Lower Classes, 1856-1920, Harvard history department undergraduate thesis, 1982, 36.
74. Gabriel Veraldi, "Une solution au problème du pouvoir d'achat," La vie française (3 October 1958).
75. René Sedillot, "Le crédit à la consommation," La vie française (5 February 1954).
76. Bulletin du conseil économique (24 October 1956), 502.
77. Léon, "Rien à Payer."
78. British Labour MP Aneurin (Nye) Bevan, who as health minister oversaw the creation of the National Health Service, articulated this concern that credit was de-radicalizing the left. In 1959, the year before he died, he described the failure of trade unionism to activate a new generation of younger workers: 'Most of them are indebted, either from paying high mortgages to purchase a house, or to purchase household equipment, modern accessories or even for cars purchased on the installment plan. They bear two contradictory sentiments: satisfaction in seeing their material situation improve, and fear at not being able to pay the debts.' L'Express (15 October 1959); cited in: Michel Drancourt, Une force inconnue: le credit (Paris: Hachette, 1961), 180.
79. CNC, box 283, Comité national du Crédit, Comité du crédit a court terme, December 1953-June 1961, Meeting of the Comité du crédit a court terme (19 June 1961), 21.
80. Morris Bernhard, "Personal Loan Departments in Banks," Bankers' Magazine 134, no. 4 (1937), 320.
81. JC Penney Corporate Papers, located at the DeGolyer Library, Southern Methodist University, Dallas, Texas. Credit Matters, July 1971, 'The Role and Functioning of Consumer Credit,' a Report by the Sub-council on Credit and Related Terms of Sale of the National Business Council for Consumer Affairs (13 March 1972), 37.
82. CHA, "Conditions de financement par le CETELEM des ventes à credit d'appareils électroménagers," April 1953.
83. Cetelem's competitor, Sofinco, followed with a similar revolving credit card, the carte d'argent. Le Figaro (14 June 1968).
84. Michel Schlosser and Gérard Tardy, Les cartes de crédit (Paris: Dunod, 1971), 55.
85. Travel and leisure cards like Carte Blanche, Diners Card, and American Express were the exception and were used primarily by businesspeople.