DENNIS MYERS Against the Grain Advertisement

On Dec. 4, the U.S. Senate Permanent Subcommittee on Investigations headed by Democrat Carl Levin and Republican Norm Coleman held a hearing on abuses of consumers by credit card companies. As with a similar hearing by the same panel earlier this year, horror stories of rapacious corporate practices attracted substantial news coverage.

And then, as with the previous hearing, the issue faded.

Congress is great at holding hearings. Enacting legislation, on the other hand, comes slowly, if at all. Levin, chair of the committee, has had enough information to write legislation for a long time. Instead, he holds hearings.

Some news reports said that the latest hearing was designed "to shame credit issuers into changing their Byzantine lending habits."

Yes, that'll happen. This is a world in which Methanex Corp. filed a $970 million claim against the state of California because the state denied the company its "right" to continue polluting state waters. Waiting for shame in a huge corporation is a long wait. As economist Jane Bryant Quinn has written, "Banks don't cancel your cards, as they did in the old days; they just keep charging until you break." It's even worse than that -- the lenders will keep raising your credit limit while you keep making the minimum payment.

On the other hand, Congress earlier this year did find time to aid those same large corporations by approving a measure cracking down on bankruptcy filings. Nevada's Democratic Sen. Harry Reid was one of the supporters of the bill.

One of the reasons there are so many bankruptcies is that thirty years ago Democrats repealed many of the protections in federal and state law that borrowers enjoyed from predatory lenders.

Jack Newfield and Jeff Greenfield have written of how, about 1950, the Democratic Party began slowly moving away from its traditional support for working people. "The Democratic Party, the traditional party of reform, began to move away from the working masses, began to take on an elitist approach...[and] began to abandon its traditional role of representing the needs of the workers."

By the late 1970s the party had drifted so far from its commitment to workers and become so bewitched by money and power that it joined the deregulation rage that was so ruinous for low income families. From heating oil to usury, Democratic Congresses gave big campaign contributors what they wanted, even when it meant making life harder for those who lived from one weekly paycheck to the next.

It was Democratic Congresses and the Carter administration that wiped out most state and federal usury laws, leaving borrowers at the mercy of predatory lenders who know all kinds of deft and imaginative techniques for enslaving people to debt. It was Democratic Congresses that enacted a variety of legislation that removed protection from people and conferred protect on corporations.

From opt-out schemes, targeting of vulnerable groups like troops and college students, two cycle billing, residual or "trailing interest" and "universal default" -- credit card issuers have learned the skill of luring borrowers past their capacity. A General Accounting Office investigation has also laid out in detail the practice of credit card lenders of writing credit card agreements in language so unfathomable that it is unintelligible.

So this year, with so many lenders held hostage by grasping lenders, it was patently clear that lending reform should come first, before bankruptcy reform.

Sen. Reid told me he supported the bankruptcy bill because, "The simple fact that credit is easy to obtain doesn't mean that you should be able to get money and then just wipe it out in bankruptcy. The fact that credit's easy to get doesn't sell with me."

All that's fine -- no borrower I know disagrees. But making bankruptcy more difficult without first doing something about the way corporations, at the Democrats' invitation, trap people in endless cycles of debt does nothing to reform anything. It just leaves good working people trapped while further enriching avaricious corporations.