But when you’ve got your eye on the sparrow, that’s when the pigeon shits on your head. So while we’re temporarily distracted by the malfeasance of the insurance industry, let’s remember that the banking and finance industries are forever hoping for your eyeballs to wander so they can get back to screwing you straight into the ground.
In Australia, for example, the prime interest rate has just been raised – a move which makes absolutely no sense except as a way to fatten the fat, and which prompted Paul Krugman to call it out as particularly, and perhaps disastrously, premature. (He recommends that the prime shouldn’t even begin to move back up until the bleeding of job loss can be halted – that is, for at least two years.) Additionally, in advance of some extremely mild and long-promised credit card reform, a lot of banks (including, sad to say, my own; they’re usually not this nakedly greedy, but they’ve got, surprise surprise, a major takeover to pay for) are starting to hike their credit card and loan interest by shockingly high amounts.
This is nothing more than pure profiteering of the sort that banking regulation exists to stop in most countries; here, unfortunately, “banking regulation” means “creating laws by which banks can charge usurious rates of interest that would make a street-corner loan shark blanch in embarrassment”. Even the minor consumer protection laws that are scheduled to go into effect next year are too much for the banks to bear, so they’re going to spend the next 6-8 months soaking their customers for everything they can get.
Is it short-sighted? It goes without saying. Doubling someone’s interest payment at a time when jobs are hemorrhaging and people are having trouble paying their bills will almost certainly lead to more defaulted loans and cards going unpaid altogether, and in the long run, this will result in less profit for the banks than leaving the interest rates alone. But short-term gains over long-term stability has been the signal call of the financial industry since the deregulatory waves of the ‘80s and ‘90s, and since history has shown that we’ll bail them out no matter how badly they fuck up, we’ve given them precious little motivation to change that call.
There’s really not much you can do about it other than to keep an eye on your bank or switch to one of the few that isn’t going along with the gouging frenzy. But even that won’t do you any good if you’ve already got debt riding with the gougers. Times like this, the best thing you can do is memorize the names of the CEOs so you can paint them on a wall when the revolution comes.