The credit revolution

Financing the American Dream: A Cultural History of Consumer Credit.
By Lendol Calder. Princeton University Press, 377 pp. 

Everyone seems to agree that America's moral fabric is being undermined by the unwise proliferation of consumer credit. We readily believe those who claim that easy credit fuels rampant hedonism and leads many to bankruptcy. Wistfully, we compare ourselves to ancestors who supposedly controlled their spending and never went into debt. We believe that our present affluence is a bubble that will surely burst.

According to Lendol Calder, these fears and claims are either exaggerated or fundamentally wrong. Consumer credit is not an invention of the post-World War II period. Our 19th-century predecessors also borrowed money, even for consumption. The "credit revolution" occurred in the 1920s and '30s, not the '50s (and certainly not the '90s). Furthermore, the naysayers of pre-Depression days—including preachers, bankers, journalists and government officials—were proven wrong in their predictions that consumer credit would end in serial bankruptcy and national economic collapse.