This is the Cato Daily Podcast for Wednesday, May 13th, 2009.

I'm Caleb Brown.

With more Americans unemployed and unsure of how to pay off their debts,

the credit card industry is a popular whipping boy, especially in Washington.

But credit cards have been a key provider of liquidity for Americans as the economy has soured.

So says Mark Calabria, director of financial

regulation studies at the Cato Institute. When Barack Obama was on the

tonight show with Jay Leno. He talked about credit cards and lending and borrowing and

he actually related, if I'm not mistaken, credit cards to defective toasters.

That is, there might actually be a problem with the product itself,

in this case, a specific way of advancing credit to people.

I think the notion that any one particular financial product at least out there is defective in and of itself.

I mean I think that notion is defective.

Some types of credit make sense for some people in some circumstances and some

types of credit don't.

Your credit card is not going to explode on you.

You know, any time your debt might explode on you that is a decision on your

part to take on that debt there's nothing faulty in the wiring and so I think that

that approach not hides more than it reveals.

When you sign up for a credit card you don't necessarily sign up for your fees to go up based

upon activity that is only tangentially related to your

relationship with the specific issuer of credit. Well let me say for

...