Brother can you spare some credit?

Out of our taxes, into their pockets... and now injury added to insult. In a brilliant effort to increase consumer spending, the freshly bailed-out financial institutions (the banks and credit companies) have decided to slash the lines of credit that in many cases enable people in these hard times to buy groceries.

As for the 'Christmas rush' on which many businesses depend, it will likely be a dismal year (I know we aren't buying a damn thing. We're hording.) Other than the stampede that killed a Walmart worker last Friday -- the darkest of Black Fridays -- this holiday shopping season will be lean. Honestly: who has money for anything but the necessities? Its shaping up into a cold winter. If I bought anything right now it would be a wood-burning stove.

But sure Henry Paulson -- you're doin a heckuva job. The economy will just bounce right back now that your rich friends can once again afford those posh, luxury retreats.

(Reuters) - The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent."

Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) represent over half of the estimated U.S. card outstandings as of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

Closing millions of accounts, cutting credit lines and raising interest rates are just some of the moves credit card issuers are using to try to inoculate themselves from a tsunami of expected consumer defaults.

I have an idea, Mr. Paulson. Of course you won't like it; and your buddies will hate it... by why don't you break these behemoths up into smaller, more manageable entities so as to pry their hands off of our collective throats? No banking or business entity should be so large, with so much power that it threatens our entire economy let alone the world's economy. Lesson learned. Of course the wealthy elite stick together, so my guess is that the lesson learned won't be enacted in any kind of meaningful way.

Banking analyst Meredith Whitney seems to be on the same page. Early on in the story:

Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said.

Further down... another observation:

"In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices," Whitney wrote in a note dated November 30.

She also said credit lines to consumers through home equity and credit cards had been cut back from the second-quarter levels.

"Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," the analyst said.