Monday, September 9, 2013

Hell = Buy Now x Pay Later

The television I get to see these days is mainly via a small box in the corner of the room - usually the hairdressers, the doctor’s waiting area or a local diner. I caught a glimpse of a celebrity-fixes-your-life type programme where a well-known television star was turning one familys grim slum reality into a middle-class paradigm. Cue the tears as the lady of the house is handed the keys to her front door (wait, what?).

This particularly grating TV format will never grow old: cheap, popular and makes the D-Listers look compassionate. Everyone’s a winner, but such programmes invariably serve to reinforce the misconception that one’s dreams can be realised merely by a lick of paint in the lounge and a modern appliance in the kitchen.
An Understandable Escape: satellite dishes in the favelas

Dont get me wrong. Credit to the masses (a trend which took-off in the 70s with mass migration from rural areas in the north to the more prosperous urban south) is not of course a bad thing in itself - it just needs to be managed well if it is to stimulate wealth creation and not simply inflate a bubble of consumer debt.
“Our mothers knew all that, and even as they voted Labor they were careful to warn us against any voices who preached against prosperity. Prosperity didn’t guarantee freedom but there could be no widespread freedom without it. Knowledge like that was handed down, from the generation that had once suffered to the next generation which would not.”
Clive James, A Point of View (BBC Radio 4, 27th Dec 2009).
By way of example, you can pay for almost anything here - from your taxes to your fridge freezer - parcelado (in installments), but not all consumers realise that buying in installments is far more expensive than paying up-front. 

In other words, cheap credit combined with a widespread lack of education in financial matters among the most vulnerable risks making access to such credit akin to (at best) mis-selling and (at worst) exploitation. It has sad echoes of the Clinton Administrations misguided home-ownership drive in the Southern States (ah, the soft outer layer of credit before the crunch).

I guess Voltaire (or, more recently, Spiderman) said it best: with much power comes much responsibility. Power to the consumer, but buyer beware. An interesting - and more timely - manifestation of the adage can be seen in the behaviour of the new-monied additions to the G20: powerful economically, but unwilling (or unable) to assume the moral responsibilities that come with such status.

I am not a proponent of what Scruton calls the zero sum fallacy - the leftist illusion which holds that every winner has an equal and opposite loser, and so the rich are by definition profiting from the poverty of others. What I desperately want for this country (considering that ours is now officially one of the Fragile 5 currencies) is a fundamental improvement in the general level of education of its people.

BONUS American Beauty (1999):

it's just a couch!

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