This is not a post about government regulations or legal consumer protections.
Nor is this a post about financial education, personal responsibility and helping the working poor to make smarter choices.
What this post is about, rather, is this:http://www.youtube.com/watch?v=Q_c7SbkGaLk
That’s Margery Mason in The Princess Bride, in a role listed in the credits as “The Ancient Booer.” And I would like to see her greeting of Princess Buttercup here become a relentlessly familiar scene for Troy Aikman and Mark Speese.
Aikman you may know as the Hall-of-Fame quarterback who led the Dallas Cowboys to three Super Bowl championships. These days, he also serves as a pitchman (alongside Hulk Hogan) for Speese’s company: Rent-A-Center.
I don’t care for Rent-A-Center. Their latest TV ads with Aikman and Hogan illustrate why. Those spots advertise Rent-A-Center’s current offer of a 60-inch HD flat television set “Now Only $29.99.”
That price — $29.99 or, for those who prefer honesty, $30 — is of course not the full price of these television sets, but the amount of the payments charged in Rent-A-Center’s “rent-to-own” scheme. If $30 a month seems reasonable, look again. That’s a weekly payment — working out to about $130 a month and $1560 a year.
Rent-A-Center’s ads tout a weekly price in part to disguise that monthly cost and to fog up any attempt by the consumer to figure out what the total ultimate cost of this 5-foot television set will actually be. That hints at everything you need to know about this company — they never give a straight answer to the question “How much?”
The weekly payment plan also provides Rent-A-Center with more chances to do what it does best — charge late fees. When you’re as good at charging late fees as these folks are, it seems a shame to only get to do it once a month. Much more lucrative to get to do it every Thursday.
For a nifty graphic explanation of how Rent-A-Center’s sleazy business plan works, see “How Predatory Lending Works, From Payday Loans to Rent-to-Own.” And then check out the company’s attempt to explain why charging $2,074 for a $1,000 mattress (not counting fees) isn’t a raw deal.
You probably don’t need me to tell you that Rent-A-Center’s big-screen TV offer — “Now only $29.99!” — is a total rip-off. But then you’re not their target customer. Their target customer either isn’t smart enough to figure out that this is a money-gouging scam designed to prey on the gullible and the vulnerable, or else they fully realize that it is but, because they’re part of America’s vast army of working poor, they’re used to that sort of thing by now and have come to realize that such scams and schemes are their only option for buying much of anything — which is why their neighborhoods are filled with Rent-A-Center’s and old-school pawnshops rather than the sorts of retailers who will give you a straight answer when you ask “How much?”
And but so, the point is that this $30-a-week offer is a really bad deal.
I happen to think that this sort of bad deal that ought to be legally discouraged or legally prohibited. I believe this for moral and ethical reasons, and also for some vitally important practical reasons. This sort of deal turns out to harm more than just the particular rent-to-own consumers involved. It tends to cause a good bit of collateral damage as well.
For several decades, the housing and real estate markets were based on exactly this kind of deal. It was lucrative for many years, earning billions of dollars for lenders and loan brokers, but eventually the “hard-money” or “subprime” consumers were sucked dry and their shriveled husks could no longer support the weight of the multibillion-dollar industry built on top of them. If you’re old enough to remember all the way back to 2007, you may recall how this almost destroyed the entire global economy. Banks fell and are still falling. Nations fell and are still falling. And tens of millions of people all over the world who never had anything to do with subprime housing markets lost their jobs, many of them remaining unemployed to this day.
So yes, I think that permitting bad deals like this is not in the public interest and that it is in the public interest to protect consumers and the larger economy from the damage they cause.
But this post isn’t about that, so set that aside. That’s not what I’m calling for here and not what I want to focus on.That disclaimer likely won’t be of any use to prevent the Randian trolls from crying “Socialism!” here. Once their reptilian reflexes kick in they tend to do what they tend to do, which is to denounce anything short of Hobbesian brutality as a big-government, statist restriction of their freedom to conduct the war of all against all however they see fit. Whether or not it’s the point of this post, I mentioned “consumer protection,” and they will feel duty-bound to condemn any such mention in the name of “personal responsibility.”
They’re not wrong to mention the role of personal responsibility here. The Randroids are wrong — stupidly, preposterously, sinfully wrong — to regard it as the only factor that matters, but it certainly is one factor in the personal and societal harm wrought by such dangerous deals. Rent-A-Center is counting on the irresponsibility of a certain percentage of the working poor. That’s part of Rent-A-Center’s business model and it’s why they sell extravagances like a 5-foot TV.
Con artists like to say that “you can never con an honest man.” That’s not true. It’s a self-serving lie they repeat to try to make themselves feel justified and to defend their indefensible actions. But it is a lot easier to con a dishonest man, or an irresponsible, foolish or greedy one. Thus another necessary measure for limiting the harm done by predatory businesses like Rent-A-Center is to promote a greater financial responsibility and financial literacy among their pool of would-be victims.
Again, though, all the personal responsibility and financial education in the world doesn’t change the fact that the working poor aren’t permitted any good smart and responsible options. Yes, you can and should easily do without a 5-foot HD television set, but you can’t do without a mattress, and if you’re among the working poor, then your only option for buying that mattress will involve paying the predatory poverty premium of more than $1,000 above what a rich person is asked to pay for that same-exact damn mattress.
As James Baldwin said, “It’s expensive, being poor.”
But that’s not what this post is about either. I think both consumer education and consumer protection are prudent, just and necessary measures in response to schemes and scams like the one I’m discussing here, but I don’t want to talk about those today. Today I’m focused on something else entirely — something that has absolutely nothing to do with the government, or with regulation, or with maternalistic efforts to train consumers to protect themselves.
What I want to talk about today is just as necessary as both of those, but a lot more fun.
My point here is simply this: People who make a living by preying on the vulnerable and the gullible ought to be reminded that they make a living by preying on the vulnerable and the gullible. They ought to be reminded that others know this about them and that it appropriately influences our opinion of them
They ought to be reminded of this loudly, extravagantly, artfully and almost constantly.
I’ve yet to hear any complaints from the owners, executives, investors or spokespersons for places like Rent-A-Center about the steady stream of insults, condemnations and dirty looks they’re subjected to every time they venture out to interact with the public. That indicates a failure that needs to be corrected.
Please don’t misunderstand me — I’m not talking about harassment. When they’re hiding at home behind the walls of their gated communities, then let them be. Don’t seek them out. But when they venture out to interact with the rest of us in their stores or at the stadium, then they need to be reminded that being uncommonly indecent means that they can’t presume to expect the same common decency due to everyone else.
I realize that any notion of this kind of public shaming sets off alarm bells for those who have seen it used, too often, to keep down the downtrodden rather than being used, as it should be, to pull down the powerful. Shame and opprobrium are like humor, sarcasm, snark, ridicule and satire. These can be righteous, useful and necessary tools when you’re punching up, but they become vicious, cruel and oppressive tools if you’re punching down. (Ideally, I think, shame and opprobrium work best when combined with humor, sarcasm, snark, ridicule and satire.)
There’s a lucrative fortune to be made for anyone who has power and resources and the willingness to put them to use to prey upon the poor and the powerless. As long as that financial reward exists, people will continue to pursue it.
One way to help limit that would be to ensure that such financial rewards come with a social cost.