I know someone who entered into a horrible car financing loan, at the end of it they would end up paying ten times the worth of the vehicle and the loan could not be paid off early, if they did they would have to pay the full amount of interest.
Why would they be so damn stupid? They had no money to put down and needed a car to get to work the next day, they investigated the cost of renting a car or using a taxi and found both would end up being even more expensive. They also tried to find the sweet spot between cheapest vehicle available and one that wasn’t a total crap bucket that would need expensive repairs within a month or two.
They decided it was preferable to keep their job then to just give up all income. I don’t think they were stupid, just desperate.
Right. And price-gouging is deemed an illegal practice because people have decided they don’t want to live in a society where businesses can exploit the desperate in a totally unregulated fashion.
To go back to your grocery store example, would you have a problem with the government making it illegal for a store to mark-up its merchandise more than 10% over the average mark-up rate, unless it can justify it? Because I wouldn’t I have a problem with that. Just like I don’t have a problem with the government telling a gas station owner he can’t raise his gas prices more than X% over the course of a day, or that landlords can’t raise their rents more than X% each year. The government has a vested interest in keeping businesses from exploiting people. Exploited people can’t pay taxes, insurance premiums, or properly feed their children.
That is a bit ridiculous. It seems like the family could pretty easily survive on his salary. They just appear to continually make poor decisions and buy things they don’t need. It also doesn’t appear that they make use of programs available to them. She doesn’t need to buy ramen and hot dog buns. They are eligible for SNAP and can use that to buy food. She doesn’t need to have a “9th grade education”. Certainly there are free GED programs that she can access and perhaps use that to find a job.
I could go on, but it seems like the only things this particular family is victims of is of themselves.
I understand that these stores fill a need. I just don’t think it’s the best way to fill that need, given that it acts as basically a wealth transfer from the pockets of the poor-- wouldn’t something that left the poor in a better position be better than something that leaves them screwed?
Microlending? Tontines? A rent-to-own model where they can get back some of what they’ve invested if the item is reprocessed and resold? A living wage? The article says 75% of items are returned in the first few weeks.
Surely there is a better way to do this.
So what do you do? If someone is dropping out at fourteen, I am guessing that isn’t because they are a horrible person, but because they had a horrible upbringing-- which has probably led to some pretty deep problems. Lots of poor families are plenty smart, but some are also not.
You can’t fix that by wishing them smarter. You can’t fix that by telling them to just get it together. Shame and tut tutting isn’t going to suddenly equip this family to do better. At some point, you’ve got what you’ve got and that’s all you really have to work with.
And in those situations, there may not be a ton we can do to make things better, but surely we can avoid reaching in to their pockets and making it worse.
This already exists. The salesperson explicitly explained the payoff (essentially a high retail price approximately half the total contract), payments, interest, penalties, totals, etc. The response from my sister to the salesperson was essentially “OK whatever, but you’ll deliver it today?”.
Nobody is reaching into their pockets except for them. To answer your more general question, I don’t think there’s anything to be done. As you said, it looks like this family is what they are, and I don’t think anything that’s going to change that. They simply seem to be incapable of managing money. Unless we completely do away with commerce, I don’t think there’s anything that’s going to prevent them from ricocheting from financial crisis to financial crisis.
I’m certainly not going to bemoan the lack of rent to own stores or payday lenders or what have you. But I don’t see how it’s going to make the lives of people like the one in the article any better.
I didn’t think the article was slanted towards the family, “glorifying ignorance”. I did find it being a bit shoddy in that the reporter should have asked them if they realized how much the total cost of the sofa would be. But the reporter did note that, even when they were struggling to make the original payment, they went ahead and bought more stuff from the same place. Personally, I don’t think putting the full payment for the article prominently on the sales contract would have made any difference to them.
But while I find this sort of business unsavory, and something I could never do myself, I can’t see the justification for outlawing it. Especially since the worst that happens to people who can’t make the payment is that the lose the thing they didn’t have in the first place. By “worst”, I mean the worst as compared to other purchasing options involving the same amount of money.
The stores already do this. Here’s a link to the advertising circular for the exact store in Cullman, AL that the Abbotts visited. All of the terms on the front page.
I would. You’d be spending taxpayer dollars to create a barrier to entry for everyone except faceless behemoths like Walmart, for no good reason. You’d be creating an additional hurdle for anyone trying to do any right thing except offer low prices. Offer a living wage? Open a store in an area with lower predicted turnover? Start a new chain competing with the big boys? Anything that might increase your cost-per-unit becomes a way for your competitors to have you harassed by the government.
It took me about half an hour to plan and find four garage sales today. Two of them were within a short distance of a train or bus stop. I saw furniture in good usable condition at all of them. I’m pretty sure that most of it wasn’t infested with bedbugs. Let’s not turn poor people into children. I’m just as in favor of safety nets as the average liberal but you need to allow adults to be adults sometimes. The choices in life aren’t usury or sitting on the floor. This whole conversation is starting to remind me of my lazy, idiot cousin. He’s in his fifties and unemployed and flat broke yet again. But he had the time this summer to take a road trip for a month. He’s begging for money on Facebook again and ignoring all job leads including the ones I sent him the last time he was unemployed.
Jezus. I have personally offered a nice-ish sofa in relatively good condition on freecycle a few years ago. I ultimately had to throw it out because two of the people who wanted to pick it up did nothing but yank my chain and then never show up.
I’m conflicted here. I have made use of a short-term loan (I consider these to be in a similar category) for an exorbitant rate, after fees are factored in. It was expensive. I could have avoided it. But given the circumstances, I’m glad that the government didn’t prevent me, and adult, from entering into that transaction with another adult (or in this case, a company) in order to keep me from being taken advantage of. I will note here that the cost of this transaction was made very clear to me up front, to the point of being told that what I was doing was ill-advised. I believe that similar information should be provided in a rental situation. And from a recent post, it looks like they do.
I have friends and family who have rented furniture–nice furniture. It was expensive, and they had no intention of owning it. I don’t even know if that was an option. I’ve not rented furniture, but I suspect the rental-only places are different from the places that offer rent-to-own.
I would absolutely have a problem with that. Managed economies have historically produced economic disaster, misery, and suffering on a far greater scale than a small number of families stymied in their desire to have Samsung speakers just because other people can afford them.
Or maybe we could create a special category for them. Sign the “I’m too fucking stupid to live on my own,” declaration, and the government takes care of you, buying your food, shelter, and sofas for you. You give up the right to enter into contracts for yourself.
Anytime you want, you can tear up the declaration and return to being an adult.
The way the government does this is by enforcing anti-competitive practices laws. Historically, you see that if artificially force the price of things to be lower than the market value, you promote scarcity. Rent control is great-- for those lucky enough to get in early. Not so great for those that weren’t.
Do you mean threads about legalizing pot, or all drugs?
The proposed regulations are no different than the myriad of regulations designed to protect the middle class from getting ripped off. Things like bankruptcy law, usury laws, and fair advertising laws are not controversial. Why are similar regulations suddenly shocking when they protect the poor?
I’ve only read 85% of this thread, but I want to get this post out there before I have to leave…
I’m sick of this suggestion that education and knowledge are congenital. Knowledge is gained through effort and diligent work. What should they do? Get smarter. Yes, that’s exactly it. Just get smarter. It’s not impossible; people do it every day. Pray to the intelligence fairy? Yes, exactly, and her altar is at the library.
We don’t want to punish children. That’s why our public schools are free. That’s why kids need to be (and are) forced to stay in them until they complete their education. Our society needs smart people with a basic knowledge of math, science, and finance.
Usurious businesses preying on the stupid is not the problem reflected in this article. It’s the existence of stupid people in the first place that is the problem. Unlike race, sex, and (to a degree) religion, stupidity is fixable.
Outlawing pot has led to the rise of some people in Mexico who aren’t the worst people in history, but certainly are in the top 1% of the worst people in history. The harm that’s been prevented by outlawing pot is miniscule.
Outlawing usurious couch sellers would almost certainly not result in a murderous couch mafia, and it would prevent some real harm.
As I said: conservatives care about principles. Liberals care about results.