All I know about economics I learned from my father and my grandfather. Dad put it pretty simply, and Papa Bryant backed him up: “Don’t ever borrow money just because you can. If you absolutely have to borrow money, pay it back as quickly as you possibly can.”
Pretty succinct, huh?
In the latter part of the 1990s, I applied for one of those “You can’t be denied” credit cards. I was still working for a living, and making reasonable bucks in the underground economy by not declaring cash for movie work and security consultations. I wanted a piece of plastic to haul around in my wallet, just in case. As a child of the government and state-schooling, I’d never felt the need for such a fallback, but a 40-ish sense of responsibility gripped me, so I filled out the application and sent it in. I had a good credit history with my local bank, so this seemed like a no-brainer.
Imagine my surprise when I got a form letter reply, informing me that I possessed “insufficient credit history.” The “You cannot be denied” credit card people were denying me!
I immediately called my contact at Equifax. I told him what was going on. He put me on hold for a minute, and then came back.
“I have your file here. You’ve had loans in the past?”
“Yes. Couple of car loans and a motorcycle loan through GMAC, a home improvement loan, and a home equity loan.”
“And how’d you pay them off?”
“As fast as possible. You know I do movies as seasonal stuff, and security moonlighting. I got my hands on some extra cash, it went to the bank.”
“So you paid the loans off ahead of time?”
“Sure! Years ahead, by their terms. Whenever I had the money, it went there first.”
“And it never occurred to you that you were screwing them out of their interest on the loan?”
“No. Is that important?”
“Yes! They have you red-flagged.”
“Is that important?”
“Yes. People who lend money make their profit out of the interest they charge you for the privilege of borrowing the money. They lend you money for X number of years, they expect the capital investment plus X amount of money at whatever interest rate you agreed upon. Lenders aren’t in the game to break even.”
“So I screwed the capitalists by doing what Dad and my Grandpa told me to do?” I repeated my ancestral advice.
“Yeah. They had the capital to begin with, or they wouldn’t have loaned it to you. They want you to pay the full-term agreement, so they can get all the interest due. They count on that as profit, and factor it in as to whether they’ll lend you the money. This credit card company figures if you borrow money on their card, you’ll pay it back too quickly, and they won’t get their full interest on the loan. They refused you, and you’re red-flagged on our computer as a bad risk.”
“Because I pay everyone back too soon?”
“Exactly. You need to get another loan—if you can—and pay it back on schedule, even if you have the means to pay it back sooner. That’ll improve your credit rating. Right now, no one wants to lend you money, because there’s no return on their risk.”
“So, my credit’s down the toilet because I followed the good advice of my father and grandfather?”
“What if I’d borrowed the money and then told everyone I couldn’t repay them?”
“Assuming you borrowed from a legitimate source instead of a loan shark, your inability to repay is bankruptcy, and everyone has to take the pill and like it. You can’t borrow any more money for a while, but if you continue to earn productively, they’ll eventually loosen up. If you borrowed from a questionable source, they might send some tough guys to intimidate you.”
“You know me, Bob. I don’t intimidate. What if I’m tougher than them?”
“Then they go away and take the pill, too.”
“Bottom line, I’m better off being a little in debt than being debt-free too soon, and a default is better than a clean up-front payment?”
This was my second lesson in basic economics. I vaguely recall some stuff from college about Keynes, Frederich Hayek, and Adam Smith, but it never had a relationship to reality like my paraphrase of my conversation with Bob at Equifax.
He was right, too. Some years later, I asked my local bank to lend me $850 against the income from my pension and the $150,000 equity in my home, which I offered as collateral against the loan. They refused. I’m a bad credit risk, red-flagged everywhere because I paid off too soon.
I learned to live within my means. I take it for granted that no one is going to lend me more than $20 to take Ms. Possum out to dinner, and I’ll repay it in good faith next week. I pay my bills every month, so we can have the basics like water, electricity, phone service, homeowner’s insurance, and even the exorbitant satellite service that brings 280 channels of crap. I even have an automatic deduction program in place, so every month a small amount goes from my checking account into savings. Impulse-buying at the grocery store aside, I can afford about one “goody” a month; things like a new pair of jeans, some new tennis shoes, a flash drive for the computer, or even a video rental or a CD purchase. My last vice—cigarettes—is outrageous, but as long as the government considers me a cash cow for their taxes while hypocritically telling me the increased costs are designed to “discourage” me from smoking, I’ll keep on lighting up, and that, too, fits within the budget.
Point is, I live within my means. I have no credit; I see those TV commercials about “Your credit score” and burst out laughing. Forget 430 versus 775; mine’s a negative, and all because everyone got paid too soon. I live hand-to-mouth, but I live well compared to the rest of the world, and I don’t have to face down leg-breakers showing up at the door demanding the vig on the loan. I bow to no king, and bend my knee only to God.
I’m not sore about this; I make allowances. What’s the real deal that the government can’t do this? I know what the political agenda of the moment is: the liberals want to keep their boy in office, so they’ll resist anything that doesn’t extend the national credit limit until 2013. A Democrat party hack nearly made me shoot my TV this morning. He kept saying that anything that doesn’t kick the debt can down the road until 2013—past next year’s election—is “not in the best interest of the people.”
Bullshit. The Democrats don’t want this debacle coming back to haunt them before election day. A couple of weeks ago, some twink named Plouf—another party hack—said that the public isn’t concerned about the horrible record of failure Bobama can’t run on; the public is only concerned about what affects them this week, so Bobama is a shoe-in for re-election.
Okay, Bubba, you think things are bad right now, how’re they going to be next year?
It’s a shame the Republicans don’t have a candidate with the charisma of Ronald Reagan to stand up and ask Reagan’s question in the upcoming debates: Are you better off now than you were four years ago? (I think we know what today’s answer would be.)
If my home was in a Third World country, I’d have four families and assorted relatives living here. As a retiree receiving federal largesse, I live like a damn king in a three-story castle on Scorpion Hill, and I own it! So, where do I get off bitching about anything?
Simply: Ms. Possum, the love of my life and my Significant Other, works for a local community service agency. She runs the food pantry, works energy assistance in season, and gives referrals to other charitable agencies when her office can’t cover their needs. Those charitable agencies are drying up, unable to offer help to the truly needy. Ms. Possum’s hours have been cut back, and people in her office are being let go. She works for minimum wage through a federally-funded Community Services Block Grant that is in danger of being eliminated to accommodate ObamabaCare with its health-care rationing and death panels. (I’m a smoker, and will be the first to go. The death panels are real; I already fought a war with them last summer.) Every day, I hear horror stories about people coming in for basic foodstuffs, crying because they’re ashamed of having to ask for help. I hear about the “Obamavilles” in our local campgrounds; people who have lost their homes, and are living in their cars. I heard about the old lady who called in hysterics because her bronchial oxygen pump works off electricity, and the local EMC was on the way to shut off her power for non-payment of a bill run sky-high by EPA regulations on the coal-fired plants in this region. I hear about the elderly with leaking roofs being forced out of their homes by mold infestation; the roofs can’t be repaired because the federal money to fund the much-vaunted improvement program was diverted to some union vote-buying scheme.
Enough rhetorical examples. You, the cynical reader, are asking: “You admitted you live like a king. Why do you care?”
Simple answer there, too: I care about people. As a son-of-the-South mountain person—that’s “hillbilly” for you urban types—I understand all too well the nature of those who are suffering the most. These are people who never had the advantages of over-education at Columbia, Yale, or Princeton. Forget even the University of Georgia; all they did was graduate high school in most cases, and go to work. Their school was the school of Hard Knocks, and they never complained, they just got up and went to work every day. They never asked for anything special or extra; they just wanted what they earned. When reduced to dependency on an autocratic, omnipotent government, they are reduced to humiliation, tears, and standing on a—possibly misplaced—pride that won’t allow them to become beggars at the altar of government arrogance. For every sobbing supplicant Ms. Possum sees every day, I’ll bet there are three out there who would rather starve than come and ask what kind of handout they can receive.
This is where the manifesto kicks in. I’m regressing to my young hippie, power-to-the-people days, only this time as a pragmatic conservative with a much broader understanding of the world and how things work.
If I believe the liberal demagogues, next week is the end of the world if we don’t accede to the demands of The Manchurian Candidate. If I believe the Republocrats, compromise is the only solution to the conflict between their divided ideological tenets and the collectivist insanity of the Far Left. If I believe the adherents of the party taking its name from my core belief—the Libertarians—it ain’t the end of the world, but it ain’t going to be pretty.
I’ve lost faith in the political system. I don’t believe anyone who’s currently holding office, no matter what their political affiliation. Ron Paul means nothing more to me than Harry Reid, and I cannot think of two more perfect opposites.
If nothing else I’ve ever said will get me onto a Ministry of Homeland Security terrorist watchlist, this will:
I want anarchy! I want chaos! I want default!
I want every entitlement-oriented jackass in the United States to take to the streets, demand their goodies, and start overturning cars, smashing windows, looting, screaming for entitlements, and otherwise showing their asses. Greece and France are nothing compared to the US; I want millions out there carrying on like the soft-as-cotton babies they’ve become.
Bobama wanted to become “Howard Beale” in Network
the other night when he urged people to e-mail their congressman in support of his re-election. (A rose by any other name; he called it “compromise on the debt ceiling” if memory serves…) I want to be Howard Beale: forget “I’m mad as hell and won’t take it any longer!”, I want the money where the mouth is. I want the 70%--almost 3 out of 4—of the American populace who receives goodies from the fed to get out there and demand their due. We have impressive riots when someone’s team wins the Super Bowl or Stanley Cup; let’s win one for The Gipper and mount some chaos in the streets that hasn’t been seen since the heady anti-war days of the 1960s. Yeah, I’m advocating actions based on a faulty premise, but the faults cannot be recognized until the actions are undertaken.
“But wait!” the cynical reader says. “You admit to being an entitlement-oriented jackass on the federal teat! What’s your fate if this comes to pass?”
First, I worked and paid into the system all my life. Had I been allowed to keep what I earned, and invested it on my own instincts, I’d be approximately five times wealthier than my current state of poverty. Calling what I earned and gave to this government for all their misguided bullshit an “entitlement” when it comes to returning it to me on the back end—which I thought was the agreement—is an insult. I’ve known Mafia dons who would kill you for a slap in the face like that.
I’ve lived in a shotgun frame house with no insulation and no electricity, cut my own firewood for woodburning stoves that were the sole heat source, bathed in creeks with homemade soap, grown my own food—animal and vegetable—and, although I’m getting old and don’t want to re-live the experiences, I learned something about being an American when I was in a terrifying gray zone between life and death: I caught my breath and said “Hell no! Not yet!” According to the doctors, I was 80% dead. I’m a simple man; what that godless bastard Bill Mahr would call “a superstitious redneck” because of my spiritual values and my empathy for common folk that his arrogance marginalizes. My life is a cautionary tale that runs to negatives: don’t do this, ever, kids. It ain’t worth it.
In other words: Me and mine will get by. Always have, always will.
My federal sugar daddy has already [anally sodomized] me for the last two years without a kiss or a reach-around. I fought an epic battle with the bureaucracy last year to simply retain my basic benefits. The precedents of my case are not allowed to be used in any other proceedings against the death panels. I won my individual battle because I entered it with nothing to lose, which made me dangerous to the status quo. Like economics, I learned a valuable lesson from this: the gummint doesn’t want crazy people with loose tongues and an understanding of what’s going on to appear in open court, even if it’s just in front of an administrative law judge.
I have nothing to lose if the government folds and closes up the shop. Unlike the careerist power-mongers in DC, I will gladly sacrifice my little bit of federal largesse if they will make the symbolic gesture of giving up their Congressional salaries and working for a dollar per year. That is about the only thing that will convince me an elected official is “working for the interest of the people.”
Otherwise, I want all those misguided, ill-informed folks who voted for these corrupt, incompetent careerists to be out there in the streets—like Athens and Paris—demanding the goodies promised to them.
I want burning cars and smashed storefronts with looters running into the darkness!
As for the politicians: I said something in an e-mail today that probably got me red-flagged on an NSA/HLS computer because of key words:
“I'm nearly 60, and didn't give the best years of my life, possibly my immortal soul, and my ability to walk so a bunch of amoral, power-mad mooks could loot the ideals I nearly died for. If Al Qadea ignited a thermonuclear weapon in DC tonight, I'd be Atlas, shrug, and say ‘So what?’ They'd be doing us a favor; giving us a second chance.”
I mean that in the sense that this country needs a slap in the face. 9/11 was the worst thing in my lifetime, and nothing approaching that should ever happen again, but we need to be subjected to a full-immersion baptism in the cold water of despair before rationality becomes a nostalgic whim of the elderly.
And we owe a huge percentage of the national debt to foreign countries, some of whom are not our friends or allies. The doomsayers proclaim the world economy will be thrown into disarray if we don’t fulfill our fiscal obligations.
I’m just a stupid, superstitious hillbilly whose opinion doesn’t mean squat, but I say, the hell with ‘em. Let the rest of the world get along without us. It might be time for a return to pre-WW II isolationism. Let the collectivists, theological fanatics, and tribal warlords perish in the feces of their failed ideologies. If America is so damn evil, we should be cut off from the rest of the world. Let’s go there, do that, and you can tell my great-great-grandchildren how that worked out.
And if the rest of the world shows up at the door with their collective hand out, wanting repayment for what the corrupt politicians of the last 100 years borrowed, tell them “Too bad. We’re broke. Bankruptcy, we’re starting over. Wanna get in line and wait for someday? We’ll repay you eventually, but we ain’t Wimpy and the hamburger won’t get repaid next Tuesday.”
Yes, we can repay them all in good faith; someday. In the meantime, if they want to muscle up, there is a facet of American will that’s forgotten: we are the most powerful nation on Earth. Our wallet may be empty, but like the Roman Empire in its final days, we are the greatest military power on the planet. It would not serve anyone well to mess with us on a strategic global scale, and despite the posturing by China and the former USSR, they knew it. The analogy is my kneecapping Mafia collectors at the front door; you might get paid if I can afford it, but meanwhile go away so’s I can wash dishes and earn a few bucks.
(Disclaimer for the Ministry of Homeland Security: I believe assassination to be morally wrong, and the worst way for succession of governmental power. I believe in passive civil disobedience as defined by Mahatma Gandhi and Martin Luther King, not the violent actions of street rioters protesting “racist” police actions, meetings of industrialized nations, or clamoring for governmental goodies. I advocate change of government in the United States through Constitutional exercise of the right to vote. I do not advocate the overthrow of the United States government by seditious or violent means. However, I think a little housecleaning might be in order, and if others agree with me in more forcible terms, it ain’t my fault. I didn’t put them up to anything. You have better things to do than reading this blog, so get ‘er done!)
This country isn’t founded on compromise; it’s founded on revolution.