Life is full of unintended consequences, often as reactions to technological advances or well intended legislation. One glaring example is in the Civil rights arena. That much needed social movement brought with it an explosion in the homeless population because many people suffering from addiction or mental illness suddenly had the right to choose or refuse treatment. To be sure there were the “snake pits” where unfortunate souls were warehoused and mistreated but in this case the baby was definitely discarded with the bath water.
I am beginning to see another unintended consequence starting to manifest itself. The first indication for me, that initial trickling of water down the inside wall of the dike, came in the form of an article in a recent edition of the Houston Chronicle. The column I reference is a regular feature, written by a local practicing attorney who answers readers questions concerning legal matters.
The normal fare is about such things as the neighbor’s barking dog or who is responsible to trim the tree that is encroaching from next door. However this entry concerned a reader who had a practical, as well as moral, dilemma concerning debt.
The person asking the question described himself as a senior citizen subsisting on a small fixed income and due to the rising cost of living barely able to service his outstanding unsecured debts. He wanted to know what would happen to him if he simply stopped making payments and used the funds to enhance his living standards instead.
While not offering advice, the attorney pointed out that “unsecured” meant just that and that the greatest downside consequence would be harassing calls and letters. He also mentioned that he had fielded that question many times in the past few years.
In my mind this is an unintended consequence of the digital age. Banks and other lending institutions, in fact most corporations without regard to the business they are in, have converted us all to being merely ones and zeroes and have walled themselves off any vestige of human interaction.
There was a time when a loan officer was a flesh and blood person, someone you sat across the desk from and interacted with on a personal basis. He or she would get to know you and would be the final arbiter in deciding whether or not you would get a loan. This person’s job security depended on an ability to make good judgments and as a client you didn’t want to disappoint the person who trusted you with their institution’s money.
Today’s “loan officer” is likely to be a clerk who only enters data into a computer. The computer then queries other computers to discover your history and sets up a series of pass/fail gateways. It is the machine that then determines your credit worthiness. As consumers we have little to base moral or ethical conduct on. The machines don’t care about us and we have no reason to care about the machine.
As for the people behind the machines, they have insulated themselves from customer contact and in the final analysis suffer no consequences from having abandoned the human element in the process. The top executives will still get their multi-million dollar salaries, the providers of the goods or services purchased with unsecured debt will have sold a product. The manufacturers of those products will have provided jobs and the only losers might be those holding stock in the lending institutions who could see a drop of a few dollars in their portfolios.
On the flip side, debt collectors will have greater job opportunities.
While most social movements are led by the younger generations, this one, should it gain traction, will be a rebellion of the older retired segment of the population.
Senior citizens living on fixed incomes and seeing their buying power eroded by the rising cost of living, coupled with having their creditors constantly seeking out new and creative ways to nickle and dime them, might come to the conclusion that no matter how good their intentions, they will never become debt free by paying only the monthly minimum due.
Despite the best advice of financial planners, many of these seniors simply cannot afford more than the smallest allowable payments and for them the obvious next step is to realize that some portion of their debts will eventually go into default even if they spend the balance of a lifetime trying to service them.
Given the choice between a life of penury, in service to a faceless, emotionless financial machine or sacrificing a sense of duty in exchange for the ability to squeeze a bit of pleasure out of one’s few remaining years, I would expect some number to choose to default on a loan in favor of a weekend in Dublin.
As computers replace more and more functions that were once person to person, the ease with which we can dismiss responsibility and obligation is sure to increase. Mrs. Smith, the loan officer we dealt with a half century ago, knew us and always asked how the kids were doing but the program that replaced her sees us only as ones and zeroes and is not programmed to care.
The obvious solution is for companies to bring back the personal touch, to add empathy to their business model and to give the public a human face to relate to, to care about and to feel a sense of obligation toward. I doubt that this will ever happen and so I predict that there will be an ever increasing number of people opting to simply walk away from debt should it become inconvenient to continue paying it.
If this debtor rebellion does take place we will never know because it would not be in the best interest of the financial institutions to allow that sort of information to become widespread. To do so would lower the bar for others and possibly create a snowball effect.
And this debtor rebellion will be less a backlash against the actual debt than a repudiation of the client dehumanization that has taken place within most of the corporations with which we have to deal.
Hi There I read your article and you are right on .. Couldn’t have said it any better.. Your writing is interesting, right on!!! What a mess the way things are going..
I read your little bio and I think it is great.. A Texan in a remote corner of life and no doubt loving it.. nice..Rixlibris -share!!
Thank you for your kind words and for the reblog. Waller County Texas is not very high up on anyone’s tourist destination list but we kinda like it that way. And oh, why do they call it “tourist season?” You can’t hunt them.
I wish some day to be in a remote place my husband and I both wish that..
Merry Christmas and Happy Holidays to you and your family
Reblogged this on and commented:
Good Article and right on!!!
Remote is becoming more and more difficult to find but I wonder, is that because of a lack of choices or too great an attachment to the “joys” of modern living? Merry Christmas to you and yours. Rick.
Bringing back the personal contact would help in so many situations. Unfortunately I think it will not happen but who knows. It would for sure be good… Great post!
Thank you. We abandoned a lot when we accepted that corporations somehow had the right to hide behind the “boiler plate” in their contracts and claim “fiduciary responsibility” as an excuse for gouging the customer base. When we conclude a deal with a handshake today it is always wise to count our fingers on the way out.
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Thanks for the boost. It is truly appreciated.
I knew the huge corporations are behind them, pulling the strings, but the representatives in my small town within a larger city are polite, friendly, ready to help, and human. I am grateful that we live in this neighborhood, even though our old homes are being replaced here and there with McMansions. Fortunately, families with children move into them because of our wonderful school system. So far, so good, but there are no guarantees. I am still fearful of the big guns.
You are truly fortunate, so far. Our last in-town Houston neighborhood, Southhampton, was solid middle class until it was “discovered” and all the single story homes went under the wrecking balls to be replaced by McMansions. Soon the older two story homes followed suit. Our “Village Shopping Center”, the first in the nation, built at the close of WWII, quickly began to lose all the quaint locally owned old shops and is now indistinguishable from any other urban center. We escaped to an area where “demographics” is just a word to be found in spelling bees.
Here I was, expecting a more cynical conclusion from you about irresponsible individuals who had extended their credit farther than they could really afford to. No idea why I’d expected you to be cynical about individuals instead of the “criminal” corporations which are in large part these very same impersonal financial institutions.
So, since you have directed your cynicism to these individuals, I guess I will! I know that all baby boomers (and I guess any other pre-millenials) can’t necessarily be painted with the same broad brush, I know many in those generations who have never even attempted to save and/or invest anything towards their old age and retirement, but instead decided, in some cases, to spend like there was no tomorrow when they were flush. Now I understand that those of us in those generations have experienced many unforeseeable bubbles in many markets over our employment and savings timelines.
I will just offer a conversation between one of my former coworkers and her daughter 15 or so years ago, which shocked the hell out of me and that I’d consider to be a prime example of the kind of thinking and behavior I am talking about here. Jodi told her kid that, when it came time to pay her credit card bill, even if she couldn’t pay the entire balance, that she should pay more than the minimum. This statement may not be shocking for some folks, but for my family, including my children who learned from us, one should ALWAYS pay off their ENTIRE balance due EVERY month.
It remains to be seen, of course, if this prognostication comes to fruition. I have an inkling you may be right, as I heard somewhere that one of the banks that is “too big to fail” now had not submitted its financial health report to the govt for some recent period. Maybe this is already the first sign of this new potential financial crisis?
On that cynical note… may I wish you a Happy Holiday anyway?
And a very Merry Christmas to you and yours. Thank you for your insightful comment, I truly appreciate the feedback. Unstated in my post was my belief that each individual has a threshold of improper action. There are those among us who would not steal a loaf of bread if starving, others who will stop to pick up the newspaper from your driveway because it’s more convenient to do so than to pull into the local “stop and rob.” By becoming more mechanistic and removing the human touch from their customer “service” those credit issuing entities holding unsecured debt are lowering the bar and creating what some will consider adequate cause to ignore the debt. “They have billions, I’m struggling, and they don’t care about me anyway so to heck with them.” I am in no way justifying stiffing anyone, just offering my opinion that the less pretense of caring shown to the debtor public the easier it will be for them to default without guilt. AI, no matter how cleverly crafted, will never replace true empathy and when it comes to unsecured debt sometimes the obligation to that “person who cares” at the loan company is all that separates the “as agreed” account from the “deadbeat.” Again, thanks for reading and commenting.