Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

Debt, By Any Other Name

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Total Black: $137.54
Total Red: $227,685.50

Today at the temp gig, I got to talking with another contract attorney about the life of solo practitioners.  I touched on that option in a prior post, Hang a Shingle.  Seems like a brave new world out there.  Nearly everyone I know is starting a firm.  I’ve been asked to join one myself.  Oddly enough, I might even have a client of my own soon since my old law firm reached out to me about a case I worked on while at the firm.  I might need to take over as counsel of record.  Details still need to be worked out though.  One area that my quasi-officemate suggested I consider is loan modification and debt collection.  Naturally, I held my tongue.  I wasn’t about to come clean to a stranger about my financial woes.  Well, at least not without the cloak of internet anonymity.  And I’m glad I did because what she had to say about former clients and their financial habits was less than flattering.  She chatted at length about irresponsible clients who had lived beyond their means, leasing cars they couldn’t afford, mortgaging houses they couldn’t pay for.  She even commented about one client’s $500 grocery bill and claimed—incredulously—that they needed to put their kids on a diet because there’s no way they could possible need to eat that much food in a week.  She even pulled out the dreaded “welfare mom” analogy, albeit only to debunk that myth as being at the root of all our financial troubles.  Instead, as she summed it up, it’s solidly middle class people just living beyond their means.  Maybe.  But, as always, it’s not that simple.

Our talk reminded me that one important yet grossly overlooked aspect of our current financial crisis is tied up with our language.  A few weeks back, in Slow Going, I touched on the problem of language and finances, noting how warped it is that we use the same terms to refer to our human value as we do our financial value.  Which came first though?  Did “worth” originally refer to human value and got drafted into phrases like “net worth” or “credit worthiness”?   Or the other way around?  Maybe it’s telling that I don’t know.  In her book Debt For Sale: A Social History of the Credit Trap, Professor Brett Williams chronicles her own experiences with debt while exposing recent practices of financial institutions and changes in the law that allow those practices.  In the first few pages, Williams hones in on this prescient point about language and finances, specifically about how we speak about credit and debt.  “We have no cultural language,” she writes, “to understand and interpret [the relationship between credit and debt], so we often liken credit to freedom and mastery; and debt to addiction, drug abuse, narcissism, low self-esteem, dependency, or a search for immediate gratification.  We tend to blame the debtors rather than the institutions that did the irresponsible lending.”  She’s right.  My quasi-officemate’s conduct today illuminated that point for me.

Williams is correct that oftentimes debt does not occur solely from low self-esteem or giving in to immediate gratification.  We live in a world where desire is constantly manufactured, stimulated, and maintained.  Social and behavioral scientists study ways to trick us into purchasing their products.  I still recall the devastation I felt as a boy when my mother took me shopping for sneakers and I left with a pair of K-Mart brand T-954.  I’ve never forgotten the brand.  This was around the time of the Reebok Pump.  Having anything less meant much.  Yet people are rebuked for not having the patience to delay gratification.

As it stands now, many banks require minimum balances just for the privilege of operating a checking account with them.  Free checking accounts do exist, but they often come with multiple strings attached.  But imagine a world where you don’t pay interest on a line of credit but maybe you also don’t get interest on your money.  The bank just holds it.  That would be one “new” way to look at borrowing and lending.  “How would such a bank make money?” you ask.  If Craig’s List can operate a massive, international website on a skeleton-crew, then maybe such a bank could as well through a nominal fee.  Maybe banks shouldn’t really be for-profit?  Maybe it’s time to start re-thinking and re-examining how we view our financial establishments?  Why is needing money—perhaps between paychecks or to make ends meet—a bad thing?  Why is wanting a new car or a nice house something shameful?  Williams points out that it’s only in the past thirty years or so that massive manufacturing has taken off.  Pundits often speak about consumer confidence.  The entire economy rides on our ability to buy useless, unnecessary goods.

So, I wonder what a world would look like where credit and debt are restructured—say like for corporations—and having debt and capital are both good things.  Or would debt, by any other name, stink the same?

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