The Economic Pressure to Get Poor People to Spend, Borrow and Play the Lottery
David Brooks, the Great Seduction
The loosening of financial inhibition has meant more options for the well-educated but more
temptation and chaos for the most vulnerable. Social norms, the invisible threads that guide
behavior, have deteriorated. Over the past years, Americans have been more socially conscious
about protecting the environment and inhaling tobacco. They have become less socially
conscious about money and debt.
The agents of destruction are many. State governments have played a role. They aggressively
hawk their lottery products, which some people call a tax on stupidity. Twenty percent of
Americans are frequent players, spending about $60 billion a year. The spending is starkly
regressive. A household with income under $13,000 spends, on average, $645 a year on lottery
tickets, about 9 percent of all income. Aside from the financial toll, the moral toll is
comprehensive. Here is the government, the guardian of order, telling people that they don’t
have to work to build for the future. They can strike it rich for nothing.
Payday lenders have also played a role. They seductively offer fast cash — at absurd interest
rates — to 15 million people every month.
Credit card companies have played a role. Instead of targeting the financially astute, who pay off
their debts, they’ve found that they can make money off the young and vulnerable. Fifty-six
percent of students in their final year of college carry four or more credit cards.
Congress and the White House have played a role. The nation’s leaders have always had an
incentive to shove costs for current promises onto the backs of future generations. It’s only now
become respectable to do so.
Wall Street has played a role. Bill Gates built a socially useful product to make his fortune. But
what message do the compensation packages that hedge fund managers get send across the
country?
The list could go on. But the report, which is nicely summarized by Barbara Dafoe Whitehead in
The American Interest (available free online), also has some recommendations. First, raise
public consciousness about debt the way the anti-smoking activists did with their campaign.
Second, create institutions that encourage thrift.
Barbara Dafoe Whitehead in The American Interest
http://www.the-american-interest.com/ai2/article.cfm?Id=458&MId=20
Donbot
David Brooks, the Great Seduction
The loosening of financial inhibition has meant more options for the well-educated but more
temptation and chaos for the most vulnerable. Social norms, the invisible threads that guide
behavior, have deteriorated. Over the past years, Americans have been more socially conscious
about protecting the environment and inhaling tobacco. They have become less socially
conscious about money and debt.
The agents of destruction are many. State governments have played a role. They aggressively
hawk their lottery products, which some people call a tax on stupidity. Twenty percent of
Americans are frequent players, spending about $60 billion a year. The spending is starkly
regressive. A household with income under $13,000 spends, on average, $645 a year on lottery
tickets, about 9 percent of all income. Aside from the financial toll, the moral toll is
comprehensive. Here is the government, the guardian of order, telling people that they don’t
have to work to build for the future. They can strike it rich for nothing.
Payday lenders have also played a role. They seductively offer fast cash — at absurd interest
rates — to 15 million people every month.
Credit card companies have played a role. Instead of targeting the financially astute, who pay off
their debts, they’ve found that they can make money off the young and vulnerable. Fifty-six
percent of students in their final year of college carry four or more credit cards.
Congress and the White House have played a role. The nation’s leaders have always had an
incentive to shove costs for current promises onto the backs of future generations. It’s only now
become respectable to do so.
Wall Street has played a role. Bill Gates built a socially useful product to make his fortune. But
what message do the compensation packages that hedge fund managers get send across the
country?
The list could go on. But the report, which is nicely summarized by Barbara Dafoe Whitehead in
The American Interest (available free online), also has some recommendations. First, raise
public consciousness about debt the way the anti-smoking activists did with their campaign.
Second, create institutions that encourage thrift.
Barbara Dafoe Whitehead in The American Interest
http://www.the-american-interest.com/ai2/article.cfm?Id=458&MId=20
Donbot
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