Filthy Commerce

Why letting 18-year-olds borrow $100K isn't the best idea

I am sure that many of you read -- and were gobsmacked by -- the May 28, 10 NYT article "Placing the Blame As Students Are Buried in Debt." For those of who didn't, a brief summary:

The article's subject racked up $100K in student loans during her four-year stint at New York University. he loans were issued through Citibank and Sallie Mae. The subject then graduated with an interdisciplinary degree in religious and women's studies. Now, she is finding it difficult to find employment which will permit her to meet her $700 monthly loan obligations and the cost of entry-level adult life.

The subject now says of her $100K education: "I don't want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back," she said. "It feels wrong to me."

(She got off lightly: another NYU graduate finished $275K in debt.)

One way to look at this: When one decides to assume $100K in debt, one better hope it's for something that will bring you long-lasting satisfaction and/or an improvement in one's quality of life. Otherwise, one is a sucker.

Another way to look at this: Might universities encouraging their students to hock their futures to commercial banks be a tad ... untoward? Or might the banks be considered slightly predatory for going after a green and inexperienced class of loan consumer?

It probably all depends on what you think about the following:

Oh good, another anticonsumption experiment

So Dave Holmes has the genius blog where he says he's reading one of those A-Year-Of-Stunt-Living books a week, then writing about the experience. And I cannot wait for him to get a hold of The Great American Apparel Diet, wherein a group of women have vowed to give up shopping for new clothing from September 2, 2009 to September 2, 2010.

Y'all, this will be hard for them:

Like most women we are attached to our wardrobes in some form or another.  In fact buying a new something-or-other is as natural as a dark choclate [sic] pick-me-up.  We all have our reasons for embarking on this project but it all gets down to this…who are we without something hip and new in our closets?  We shall see.

Speaking as someone who hoards the three-ounce Scharffenberger 82% extra dark chocolate bars in her fridge like they are priceless gems and I am Smaug the dragon ... my dark choclate [sic] pick-me-up costs me approximately $2 per each delicious, 190-calorie hit, or about $8 per typical week. I defy you to find me any well-made $2-$8 sartorial pick-me up.

Even assuming a 45-week run of pick-me-ups (because vacations and Christmas breaks will have their own consolations), that's only $360 bucks for 180 moments of sensory bliss. And I don't have to deal with clutter in the closet.

But I'm getting away from my points. You know I'm opposed to disposable fashion for both environmental and financial reasons, and it's not winning any points for human rights practices either. I'm for making changes to your personal consumption patterns in order to reconcile your private beliefs against your public commercial actions.

But I'm growing a little weary of the one-two punch where it's "Hey, I'm going to stop doing [presumed mainstream consumer activity] for a limited period and then blog about it!" Having that escape hatch means that you're not really committing to any change, you're just experimenting.

And I'm a little weary of people not realizing what a luxury it is to give something up voluntarily. There is a tremendous amount of privilege in a life where you can say, "I have too much, so let me see what it's like to live without." 

During Lent when I was growing up, my family would have one night a week where we ate a bowl of rice, and we'd donate what we would have spent on that meal to the local food bank. The reasons for this were twofold. First, my parents believed that "going without" was something we needed to experience in order to appreciate what we had. Second, they believed that you weren't supposed to profit from the experience but use it to help others.

I'd respect a lot more of these attempted-unconsumption efforts if they were just as adamant about addressing those who do without by necessity as they were in celebrating those who do without by choice.

Pick a Fight Monday: There's no reason to romanticize the Great Depression

Over the last 18 months or so, there have been a plethora of articles and blog posts about how the adults of today are revisiting the habits of their Great Depression-era forebears. ("Great Depression Holds Lessons for Surviving Tough Economy," CNN, Oct 13, 08; "Survival Basics from Depression-era Kids," Wisebread, Oct 31, 08; "Wisdom of the Aged," Time Out Chicago, Dec 8, 08; "Making Ends Meet in the Great Depression," NYT, Apr 1, 09; "Catering to the Recession Mentality," WSJ, Nov 9, 09;  "Will the New Frugality of Born of the Recession Shape a Generation?" WaPo, Dec 20, 09; "Recession Generation Will Spend Less for Life," Newsweek, Jan 9, 10)

Think about how trendy things like gardening, canning and sewing have gotten among a certain subset of domestic bloggers. I am pretty sure the trend is peaking, as there's a book about to come out about channeling your grandmother's household skills, and lifestyle books usually reflect popular sentiment; they don't create it. ("Book Aims to Connect New Generation to Grandmothers' Skills," Spokesman-Review, Jan 10, 10) And plenty of green bloggers are now claiming the Great Depression was awesome in that everyone was forced to reduce, reuse and repurpose things.

Here's what everyone conveniently leaves out: People did these things not because they wanted to, but because they had to. An entire generation did not decide to make the 1930s the greenest decade, nor did they decide to reject consumerism for DIY empowerment. Those benefits were side effects.

Did the country lose its mind for the past ten years and go nuts with buying houses they couldn't afford and lifestyles financed by credit card? Yes. Are we paying for that now? Yes. Is it kind of awesome that people are changing some of their habits so they're not merely uncritical consumers? Yes.

But for God's sake, be critical of this Depression-revival chic too. The Great Depression created staggering workloads for women ("Life In (And After) Our Great Recession," The Atlantic, Oct 09), so remember that the next time someone asks why you're not cultivating your own organic plot/canning your own preserves/sewing your curtains out of old sheets/cutting your husband's hair/following the dictate to only eat food your grandmother would recognize. If you must embrace the habits of the Great Depression, do it with your eyes wide open to whether or not they're reconcilable to the realities of today.

Encounters on Craigslist: You think I'd learn

So last weekend, we took the doughty little Subaru out to the hinterlands of Concord and picked up a set of Metro restaurant shelves from a very nice man who was cleaning the final remnants of his restaurant's equipment out of his self-storage space. I paid $75 for a set of used shelves approximately 18" deep, 48" wide and 75" tall, and I got two shelf liners thrown in. This is aces by me, as these shelves are going in the garage, where they will assist me in my efforts to render order unto chaos.

I did not, at the time, buy two sets of these shelves for $75 apiece. Call it concern over cramming assorted bits and pieces into the Subaru, call it short-term amnesia over what all I need to store in the garage, call it trepidation at having to clear off and haul out a set of shelves from the back of a very full garage, call it chronic stupidity. The fact remains: it is a week later, I now want another set of used Metro restaurant shelves approximately 18" deep, 48" wide and 75" tall, and I sort of regret my short-sightedness.

Fortunately for me, Craigslist is chockablock with Metro restaurant shelves. I poked around some, determined that $75 is right about in line with what most people are offering, then contacted one seller who had a lot of Metro shelving for sale. I very politely wrote that I was interested in a set of used Metro restaurant shelves, I had seen them offered in other postings for $75, and would he be interested in unloading them on me for that price?

I got back an email informing me that the aforementioned shelves had cost $300 new, and therefore my offer was neither realistic nor in line with how the seller valued these very expensive shelves; he wanted $150 for the shelves as they were in very hot demand. If I were to reassess my price points, he'd be happy to do business.

For a brief moment, I wondered if I was really out of line. Then I remembered: for only $25 more I can get new Metro shelves without the chiding about how unrealistic my price expectations are. And a nice person will deliver the shelves to me instead of requiring me to schlep an hour away to get them myself.

This whole thing has me wondering: how much of a premium do I place on convenience? Truly, luxury is not always about expensive goods; it's as much about a hassle-free procurement experience, isn't it?

When the motivation is money

One of the daily news digests I read has hosted a long-running debate on what would be more effective in getting consumers to ditch disposable bags for reusable totes. The debate centers on two options: charging per bag used, or discounting per tote brought in. The big point of dispute is whether people respond better to an incentive to save money, or to a disincentive to spend money.

The tyrannical time-suck of free shipping

A tale of time wasted:

I needed to get two Girl Scout handbooks, and because my local council is apparently under the impression that all volunteers associated with Girl Scouts do not have day jobs*, there is no way I can pick them up from the local Girl Scout store. So I went to order them off Amazon.com, and when the total for $21.49 came up in my shopping cart, so did a little tag noting that all I had to do was spend another $3.51 and I'd qualify for free Super Saving shipping.

Very well, I thought. I'll see what I can do.

My first stop was to go to the Amazon Filler Item Finder, a search engine that lets you type in the dollar amount you need, then spits out the results. I applaud the idea. The execution had two small flaws: There is a lot of crap that's priced at $3.51 and above, and the pricing isn't accurate. When I clicked on a wooden spoon that was allegedly selling for $3.95, the Amazon page had it priced at $4.99. My total order would have been $26.48 -- not exactly bank-breaking but not exactly the $25.44 that I would have preferred.

I futzed around looking for items that I wouldn't mind spending $3.51 on, when it hit me: my time was probably worth more than $3.51. Besides, I wondered, how much is the standard shipping going to be?

It was $4.98 -- a penny less than the only order-filler I wanted.

I'm sure there are people who would have rather had the spoon and the free shipping. However, I don't need a spoon. I needed the books, I need an uncluttered house, and I need to use my time productively.

It is true that shoppers love it when there is free shipping. But I'm thinking that occasionally, free shipping still costs too much.

5S, 43 folders, containerizing and S.H.E.D.

Fairly or unfairly, organizational skills and financial skills go hand in hand. Now, it seems some companies are exploring the link between an organized office and an employee's productivity. A few months ago, the WSJ reported on Kyocera's "5S" strategy -- sort, straighten, shine, standardize, sustain -- and how one of the side effects is that people can more easily operate in a colleague's work environment. ("Neatness Counts at Kyocera," Oct 27, 08) Less adjustment = more efficient use of time.

The "5S" thing prompted a meditation on why we like smartly-nicknamed systems for imposing order on chaos like S.H.E.D. ("Separate, Heave, Embrace, Drive Forward") or the 43 folders with its "tickler" file system. Easy answer: because they're confidence-inspiring. They offer a theoretical framework which is supposedly expansive enough to contain your multitudes, yet structured enough to guarantee that your multitudes are easily accessible. You wouldn't be as confident with an organizational gimmick that started off with "Look, I don't know how your brain works! Why can't you just throw that out?"

I suspect that as this recession lingers, more and more people will be casting about for easy ways to get and stay organized. We'll see more blog posts advising you on the best times to buy anything, if not websites that promise to send reminders of what to buy when. We'll see more blog posts like "Why You Should Inventory Your Food Supply," if not blogs devoted to retro-appeal household skills in which organization is a bedrock skill from whence all else springs.

For the organized among us, there may be a real opportunity to make money off this recession. See what I mean about organizational skills and financial skills going hand in hand?

Everyone in the supermarket is a suspect

Consumerist has been on the case of the shrinking food package for a while (see also, "The Grocery Shrink Ray," WaPo, Jul 18, 08), but last week, Marketplace turned its attention to a growing phenomenon: food manufacturers are monkeying with packages so they don't appear smaller, but actually are. This way, they can provide you slightly less food at the same price. It's a sneaky way to raise prices without appearing to do so.

With the price commodities going up this year [Simon Kucher & Partners consultant Frank] Luby says shrinking containers might be the lesser of three evils. The other two being cheaper ingredients, which would change the taste of your peanut butter, or alienating even the most loyal consumers with higher shelf prices. Now, Skippy is made by Unilever, a food conglomerate that also put a dent in the bottom of Hellmann's mayonnaise and shrank your carton of Breyer's ice cream. No one there would go on tape but when I raised the deception question, a spokesman said the new weight is clearly marked on the package.

-- "Less Product, Same Price," Jan 8, 09

This is why you always check the price-per-ounce measurement at the store. And log it, if you're extra-paranoid. Angry consumers might look up Unilever's U.S. grocery brands and just avoid those under the assumption that all of them are now monkeying with the packaging. However, Marketplace also tagged General Mills as a stealth downsizer. And we know Tyson foods has also committed shrinkage.

So the lesson here is, if you're boycotting the sneaky downsizers, you might well end up paying more anyway because there's hardly anyone left. Your grocery bill's going up almost any way you look at it.