Tuesday, April 12, 2011

Snake Oil Salesmen

The proverbial Snake Oil Salesman has been around for Centuries - perhaps eons.  And they still exist today.  Do we blame them for their odious acts - or blame ourselves for being foolish enough to listen to them?

"My Friends!  Gather 'round!  What I have to show you is nothing short of astounding.  Dr. Elixer's Patent Rheumatism Medication!  Cures everything from the common cold to deadly cancer!  And only $9.99 a bottle!  Step right up!"

Or so went the pitch of the snake-oil salesman - a fixture in turn-of-the Century America.  They would go from town to town, selling quack cures in a bottle - usually just alcohol and laudanum (opium) and then skedaddle before the local patsies got wise that they had been conned.

And in folklore, oftentimes such scoundrels were "run out of town on a rail" - tied to a fence rail and carried out of town, or towed behind a horse, who was then whipped into a stampede.  Or perhaps they were "tarred and feathered" - which is often depicted comically in the movies, but usually resulted (when actually done) in painful 3rd degree burns and a slow death.

But more often than not, the snake oil salesman made a clean getaway.  And more often than not, this was because - then as now - what he did was not per se illegal.

In other words, who is to blame here, the salesman, who takes advantage of the local rubes' gullibility, or the local rubes, for being so gullible?  Today, it seems, we tend to take the latter view.

And the Snake Oil Salesman is far from an interesting anachronism from the past.  Today, he is present in nearly every area of commerce.  And now, as then, people line up to hear his spiel and lay down their hard-earned cash, and give him blubbering thanks.  It is only later on that they think, "Hey, I was sold a bill of goods!"

The Timeshare Sales Seminar is one obvious example of the Snake Oil Salesman at work.   The Salesman stands up in front of a captive audience and gives the high-pressure spiel.  "My friends!  Never pay too much for a vacation again!"

And like with the Snake Oil Salesman of old, a pre-planted "shill" in the audience will pipe up "spontaneously" about how great the timeshares are.  And as in days of yore, before long, you will be saying the same thing - effectively shilling for the Salesman.

It is human nature - the herd instinct, the group-think.  When everyone starts saying the same happy-talk and same lies, everyone starts to believe them.  Whether it is the Emperor having no clothes or forming your local chapter of the Nazi Party in 1930's Germany, once you think all your neighbors have signed on to a concept, you sign on as well.

And not only do you not consider alternative points of view, you shout them down.  Those idiots who pay too much for their vacations!  What do they know about the beauty of timeshares?  But it is you that are being the idiot, not them.

So who do we "blame" for the Real Estate Meltdown of 2009?  The Wall-Street Fat Cats who bought and bundled questionable mortgages and mortgage derivatives?  The Government Officials who promoted the "Dream of Home Ownership" as the American Dream and passed laws to back those mortgages?  Do we blame the Real Estate Agents for saying things like "Buy now, before you are priced out of the market!"  Or is it the mortgage brokers and bank officials who earned huge commissions on questionable loans, even though they knew most of them wouldn't be paid back?

We can blame these remote, faceless people, because it is convenient to do so.  But it is our own lazy, weak thinking that is often to blame.  No one put a gun to anyone's head and said "Buy the Snake Oil" and no one put a gun to your head and said "Buy the Granite Counter Tops!".  There reaches a point where personal responsibility kicks in, and you have to say "Yes, they sold me a false bill of goods, but I made the decision to buy it!"

During the meltdown, we all saw the signs.  I would talk with Real Estate Agents, Mortgage Brokers, Investors, and even ordinary Homeowners, and all of them would say "the market is crazy!"  But few had the courage to sell their homes and pocket the profits and then RENT for a few years until the market calmed down.  Why?  Because most of us were caught up in the idea that "owning" a home was the end-all to humanity, and that only poor, stupid people rented.  But it was the other way around - owning a home was an idiot's move when you could rent for about half the cost in many neighborhoods, and that price differential was a sure indicator that the market was whacked.

But the Snake Oil Salesmen have moved on - and have been around in nearly every other area of commerce as well.  Your local new and used car dealer has them in spades, of course - selling you the siren song of shiny-shiny and the false status of car loan payments.  And yet every day, people sign up for such nonsense and wonder why they are broke - and have to work all the time.

And most of us think such things are "normal" - and thus end up shilling for the Salesmen.  I can't tell you how many folks I know who vehemently defend buying brand-new cars (or worse yet, leasing) on their limited incomes.  Vehemently.  They complain they are broke, and yet when I get out a pencil and paper and show them where the money goes, they dismiss this with a wave of the hand.  It can't be the leased car!  The monthly payments are so low, low low!  (yea, but they go on perpetually!).

So what can you do to protect yourself from the Snake Oil Salesman?  Well, leave the tar pot and the pillowcase of feathers at home.  The best thing you can do to protect yourself from the Snake Oil Salesman is not to persecute them, or to cry about how unfair it all is, but instead to be more skeptical of so-called "bargains", "deals", and "sales".  Because, 9 times out of 10, whatever is being advertised and sold to you is basically a raw deal - otherwise it would not need to be advertised.

If you think about this, it becomes like an inverse guide to living.  The more something is advertised, the chances are, the less of a real bargain it is.  You go to the grocery store to buy food.  Advertisements for Soda-Pop and Snack Foods dominate the airwaves, the radio, the newspapers, magazines, and billboards.  On the other hand, no one advertises broccoli, do they?  Not like they do Coca-Cola.  And yet, which is good for you, and which is going to make you a diabetic 400-pound tub 'o lard?  And whose fault is that, when it happens?

You can't "win" at the Snake Oil Salesman's game.  You are not going to get a "bargain" on Snake Oil, because at any price, it is a ripoff.  If you stick around for the pitch, chances are, your comments will be shouted down by the crowd.  And you run the risk of falling for the pitch, if they can get you into the right emotional state.  It is a lose-lose proposition, so just walk away from such sales pitches, when you can.

It's called taking responsibility for your own actions - and not mindlessly following the crowd.  And it takes courage and dedication and a modicum of self-control.    If you fall for the pitch of the Snake Oil Salesman, you have no one to blame but you.  And when it is all said and done, you can't tar and feather yourself.