Financial Abuse

There are many ways to be abused.  Financial abuse is one of them, and not often talked about.

On Reddit, this plea from a woman who lost her job and "just discovered" her husband ran up $90,000 in credit card debt:

1) I only recently found out that my husband has been secretly building up $90k in credit card debt. He was paying just the minimum until he could no longer do that and I found out when a card was declined. It includes medical debt for our kids. He was helping his mother out without my knowedge. Some of it was just wasteful spending. He's always paid the bills, and in 24 years we have never carried any debt before other than a mortgage, not even a car loan. Our credit rating is fantastic. So believe me when I say I had no idea.

2) I recently went back to school after being a stay at home mom and got a degree but lost my first job within 3 months. I've been applying like crazy for 6 months now with no luck. It doesn't help that I'm older and haven't really worked in 15 years. I am now working 55-60 hrs a week in retail while I'm looking, but even with those hours, the pay is not close to what I need to make a dent in that debt.

3) Our kid starts college in a month and we were counting on my income to help. We don't have the down payment for her tuition.

4) Husband refuses to declare bankruptcy because he is proud and says "it's only money" and that I will find a better paying job and we can pay it off if I put all my income to it in the next few years. Apparently, he thought our income would double when I graduated and so he just started spending it ahead of time.

I'm very depressed, very angry and at a loss on what to do.

 This is a pretty clear example of financial abuse and it happens more often than you think.   A marriage, instead of a partnership, becomes a "race to the bottom" where each partner tries to get the most out of the relationship (in terms of possessions or money) before it all falls apart.

And like with physical and sexual abuse, I believe that men are largely the players in financial abuse as well, although women can also play this game - spending a family into the poor house, while having a good time, themselves.

Living here on retirement island, I've seen examples of financial abuse.   Usually, it isn't discovered until one spouse dies, and then the surviving spouse - who did not handle the finances - discovers they are in a world of woe.

In many traditional marriages, the wife is usually 3-5 years younger than the husband.   And since women live longer than men, retirement communities tend to trend female over time.   Husbands die early, leaving the wife to soldier on with what is left of the marital assets.  Often there is little left.

What would cause people to do this?   And how can it be stopped?   Well, to answer the first question, some people use emotional thinking to self-justify whatever it is they want to do.   Others have gambling habits, mistresses, or drug problems, that they are keeping a secret from the wife.   My own father spent an inordinate amount of money on a mistress that was blackmailing him - money that was a joint marital asset.

The second question is easier to answer:  Never let anyone, even your spouse, control all the purse strings.   You should know the names and account numbers of all your investments, bank accounts, and other assets, held separately or jointly by the both of you.   You should also know the amount of debt you have, how many credit cards you have, and what is being spent, on a monthly basis.

You need to know this information for a number of reasons.  First, if your spouse dies, you need to know where all the money is and who you owe.  Many a spouse has discovered that their husband's record-keeping was less than stellar, and as a result, they had no idea about the monthly finances, how much the bills were, or who they were even paid to.   When you are planning a funeral, it is not a good time to be trying to sort this stuff out.

Second, a marriage should be a partnership, and you both should have everything in joint accounts, including your credit cards.  This idea of "her money and my money" is just ridiculous.  If you want to live that way, why bother getting married?   In addition, you really shouldn't have secrets from each other, particularly financial ones.

Third, two heads are better than one.  If the wife in the above scenario had been keeping up with the bills and investments, she would have noted the increasing debt load a long time ago and talked to her husband about it.   Or at least tried to.

But sadly, financial abusers, like physical, emotional, or sexual abusers, use financial power to intimidate or control their spouses.  In this example, the husband refuses to declare bankruptcy, putting his personal pride above the needs of his own family.   Divorce, expensive as it is, might be a better option.  It doesn't sound like much of a marriage to begin with, does it?

What amazes me, is how people can live like this for years and decades, with a spouse who clearly is selfish and self-centered, and is also abusive in this manner.   It is also hard to believe the warning signs of impending financial collapse were not seen by the wife sooner.   It doesn't sound like either husband or wife bothered to budget or live within their means - but just went out and spent money they didn't have on things they felt entitled to owning.   I am sure they both have the latest smart phones and all the cable channels, too!

If you let your spouse handle all the bills and finances, that's fine.  But you should be able to log into these accounts and figure out what is going on and where the money all is.  You should know this stuff.

Calculating your net worth (listing up all your assets and debts) on a monthly basis is one way of keeping track of this.   The Merrill Edge Net Worth Calculator, despite its flaws, can be a handy tool to see which way your financial situation is heading.  Creeping credit card debt would clearly show up on such a report.  Your net worth is like an altimeter on an airplane.  Without this piece of data, you have no idea whether you are flying high, or about to crash into the side of a mountain.

I print out a monthly net worth calculation and give it to Mark.  If I die, he knows where all the money is, what we own, and who we owe.  I also keep binders with monthly statements an information for each investment.    And when we make purchases, we talk about them jointly and reach a joint decision.  No one goes out and buys things (more than $100 or so) without consulting with the other.   It seems like such a simple thing, but I guess it eludes most people.

Thus, while it is tempting to "feel sorry" for the lady in the story above - and blame her husband for clearly abusing her financially, she does bear some culpability in this scenario, for not taking an interest in her own financial life and lifestyle.   You can't be a co-pilot in a marriage without at least occasionally glancing at the instruments!

If You Found a Million Dollars...

Suppose you found a suitcase full of money?  What could you do with it?  Not much, as it turns out.

Suppose you "found" a million dollars in cash.  Maybe it fell off an armored truck.  Maybe some robber buried it in your backyard.   Or maybe you tunneled into a bank.  Whatever.   You have this pile of cash, what do you do with it?

In the movies, they always have a scene with a suitcase full of money.  It is a trope, and people love to see those Benjamins all lined up in neat piles. In fact, it is such a trope, that they actually make "suitcases full of money" for the movie business.  Look at the photo above more carefully.  Each bill says, "for motion picture use only" on it.  And that isn't Franklin on the 100, either.

I suppose everyone dreams once in a while about what it would be like if the armored car ahead of them suddenly had a door pop open and a big old bag of money landed on the hood of your car.  You try to flash your lights and honk your horn, but they just drive off.   It has been known to happen and in most cases, the person who finds the money turns it into the Police.  Why is this?

Well, simply stated, it is awfully hard to spend or invest a lot of cash in this country, without someone asking a lot of questions.   We have laws in place, as well as ways of tracking financial transactions, such that it is darn near impossible to spend that cash - at least on any kind of big-ticket item.

For example, if you deposited the money in the bank, they would have to fill out a form and send it into the IRS, who in turn, would want to know why you suddenly had all this money.  Even if you tried to deposit it in smaller increments, you'd have problems - any transaction over $10,000 has to be reported by government form.

OK, so you try to deposit in a bunch of $9,000 transactions.   This is called structuring and it is illegal per se.   And yes, they can track this and catch you - and they can actually seize the money using civil forfeiture procedures.   You can go to court and argue the money is yours, but you'd have to prove in court that you came upon the money legitimately.

So trying to get the money into our financial banking system is very hard to do.   You'd have to launder the money somehow.   One way is to start a cash business as a "front" and then claim small amounts of the money as income from your business.   You could deposit this over time and pay taxes on it, and thus not raise the ire of the IRS.   However, such cash businesses are audited regularly and of course, money laundering itself is illegal.

Speaking of cash businesses, many small Mom & Pop groceries play this game, where they ask you "do you want a receipt?" and if you say "No" they put the cash you paid into a cigar box under the cash register and then fail to record the sale.   This way their profits look smaller to the IRS and they take home the cash which they keep in a vault at home.   There are a number of problems with this approach, of course, the first being it is illegal (failing to declare income) and the second that it makes you a target for robbers.

Whenever you read about "home invasions" usually they talk about surprising amounts of cash kept in a safe at the home.  Usually, these are immigrants who run cash businesses, and they are hoarding that undeclared income, with predictable consequences.  Sometimes they get killed over it.

So what can you do with this cash?  Not much.   You can't buy a new car with it, as again, the car dealer has to report any sale in cash over $10,000, which limits what kinds of cars you can buy.   You see a lot of people with cash businesses buying secondhand cars from individuals, paying cash, to try to get around this.  Of course, the guy you bought the car from has to deposit that into his bank account, and if it is over $10,000, it gets reported, and then someone starts asking questions.
 

Well, OK, maybe you can take the money overseas - and deposit it to a Swiss bank account or one of those Cayman Island offshore accounts.   There are a number of problems with this as well.  First, you are only allowed to take $10,000 in cash out of the country at a time.   And since you don't want to check a million dollars in checked luggage (where it would be stolen) you put it in your carry-on bag, where TSA can see it as you are frisked before the flight.

And assuming you can get the money overseas, you are not home free.  International banking has been cleaned up in recent years, and the Swiss "secret" banking system, as well as that of other haven countries, has been pried open.   It's getting harder and harder to keep your money a secret these days.

Perhaps this is a good thing.  I've read that the vast majority of $100 bills are in circulation overseas, where they are used in illegal trades of one sort or another.   Some propose eliminating the $100 bill, as the shear volume of lower denomination bills would make many drug or arms transactions physically difficult.  Instead of a briefcase, you'd need a trunk - or a truck - to haul your money around.

And that is why I have little sympathy for these stories you see in the papers about civil forfeiture.  Some kid is arrested with $20,000 in cash on him, and the police seize it.  "It was my life's savings!" he cries.  And we are supposed to believe that a kid in the ghetto, working as a dishwasher part-time, has saved up $20,000 in cash.  Moreover, we are supposed to swallow his "fear of banks" excuse for carrying that much cash around.   The honest truth is, of course, is that there is a 99.99% probability he is a drug mule, particularly when he is caught on a bus, train, or car, along a well-known drug-running route (Miami/NY or Chicago/LA for example).

We are increasingly a cashless society, and people with legitimate jobs and legitimate businesses just don't have that much cash on hand.  General Motors probably has less "cash" on hand than you have in your wallet.  Everything is paid electronically - by eCheck, regular check (which is just a paper request to make an eCheck these days), wire transfers, credit cards, and whatnot. Very few people pay cash anymore, simply because carrying cash is inconvenient, risky, and time-consuming. Buying gas, for example, is easy with a credit or debit card.   It is a pain-in-the-ass with cash, although some gas stations are experimenting with pumps that accept $20 bills.

So what do you do with your "dream" pile of dough?  I suppose you could use it to buy restaurant meals and become fat as a house.  And you could use it to buy a lot of small things like your groceries and your clothes, and whatnot. Your daily expenses, paid in cash, would free up your income for investment.   But even then, I suspect you might be headed for trouble.  If you make $100,000 a year and are banking all of it, some questions would be raised.

Also, it might look odd if everywhere you went, you paid for everything in crisp $100 bills all with sequential serial numbers.   If the money was ill-gotten or even just "found" and law enforcement had the serial numbers of the bills on file, they literally could zero in on you by tracing the traffic in those bills, which would form a nice target centered on your house.

It seems kind of unfair, to some, that if you "found" a million bucks, you couldn't keep it.   But it is the reality of the world today, which is why I don't understand why folks still try to pull off these "capers" like kidnappings or bank heists, where millions of dollars are stolen.  Once you get the money, there isn't much you can do with it, except get caught.  Maybe in 1965 you could waltz into the Cadillac dealer and plunk down a pile of cash on a new convertible, like they show in the movies.  Today, that simply would not be possible.

In a way, it is like prison escapes.  In movies (again, movies) such as Shawshank Redemption, the hero tunnels out and ends up in Zihuatanejo, Mexico, living happily ever after.  The reality is, of course, that you end up living as a fugitive, unable to obtain money or food, except to steal it, with the end result that you are shot and caught.  Of course, criminals are not that smart, and one of their problems is the inability to think things through.   So, you kidnap Mr. Heineken.   What do you do, once you get all that money?

Again, "back in the day" it was a lot easier to get away with this.  And perhaps in third-world countries, where cash is king, you could spend that money with impunity.   Although I suspect someone at the CIA would figure it out, when you suddenly come into so much money and buy a mansion for yourself.   You might want to check your car for explosives before starting it.

No, it seems that we are destined to work for a living.  Fantasies of suitcases full of cash are just that - fantasies.  The best you could hope for, it seems, if you found such a stash, is to turn it in and hope that no one claims it - and that the money would revert back to you, legitimately.

But you know, it ain't so bad - or so hard - making money "the hard way."  And you don't have to constantly be looking over your shoulder as well.

UPDATE:  Even amounts less than a million dollars are problematic.  A Connecticut man "found" a bank bag with $5000 in it and decided to keep it, even though the bag had the name of the bank on it and a deposit slip inside had the name of the depositor (turns out, it was the local government!).  Now he is facing larceny charges.  Turns out, the correct thing to do is to turn in such "found" money to the Police, and if no one claims it, you may get it back.  But to just keep it?  That's stealing - particularly when it is clear who it belonged to!

Not worth it, for $5000 - or even a million!

Never Start a Sentence With.... (Argument Starters)

Certain phrases are guaranteed to start an argument, every time.

In a previous posting, I mentioned three phrases which you should never use to start a sentence, unless you intend to start an argument with someone (usually your spouse).  These are phrases that immediately put the other party on the defensive, and thus force them to defend themselves in view of what amounts to be an accusation.  A huge argument is sure to ensue.  The only possible upside is make-up sex.

What are these phrases and why are they so toxic?   Well here are a few, and maybe you know a few more.  If so, let me know.

You Always - As I noted in an earlier post, when you start a sentence with "You always...." a fight will ensue.  "You always leave the toilet seat up!" you say.  The spouse will then respond with, "No I don't, in February of 2007, I put it down" (raising evidence to refute your absolute statement).   A civil discussion has devolved into a court case.

You Never - is the same deal, but in reverse.  "You never put the seat back down!"  The problem with both statements is that they are absolutist statements.   A better way to make the same argument would be to say, "Could you please remember to put the seat down?" as it isn't gasoline on the fire.   Of course, I use this argument as an exemplar only.  The real solution is to look before you sit, not blame your spouse (externalizing) for your own shortcomings.  Right?

You Said - is one way to start the court-case of argument going.   Each person starts dredging up stuff the "other person said" as if this was a murder trial and their inconsistent testimony was going to incriminate them.  If this isn't what starts an argument, it surely is one way to keep the fires stoked.  Calling up statements from the past is never a way to resolve things.  A relationship is not a trial or a contract to be interpreted under the law (with you as the Judge).  If you catch yourself saying this, just stop.

Ever Since - is another one.  "Ever since your Dad died, you haven't been the same person!"   How can one respond to that sort of accusation?  Again, it is an absolutist statement that cannot be responded to, other than to acquiesce to the accusation, or to mount a defense to the charges.

I Already Told You - is a phrase you hear older harridan wives shouting at their nearly deaf husbands, or husbands going through the first stages of dementia (or it could be wives, too, of course).   This is a particularly cruel saying, as in the time it takes to say, "I already told you!" in a scolding manner, you could have just repeated the information.

And yet I see this all the time here on retirement island.  A spouse who is going deaf or losing his attention span asks someone to repeat themselves, and they respond with "nevermind!" or "I already told you!" which is another way of saying, "you're not important enough for me to repeat myself!"

Frankly, I am not sure why people think this is helpful, but I see it all the time, folks screaming at dementia patients, as if you could scold them into wellness.  "It's Tuesday!  You already asked me three times!  Listen up!"   It is not a good strategy.

Of course, there are other situations where this phrase is used.  For example, when you mumble something (while facing away or in another room) and someone doesn't hear you.  They ask for the same information and you say, "Nevermind!" or "I already told you!" - it really isn't helping matters any.

It is funny how our brains are programmed, however.   We all do these sorts of things without thinking much about what we are saying or why.   To some extent, it is laziness or emotional thinking.  Or, we are simply tired and tend to snap at people we love.

One way to short-circuit this tendency, though, is to catch yourself (or others) when they throw these argument-starters out there.   It could save a lot of time and grief.

Why Social Media Is Broken

Social Media is Broken, in a number of ways.

Nothing good has ever come from Social Media.  Despite all the pleas posted on Facebook to find lost children, I am not aware of even one being found.   The reason for this is simple - most of these types of postings on Facebook are outdated, wrong, incorrect, or just spam.

"If it saves even one life!" these Facebookers always predicate the latest Wal-Mart slasher posting.   But it never does.

Meanwhile, another school teacher, politician, or policeman loses his job when they say something stupid on Facebook or other social media.   And another teen is bullied into jumping off a bridge.   Nothing good ever comes of Social Media - but an awful lot of bad comes of it.

Why is this?   Well, to begin with,  I think people who spend a lot of time on Social Media are not very bright people, and they are probably also very depressed people.  Throw in rumor-mongering and shaming, and you have a perfect storm.

What is shaming?  Well, it is a form of awfulizing which is one of the ten irrational ideas.  It is the idea that we, as social media users, can sit in judgment of anyone and everyone, and shame them for their actions, often based on a superficial reading of some slanted article or headline, or just some other social media posting.

Social media people don't research or vet anything that comes across their plate.   They don't because they don't know how to.   I don't know why, but many people I know, who appear to be fairly intelligent, act like I split the atom because I found something on Google.   It isn't hard, but then again, I have been doing boolean searches on computers since the days of UNIX.   Most Facebookers probably didn't understand a word of that last sentence.    Most of these Facebookers and Tweeters never bother to check things out before they mass forward the latest outrage, accompanied by their own tsk-tsking.

And other people have noticed this and made fun of it.  People have set up fake news websites just to see what idiots will forward improbable stories on Social Media.   Snopes has had to hire more people just to keep up with the avalanche of fake news and specious stories.   It is a like a hurricane of bullshit blowing across the web.

Take this posting from Joyce Carol Oates, a supposedly smart person and an author to boot. She has won numerous awards for her writings over the years.   And then she goes and does this.....

Joyce Carol Oates‏Verified account @JoyceCarolOates

Joyce Carol Oates Retweeted Chris Tilly

So barbaric that this should still be allowed... No conservation laws in effect wherever this is?

Joyce Carol Oates added,

Chris TillyVerified account @TillyTweets

This guy thinks it's cool to kill defenceless animals then take a selfie. Jerk.

8:52 AM - 9 Jun 2015

The problem is, the photo is of Steven Spielberg on the set of Jurassic Park next to a "dead" Triceratops, a species that has not lived for millions of years.  The Triceratops is plastic - in case I am not making myself clear.  Ms. Oates' reaction (and let's be charitable and hope she was in on the gag, right?) illustrates how knee-jerk reactions are the norm on Social Media.   A photo of a hunter and his prey - time to shame, time to awfulize, time to re-tweet!

UPDATE:  Some are saying Ms. Oates was indeed in on the gag, and was trolling social media with her posting.  This illustrates another problem with social media - trolling, and of course, people who believe in trolls.

But the problems don't stop there. Rumor-mongering is a big problem on Social Media.   Misinformation, outright lies, slander, and whatnot are the order of the day.  Mark Twain had it right - a lie spreads around the world before the truth can even get out of bed.   And he said that in the age of the telegraph, not Social Media.

As a result, people who have access to the world's largest database (the largest in the history of mankind) - the Internet - are less informed than ever before.  In fact, one might argue that we are more poorly informed than previous generations.   We certainly make far more financial mistakes than our forebears, who would never think of taking out a 300% payday loan, would they?

Hysteria is another problem.  As I alluded to earlier, there is a whole species of people on social media who love to spread scare stories.  Obama is going change the dollar to the "Amero".  The Wal-Mart slasher is waiting for you under your minivan.   Something in the air, water, or food is going to kill you.  The common denominator is fear.  People on social media are afraid all the time.   As a result, they are passive, cautious, and thus poor investors but excellent consumers.  Oh wait, maybe this is by design, no?

Bogus News Stories, I alluded to before.   What is truth and what is fiction is now a very blurred line these days, with people believing what they want to believe.  And much of this is because Social Media allows you - is designed to - steer you to people and opinions that already reflect your per-conceived notions.  Marshall McLuhan once opined that television would turn the world into a global village, drawing us all closer together.   Maybe that trend was once true.  Today, we are becoming a planet of cubbyholes, each with its own crackpot following.  Consensus and agreement are in very short supply these days, as we each get our "feed" from different sources - hence our views of the world are so divergent.  For example, there are people here in the USA that believe that Obama has exploded nuclear weapons off the coast of North Carolina, in an aborted attempt to nuke our own cities.  They really believe this.

Trolling, of course, is what destroys everything.   It destroyed the USENET newsgroups.  It destroyed many a decent discussion group.  It has largely ruined Reddit.  It is one reason I don't have comments enabled on this blog - and one reason blogs have fallen from favor.   Trolls just want to wreck everything for the sake of wrecking it.   So even if we could eliminate a lot of this other nonsense on Social Media, there would be a hard core group of folks willing to tear down the house for the hell of it.

The Career-Killing Faux Pas, I alluded to before as well.  Want to get a job?  Get off Social Media.  Want to keep your job?  Get off Social Media.   Nothing on your Facebook page or Twitter feed is going to land you a job or help you keep your job.  "Gee, we saw your Facebook feed, and realize you are just the kind of go-getter we need in our company!   Someone who updates their status every hour has to be productive, right?"   Everything on your Facebook or Twitter accounts is likely to detract from your employment picture.

They Aren't Making Money - this is the puzzling thing.  The CEO of Twitter just stepped down because growth in the service is slow and leveling off, much as Facebook's has.   Facebook is losing the young audience and gaining an older audience.  They have to look to overseas to expand.  And while Facebook is finally making a small profit, it is not enough to justify the current stock price.   Linked-In is even worse - far worse.  While the "news" talks about tweets and Facebook postings, and it seems that "everyone" is on Facebook, these services have yet to find a way to really make serious coin from this.  And if they can't now, when will they?

People are Leaving - as I noted above, the recent stats on Facebook are alarming.  Huge drops in membership among the young set, big gains in the 55-and-over crowd.  The reasons are various.  Kids don't want to Facebook with Mom and Dad or Grandma.  It is creepy.   And young people are realizing that posting stuff on Facebook can cost them that first job, or even a career.   Everything you post on Facebook is fodder for law enforcement.  And of course, there is the whole bullying thing.  Why go on a site just to be in perpetual high school?   Whether this is a trend or a blip remains to be seen.   But there are fewer and fewer untapped users out there for Facebook to expand into, and more and more people eventually get bored with online sites and eventually leave. 

World's Largest Time and Productivity Bandit - the big problem with social media is how much time it consumes.  People take pictures of every goddamn thing and post it on Facebook.  But Facebook is just the most popular version of the genre.   Twitter, Reddit, whatever - they all add nothing to your life, and detract much.

They All Crash and Burn Over Time - One big problem with "Social Media" is that no one has figured out how to make money from it - or any serious amount of money.  As soon as you monetize a site - implanting ads or sponsored content, users flee in droves.   Try to gin up the number of users by refreshing the site or redesigning it, and users flee in droves.  We saw this pattern many a time.   MySpace tried to monetize and "re-launch" the platform,and  people just left.   Why spend hours re-doing your home page, just because some coder got bored or some marketing guy thought that a "new look" would attract more users?  One reason I left Facebook was a page re-design, that basically wiped out my carefully constructed home page.  It would be like spending hundreds of hours building your farm on Farmville, only to see it scattered to the wind.

Digg used to be a social media news site.   Same thing happened there.  They tried to make money from the site, failed to do so and pissed off users.   They made changes to the site and "re-launched" it - scaring off even more.   Reddit replaced Digg, the latter of which has been chopped up and sold off in pieces, with the brand-name going one way and the coders going another.   Reddit, of course, has become popular, but is failing to figure out how to make money running servers if they don't have paid content.   Users take umbrage at any minor change to the site.   Today, they are shutting down huge portions of the site just in protest to the firing of a single moderator.   How long will this last?

And that, in a nutshell, is the problem with Social Media.   Something can be wildly popular, but still wildly unprofitable.   We, as humans, do a lot of things which are just time-wasters and unprofitable ventures for everyone.   How many bars, for example, do you know of, that had a line out the door and were crowded every night, but couldn't make ends meet?   It turns out that just being a popular place to meet isn't going to cut it, unless people actually pay to buy things.

Social media works the same way.  It is the bar where "everyone knows your name" but no one every buys anyone a beer.  And why should they - when water is free?  Facebook would like you to pay to have your posts promoted.   Twitter would like you to pay to have your Tweets featured.  Reddit would like you to buy karma or whatever.   Few do.   Just as in Farmville, there are a few hard core people with addictive personalities who will pay thousands of dollars for imaginary cows.  The rest get quickly bored and leave.

And that in a nutshell is the problem with Social Media.   It is a time-waster for the users and a money-waster for the investors.   It does not foster harmony, peace, understanding, or greater knowledge or wealth.  In fact, it does the opposite.   Everyone who touches social media ends up impoverished, in mind or spirit, to some extent.

Social Media is broken.

How Marketing Has Redefined Our Language

Words matter.  And if you can define the terms of a debate, you win the debate.  The same is true in the marketplace.

As a "consumer" (a word that has replaced "citizen" or "human being" in our culture) you may see the terms "Bargain" or "Sale" or "Savings" used in connection with commercial transactions.  And likely, you salivate at the sound of these words, as you feel these terms mean there is some discount or freebie involved.  And why you salivate, is of course, no accident.  These are high-index words designed to get at you emotionally.

But the terms really have value-neutral meanings.   It is the marketers that have made us feel they mean something else.  In another posting, I noted:

The term "bargain" is used in Contract Law to define an agreement between two parties.  I pay you $5, you sell me your old hat.  We have a bargain.   To most "consumers" the term "bargain" implies some sort of discount or sale or freebie.   I am not using the term in that manner, anywhere in this blog, unless I describe something as a "good bargain" or "bad bargain."  A "bargain" by itself is value-neutral.

So when you "strike a bargain" with someone, you have made a deal.  It does not mean you have made a good deal.  It does not mean you have obtained an advantageous price or otherwise snookered the other person.   The bargain is the basic terms of a sale contract (written or oral) - what one party does or gives in exchange for the other party does or gives.

Yet, in our culture, we talk about "bargains galore!" and "bargain basement" and "bargaining" as if they meant something else.   What they really translate to is, "transactions galore!" or "transaction basement" or "making a transaction."    Not as sexy sounding, is it?

Similarly, the term "Sale" has taken on a meaning that is not what was originally intended.   When something is "on sale" that means it is for sale.  It means, simply, that it is being offered to the public for a price. Today, we use this term to imply that discounts are being applied or that merchandise is being sold at advantageous pricing.

But of course, it isn't.  Many stores today routinely mark-down merchandise (from "suggested retail prices" which are made-up) by 50% to 70% or more, which is utterly ridiculous.  But even at these prices, they are still making money. A pair of pajamas marked down 70% to $15 is still profitable to the merchant, who paid $5 to have them made in China.

"Savings!" is another term that irks me in the way it is used. If you buy those pajamas, you haven't "saved" 70% at all.   At the "regular retail price" you simply would have refused to buy them - like most people - and they rarely are offered at that price anyway.  Retail prices are arbitrary markers not indicia of real value.

If you buy those pajamas, you did not "save" 70%, as you did not walk out the door with an $85 pair of pajamas, but rather a $5 pair that you paid $15 for.   In fact, all you did was just spend money and if you bought them because they were "on sale!" and you really didn't need them in the first place, then you just squandered money.

But again, that doesn't sound as sexy as "Savings!" does it?

Savings are what you put in a savings account.  It is money you accumulate, not fictitious discounts from arbitrary price pointers.

Yet it is surprising how many believe otherwise.  Otherwise rational people believe that in real life, a car is "worth" 5% more tomorrow because the Dealers "sale" ends then. They fail to see this as merely a pressuring tactic to get people to think less and "buy now!"

How these terms got so mixed-up is hard to say.  But I believe it is the end result of over a hundred years of marketing - of bending and abusing language to sell products.  Marketers know which words go right to our gut.  Today, the phrase "Free Gas!" will get people lined up around the block, even though they have to buy $200 of groceries to get $5 in "Free Gas" - which of course means it wasn't "Free" - was it?

If you can set the terms of a debate, you can win the debate.  And we see this all the time in politics.  Abortion opponents are not "anti-abortion" but "Pro-Life!" - and their opponents have similarly named themselves "Pro Choice!" - a naming battle the pro-abortion side clearly lost ("Life", in terms of emotional index, beats out "Choice" every time).

None of this happens by accident.  Merchandisers, advertisers, and marketing people know how we think emotionally and how to get to us, often in very subtle ways.   And one of these ways is to redefine the very language we speak.