Last week’s acquisition of Discover by Capital One, together with recent dismay over pay-TV rights to NFL playoff games, point toward a trend in American life. We are becoming streams of monthly payments, with every business and interest group trying to extract one more subscription out of us.
Much of this trend comes from the internet, which piles $20 to $80 monthly services into your phone, from the ISP service and phone payments themselves to social media, games, news sources, contact management apps, and of course the aforementioned streaming services.
To pay for these, many use credit cards – and overall debt of $1.1 trillion probably give credit card issuers that $20 to $200 monthly income stream, in accrued interest, from a third of our population. (Derived from this guesstimate: if 200 million people use credit cards and 49% carry balances, then perhaps 100 million persons have average debt of $11,000. Assuming 15% interest, or roughly $140 per head per month.). A very large chunk of American spending is now nicely “regularized,” including our $300 monthly car leases and the mortgages or rents.
Reliable payment streams insulate businesses from random impulses and unforeseen fads and needs that can destabilize cash flows. So it’s no wonder that businesses seek ways to garner these streams. Time share loans, health club memberships, even furniture financing and car leasing, are aimed as much to generate those streams as to gain nominal profits. As a time share salesman once told a banker (me) asking how the developers determined maturity and interest rates for loans to the buyers: “we just work those things out; all I need to know is if they have $400 monthly disposable income.”
As we consumers tie up our incomes in (now mostly automated) subscription payments, do we limit our options for living lives and pursuing pleasures? Are we reduced to choosers from a menu – of streams to pay in exchange for ever more vacuous or addictive products specifically designed to draw our commitment? Sales and advertising were created to grab a sliver of our brains, that particular impulse satisfied by the seller’s product, by saturating our eyeballs with spurs to that urge. We now expect to be treated as recipients for these messages, pledging slivers – and more slivers – of our income at the click of a button.
We are a nation conceived in a premise that people must be free to live by their chosen pursuits, by unalienable right. And we are free – ads for installment-purchased services do not coerce buyers to commit to them. Quite a few meet real needs (car leases) or provide genuine enjoyment (says this fan of “Fargo” reruns). Consumer culture itself has long been cited as draining people’s energies away from creative, self-realizing activities, regardless of how its vendors get their revenue. But as we constrict our options, in proliferating slivers of our means, how much do we deaden any urges to try something new? How much is the atrophy strengthened by the siphoning off of funds – means for new ventures – into those monthly charges?
Of course there is a whole other issue that affects this question: how stable and reliable are our incomes? To the extent they are not, and what we get is pledged to monthly obligations, do we start to feel like “slaves to our payments?” The norms of employment and the strength of the job-creating economy likely have a greater effect on the erosion of people’s sense of autonomy. But even if we could restore reliability of income, we would face the question of what we use it for. If the prize doesn’t offer something deeply satisfying, something vibrant for our souls, why would I pay attention to anyone’s plans for tax reform, subsidies, de- or re-regulation, or any other policy measure? And then, why wouldn’t any politician pander to me, asking for a vote instead of a monthly payment? And why wouldn’t I just react to the options they generate, like any other product or service out there? Subsidize my neighborhood and reduce my debt, defend the border and stop government meddlers – and I’ll pick the lesser of two evils on polling day.
What is to be done? Campaigning against casual commitment of slivers of our incomes amounts to a hectoring arrogance. But if we carried a clear image of what our freedom entitles us to, if we could see how our creed entitles us to live by our own lights, might we husband those slivers of income, personal options, or public policy influence, more jealously?
Common Conviction 