Farewell to the Feckless Life by Julia Sneden

Farewell to the Feckless Life

The news that President Obama has appointed Dr. Elizabeth Warren to take charge of designing the new Bureau of Consumer Financial Protection appears to be at once a brilliant concept and a clever endplay. The proposed Bureau will be a big help in restricting the financial industry’s ability to screw consumers.

But beyond that, the Presidential Appointment of Professor Warren neatly steps around the need for endless Congressional hearings to approve her, hearings which would have been automatic had she simply been nominated to become Director of the Bureau. Given the financial community’s strong influence in Congress, it would take a miracle for a brilliant, forthright consumer advocate like Warren to squeak through those hearings.

Perhaps the new Bureau will also take on the job of educating a financially ignorant public.

A short while ago, Bank of America announced that it would change its practice of charging a $40 overdraft fee for people who use their debit cards when there’s not enough money in their accounts to cover it. The bank simply won’t approve the transaction, a welcome bit of restraint that may cause the customer an embarrassing moment in the checkout line, but will probably save him a good bit of cash. Dare we hope that other banks will follow them? For far too long, banks have encouraged abusive use of debit cards, and have pocketed the resulting punitive fees with, I’m sure, big, understanding smiles on their corporate faces.

However welcome, this move seems to me to beg the question of how the whole mess got started in the first place. Have we reared a generation or two of financial idiots? How did our children and grandchildren escape noticing that it is just plain STUPID not to keep track of bank balances? Even the seemingly small items, like a cup of java at the local Starbucks, can cost many times more than the original expense if you figure in the overdraft fees. And going one step further, how did our youngsters manage not to understand the outrageous and multiplying interest charged by their credit card companies when they fail to pay their bills in timely fashion?

Whatever happened to personal responsibility? Our parents and grandparents must be rolling in their graves. Having experienced and survived the Great Depression of the 1930’s, they were badly burned and thus very careful with the little money they did have. As their children, we, too, were encouraged to keep track of where our pennies went, be it into piggy banks or, later on, into our gas tanks.

It’s understandable that the post-WW2 boom fostered a sense of security. The GI Bill sent to college large numbers of veterans who otherwise couldn’t have afforded a higher education, and in the process it eased the large number of veterans hitting the job market all at once.

Prosperity was in the air, and for a few years there, life was just one big celebration. We had won. There was a sudden influx of material goods: no more ration cards; people could buy gasoline as needed, and real, rubber tires replaced the worn and patched synthetics. Meat and eggs and butter reappeared in the grocery stores; shoes were no longer rationed and were once again made of real leather, not the stiff “composite materials;” and there was a housing boom of epic proportions. The future stretched before us like an endless, sunny day.

By the time the late ‘60’s came along, designer goods were all the rage. With so much cash flowing freely, why not indulge oneself by buying a celebrity-labeled cotton T-shirt for three times as much as a plain one? My grandmother called clothes with brand or designer names that actually showed, “tacky.” We youngsters called them cool.

When my generation went off to college, we enjoyed the thrill of opening our own checking accounts. For me, that thrill provided a fast lesson in what happens if you don’t record in the register the checks you write, or reconcile your accounting with the bank’s monthly statement. I enjoyed the freedom of going to the movies whenever I wanted, or drinking endless cups of coffee in the snack bar, or buying books with reckless abandon in the college bookstore, but I was horrified at the rapid dwindling of funds that were supposed to last for the entire semester. By November, I was looking for a job, any job, to keep myself afloat until the end of January. At 25 cents an hour for stuffing mail into boxes at the campus post office, I didn’t float very high.

During the second semester, I discovered how delightful it was to hop a train into the city (New York) and buy at-the-door tickets for the theater, or standing room tickets to the opera. My little post office job didn’t support that for long, and I wound up having to call home for an infusion of cash. It was forthcoming, although in a much smaller amount than requested, and my stepfather demanded to see my checkbook when I went home for Spring Break.

He took one look at the register and started to laugh. It did, in fact, resemble a barn yard full of chicken tracks, cow pies, bird droppings, and lots of mud. I had thought I was doing pretty well, but several checks were unrecorded, and there were mistakes of both subtraction and addition, with lots of cross-outs and corrections, the latter entered from my bank statements without question. I just took their word for what I had spent and the charges they had added, without even trying to reconcile my own illegible or non-existent records.

My stepfather proceeded to show me how to sit down at the end of each month and really, really check the bank’s bookkeeping as well as my own. It was a humiliating and painful lesson, and one which I took not only to heart, but to pocketbook. (The banks are a lot more likely to be accurate, these computerized days, but even now, they can make mistakes. The numbers are only as accurate as the persons who enter them into the electronic maw.)

By the late ‘60’s, credit cards, a new and highly seductive prod to impulse buying, began to stack up in our wallets. It took a few years for some of us to realize what a nuisance it was to tote cards for all those individual stores, never mind keeping track of so many monthly bills. Enter one-card-for-all plastic like Master Card and Visa.

We live in a speedy world these days. We are spoiled by things like instant communication, instant meals, and instant gratification for our smallest wants (the latter not to be confused with needs).

I find it hard to believe in the need for debit cards, but if you’re in a hurry, perhaps they have their place. They get you through the checkout line faster and relieve you of the chore of writing a check and filling in the register. However, unless you keep close track of how many times and for how much money you’ve used the cards, it appears that they can get you into big trouble.

A credit card, on the other hand, is a great convenience; it relieves you of the need to carry a checkbook and/or lots of cash. It can also be a quagmire that will eat you up inch by painful inch if ever you get behind in payments.

These days, more and more high schools are offering “life skills” classes that teach kids how to make a budget, handle a checking account, read a credit card agreement, etc. It’s a smart step. There is no fail-safe way to teach personal responsibility, but perhaps youngsters will be more likely to develop it if we arm them with an understanding of financial systems and true knowledge of the possible pitfalls for the unwary.

If the new Bureau of Consumer Financial Protection can publicize and restrain the financial industry’s greedy and deceptive practices, it will go a long way to educating us all.

Good luck, Ms. Warren. We’re counting on you.

Farewell to the Feckless Life

More Articles