Change

Oh! How things have  changed!

Change will happen. One hundred percent certain nothing ever stays the same.

We have great fun complaining about almost everything, the younger generation, politicians, lack of civility, etc. Rather than discuss a specific issue, or complain about a specific politician or policy, why don’t we take a look at the big picture?  What major change happened in our culture and when?  A change that seemed to affect every single one of us.

Every citizen has to do business, whether you own a business, work in a business, or are involved in the academic world, you must handle the day-to-day business of living.  Buying a car, a house, getting insurance, going to the dentist, etc.  The list is rather long.

I can remember the teenage years, early adulthood, raising a family, etc.  Taking care of the business of living was handled differently than it is today.

It used to be when you used professional services such as a doctor or dentist, your account was charged, and you received a bill at the end of the month. You would then send a check for services rendered.

At the gas station, you filled your car with gas and then went in and paid for the gas you pumped. When you had your tires replaced, the work was done and then you paid.

In other words, most businesses assumed that the average customers would honor their debts and pay their bills. The feeling was their customers were honest!

In today’s world, the customer must pay before they pump their gas or have new tires put on their car. When you use professional services, you are required to pay at the time of service. In fact, the first question at a doctor’s or dentist’s office is how will the bill be paid? Or, pay your co-pay prior to seeing the doctor.

In other words, most businesses assume that the average customer is a deadbeat and will not pay their bill.

This major change in how the day-to-day business of living is conducted started about thirty years ago and has become steadily worse.

The obvious question must be asked. Is the average American citizen a deadbeat?  Will more than fifty percent of Americans not pay their bills, pump their gas and drive away without paying, etc.?

All one must do is look at the financial crises of 2008. What really happened?

The average American home buyer was willing to pay way too much for a house.  Consequently, the prices kept going up!

• Financial institutions continued to provide the money needed at variable interest rates.

• They sold the loan to the government.

• Wall Street created a new product with the loans and many people made a fortune selling them to buyers who knew that the government would bail them out.

• Six months after escrow closed, the homeowner refinanced and used the money to pay off credit card balances, etc. They used their home as a piggy bank.

So the obvious happened!  

• The rules of economics kicked in.

• Homes became so expensive even the most trustworthy buyer, said no, too much!

• Interest rates went up to the point that those who had mortgages could no longer pay them or refinance to pay off all their credit card debt, etc.

• The value of the homes dropped so much that even if they found a buyer they would still owe the bank a significant amount of money.

The important point to remember is the average American citizen freely entered into these mortgages. They were not forced. They were willing to use their homes as piggy banks to purchase more and more stuff. So what did they do when the inevitable happened?  Did they say I made a deal and it is my responsibility to live up to my end of it? Did they take “personal responsibility” for their actions?

No, they blamed the bank, Wall Street, and the credit card company.  It was all their fault, not my fault!  Therefore, I will walk away from all my debts and all the agreements that I freely agreed to!

The economy collapsed.

• Banks repossessed worthless houses.

• Credit card companies were unable to collect money owed.

• Automobile companies were unable to sell cars or receive payments on the loans they issued.

• People took the easy way out and declared bankruptcy.

Government to the rescue!  

The ever-present political opportunist used this opportunity to tell the American people it was not their fault. We will make the banks and car companies whole again. You just go on with your lives and the big benevolent government will take care of you.

What the government did not say!

• We will do it with taxpayer money, i.e. your money!

• Those who made billions will keep their money!

• No wrongdoers will ever go to jail!

So that’s what they did, and the taxpayer paid for it all.

The most important point:  Since there were no consequences for bad behaviors, it will all happen again in one form or another!  Until the government raises taxes to the point that there is not enough money left to live on or it prints so much money that it is worthless!

Then What?

Tom Vaillancourt is a U.S. Navy Vietnam Veteran. He is a retired small business owner and is married with two children and two grandchildren.