Pinocchio and his Master Card

There are three subjects covered in the blog that tempt me to throw screaming purple fits. Recently I covered one of them, the failure of the baby boom to prepare for retirement. Today, I will cover the second, debt slavery. It grieves me to watch my friends, coworkers, and acquaintances working their lives away to enrich some bank or finance company. They bought things they didn’t need with money they didn’t have and now they must pay the price.

In Walt Disney’s movie Pinocchio, bad boys are tempted by low level con artists like Honest John and Gideon in the employ of The Coachman, a rich powerful racketeer to visit Pleasure Island. Here wicked little boys can indulge all their fantasies, smoking, getting drunk, gambling, and vandalizing other people’s property. But there is a terrible price to pay. The bay boys are magically transformed into donkeys. They are then sold to circuses and salt mines where cruel task masters with long whips force them to carry other people’s heavy loads---for the rest of their miserable lives. In the movie Pinocchio’s friend Lampwick discovers the truth too late. He is transformed into a donkey and shipped off to parts unknown. The good hearted wooden head, Pinocchio escapes with a donkey’s ears and tail.

Sound familiar, “Master Card, I’m bored.”

Of course the message of Pinocchio is for misbehaving children who don’t go to school. They will spend the rest of their lives carrying heavy loads in the heat instead of working in white collar jobs, programming computers, or mastering a skilled trade. The story is just as true when applied to the American middle class consumer, who through his own folly damns himself to a lifetime of debt slavery.

The foolishness I hear on an almost daily basis never ceases to amaze me. Since I work at a research laboratory, my coworkers are for the most part intelligent, well educated, and successful by the standards of this country. To be perfectly honest, many of my coworkers are more intelligent and capable than I could ever be, even in my dreams. That is not false modesty. It is the truth. Still they say things that simply amaze me.

The following story is fictionalized to protect the guilty, but it was inspired by a real conversation I had this past week. A young family man was worried about the amount of debt he carried. In past conversations I know he really truly wants to pay down his debts to a more reasonable level. He is looking to buy a new minivan. I asked him what was wrong with his current moderately low mileage, 5 year old minivan. He replied there was nothing wrong with the vehicle, but he wanted to trade it in on a new car while it still had some trade in value. After asking a few questions and gathering some more facts, we both concurred the vehicle could easily provide another 5 years of service without any significant mechanical problems.

Don’t you think the car dealer knows the value of your trade in? The reason he is willing to give you a good price is that he sees the inherent value of your vehicle. He knows he can sell it at a considerable profit.

His wife and two year old child was his excuse for wanting to spend $30,000 he didn’t have on a new top of the line minivan he didn’t need. I asked him, “Do you really think, your toddler is going to be any safer, more comfortable, or happier in strapped into his safety seat in a new vehicle than he is in your current car?” Of course the answer was no.

The young family does need a safe reliable vehicle. That can be accomplished for $9,000 or even less with a little effort. The minivan they currently drive is almost paid for and it exceeds all their needs by a considerable margin. It’s OK to want a new car. It is OK to reward yourself with a new car if that is what you want and you can pay cash.

But please, don’t call your wants, needs.