Think over this statement for a while:
The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. - Mad Magazine
Probably, people don’t realize it, but one such elephant is already being sold to a great many American families through easy payment installment plans - it’s just that this elephant is packaged and labeled as the American dream.
By the end of the 1920s, installment plans had become the primary way for a middle-class family to attain a piece of the American dream. People who had formerly shied away from acquiring debt now accepted installment buying as a means to finance modern consumption. This transformation in consumer attitudes resulted from a gradual change in the depiction of installment buying in advertisements. Retailers increasingly utilized this medium in order to convince consumers to buy on installments, both influencing and reflecting popular perceptions of this practice. By the eve of the Great Depression, they had intimately linked installment buying to the attainment of the American dream, a legacy which remains with us even as the twentieth-century draws to a close. [source: The Advertising of Installment Plans]
Instinctively, fingers first start to point towards unscrupulous sellers who encourage and facilitate over-consumption; however, the way I look at it, companies/agents/retailers might just be exploiting our messed up consumer attitudes and our pursuit of unreasonable material *dreams* (read greed). It’s probably more about people who are trying to buy elephants on easy monthly payments than it is about unfair marketing by irresponsible sellers who are trying to sell elephants - to those who are looking for elephants (think subprime mortgage mess).
Sometimes, I wonder what exactly is the American dream. Is it the extraordinarily fancy house or the unnecessarily large luxury car or the mortgage or the credit card debt? or is it just the thrill of paying for elephants through easy installment plans?
{ 5 trackbacks }
{ 9 comments… read them below or add one }
The American Dream has become so disgustingly skewed that people really don’t even know what it means, which you have pointed out.
The original idea of the American Dream was brought up in the early 1930s by James Adams and basically says, “But there has been also the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement.”
The most important part of this quote is “with opportunity for each according to his ability or achievement.” This is the part that has been completely lost in today’s idea of the American Dream. What started as the idea that through hard work and your own abilities you could have many opportunities as a result, has turned into something where people believe they just deserve it because they live in America.
Certainly, the media and the emphasis on placing so much value on material things hasn’t helped either. Ultimately, people have simply altered what the American Dream really is. It was about opportunity through achievement and hard work, now it is about being entitled to the good things in life simply because of where we live.
I concur with Gen X Fin.
The prevailing concept of American entitlement seems to be that American political, economic, and social freedoms are free, when they most decidedly are not. One and all must struggle to retain and maintain them (personally, locally, regionally, and nationally) every single day.
Property rights are the basis of such freedoms. The emphasis is on the right to own property, not the requirement to own it. For my lifestyle, the more property I own the less free I feel. Yet I never forget that it is my right to own that guarantees some of my freedoms. One might say that the fixation on material is a manifestation of Use-It-Or-Lose-It w.r.t. property rights. While I think there is some merit to that conceptually, I suggest that it’s excess in practice has cheapened our dear rights and freedoms.
The real American Dream, as I retroactively attribute it to founding documents, is to live at liberty while pursuing happiness. Such a dream is hard work and I’m not privy to any shortcuts. I want to do what, when, where and how I want, to the extent that in doing so I do not impede others in doing same. But achieving this takes much more than gaining US residency, citizenship, or even being born into them.
Not being an American I can’t really relate very well to the ‘American Dream’ I’m afraid. However, I am interested in finding out how easy the weekly payments are on the elephant ;).
Golbguru,
I pay for my elephants with cash and drive them for about 35 years before selling them to the next owner:-)
By the way, are you preparing for a political office? Seems your recent posts are testing the views of your future voters on key social and economic topics
Golbguru,
As a counterpoint, I believe installment plans do have a (small) place in personal finances. I would not have been able to buy my first house within 3 years of starting work without a monthly “installment plan” . Probably would have needed to save at least 10-15 years to pay cash for a house.
To note, I am advocating judicious use of loans for limited items (e.g. home, education and car), not the wholesale use for everything. Even for the limited items, one needs to be careful, as the sub-prime debacle has shown.
Super Saver: Point well taken; in fact, like you, I am a proponent of using debt wisely. However, with the subprime debacle, it doesn’t seem like lot of people are doing that. Plus, I don’t much like the association of the installment mentality with the achievement of American dream - like Jeremy points out (in the first comment), that is sheer material greed.
I am beginning to believe that the idea of home ownership for most people is just not smart.
We speak of paying rent as “throwing money away” (why isn’t it throwing money away to eat food that we just poop out?) yet rent is now 10% lower and mortages 25% higher than they used to be. (Got that from a Jean Chatzky book.)
Owning a home means that I have to shell out cash when the toilet breaks/roof caves in/etc/etc/etc. Not so as a renter.
I do honestly want to own a home someday but for now, renting is smarter for me. I am a single mom of 4 and don’t have or want lawn work… until they’re teenagers. LOL
Or did I miss the point of this post?
I’m with SuperSaver (though that doesn’t mean I disagree with the original post). As a general rule, I dislike the idea of credit and installment payments. Fortunately, I’m also fairly easy to please, so our apartment is furnished entirely in hand-me-downs and a few wedding gifts.
But they’re critical for house and car payments. If I paid rent (like I do now) and tried to save for a whole house payment, it would take a lifetime. As it is, we’re saving for a downpayment. And we don’t need a house right now, anyway.
Credit and installments are definitely problematic when they encourage consumption for the sake of consumption instead of necessity.
-MM
Don’t get me wrong, I’m in agreement with the whole anti-elephant (doodad as per Rich Dad Poor Dad) sentiment.
However, I know quite a few people who own quite equisite “elephants” that pay for themselves. Against my advice, after participating in a tax shelter program, a friend of mine didn’t invest their money and instead bought a boat (swimming elephant).
Now although that wasn’t the smartest of ideas, afterwards they went out and got a collateralized loan on the boat (providing that they also got insurance on the boat) and then re-invested the money. Said swimming elephant’s payments are even easier when you no longer have to make them, and the investment pays for you. Imagine that… a self feeding elephant!
Leave a Comment