No, I'm not talking about the promise of freedom or liberty or the promise of a chance at a new life. I happen to believe those things, the things
that made America great once, are disappearing before our eyes while we as a society eagerly await the latest episode of "Dancing with the
Stars."
I mean promises that made and sold in lieu of actual goods. Here's a few examples:
- Warranties: Warranties are good things, but has anyone
ever noticed how they seem to have become much more prevalent and much more promoted in recent years. Once, a warranty was never expected to be used;
today it is seen less as a symbol of quality and more as a promise of not having to buy a new item within a certain time period. I came across this
back when I had a business that specialized in home design. One of the more often asked questions was what kind of shingle I suggested for a
long-lasting roof. My answer was always the same:
"The shingles don't really matter. All asphalt shingles are a layer of fiberglass covered with asphalt and tar. The only difference is the color and
shape of the gravel patterns they put on the tar for looks. The slope of the roof, the manner in which they are installed, and adequate ventilation
under the roof has much much more to do with roof longevity than who made them. The warranties are all prorated because the manufacturers know this,
and you pay more for the warranty than you save. I buy second-run shingles from ####### because the defects are covered once installed and are
cosmetic, and I get them for a third of the price at the local building suppliers."
And it's true. I have second-run shingles on all my buildings here, most with a roof slope of 5/12 and all with adequate ventilation; some have been
there for 30 years and still are holding just fine.
Today, we have warranties on everything, especially electronics. Just try to buy something electronic in a store and you will eventually be asked "do
you want an extended warranty with that?" I get phone calls all the time wanting me to buy an extended warranty on my car, even though the caller
obviously has no idea what kind of car I have. Automobile warranties are touted as much as price in the sales pitch.
And a warranty is nothing more than a promise: "If it doesn't work, we'll give you a new one. We promise."
- Retirement accounts, and really all banking, is based on a promise: a promise that your money will be available to you when you want/need it.
Interest on retirement and even 401k matching contributions are a promise. Again, this is not to say that retirement saving is a bad thing; it is a
good thing to plan for the future. But it's not a "product" as I have heard it referenced as lately. No one assembles materials in order to produce
a desired item. Retirement and interest in general is a promise: "Pay us money every month and we'll pay you money when you retire. We promise."
- Insurance: Insurance is nothing more than a promise to pay you money if something happens. Now, that may not necessarily be a bad thing in some
circumstances, but it is no longer a choice today. Regardless of the circumstances, one is forced by law to buy car insurance if one wishes to drive
(an absolute necessity in may situations). Driving record is not relevant except for the rates (and sometimes not then)... insurance is required by
law.
Now health insurance is required by law as well, thanks to the AHCA. Just for being alive and living inside our boundaries, one is required by law to
buy a promise... and that's all insurance really is. "If this happens, we will pay you money. We promise."
- Today I was walking out of WalMart after performing a small merchandising job and saw a kiosk with movies for sale. I have been wanting to see
"The Hobbit" for a long time, and for one reason or another, that movie has eluded me... either the rental is out, the kiosk is down, the store is
out, or something. Anyway, I decided to take a look and see if it was in stock. No such luck, but I did see a box for Disney's new movie "Frozen."
I was a little surprised since it is still in theaters, so I took a closer look. The box contained no movie; it contained a card with a code. By
purchasing a box without a movie in it, you got a ticket to see the movie and a promise that you would receive the movie in Blu-Ray format when it is
released to disk.
A promise... sold as a product.
That got me thinking about how many times I hear about "pre-sales" or "pre-orders" for products that are not yet available, but will be sometime
in the future. How much of our economy is composed of selling promises? It appears to me a tremendous amount is so devoted. Instead of selling things,
physical objects one can carry home from the store, we are selling promises that we will get something in the future.
I remember one time in my youth, sitting around the dinner table, when I told my Dad that I had decided to paint my car he had gotten me. It was a
little VW Beetle in that dull blue color that was so prevalent back then, and I wanted a 70s paint job, complete with flames and bright colors. I
described how I was going to do it and how it would look, and my Dad replied with "Good! You got the easy part out of the way; you talked about
it."
He made a point: I hadn't accomplished anything yet. I hadn't painted a car. All I had done was make myself a promise. If I didn't follow through
on that promise and actually paint the car, nothing had changed and nothing was accomplished.
I did paint the car, btw. It took a while to get the flames just right, but I did it. And I found out that Dad was right: telling him about it was a
lot easier than doing it.
Our entire economy is moving from the production of goods and the rendering of service to the production of promises. At some point, those promises
will be broken; it will simply become impossible to follow through. When that happens, the future of promises, and the industries that depend on them,
is ruined, because a promise is only as good as the promisor's word.
In the case of promises made by corporations, however, how good is that word? That all depends on how good the word of those running the corporation
is. Who is running the corporation? Those with the money to buy shares; Board of Director members are elected by shareholders based on the number of
shares they hold. So when we take the word of a corporation selling a promise, whose word are we taking? We don't even know, but we know it is
someone wealthy or someone working for someone wealthy.
Yet, how many of those promises are bought every day?
Just being wealthy does not make one a liar, but it also does not make one honest. Wealth is unrelated to honesty, save for one connection: it is
notoriously easy for some to use trust to become wealthy. Witness the Enron scandal, or the HealthSouth scandal... all these people lived in wealth,
and most even retained some measure of their wealth after being caught. How many were never caught... how many corporations have manipulated their
books to make their promises look better, knowing that there would come a time they couldn't back their promises up? I would suggest many, and at
some point in time there will be defaults on warranties, retirements, insurance, and pre-sales. It has to happen, because as a rule people in high
places seem to covet money more than morality.
When that happens, what then?
TheRedneck