Isegoria

It’s fascinating to hop into a time machine and look back at how credit cars were viewed a few decades ago. Paul O’Neil wrote A Little Gift from Your Friendly Banker for the March 27, 1970 issue of Life:

American banks have mailed more than 100 million credit cards to unsuspecting citizens of the Republic during the last four years, and have offered each recipient not only a handful of “instant cash” but a dreamy method of buying by signature after the lettuce runs out. One should not conclude that bankers no longer consider money a sacred commodity. They do. They do. But the soberest of trust institutions now suggest that we forget those strictures on thrift with which they belabored us so vigorously in the past and “live better” by refusing to “settle for second best.” This means that our friendly banker hopes we will run up credit-card bills we cannot pay off in 25 days and will allow him to charge us EIGHTEEN percent a year on the resultant debt. It does not mean that he trusts us. He will put us on the “hot list” in a flash if we go broke in the process or try to support mistresses at his expense.

We tend to be such 1) slippery, 2) careless or 3) compulsively extravagant louts that bankers have always viewed our attempts to wheedle loans from them with vast suspicion, and have kept the notes by which such transactions are solemnized locked up in fortress-like vaults. The credit-card concept has led them to something very like mailing off hundred-dollar bills to every Tom, Dick and Harry in town, with accompanying notes pledging the receiver to act like a good chap and pay it all back later. They have gamely stifled an instinctive sense of horror in so doing because the cards also present them with an irresistible opportunity for new commercial accounts and the quick, vastly profitable development of widespread consumer credit.

I haven’t watched Dirty Jobs, but I have seen Mike Rowe discuss his show (on a video podcast), and he’s an interesting guy. In It’s A Dirty Job, And I Love It!, he gives his own advice not to follow your passion:

I’ve been thinking about the first time I castrated a lamb with my teeth. (It’s a real job, I swear.) I was anxious, and judging by the sounds coming from the lamb, I wasn’t the only one. He was propped up on the fence rail, pinned in place by a cheerful rancher named Albert, who was holding the animal’s legs apart for my convenience. The blood in Albert’s mustache was still wet from his demonstration moments before, and he spoke in a way that reminded me of the directions on a bottle of shampoo. “Grab scrotum. Cut tip. Expose testicles. Bend over. Bite down. Snap your head back. Spit testicles into bucket. Rinse and Repeat.”

It wasn’t the first time I found myself cocking my head like an Irish Setter, wondering if I’d somehow misheard the instruction. (Spit testicles in bucket? Really?) I had assumed the same expression a few months earlier, when a jovial bridge worker explained that I would be walking up a skinny suspension cable 600 feet in the air to change a light bulb over The Straits of Mackinac, which connect Lake Michigan to Lake Huron. Likewise, when the happy-go-lucky Shark Suit Tester casually informed me that I would be leaping into the middle of a feeding frenzy to “field-test” the efficacy of his “bite-proof shark suit.”

I didn’t create my show on the Discovery Channel, Dirty Jobs with Mike Rowe, to get myself killed or scare myself half to death. I created it to show that there are hundreds of ways to make a living that no one was talking about. After four years and 200 dirty jobs, I’m no longer surprised by the variety of opportunities out there. What does surprise me is the fact that everybody I’ve met on this gig — with the possible exception of the lamb — seems to be having a ball.

It’s true. People with dirty jobs are in on some sort of a joke. Maggot farmers are ecstatic. Leech wranglers are exultant. I’ve personally witnessed lumberjacks and roadkill picker-uppers whistling while they work. And don’t even get me started on the crab-fishermen, spider-venom collectors and chicken-sexers — they’re having such a blast they’ve sworn off vacation. So why are people with dirty jobs having more fun than the rest of us?

The answer (aside from the fact that they’re still employed) is because they are blissfully sheltered from the worst advice in the world. I refer, of course, to those preposterous platitudes lining the hallways of corporate America, extolling virtues like “Teamwork,” “Determination” and “Efficiency.” You’ve seen them — saccharine-sweet pieces of schmaltzy sentiment, oozing down from snow capped mountains, crashing waterfalls and impossible rainbows. In particular, I’m thinking of a specific piece of nonsense that implores in earnest italics, to always, always … Follow Your Passion!

In the long history of inspirational pabulum, “follow your passion” has got to be the worst. Even if this drivel were confined to the borders of the cheap plastic frames that typically surround it, I’d condemn the whole sentiment as dangerous, not because it’s cliché, but because so many people believe it. Over and over, people love to talk about the passion that guided them to happiness. When I left high school — confused and unsure of everything — my guidance counselor assured me that it would all work out, if I could just muster the courage to follow my dreams. My Scoutmaster said to trust my gut. And my pastor advised me to listen to my heart. What a crock.

Why do we do this? Why do we tell our kids — and ourselves — that following some form of desire is the key to job satisfaction? If I’ve learned anything from this show, it’s the folly of looking for a job that completely satisfies a “true purpose.” In fact, the happiest people I’ve met over the last few years have not followed their passion at all — they have instead brought it with them.

Andrew S. Kahr, a child prodigy who earned his Ph.D. in mathematics from MIT by age 20, changed the credit card from a mass-marketed, straightforward loan at 18 percent to a highly complex financial arrangement with ever-shifting terms and prices:

Now a financial industry consultant, Kahr pioneered several ground-breaking consumer banking products and founded a small credit card company in 1984 that would eventually become Providian, one of today’s top 10 issuers.

Before many others in the industry, Kahr discovered that it was possible to analyze vast troves of consumer financial data and reliably predict which customers were least likely to pay off their credit card balances each month.

“It didn’t require a lot of investigation to see that the people who paid in full every month were not profitable,” Mr. Kahr said in a rare interview with Frontline. Armed with exotic formulas and scoring systems, Mr. Kahr and his colleagues mined the data in relentless pursuit of the most lucrative “revolvers” — consumers who routinely carried high balances, but were unlikely to default.

“I don’t believe in customer irrationality,” Mr. Kahr said. “I don’t find psychographics useful. I follow financial behavior.”

Prospecting for profitable cardholders became an industry-wide preoccupation as growth slowed after 1990. Soon enough, the major credit card companies were using credit scores and other financial data to develop ever more sophisticated pricing and credit strategies. Instead of extending a generic credit line or charging a uniform rate, they set rates and limits based on computer-driven assessments of each consumer’s risk of default. The higher the risk, the higher the rate.

“There was an opportunity to be more selective, both from the standpoint of credit quality and the standpoint of profitability and therefore to be able to offer attractive terms to the customers who we wanted,” Mr. Kahr said.

One of the most attractive terms to customers and banks alike, according to Mr. Kahr, are higher credit lines. So in another innovation, Mr. Kahr saw that credit lines could be increased by slashing the required minimum payment. This increased revenue in two ways. First, since it would take longer to pay off balances, each dollar of principal would generate more interest income. Second, the principal itself would be increased because cardholders would be able to take on more debt while maintaining the same monthly payments.

With minimum payments cut from five percent to two percent, for example, a credit card company could increase a credit line to $5,000 from $2,000 and yet charge the same $100 minimum payment.

Today, two percent is the standard minimum payment, a practice that critics say obscures the true cost of debt and keeps consumers dangerously leveraged. Average household credit card debt, they point out, has nearly tripled since 1990 — from about $2500 to $7500. Mr. Kahr, though, argued that “it is very consumer friendly” to allow people breathing room if they have a difficult month. “That’s very important,” he said, “because when people get behind on their payments, unfortunately, it becomes harder and harder to catch up.”