Author: Suze Orman's advice won't save your finances
January 23, 2013 6:05 PM
Helaine Olen, author of "Pound Foolish:Exposing the Dark Side of the Personal Finance Industry" talks to Jill Schlesinger about the true roots of many people's financial troubles, and debunks much of the advice given by popular "money gurus."
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Having said that, I'm glad Helene Olen has written this book (and I hope I can afford a copy!).
Big takeaways:
The Allure of Taking the Blame: This seems to be the mainspring of the whole financial scamfest,. In the USA, f and the reason why US citizens are so eager to swallow it. We know that freedom means responsibility, and we as a culture are addicted to assuming that everything is our fault. (And applying that to other people, too: if someone is desperately in need of help, and you don't feel like giving it, you can just tell yourself that it's his own fault and walk away!) Doing this makes us feel powerful, and it impresses the neighbors with how much we value our country's freedoms. But it leaves the door wide open for snake-oil salesmen.
The Allure of the Scold: I don't know about other countries, but here, we seem to think that if we can get somebody to punish us, that somehow lessens the significance or imact of whatever it is we feel guilty about. It's quick, it's formulaic, it's easy, and it's entertaining for spectators, plus it makes us the star. No wonder we like it. So it's easy for popular financial advisers to rant about "your overspending" or "your unnecessary luxuries." They know that most of us will eat that up.
Nobody Admits That Legitimate Costs Are Becoming Unaffordable: Health insurance rates, housing, and other necessary costs are going so high that many of us have to choose between going broke to pay them, or simply going without. And you can go without, of course. But should a first-world post-industrial society still have people dying of things like pneumonia because they can't afford medicine? That's Dickens stuff! We're supposed to be better than that!
Evading Reasonable Oversight by Blaming the Victim: Olen makes an excellent point about the financial industry insisting, with pious wide-eyed sincerity, that if onnly we poor ignorant masses would "learn more about finance," then no nasty old nanny-state freedom-robbing government regulation of what they're doing would be needed. But where do you get access to info about new rules and fine print and conditions that will be quietly added when nobody's lookin', and then apply all of that knowledge and information in a post-industrial economy? You can't. Neither can I. Nobody admits that.
Most People Don't Really Overspend: Olen gives us a big acknowledgement of something I'll bet we already knew: most of us don't buy a 70" LED TV for every room in the house, or eat every meal at fine fine gastropubs, or take vacations every six months. When somebody does do this, it gets on reality TV and attracts a lot of eyeballs... because it's unusual. But accusing us of doing this is easy, it's quick, it's formulaic, and it's entertaining as hell, so it's an easy route for a popular guru to take. But it solves a problem that doesn't really exist for most of us. (Nothing easier than solving a problem that doesn't really exist!!)
So far, I'm impressed. One is never ready to agree with everything an author says without reading the book, but most of what I hear from Olen in this interview makes a lot of sense, and I'm willing to dive deeper.
(BTW, this was a beautifully conducted interview. The fishing for an "up" note at the end was a little bit weird, but you can't have everything.)