Banks Don’t Make People Bankrupt, People make People Bankrupt

There was a bizarre piece on Woman’s Hour today, asking how is it that so many women are going bankrupt nowadays.

One of the reasons advocated is that more women are exposed to the economy by being wage earners etc and that part of the argument is fair enough, there are more in the line of fire.

Then we had Alexis, who got herself into £31,000 worth of debt. Let’s take a look at some of her reasoning:

Jenni (interviewer) “How did it [your debt] get so high”?

Alexis “It got so high because I was able to borrow so much money”

WTF? Can this lady run safely with scissors, is she allowed to cross the road on her own?

Alexis “unfortunately, nobody put the brakes on me except myself”

Jenni (incredulous tone of voice) “Hang on, what were you spending it on?”

Alexis “Anything, I genuinely was shopping constantly, I had this attitude that life is short, and if I wanted it I should have it, and we do live in this society where we are told, ‘Look at all these worderful things you can have’ look at all these wonderful things these celebrities have got, and why don’t you have it and if you can’t afford it just borrow the money”

Prof Sheila Crispin then goes on to say that people think that “if the bank is prepared to lend me 20,000, then I must be able to afford it.”

Since when did adults get infantilised in this way? There are some things that have hidden risks that are hard to gauge and quantify. But there’s not much that is hard about spotting the risk of borrowing £1000 when you can’t see a way to paying it back.

I’m not talking about to people unfortunate enough to lose their jobs, or have other unforeseen financial events catch them out. This was a woman who sounded coherent, reasonably intelligent and who had finally seen the error of her ways. But was she raised by wolves? Why didn’t her parents teach her the basics

all advertising is a story designed to make you want to spend

I’m sick of people of both genders blaming the banks for making them overspend. Banks have made their own mistakes, and been greedy on their own behalf, but they aren’t a conspiracy to make us overspend. They held up a mirror to our own greed and lack of responsibility. We cannot blame the mirror if the ugliness of the reflected image disturbs us. A failure of macroeconomic policy and regulation made this worse, but nobody had their arm twisted by a banker in a balaclava holding a gun to their head, saying

borrow this £31,000 or we shoot your husband and kids

It just didn’t happen.