Imagine a special retail business where management can legally mark up their prices on consumer goods by almost 500 percent, and people still readily shop there for big-screen TV's.
Customers are told, several times, exactly how much it will cost them, and how long it will take to pay it off.
Their rights and responsibilities are clearly spelled out before they sign the long-term contract. And they can get out of the deal at any time. That is the business model approved for rent-to-own stores, like Rent-A-Center and Aarons, in a state law signed last weekend by Gov. David A. Paterson.
The law tightens oversight of the industry, mandates more disclosures for consumers, directs the Attorney General's Office to write regulations, and for the first time, creates a framework for setting prices in rent-to-own transactions.
But, still, consumer advocates aren't satisfied.
But consumer advocates worry it doesn't go far enough to rein in what they call predatory prices. They were disappointed because the law allows rent-to-own stores to charge as much as 4.8 times the merchant's own cost for a household good. That's even worse, they say, than the old system, and effectively legalizes what they call predatory practices.
"According to [Thomas] Jefferson, the purpose of government is to enable the people to live in safety and happiness," said Peter Dellinger, an attorney at Empire Justice Center. "This legislation accomplishes neither."
I doubt that it ever crossed Thomas Jefferson's mind that government should make people live in someone else's idea of safety and happiness. Who are these consumer "advocates" anyway who profess to know what makes other people happy?
Whether we like it or not, many poor people with no credit find a measure of happiness in the immediate gratification that comes with having a new sofa, washing machine or TV in the apartment tonight. They will eventually pay through the nose for that satisfaction, it's true, but if it's that important to them, who are we to forbid it?
For their part, the stores are charging very high prices because the costs of serving that clientele are high. Customers often stop making payments and the merchandise must be reclaimed -- that takes trucks, manpower and time. Very often (probably almost always), that merchandise is no longer saleable and will have to be scrapped. The high price must cover all that.
It doesn't take a Philadelphia lawyer to figure this stuff out, folks.
But still, the ubiquitous consumer "advocates" wail that it's unfair and insist that they know what's best for other people. They are no different from an earlier generation of "advocates" who insisted that government force banks to issue market-rate mortgages to the same creditless poor; and, of course, we all know how that turned out.