Gambling and the culture of credit

Yesterday on ESPN's The Herd, Colin Cowherd mentioned a news item where a woman who was involved in catering a Notre Dame function was mailed a $29,000 check from the university that should have been a $29 gratuity. She called the university, left a message, and when she didn't hear back in a couple of days she went and spent all the money.

Cowherd condemned the woman's ethics. The he got emails saying, "Colin, you gamble, so how can you judge other people on their ethics?"

What's scary is that people who think like that then go out and vote.

Gambling can mean two things: betting, or reckless behavior. If you bet with money you can afford to lose, I can't imagine how anyone on God's green earth can call that unethical, immoral, or sinful.

The problems associated with gambling involve people who can no longer afford to gamble, but continue to do so with the money for next month's bills, or with borrowed money, or with stolen money.

Indeed , I believe our culture of credit, or creditism, fuels many social ills such as gambling addiction. As I've written:

"Under this system, the economy is supposed to grow by people borrowing and enjoying the fruits now, and working later to pay off the debts.

At the same time, banks lend far more money than they have on deposit (fractional reserve banking), and charge interest. In a true capitalist/savingist economy this would be considered fraud. But it drives the economy of creditism."

College loans, easy mortgages, and high-limit credit cards all subtly encourage us to consume now, as opposed to working and saving now and purchasing later. It also gave us the illusion of having more discretionary money than we actually had. And this, in turn would inspire many younger people to gamble more or party harder than they could really afford.

In a society of sound money and of production through investment rather than lending, there would be less money available for lending. This in turn would force more people to live within their means. College kids couldn't to do all the stuff they do now because banks would have the sense not to issue them credit cards.

Instant cash is to humans what the steak on the table is to Fido. You don't tell Fido, "I'm leaving for 5 minutes, and you better not touch the steak!" Instead, you put the steak out of reach. The same is true of us. The ATM cash and credit card in the wallet are more pleasing to think about than the future interest rates. In a savings-based economy, this easy borrowed cash would be out of reach. The money people own now would be the only money they can spend now; they can't spend the money now that they hope to earn in the future, because it wouldn't be lent to them. Therefore, they'd have to spend a larger proportion of their available cash on necessities, and would be forced to save if they want to party, buy cool new stuff, or go to Vegas.

Creditism creates the temptation for us to gamble now, try drugs now, purchase the cool new thing now, etc., because it provides the opportunity by lending us the money.

Those who want to rail against all the consumerism and immorality in society should stop blaming the casinos and advertisers, and start looking at the way entire culture is financed.