Magic Johnson is a respected businessman. He was a respected college basketball player at Michigan State, and he was the first round first pick in the NBA draft in 1979. He played for the Los Angeles Lakers as part of a championship team, and was MVP of the Finals in his rookie year. A high performer. A star. One who is willing to work hard to achieve great things. He knows the payoff comes after the hard work, and that there are no short cuts.

His was the celebrity voice I heard. Encouraging people to reach their goals and get want they deserve by using Rent-A-Center. This is a chain that charges a low monthly fee for many household items. The kind of things that cost more than a paycheck or two. Washers and Dryers. Widescreen televisions. Furniture. Things that many people save for. Things that if you rent for any length of time you will spend much more than the outright purchase.

Rent-A-Center is a good business, in the sense that their business plan works. But the business plan relies on our inability to save for big purchases, and almost assures that we never will.  This approach is sharp contrast to Dave Ramsey, and if we did more of what he suggested, we would have far fewer credit problems to deal with. But Dave’s advice is sort of like living like The Biggest Loser contestants. Sure, they make a lot of progress, and their changes in health are nothing short of remarkable. They will also need to be more disciplined than they have ever been before.

So my problem is really with Mr. Johnson. He knows that what he is selling is not good business for the individual. He knows, in fact, that for most customers, it’s an easy way to greater problems. He uses an emotional appeal of “You want to provide your family with the things they want” and “You don’t even have to have credit”. Every time someone walks into those stores and signs a contract, they are moving further away from the goals that Magic is selling them.

If he didn’t do the commercials, someone else would. And people would still get into more debt. But these contracts aren’t about debt, they are about easy payments and immediate gratification. People don’t get that because they live in comparison to far too many bad examples of excess. Money is a fundamental part of our lives, and yet a large percentage of the population does not understand the power they can have over their finances.

If we had any sense at all we would do more in schools to educate our kids about money. They’re smart, they can understand the long term costs of short term thinking.

Oh, and it might help of Magic said something like: “I worked hard to be a champion, and eventually I earned a reward for my skills. You might not ever play pro basketball, but if you find your passion, and work to perfect it as I did mine, you can have a good life too.”

When I was younger and living in the midwest, car companies were just starting to expand into the south, and foreign competitors were building plants in the US as well. Older inefficient operations were replaced with more sophisticated equipment, and staffed with willing workers at a lower cost than the Detroit standards.

Lower cost has also pushed many repetitive tasks such as basic accounting and service desk work to areas with lower wages. The world is now flat. Information flows electronically around the world in seconds. Some work can be transferred literally anywhere in the world. As more work heads out of the US, to Mumbai, India for example, then the competition for labor there increases. Some of the outsourcing companies are finding that they must hire and train new people on a continuous basis. The cost advantage is going away.

If we had any sense at all, we would understand that this current cost advantage may slowly erode, and the opportunity to fix the issues at home, with our own workforce, will be gone. I hope to see the trend shift over the next 10 years, and that we bring some of that work back to the US workforce.

What do you think? Can we bring the work back, or is it gone forever?