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Burrito Now, Pay Later

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Re: Burrito Now, Pay Later

#71

Post by pc86 »

Retr0id wrote: post #57
ToucanLoucan wrote: post #56

Earlier quoted context omitted.

Why do we have to discard the morals of a business to judge it "objectively?"

Because morality is inherently subjective

You state this as if it's a fact but I think most people would disagree.

If morality is subjective, then that means there is nothing objectively wrong with murder, rape, pedophilia, chattel slavery, or any number of things that most civilized people would find abhorrent.

I'm not even trying to make a religious argument about the source of some objective morality, I don't think it's necessary to solve that to answer the "objective v. subjective" question.

Re: Burrito Now, Pay Later

#72

Post by rtpg »

zug_zug wrote: post #12

I think this would be more informative if it dropped all moral pretense and just talked about the economics objectively. If we’re gonna call a spade a spade, bnpl is one of a dozen services that extracts money from those whose judgment we doubt (like gambling, lottery, junk food?, drugs, overpriced status-symbol vehicles, or even “digital goods”).

Your statement is pretty subjective! Not going to defend gambling but "junk food" and "overpriced status-symbol vehicles"? Digital goods as an entire concept?

You can think it's all for the stupids, but I'm not seeing how it's some objective truth. Even if you're some stoic who thinks spending money on leisure is just incorrect at a fundamental level, but I think you're going to find yourself in the minority there.

Re: Burrito Now, Pay Later

#73

Post by buzzerbetrayed »

msm_ wrote: post #38
cousin_it wrote: post #31

I'm beginning to think that consumer debt simply shouldn't exist. If you don't have money to buy something, don't buy it. If you don't have money for necessities (food/housing/healthcare), putting you into debt isn't the right answer anyway. A safety net is the right answer.

I agree, with exception of housing. Most people can't buy home with cash, and for many this is a necessity. But homes are an appreciating asset, which cannot be said about cars or food - this is an investment, actually. But for everything else - cars, phones, electronics, food, subscriptions, jewelry - I 100% agree. Consider two people: * One person has $10k saved, invested into something safe and liquid. Then buys s…

Aren’t mortgages the number one reason houses cost so much? If mortgages weren’t allowed, the price of houses would plummet.

Re: Burrito Now, Pay Later

#74

Post by Garlef »

sologoub wrote: post #65
scubbo wrote: post #37

Earlier quoted context omitted.

Amen. It's been my experience that, for any innovation in financial technology, if you keep asking "and why is that beneficial?" for long enough, you will finally arrive (via tangents into "liquidity" and suchlike) at "it allows those with money to extract more money from those with less money".

In general, the availability of credit has been a positive economic factor that helps enable capital expenditures that otherwise would only be available to the wealthiest. Lack of such credit leads to capture of means of production and rent seeking behaviors in economic terms. However, it’s become more and more clear that not all credit is created equal and what you spend the resulting capital on matters a lot. If on…

Exactly.

Key differences:

- Houses are gaining value over time while consumer goods such as food, phones, TV, cars are loosing value over time.

- A loan for a house can be paid back very slowly so that you effectively only pay your initial share of the price (and share the profits with the loan giver via interest). A loan for consumer goods must usually be paid back almost immediately.

Re: Burrito Now, Pay Later

#75

Post by benlivengood »

skybrian wrote: post #60

When the interest is paid out of a store’s marketing expenses, it’s pretty ambiguous who specifically pays it, but the money ultimately comes from the store’s revenue. If it results in higher prices, the people who actually use “buy now pay later” aren’t going to be the only ones paying more, since they pay the same price as everyone else. The costs are spread across all customers. Depending on demographics, this cou…

Credit in general is an incredibly regressive tax; only the poorest end up paying much interest and it's a much larger fraction of their total cash flow. I can get between 2% and 4% cash back on all purchases on a credit card that I pay off monthly with a zero-fee ACH transfer, paying no interest or yearly fees. I literally take poorer or less financially secure people's money that they spend on credit card interest. While the prices I pay likely reflect an overhead of 1.5%-3.5% to cover merchant credit processing fees I potentially come out net positive.

Finally, if I had substantial investments, I would be earning returns for the ~month before having to liquidate assets to pay the credit card.

The bank financing my car loan is still paying me to have it because inflation is still so high and I got lucky with origination date.

In general I am skeptical of the overall societal benefit of new financial instruments for the above reasons. E.g. I can't imagine BNPL loans existing in a strong economy of mostly secure and economically savvy middle-class earners.

Re: Burrito Now, Pay Later

#76

Post by Retr0id »

pc86 wrote: post #71
Retr0id wrote: post #57

Earlier quoted context omitted.

Because morality is inherently subjective

You state this as if it's a fact but I think most people would disagree. If morality is subjective, then that means there is nothing objectively wrong with murder, rape, pedophilia, chattel slavery, or any number of things that most civilized people would find abhorrent. I'm not even trying to make a religious argument about the source of some objective morality, I don't think it's necessary to solve that to answer t…

> If morality is subjective, then that means there is nothing objectively wrong with ...

Yes, this is a true statement. Subjectivity and objectivity are two different things.

But I will grant you, there are plenty who believe in an objective framework for morality. My earlier statement is not universally agreed upon.

Re: Burrito Now, Pay Later

#77

Post by maxerickson »

msm_ wrote: post #38
cousin_it wrote: post #31

I'm beginning to think that consumer debt simply shouldn't exist. If you don't have money to buy something, don't buy it. If you don't have money for necessities (food/housing/healthcare), putting you into debt isn't the right answer anyway. A safety net is the right answer.

I agree, with exception of housing. Most people can't buy home with cash, and for many this is a necessity. But homes are an appreciating asset, which cannot be said about cars or food - this is an investment, actually. But for everything else - cars, phones, electronics, food, subscriptions, jewelry - I 100% agree. Consider two people: * One person has $10k saved, invested into something safe and liquid. Then buys s…

It's likely enough that 30 year mortgages contribute to asset appreciation more than affordability.

Which doesn't mean you get rid of mortgages entirely, but maybe don't have the main policy intervention in the market be like that.

Re: Burrito Now, Pay Later

#78

Post by dokyun »

pc86 wrote: post #71
Retr0id wrote: post #57

Earlier quoted context omitted.

Because morality is inherently subjective

You state this as if it's a fact but I think most people would disagree. If morality is subjective, then that means there is nothing objectively wrong with murder, rape, pedophilia, chattel slavery, or any number of things that most civilized people would find abhorrent. I'm not even trying to make a religious argument about the source of some objective morality, I don't think it's necessary to solve that to answer t…

The ancient Romans had far less of a problem with all of those things than many people do now; would you consider them uncivilized?

Re: Burrito Now, Pay Later

#79

Post by socalgal2 »

rtpg wrote: post #72
zug_zug wrote: post #12

I think this would be more informative if it dropped all moral pretense and just talked about the economics objectively. If we’re gonna call a spade a spade, bnpl is one of a dozen services that extracts money from those whose judgment we doubt (like gambling, lottery, junk food?, drugs, overpriced status-symbol vehicles, or even “digital goods”).

Your statement is pretty subjective! Not going to defend gambling but "junk food" and "overpriced status-symbol vehicles"? Digital goods as an entire concept? You can think it's all for the stupids, but I'm not seeing how it's some objective truth. Even if you're some stoic who thinks spending money on leisure is just incorrect at a fundamental level, but I think you're going to find yourself in the minority there.

No, rather I think I can scrape by for the few days it takes to get ahead of the curve for something as cheap as a burrito and then next month I can afford 5 burritos for every 4+interest I could only afford before. Paying for a PS5 or TV on credit I can see because it might take me months to save. But saving for a burrito is arguably something I shouldn't even have to save for in the first place.

Re: Burrito Now, Pay Later

#80

Post by Tyr42 »

xg15 wrote: post #18
ary wrote: post #17

> Despite skepticism from Volcker and Buffet, financial innovation has been and will continue to be a massive net positive for humanity. Juxtaposing yourself with Warren Buffet and then hand-waving away his wisdom is probably the reddest of flags when discussing finance (not that Buffet is always right). "Innovation" in payday loans is akin to inventing new ways to feed living, breathing things into a meat grinder. I…

This. Also, I like the term "net positive" in articles like this. If you lose everything, but I win even more, it's technically still a "net positive". Even if only one person would be happy about it.

Yeah you want Pareto Optimal or whatever. Which means everyone is better off, rather than surplus utility generated.
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