Ron Rosenbaum

"People are smart": The Mortgage Industry Defense Shows its Hand

I’m endlessly fascinated by the minds of Madison Avenue, especially trying to figure out the true purpose beneath a puzzling pitch. And there was something that kept nagging at me as I listened to endless iterations of the recent Ditech mortgage ads which seem to sustain the entire economy of MSNBC and Fox.

“People Are Smart” was the slogan. There were some cheap-looking sketchy graphics involving magicians and illusionists and a pitch for their “Smart-rate” loans.

“People Are Smart” it keeps repeating. “People” can’t be fooled by an “illusionist” which is “just another fancy word for magician.”. There was something weird about the “people are smart” illusionist riff. they were selling mortgage financing, fixed rates (in this ad) not the subprime mortgages that threaten world economic crisis. But it seems to me they’re selling something else: an excuse, a pre-emptive defense.

“People are smart” and can’t be fooled by illusion Could it be that the “people are smart” slogan is going to be the prime (or subprime) defense of the subprime mortgage sellers who, amidst the ruin of lives and families, say it wasn’t our fault, we didn’t fool anyone into doing something unwise that would result in them losing their homes to foreclosure. People are smart! They knew what they were doing when they signed the shaky paper.

People are smart! They can read the fine print. Of course Einstein couldn’t read the fine print disclaimers Ditech flashes on the screen, written in such tiny type they might as well be invisible. They’re like a parody of truth in advertising. How does the FCC or the mortgage industry regulators let them–and they’re of course by far not the only ones–get away with posting these unreadable print caveats? Why require them to run any thing at all if it can’t be read? It’s the kind of thing an “illusionist” would do, giving the shabby illusion of transparency.

Oh right, the subprime scandal has made clear the mortgage industry regulators are as deep in the pocket of the industry as mining industry regulators has been shown to be by the recent Morgan Energy Company mining disaster.

“People are smart”. Don’t blame us for their folly if that’s what it turns out to be. Blame “people”! Because smart people should be able to avoid stupidly taking our ads seriously.

Are people smart.? Well some are smart in some ways and not in others. Many people wanted to own their own homes and saw an opportunity, nothing wrong with that, it’s often admirable for those who aren’t the repellant “flippers”.

Maybe there’s some abstract merit to the argument that people should read the fine print about the risks, that it’s their responsibility, not the “illusionists” for getting tricked. That government, on coldblooded libertarian grounds, has no business protecting people from their own bad choices.

Still my reaction to this ad is that it’s subtextual denial of responsibility is not exactly a principled argument. That the “people are smart” slogan reflects bad faith, disingenuousness and attempt to wriggle out of responsibility.

People are smart; it’s not a tribute to the intellect of “people”. It’s contempt for it.

People are smart: what it really communicates is more like “Yeah, but we think we’re smarter. We think we can outsmart them.”

People are smart why didn’t Enron think of that?