My car was towed the other day and while I was paying my bill for the $700 or whatever SF makes you pay, there was this guy at the next counter with nothing who was sleeping in his van who had it towed and they wanted $100 to release it. The tow counter lady could obviously do nothing (his price is low because of low income etc. etc.) but the guy was going to have to sleep in the street otherwise. And there is a holding fee each day it's in the tow yard.

Sure, we could find each of these risky situations and try to regulate them, but you won't even know of them because most people will never get towed. It's better to improve access to credit.

The guy could get $100 the next day, but not $100+storage-fee/day. It's like $70/day. Any loan that goes between 0% per day and 70% per day simple interest would have been a net win for this guy.

Obviously, having eavesdropped on the whole thing, I paid it as I was leaving but I think perhaps those of us with easy cash liquidity should perhaps build some intuition on what kinds of situations cause people to take on onerous credit.

EDIT: Oh, I recalled a detail I'd forgotten when first relating the tale. He wanted to go get his phone from the van so he could call for help but they wouldn't let you in the yard without paying to release. I imagine he was going to have a damned hard time asking for help without the phone.

It’s expensive to be poor and people who haven’t ever been poor just can’t wrap their heads around that. They don’t understand the loss-loss choices poor folk have to make every day and the toll and psychological exhaustion it puts on them.

I will never let a chance slide to quote one of my favourite passages from my favourite author and fantasy series: the Discworld, Terry Pratchett (GNU!):

"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."

I absolutely hate that quote. It may have been true-ish for classes of goods and services 150yr ago but today it serves little purpose than letting yuppie consumers pat themselves on the back for buying premium products.

As someone who has been poor 10 years ago, trying to raise a family, that’s just false. We had to deal with the literal situation from the quote: shoes. We could only afford cheap ones for our children and the shoes “broke” before they grew out of them. If you think this only happened 150 years ago then I envy your privileged outlook on life. This quote is as relevant today, as it was then. Being poor is expensive.

I stand by my statement. You might occasionally find classes of long term consumable goods where the literal cheapest is just too short lived to work or medium term consumable goods where the fancier options last longer by a big enough margin to be worth it (sawzall blades and dish soap are the only two I can think of). The majority of long term consumables get destroyed by a mishap long before it succumbs to wear and tear. Coats and pants get torn. Tools get broken from too much being asked of them in a pinch. Anything with an electric motor will live until you do something dumb that lets the smoke out. If you want to save money your default should be to cheap out. You will win some and lose some but the losses will be so, so, so rare as to be a rounding error. More often the problem is you buy something that is cheap junk and it refuses to die so you are left suffering though it forever.

I went through my fair share of Walmart black no slip shoes before moving into tech. I hope financial hardship is in your future as well as your past. Maybe you'll figure it out the second time around.

> I went through my fair share of Walmart black no slip shoes before moving into tech. I hope financial hardship is in your future as well as your past. Maybe you'll figure it out the second time around.

Wow.. I had to check your post history to make sure I didn’t misinterpret your words. There was a clear pattern. You seem smart, maybe you can find it too.

My dear internet stranger and fellow HNer: I hope you find more love in your life and the ability to see it in, and give it to others. All the best to you!

Props on paying it forward. It’s not a systems fix, but we underestimate how impactful culture is & in a future where the wealth distribution is going to be even more lopsided, benevolence & sense might be a good stopgap.

It is $700 now? SF is ridiculous. They towed my car once and it was $400 back in 2017.

Strictly, it's $100 for the citation you pay online, then there's the city fees for ~$300 or something and the tow fees for $250 or something. They will take $50 off one of those things if it's your first-time. No one was amused by my request for a subscription plan.

Good man. Too few like you.

I'm not so sure, living paycheck to paycheck doesn't mean you have no discretionary spending at all. Maybe you have $500 a month for one off expenses and you already used up this months on a laptop for you kid at school or something.

One off expenses don't happen 12 times a year. If you haven't been able to save $100 a month for five months, you just won't be able to save five times as much, let's be realistic.

Poor people find that one off expenses happen surprisingly often. Between car breakdowns (far more likely for those who can only afford a clunker), sudden health crises, domestic maintenance, wear and tear on clothes, unexpected inflationary price rises on essentials like energy and food, and a host of other issues, the poor have no slack at all in their budgets.

Of course the real problem is many jobs don't pay enough.

In fact not getting paid enough - and therefore being unable to budget - is considered evidence of poor character, while not paying enough is considered evidence of enlightened and mature rationality.

It's quite a strange view of the world.

How one-off are they really, at that point? Either way, the other guy's point -- that paying it off is not all that likely -- still stands.

>One off expenses don't happen 12 times a year.

so you'd be in favor of payday loans if they were limited to n times per year?

>If you haven't been able to save $100 a month for five months, you just won't be able to save five times as much, let's be realistic.

what about people who have the free cash flow, but can't save for various reasons? eg. friends/family asking for money, poor self control, etc.?

For example, in Italy there's a special kind of payday loan that is limited by law to 1/5th of the net paycheck. It is taken off the paycheck by agreement between your bank and the lender's. The combination of these two rules makes them more likely to be paid successfully, and gives them a better APR than e.g. credit cards despite being essentially used for the same purpose as subprime payday loans in America. There's also a maximum legal APR of ~18% for these loans (it varies every quarter), which is better than e.g. the ~24% maximum legal APR of credit cards

Unbounded APR and "letting the market figure it out" is not the solution.

Isn't Italy topping the charts of countries in financial ruin? If it weren't for Greece being worse Italy would be in the headlines. If America is to change laws, it'd help to use a successful nation as an example

Interesting spin on the ad hominem, but I just mentioned what I know about since I live here. Anyway, we're talking about private debt; and while Italy has a huge public debt, its private debt is quite low.

BTW, right now US treasury bonds have a higher 10y yield than Italy.

and next month, another emergency. The root cause is low income, because with a higher income, such things won't be an emergency.

If you have $500 per month for one off expenses, you should have been able to build some sort of emergency fund.

But then what is the alternative. If you don't get the car fixed, then you will not be able to commute to work. If you won't work, then you won't be able to pay rent. Isn't the $500 loan then a better alternative than ending up homeless ?

Would'nt it be better to rack up a $500 loan and then try to pay $100 per month so that it can be paid off in 6-9 months - even with 36% interest ?

The sane alternative is being part of movement of millions of people that pushes for better wages, better working conditions, etc. But no, instead everybody's forced into dealing with their own individual situation(s) as if they are not actually all connected to the greater economic organization picture.

One alternative is the guy who needs a $500 emergency loan gets it at a non-usurius interest rate. The system could be revamped to support easier repayment for actual emergency loans.

> If you don't get the car fixed, then you will not be able to commute to work.

Don't most metro areas have public transit? Perhaps buses are not the most comfortable or convenient, but they do exist, and for good reason.

I would say that it's a pretty substantial portion of the population for whom this is not a serious option.

While true, vehicle dependency is a serious societal problem in North America that needs to be fixed. This is partially the reason. Nobody should need a personal vehicle in order to be able to live a baseline satisfactory life.

Don't disagree, but you won't get a paycheck standing on principle here.

The alternative is a society where nobody is homeless regardless of their income or lack thereof.