The Screwing of the Average Man
Rothchild, John
The Screwing of the Average Man The first in a series on this subject. by John Rothchild As the average man gets more skeptical about affairs of the world, he takes more of his daily...
...While the distance between both ends of the middle class are as great as the gulf between the rich and poor in underdeveloped countries, we Americans place ourselves on the same cozy plateau...
...A large proportion of what the average man calls his possessions are therefore no longer really his until they are paid off, if they ever are...
...For a large amount of money, paid in a lump sum when the house is purchased, a buyer is given relief from this worry so he can enjoy his property without fear...
...Now goods are abundant,” Galbraith said...
...It is rude to delay the zombies behind us and impractical to cause a ruckus...
...More die in the United States of too much food than of too little...
...Title insurance now costs the home buyer somewhere between $100 and $400, depending on where he lives...
...Closing costs are just one example of the effect of expertise...
...Middle professionals are those who produce goods and services that are desired by the public, and which must be purchased regardless of price...
...He doesn’t accept what Nixon says about the economy, yet he accepts without question what some strange mechanic says about his cam shaft...
...Insurance policies give us chicken chains, textile mills, and book companies, while our taxes make us instant investors‘ in railroads and aircraft companies...
...The swindling of the mentally disturbed is calculated to guarantee their complete concentration throughout the session...
...Where the average man once possessed things individually and separately, he now buys on credit...
...Where the building of the house was once a matter for carpenters, now it involves a growing industry of scribes, heraldic researchers, and protocol officers-people who have been idle since the decline of the family tree business...
...He cannot keep the money in the bank, collecting interest, and pay the fees himself...
...While the latter, in general, make more money, they usually have to do at least some work to get it...
...The real estate man may hustle the auto saleman, but someday that real estate man will have to buy another car...
...If he had a direct choice, the client’s ignorance of the value of the product might lead him to keep the money, thus threatening high professionalism...
...The lower professionals are those who do not possess the indispensibility or grandeur of tradition...
...While we are all consumers, few of us feel comfortable being singled out as such...
...attorney fees, “charges designated as attorney fees, not reportable elsewhere...
...But there are signs...
...The average man, to hear the talk, is beginning to own America itself...
...He is threatening the high fees that guarantee legal competence...
...In general, it can be assumed that high professionals and middle professionals screw low professionals more than vice versa, since their loftier traditions mean loftier tithes...
...While a careful emphasis on building materials and carpentry once protected the buyer from the vagaries of wind, storms, and snow, this new emphasis on housing paperwork protects him from the more abstract dangers of a complex, modern society...
...The relatively poor middle-class workers look up and have difficulty isolating the enemy from all their equals...
...The Church provides a useful model for high professionals in other ways...
...The real estate company would not let him do it...
...wealthy on that Nirvana pinnacle are those who have enough money to screw without being screwed...
...While the VA study said the average title insurance fee amounts to $117, another study of 600 mortgages done by the Institute for Urban Life found average costs to range from $126 in San Antonio to $384 in Newark...
...If the toaster broke, it was probably because we didn’t deserve it anyway...
...Total national income has risen from $414 billion in 1960 to over $800 billion in 1971, with the largest share of the increase going to the middle class...
...The difference between the lower and middle professions is mostly a matter of time and pretense...
...For all these reasons, the average man is probably still-unaware of the drubbing he took during the last decade, the beneficiaries of his sophistication and piety being the large banks, corporations, and insurance companies...
...preparation of documents...
...Screwor or Screwee Senator Philip Hart has tried to compute the tab on this humdrum fraud and has come up with a figure of over $200 billion a year...
...The Paper Hearth We can calculate the impact of the expert on human affairs by looking at one example: the house...
...Part of the reason that the plight of the working class has been submerged in the decade of affluence is that those who wrote about him were professionals in their own right...
...The beneficiary of high professional services does not actually shell out the money directly from his own wallet, but pays indirectly through taxation...
...What he gets out of all this is uncertain, but, he does not have the power to decide between the professionals or the money...
...This group is the largest growing as it expands to take in each year’s new college graduates, and as more and more human transactions are carried out by people who are structurally independent from the fickle wishes of their constituents...
...The seven-dollar-a-week increase, spread over a decade of work, was hardly enough to stand up to the growth of state and local taxes, which support the decentralization of high professionals...
...He is always thinking about something else as he is herded in and out of the supermarket lines and bank windows, silently accepting the 30 per cent fat in his all-meat hotdog or the four per cent interest on his meager savings account, moving quietly with the rest like refugees through a checkpoint...
...It is also accompanied by the revelation of a new danger from which the public was previously unprotected...
...Usually, one’s economic caste roughly coincides with on e ’ s degree of professionalism...
...The entrance of professionals into an affair of life previously left up to popular common sense is usually accompanied by a large number of typewriters, a code of ethics and the elimination of price competition...
...The VA explains the steps: FHA application fee, “charged for a conditional commitment to insure...
...This seven-dollar-a-week raise was received in the first five years of the decade, because between 1965 and the present, the take-home pay of the worker has declined from $78.53 to $77.28...
...According to Jethro Liberman in Tyranny of the Experts, “at least one state and usually many more could claim the licensing of the following professions: abstracters, boiler inspectors, private detectives, egg graders, electricians, electrologists, elevator inspectors, guide-dog trainers, hoisting engineers, homeopaths, horseshoers, librarian s , manicurists, masseurs, mechano-therapists, milk certifiers, mine inspectors, motor vehicle dealers and salesmen, motion picture operators, naturopaths, oculists, pest controllers, physical therapists, drugless physicians, plumbers, psychologists, certified shorthand reporters, sanitarians, social workers, watchmakers, well drillers, and yacht and ship brokers and salesmen...
...Their professions are those that are in constant danger of being called jobs...
...Included in this was the debt left by the 300-million plastic credit cards, on which $14 billion was owing as of June, 1970...
...At the same time we were informed of our gluttony, we also discovered millions of poor among us...
...While this figure may be inflated by transfer swindling-that is, the auto salesman screwing the doctor by the same amount of money the doctor screws him-the total is an impressive monument to the heritage of the American huckster and a good illustration of why the Mafia had to go into legitimate business to survive...
...The average buyer is not even permitted to decide whether or not he wants to take the risk of title defect and thus save some himself money...
...He is also subject to taxes on the transfer of the house (above and beyond normal real estate taxes) that can amount to as much as two per cent of the total cost...
...The average American has no inkling of the increasing distance between him and the screwers above...
...While snake oil was sold primarily to the ignorant, it is now the ignorant who are most keenly aware that they are getting John Rothchild is an editor of The Washington Monthly...
...Both a person getting an income of $50,000 a year and one making $8,000 can think of himself as middle class and believe that the rest of the class roughly shares his characteristics...
...Since the general rule is that the higher the caste, the more people one is able to screw, it may be worthwhile to examine the effect that the expert boom has had on the pocketbook of the average man...
...but all along the chains of trade in ways of which we are only remotely aware...
...This trend accelerates as more people receive higher education to expand their horizons...
...One such danger is the land title defect, which the American Land Title Association (ALTA) has tried to bring to the attention of the public through radio spots by Senator John Sparkman, Lloyd Nolan of NBC’s “Julia,” and Beverly Garland of CBS’s “My Three Sons...
...John Kenneth Galbraith told us in 1958 that we were the affluent society and that our overeating was an eloquent refutation of classical economics, which has always believed man’s natural state to be poverty...
...At the same time, his country has vaulted the trillion dollar GNP, the wageearner is not any better off than he was in 1960...
...Any lawyer, for instance, who suggestes that he wants to charge less is accused of being in the business for the money...
...Title claims are, of course, very infrequent and seem to occur mostly in rural areas...
...Almost to a group, the middle professions have fixed prices, and believe the offering of a lower fee to be not only ungentlemenly and dangerous, but also immoral...
...Some of us secretly fear that if we stand up to product fraud we will be called “consumers” or “defenders of consumerism...
...Their labor is still perilously close to fingernail grit, as lower professionals frantically scramble to achieve the status that will allow them to raise prices...
...But low professions move up and others take their place as more and more professions are created to take the place of jobs, which are dwindling...
...He must pay the experts for direct services and must pay money to the government which then hires experts...
...And like Easter flagellation in Italy, it humbled and purified so we could go out and buy more...
...The richer average men enjoy a revolutionary solidarity with the masses without having to suffer the discomfort of income redistribution...
...Curiously, title insurance costs significantly less in the rural areas, where the risk is greater...
...The premier hucksters are the high professionals...
...The analysts had apparently conquered this love themselves by making more money than hard hats, but they didn’t prescribe this remedy to them...
...recording fees, “fees charged by local authority for recording the instruments...
...survey...
...closing fee...
...They are characterized by the fact that what they sell cannot be understood or evaluated by the people who receive it...
...Consumer debt, excluding mortgages, rose from $60 billion in 1962 to over $127 billion in 1971...
...He is still behind the average Russian peasant, who can scrutinize his lands and horses by flashing the Communist Manifesto at any neighborhood collective farm...
...The construction of a house was once a delicate, complicated matter, but now it has become a simple, pre-fab affair...
...Since the homes in the study were in the $20,000 range, closing costs amount to nearly 10 per cent of the sale price...
...Sometimes, the title people are careful enough to give double security, as in subdivision homes which are protected en masse by title insurance on the entire subdivision, and then protected again when each homeowner has to buy a separate title insurance Overall, the risk is so small that title companies have become profitable enough to merit the legislative scrutiny of Senator William Proxmire...
...High professionals are therefore the only ones qualified to assess the value of their services, which is usually quite high...
...Those who were sent to figure out what was wrong with him were sociologists and journalists convinced .from their own experience that the middle class was well off...
...Closing costs were originally trivial fees involved in signing papers and verifying titles...
...But, while the screwing of the average man makes it increasingly difficult for him to acquire individual things, it provides him the priceless luxury of owning everything...
...Such are the advantages of professionalism which provide the growing margin of profit...
...The average man gets less aware as he becomes more specialized and more informed...
...But according to a Veterans Administration study, these costs are currently averaging $1,783 for FHA-insured homes and $2,422 for VA homes...
...title examination...
...screwed in daily life...
...Likewise, they conscientiously take care of our other holdings-factories and newspaper plants-which are purchased for us with the money left over after this year’s lives are paid off...
...The advantage of high professionalism, aside from the salaries, is that if you put out a defective product, nobody can tell...
...The imagination that once went into the building now goes into the purchasing, as the real craftsmanship of the experts is demonstrated in the transaction of “closing...
...His staff concludes that for each additional year’s liability, title insurance losses are less than one dollar for a $10,000 house, and less than $1.60 for a $20,000 house...
...This group includes doctors, lawyers, and insurance agents...
...by John Rothchild As the average man gets more skeptical about affairs of the world, he takes more of his daily life on blind faith...
...Since we are the real owners, like the man in the ad, we can order the cowboys around, ride the horses, and scare the cows...
...They find that the average worker who took home $70.77 a week in 1959 is getting $77.28 of buying power today after federal taxes...
...The median income person is screwed by the experts in multiple ways...
...The truly...
...While he does not enjoy the freedom from quality of the higher order, the middle professional nonetheless ensures the continuing excellence of his product by charging exorbitant prices...
...On the rare occasions we discover we have been gypped, we suffer alone and quietly pay the check...
...Likewise, to those disillusioned with the progress of government programs, the high professionals can conscientiously suggest bigger budgets and larger staffs...
...While we all can feel outrage that our fleece is getting collectively clipped to this degree, there is still the problem of deciding whether we, as individuals, are screwors or screwees...
...Groggy from the drumming of registers, we shuffle through these lines only half aware...
...The average American is also reluctant to probe the depths of his screwing because he is relatively better off than before...
...We are also told that by buying low-yield Series E bonds we are buying a share in America, that by investing in the Stock Exchange we acquire title to all of free enterprise...
...Generally, they seek legitimacy through licensing by state legislatures...
...This is the basic closing cost model, but the VA also left space on their survey for fancier maneuvers like “charges for amortization schedules, photographs, truth-in-lending statements, etc...
...Therefore, they found the problems not in the hard hat’s pocketbook but in his head...
...We got the shaft not only at the checkpoints...
...The Bureau of Labor Statistics monitors the weekly wages of nonsupervisory earners, who comprise about 74 per cent of the labor force...
...They also produce a television ad that explains the human side of the drama-a family is enjoying a quiet Saturday when an irate woman rattles the screen door, waves a forgotten deed, and demands that the squatters get out of her house...
...An intelligent career choice between these two groups would depend on the relative strength of one’s greed and laziness...
...The Head of the Screw While screwing is a relative matter for professionals, it is an absolute one for the non-supervisory wage-earner, the head of the median income family, the real average American at the intersection of all the scales...
...He believes, in fact, that there is a direct correlation between how much he charges and how well he works, and he has been working extremely well during the last decade...
...Defective products served as a kind of absolution...
...While the Russian peasant has been the real owner of his country for a long time, the American common man is definitely catching up...
...In the same way that Thorstein Veblen understood the Catholic Church as the most privileged of all ad agencies, since the product it promoted never had to be delivered, so the high professional enjoys the freedom of producing a good that people care so little about as to ignore its possible deficiencies...
...In their continuing fight to insure this competence, some bar associations attempted to ban the book How to Avoid Probate on the grounds that it told people how to get around estate lawyers and therefore was an unauthorized practice of law...
...For every $100 the average man shells out, about $30 is pure sucker money, lost to overpricing, underquality, or surcharges...
...It is hard to measure one’s relative position in this equilibrium because almost everybody considers himself an average man...
...They have to squint more and more as the distance between them and the middle-class supplicants also increase, as they are pushed a mile higher for each inch added to the lowest economic rung...
...While these words were invented to revive the heroic fellowship of oppression conveyed by “masses” and “inevitable class struggle,” somehow they conjure up only acid indigestion or the petty hordes at the post-Christmas complaint windows...
...While title insurance alone is estimated to screw the home buyer to the tune of $50 million a year, the other parts of the closing transaction are equally suspect...
...One illustration of the growth is the number of books now printed for which there is no commercial market...
...He mistrusts political experts, but he gladly turns his teeth, his plumbing, or his life savings over to other experts about whom he knows little, if anything...
...The dust from this struggle clouds the view toward the top of the gulch, where the truly wealthy sit and enjoy the show...
...When Marty Lobel, of Senator Proxmire’s staff, bought a house, he attempted to conduct his own title search, a simple matter of going to the recorder’s office and looking through property logs...
...These feelings are now encouraged by the giving away by the subdivision owners of free cameras or baseball tickets to the new occupants...
...Fiscal shortcuts, like legal price wars, are the enemies of the professional canons...
...Where bankruptcies were once a matter of small businesses, consumer washouts now comprise over 85 per cent of the 200,000 personal bankruptcies a year in America...
...Climbing the Ladder All the groups, from high professionals down through job holders, continue to scramble for relative advantage up the middle-class gulch, Each overpriced service from the top inspires wiggling from below as the lower orders concoct new postures and new swindles so as not to lose ground...
...In fact, the total danger in modern life seems to grow along with the number of new professions as our worry about starvation, accidents and crime expands into title defects, feminine hygiene deodorant, and teeth tartar...
...escrow fees...
...and termite inspection...
...And he often must pay lender’s fees and “points” for getting the mortgage loan, as a form of what the Mafia call “vigorish,” or a kickback for the originator of the deal...
...During the 1960s, the largest increases in salary went to the professionals, with the median income of doctors rising from $28,000 a year to over $50,000 in less than 10 years...
...It took some years for the public to forget that the medical doctor was first a barber, and it will doubtless take the same number of years before they forget that the hair stylist was also once a barber...
...Up From Grit It is difficult to decide whether it is better to be a high professional or a middle professional...
...The buyer is often forced to put money in an escrow account, from which various mortgage fees are paid...
...It was certainly not enough to absorb all the shoddy products and the phony carrying charges that now come with them...
...He met with similar resistance when he attempted to get a mortgage without buying the insurance...
...The Screwing of the Average Man The first in a series on this subject...
...The freelance swindler was gradually driven out as swindling became company policy, and the profits from this formed a kind of reverse income tax, preserving the investment incentives of the rich by transferring back to them most of the excess that might have been invested modestly by small individuals...
...The great institutions tell him that he is owning a greater and greater share of America...
...Exorbitance is Excellence Already, we not only have professionals, but three different kinds of professionals...
...For example, he has probably read some of the Pentagon Papers, but not his Allstate liability policy...
...This scarcity of claims made it possible for the title industry to turn a 13 per cent profit last year, one of the most lucrative of all insurance operations...
...The occupants, who had no way of knowing there was a claim on the title, would be out in the cold without title insurance...
...Prudential nominally manages the ranch for us while wz are home working to pay off the premiums...
...Since the enemy takes a form invisible to the common man, the professional closing cQst people are there to insure that the dangers are properly guarded against...
...credit report, “charge for report on mortgagor’s financial and credit status...
...state or local transfer taxes...
...Think tanks, research centers, urban planning institutes, foundations, and presidential commissions are among the more recent advances in high professionalism...
...When a faithful was disillusioned or distressed at his chances for salvation, the Church could express its concern by offering him more services and prayers, for which the skeptical would pay...
...They found his trouble to be an exaggerated love for materialism...
...This money generates a pageantry that could not fail to excite even the least ceremonial of minds...
...Prudential’s new ad series, for instance, shows the run-of-the-mill life insurance policyholder, you or me, driving onto the million-acre Prudential ranch for our Western vacation...
...As high fees protect the lawyer’s client from huckster lawyers, so in the psychiatrist’s office they are a therapeutic tool...
...origination fee, “lender charge to the borrower for making the loan...
...The effects of these changes are not as drastic as they were in Russia, where the peasants took control all at once rather than in this non-violent, relaxed way that the American worker is acquiring his empire...
...This group includes roughly anybody who is paid to think or administrate for federal, state, or local government or for any organization that gives or receives grants...
...The rationale given for most closing cost transactions is that they are there for the buyer’s safety...
...Within the camouflage of the middle class, however, one can begin to ferret out the plateaus on the way to fiscal Nirvana...
...Where the population was once thought to press on the food supply, now the food supply presses relentlessly on the population...
...The blurring of the origins is usually accompanied by some Hammurabi, a heroic figure from whom a code of ethics can be derived, by the elimination of competition, and by an elaborate set of rituals and mysteries that the public is told it could never understand but must pay for...
...title insurance...
...Then he will be hit with the defensive overcharge, as all things tend toward the natural equilibrium of fraudulence...
...This dichotomy encouraged the growth of consumer guilt...
...In cities, with the large turnover in property, the title to a house, insured with each separate purchase, may have been searched dozens of times...
...If we are average Americans, we probably own more than just a piece of Prudential’s rock...
...It is worth remembering that in the days before specialization and pervasive mutual screwing, home construction was a neighborly act that filled the community with feelings of good will...
Vol. 3 • October 1971 • No. 8
