The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

The Power of Rationale Can be Expensive

On January 24th, 2011, posted in: Uncategorized by

Sometimes people fool themselves.  They think something is okay when it’s really not.  They think that their pants fit even though the zipper won’t close and the seams are screaming. Bad habits are justified, and loves are sometimes lost because of the misguided power of rationale.  Sadly, there are even people who think their current bank is the best financial solution for them and their family.

The most exaggerated example of misplaced rationale I’ve ever witnessed was contained in a recent Wall Street Journal article.  Kim Jong Il, the diminutive dictator of North Korea, was playing golf on a par-72 golf course west of Pyongyang, where he was reported to shoot a 38.  How could his score get so low?  Well, he was reported to have had 11 holes-in-one.  Wait a second…I think a pig just flew past my window! Whoever is in charge of making sure that the pint-sized, power-monger has a gallon full of ego has surely exceeded expectations and any semblance of rationale for that matter.

Let’s unravel this mystery that goes far beyond intentionally lying at golf and believing it.  In the real world, it happens all the time.  As an example, a business crafts a message that is extremely enticing yet borders on questionable.  The recipient (i.e. the target market) believes it sounds too good to be true, but is willing to accept the glitzy advertising as reality in order to feel better about the situation.  Even when the misinformation borders on outrageous beyond belief, and thousands of people of a normally sound mind know better, that power of rationale we discussed earlier just will not allow for the truth to be uncovered and consciously dealt with.

Kim Jong Il and his made-up golf score are a perfect example of rationale being so powerful that the truth no longer matters.  What does matter is that the person becomes capable of believing what doesn’t exist really does exist in order to justify the falsehood.  I might be crazy, but I think I just described why millions of people have bank accounts instead of belonging to a credit union.

Why else would people give their hard-earned money to a “for-profit” bank, when by the very definition of “for profit” would make the banking executives responsible for taking your money and giving it to someone else (i.e. their stockholders)?  Think about that.  Because the bank is for-profit, their motivation is to pay lower rates on deposits; charge higher loan rates; charge higher fees; and require higher minimum balances.  In other words, their primary motivation is to take the money that belongs to you and transfer it to themselves.  The very nature of the for-profit bank is to subtract value from the consumer.

Yet, every day, people choose banks over credit unions.  I don’t get it.  Credit unions are not-for-profit financial cooperatives, which means value is given back to the consumer – not subtracted from the consumer.

Kim Jong Il didn’t shoot a 38.  Your pants might be too tight.  And the local bank is in the business to subtract value from you.  Don’t be fooled!  The power of rationale is sometimes extremely expensive.

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