tony mcmanus

On writing, writers, books and publishing.


On my first visits to Thailand, I was enraptured. I thought I’d found paradise on earth. A democratic country with a constitutional monarchy and land of happy, contented, smiling people at peace with itself. Among the things I admired was the sense of economic vitality. When I looked at all the expensive trucks and cars that pack Thailand’s roads, I came to feel that Thailand was an affluent society with a healthy, booming economy.
But then I woke up and saw a country that was a military dictatorship like no other on earth, with brutal draconian laws and society so unequal that 1% own more than two-thirds of the nation’s wealth, where trade unions are outlawed and wage levels low.
So, I pondered, how do Thais get to own these Toyota SUVs, and Landcruisers, Honda Civics, and Preludes and Mazdas, not to mention the Mercs, Beamers, and Volvos, etc?
The answer is, they don’t. The banks and other financial institutions own them.
So, after a little checking, I found that household and personal debt is very high in Thailand, closing with 70% and increasing. Most of this in credit-card use (abuse?) and automotive loans. Add on store-card use and you see a different picture. Like the rest of the world, Thais are in debt; massively so.

Many years ago, in a happier time of fiscal sobriety, there were only a handful of credit cards. Top of the heap was American Express; ‘Don’t leave home without it.’ Remember that slogan? There was Diner’s Club, Carte Blanche, and a few others. They were a privilege to have and not easy to get. I recall applying for an American Express card and being turned down.
And in those days, you had to pay off your balance before the end of each month or lose your privileges. Most people used cash or wrote checks. It was difficult to get into debt. Nations balanced their books. And so did the citizens.
Then the banks, driven by greed, got into the act.
They introduced the ‘Bankcard’; Visa and Mastercard leading the charge. One feature of these new cards was, you didn’t have to pay the bill before the month’s end. “Just make a small payment and roll the debt over into the next month. No problem.” But the best part was, they were easy to get. And it got easier.
Today, the banks hand them out like confetti at a Greek wedding.
Then the big department stores and supermarkets came up with their ‘store cards.’ People short of cash began buying groceries on credit. Fiscal sobriety, a boring restraint, was cast aside. Let the party commence, and the good times roll.
And the siren call was, “It only costs $$$ a month. You can easily afford it.” Yeah, right.

Not long ago, in Canada where I come from, household debt reeled out of control and personal bankruptcy reached record proportions, forcing the Federal Government to tighten the bankruptcy laws. It was crazy. One Friday night I was enjoying a few drinks with friends in a Montreal bar when a bunch of around eight girls entered. They all handed the barmen their credit cards and began drinking. No cash changed hands. At the end of the night, they would sign their receipts and stagger home, a lot poorer. And deeper in debt.

Back to Thailand.
I know a Thai lady, an educated lady, so ensnared in debt she will never escape. The banks take 90% of her salary, leaving her and her small family in dire straights. She will die in debt.
The bank’s high-interest rates, compounding, ensure this. The banks want her and other Thais in debt. They like it when she defaults and misses paying on time. That way they get to bleed her for life. She’s not alone. She was foolish; the banks are pitiless.
Interest rates in excess of 8% are usurious and immoral in my view. But, hey; when did banks give a shit about morality? I call such interest rates, “vig”. Vig is short for ‘vigorish’, a Yiddish word. It means the interest one pays on a loan sharks loan.
You read of it in crime novels, and hear it said in Mafia movies:
“What’s the vig on this loan, Mario?”
“Fucking high, baby.”
Always remember, when you deposit money in your bank account, you are making the bank a loan. That is what you are doing. It’s the only case where the borrower decides the rate of interest, usually a pitiful 1% – 1.5%.
But you make a loan from the bank and you face the vig. In the case of credit card loans, over 18%. And the Thai bank’s vig has placed the Thai people in a huge web of debt. Endlessly paying the vig, tossing their wages into the big banking piss-pot till they die.

With no trade unions allowed, Thai wage levels are low. Consumer demand, so essential for economic activity, is not there. Thais are forced into debt. To spend they must borrow.
So when you see conspicuous consumption in Thailand and think it represents a healthy economy, think again. Think of that big bank piss-pot. And the vig. I see a big recession ahead. The future is bleak.

Res ipsa loquitur.
Res ipsa loquitur

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