I have had a moment this morning. Apparently, some organization is threatening to take the South African government to the Human Rights Commission, because the lock-down rules in South Africa at the moment have the potential to cause wide-spread bankruptcy, both in businesses and personally.
Do I have empathy with the companies and individuals who are in this predicament? Yes. Do I feel sorry for them? No!
In high school, I had an interesting History teacher. Mr Theo Bunge was an ornery old coot who spent most of the day chain-smoking outside of his classroom. He didn't really keep discipline and his lessons were usually pretty chaotic, but one of his lessons stand out in my memory, even 30 years later.
We were discussing the Wall Street Collapse of 1929, and he mentioned that many men went bankrupt and then went flying out of their office windows. (Very dramatic, if true!) He then proceeded to ask us if we knew what bankruptcy was. Most of us gave answers like “to lose everything”. His response to that was “No, that would only make you poor. What would make you go bankrupt?” The class went silent as we all tried to think of the answer.
He then enlightened us that bankruptcy occurs when the value of what you owe exceeds the sale value of the assets that you possess, and that in the 1920's many men and small companies (women didn't have much rights, then, so not really women!) built their livelihoods on debt, instead of living with what they could afford. That meant that when the crash came, they had nothing of value to sell to offset their debt.
Various financial gurus over the past few years have advocated against using debt to buy doodads. Dave Ramsey built a reputation around teaching people to get rid of their debt. Even in South Africa, many financial leaders (such as Trevor Manuel and Tito Mboweni) warned that South Africans were living way beyond what they can afford and have much too much debt, especially in the way of credit and store cards, as well as micro-loans from nefarious sources.
A few years ago, I found myself in a similar situation. I was young, dumb and way too deep in debt for my own good. I had to take a long, hard look at my situation and – with the support of some friends – did exactly that. I drew up a spreadsheet of what I owed to whom, made some really difficult phone calls and put myself on what I call a “money diet”.
It wasn't easy, to say the least. I had to decline many social invitations, not because I didn't have the money, but because the money I had went towards repaying my debt as fast as I could. Every account that died was a reason for a small celebration, usually a crazy victory dance. The last was in the bank, when I had paid off my last credit card. (I decided to make my very last payment manually, for that very reason!)
I'm not totally debt free. I still have a personal loan and a mortgage bond, but those expenses aren't going to kill me and I have assets in hand to offset those debts if push comes to shove.
My heart goes out to those people who have been living on serious debt for the past few years and who have very little to show for it. Those are the people who put their trust in the share market and their jobs and businesses and bought things they did not need with money they did not have to impress people they did not like!
However, blaming the government for a situation that you put yourself into in the first place is foolish and stupid and definitely not a Human Rights issue. You would not die if you went bankrupt. But yes, your reputation would be shot for the rest of your life. And the only person you can blame for that is the person you face in the mirror.