Unlike most people, I like spam: the digital kind, not the processed meat kind. Every day, I see what’s being offered for sale to millions of people. I see the efforts of hope-filled people who think they can make big bucks for almost no investment by renting a list and sending out an offer. A few of them must be making money, because I see the same ads over and over.

I have a rule: no matter how good the offer sounds, I refuse to buy anything from a spammer. I follow the same rule for telemarketers. The rule is “never.” I don’t want to encourage these people. But I do at least read the spam’s headlines.

The Internet has about half of the adult American population on-line. It is a good indicator of what the top half is thinking. These are people with credit cards. They can’t get ISP service without one in most cases. So, it’s an audience with money to spend.

Spam lets me see what the bottom tier of the upper half is thinking. The recipients are better off financially than most people on earth, even better off than most people in the United States. I can’t read more than a few magazines. Other than by reading Reader’s Digest, I can’t figure out what typical Americans are thinking. But by paying attention to spam, I can get a quick view of what people at the bottom end of the middle class are buying.

Spam is visibly amateurish. Major American corporations don’t indulge in spam. They don’t want the bad publicity. So, what we read in spam letters are the dreams and schemes of average people who think they can tap into great wealth with a $250 investment.

Most of these offers are from people with some business experience, but we rarely see anything from a firm that looks as though the marketer has any idea of how to market. There is some sophisticated marketing going on these days on the Internet, but it’s not through spamming.

The master of non-spam e-mailing is Dr. Ralph Wilson, “Dr. Ebiz.” Over the last five years, I have watched Dr. Wilson go from a designer of very nice Web sites to a master Internet marketer. What he is doing offers a viable model. He has a free newsletter (100,000+) that gets sent weekly. He uses it to get subscribers to his $49/year newsletter (50,000+). He sells ads in both. The cost of mailing are a few thousand dollars a year. Do the numbers. Ralph Wilson has found a model that works, and he is now refining it. But he warns his readers against using all forms of spam marketing.

Here are the topics that I see in spam every day.

PORNOGRAPHY

There are pornographic offers. I note the nature of the headline’s offer. Have I seen this headline before? I am interested in deviancy as a social phenomenon, and Web pornography I regard as a form of deviancy. Because of spam, I can see where mass-market porno is today. I want to know how far we have come from the world of Ozzie and Harriet. Pretty far, it seems. Spam offers sometimes are for a fringe market — pornography also has a bell-shaped curve — such as “animal buddies,” but not too often. But the overall moral degeneration is obvious. Hugh Heffner is the old man of pornography in more ways than one.

The pornographers are still making most of the money that is being made in the Web. The Web is still like the videocassette market in, say, 1985. Pornography went through a major transformation with the videocassette. It remains big business, but it is no longer visible in the videocassette stores. I notice that there is more pornography — sealed — for sale in Hastings’ magazine racks than there is in Hastings’ video/DVD section. The older printed pornography maintains a visible market, but the videocassette market has gone into the shadows.

I think this is what the Web pornographer have already found. There is a steadily growing market out there, and new digital technologies — “steaming video,” maybe — will continue to be appropriated by this subculture, but in general, pornography is not visible, even though it’s hidden in plain site. There are millions of desperate people out there, addicted people, but they are not anything like a majority. If they were, the DVD’s would be mostly pornography.

SAVE MONEY NOW

Then there are the save-money offers. Discount term life insurance is big these days, as well it should be. The newer level-term insurance policies really are terrific. Last year, I went to a Web site, http://www.termonly.com, and saved $600 a year on a million-dollar policy, a policy that let me extend the new fixed rate out ten years, to replace a policy that was six years old. How can they do this? Are we living that much longer? No.

The economics of the new policies has to do with reducing company risk. With an annual renewable term policy, the company can’t cancel your policy unless you stop paying. If you get cancer in year eight or nine after you buy the policy, then you’re going to keep paying your premiums. The company will pay off your beneficiaries. But with ten-year level term, they get to re-examine you medically when the policy runs out. If you’ve got cancer, you will lose your coverage.

This tells me that degenerative terminal diseases are big loss-producers for life insurance companies, diseases that kill you slowly. Level-term policies let the companies cull out the high-risk prospects after they get sick. This is good for us low-risk people who rarely get sick and whose parents are still alive, as mine are. We aren’t paying higher premiums to co-insure sick people. We are essentially buying fatal accident insurance, which insures against a rare event. The premiums are lower.

The next category of save-money spam is low-interest mortgages. I think the bulk of these re-finance offers are being sold to people who want to get their hands on extra money. The ads don’t say this openly. They initially promote the savings feature of lower rates. But the fact is, most people will use their new credit line to the maximum. They will borrow enough money to absorb all of their homes’ equity. If they borrow only enough to pay off their existing mortgage, re-financing is wise. But most people will grab all the debt they can get their hands on. Here is an offer that I received last week.

Anyone who borrows 125% of his equity is not looking to reduce his debt. He is tapping his last remaining source of cash.

Then there are the ads to help you get out of debt. These seem to be counter to the mortgage re-finance offers, but they aren’t. The people who have gone into the hole with their credit cards at 18% can pay off their cards with money borrowed from the mortgage issuer. They will pay 7% instead of 18%, and their interest payments are deductible from their gross income for income tax purposes. The problem is, they will probably start using their cards again. They are addicted to debt.

The ads that offer to help people to reduce their debt are based on the fact that credit card companies will cut rates from 18% to 9% if they think the card holder is about to go bankrupt. So, there is a new industry: debt counselling. These non-profit firms make their money from the creditors, who prefer to get paid something rather than nothing. They are kind of like debt-collection agencies, except that they are pre-default collectors. They can position their services as helpful rather than coercive, unlike debt-collection agencies.

The creditors would offer the same deal to individuals directly, but individuals don’t know that a letter to the credit card company explaining their predicament and offering a lower payment schedule will get them a better deal. The creditors aren’t about to publicize this. Otherwise, they would get hit with thousands of sob-story letters and threats of going bankrupt. Creditors prefer to let the credit counseling firms serve as intermediaries. Someone else makes the offer for the card-holder. It looks better this way. The creditors can look cooperative without looking weak.

BUSINESS OPPORTUNITIES

There are ads to show you how to make a lot of money by becoming an independent businessman. These are the business opportunity offers. They are no longer confined to the local classified ad section or small-circulation business opportunity magazines. They testify to a longing of millions of men to start their own businesses, on the false assumption that running a business is easy.

Between the time that I started writing this article and when I finished it, I received this offer.

The punctuation indicates a man with not much of an education, at least not in English. He capitalizes everything. He uses a comma splice. He neglects periods.

His targeted audience is struggling financially. “RIGHT NOW, Are You Earning a Strong Monthly Income?” Income opportunity-seekers are like dieters: always hopeful and soon disappointed. “Stop Searching and Start Earning Immediately!”

I got another offer a few minutes later. It is better written than most, but the offer classifies it as an ad aimed at the terminally naive.

Already, you should sense where this is headed. It’s a chain letter — a good, old-fashioned chain letter. But the offer is not being made by the U.S. Postal Service, so it’s not illegal. (I never have figured out why chain letters are illegal. The offers and the checks are sent by first-class mail. The Post Office makes whatever positive cash flow it generates from first-class mail.)

Actually, I do not recall having seen this offer before. But that doesn’t mean it hasn’t worked.

This guy is telling me that two people offered voluntary testimonials for him to publish by name, who pulled in several hundred grand each in $5 bills. Do I believe this? Suuuuure I do!

He makes the program legal by having you order reports. Of course, the reports cost next to nothing to deliver by e-mail.

The instructions for filling in the forms are so complex that I figure the guy spent several years writing software manuals.

Here is another testimonial:

Well, Mitchell, had I been you, I would have kept my mouth shut. As the Bible says, “A prudent man concealeth knowledge: but the heart of fools proclaimeth foolishness” (Prov. 12:23). By the way, Mitch, if you’re an accountant, why did you put M.D. after your name? Times must be hard on physicians in Chicago. And, also by the way, why aren’t you listed in Yahoo’s yellow pages under accountants? You should be.

I suppose that someone may have made money off this thing. It’s possible. But this letter indicates that the greed factor is alive and well on the Internet. People with enough capital to run up credit card bills are ready to send $5 cash to each of five people on a list.

I suppose the most depressing thing about spam is the moral condition of senders and would-be responders. The spammers are trying to get rich quick. They are appealing to the base motives of readers: sex, money, and fear. Spam-responders think there is a magic bullet for sale by people not much better off financially than they are. The senders see the responders as their personal magic bullets. Unlike a legitimate e-mailer like Dr. Wilson, who offers serious advice on non-invasive Web-based marketing techniques, the spammers are looking for a quick fix to their own financial problems.

So far, there really isn’t too much spam. This is the good news. When you think about how cheap it is to do bulk e-mailings, it’s amazing that we don’t get 100 to 200 spam offers a day. I can go through most of mine in about 5 minutes. It takes me that long only because I read the headlines. I want to see what people think will sell, especially the same people with the same headlines. There aren’t many repeats, but I look for the repeats. They give me information on the state of the lower end of the digital nation.

MAINLY INFORMATION

Most of the Web is informational. It is broadcast-oriented. It is for very dedicated people who want to get their story to an international market.

With Google — how do they make any money? — the Web is a 2.3-billion page encyclopedia. Google searches the complete index of all 2.3 billion pages, some of which would take 200+ pages to print out, in 0.3 seconds. How is this possible? I pay nothing for this. For almost any obscure fact that I can even vaguely recall, there are at least half a dozen Web sites that will tell me specifically what I thought I remembered.

This is the division of intellectual labor as never seen in human history. The Web is Professor Hayek’s spontaneous order on a scale inconceivable a decade ago. Think of The Encyclopedia Britannica. At $1,300, printed, it used to offer information that had grown out of date before the ink had dried. Now we can buy a CD-ROM copy for under $20. It can be updated without much trouble. The company’s Web site tries to sell a printed version of Compton’s Encyclopedia for $559, but I cannot imagine anyone who would be silly enough to buy it. It is sold to people who do not understand academia, but in the name of academia. The ad copy says, “The Perfect Learning Resource for Every Family.” What family do they have in mind? Kids never did read encyclopedias. Did you? By the time you are in college and might actually need one, it’s in the library free of charge. Then you find out that quoting from anything but a narrow-focus academic encyclopedia gets your paper marked lower. You are supposed to quote from scholarly journals and monographs. All that an encyclopedia is good for is legal plagiarism: the bibliography at the end of each article and the basic outline of the committee-screened version of the topic.

The spammers think that they can get people to send them money for better information. A few spammers will prosper for a while, but information is rarely force-fed outside of a classroom. When people are looking for information, they are active. They want something highly specific to meet their immediate interest. The odds against a spammer are great: to discover a hot button for the masses. Hot buttons by their nature appeal to a narrow market. “The larger the audience, the cooler the button.”

That’s why I watch spam, and why I suggest that you do, too. Spammers are working night and day to figure out hot buttons for the masses, or at least for a large enough percentage of e-mail readers whose purchases will pay for the spam.

What I have learned from spam is that the burden of personal debt is beginning to cause trouble. People are looking for lower interest rates, as a last desperate measure: pre-default. They are also looking for pots of gold at the end of digital rainbows. They want financial independence. They want an easy, one-step way out of their present situation.

You don’t see “end your pornography addiction” offers from spam. You see “the first one’s free, kid” offers. So, the pornography market is still a growth market. Addicts are not ready to quit.

You do see “get out of debt” offers. These are not all offers to increase the size of your principal owed by lowering your monthly interest rate payments. Some are, but not all, and the ones that are do not promote this openly. This tells me that spammers think there is a large market out there, an audience that perceives that they are in too deep, and that they must get their lives together by getting out of debt. Spam readers may be looking for a quick fix, but they presumably already know that, apart from declaring bankruptcy, there is no quick fix. I don’t see offers on how to declare bankruptcy. I see offers on how to get out of debt instead of having to declare bankruptcy.

CONCLUSION

The nation’s debt addiction is continuing, but its growth rate has slowed. The recession did not slow it enough. Consumer spending continued. The savings rate has collapsed.

What I’m looking for is a pattern of spam that moves from the “get out of debt” mode to “get a credit card that offers a better rate.” This would point to a booming economy. I know this offer appears all over the Web. I know a man who makes search engine-based Web offers — not spam — and he says that offers to get out of debt do about as well as offers to get a better credit card. It’s kind of like candy sellers and dentists. They need each other. But spam offers are not for lower-rate credit cards. They are for debt-reduction programs and mortgage re-financing programs, which are sometimes sold up front as a way to lower one’s debt burden.

The mortgage rate ads are the ones I pay closest attention to. I am watching for this offer: “Rates are going back up: re-finance now.” When that one starts hitting your mail box, you will know that we have moved back into the inflation scenario. I think that will indicate a loss of confidence in the dollar. That will be a bad sign for the stock market, as if signs were not bad enough already.