The biggest problem here is information asymmetry. The market for these time share schemes is very inefficient because the sales people have more information on both the value and cost than the customers. This is why people commenting here who have out of band information about this were unpersuaded despite finding the pitch emotionally compelling / exhausting. Regulations to require earlier and less subtle cost disclosure would help. But this is right in the zone where it's difficult to take political action: most people don't care very much about this so you can't win an election or build a career on fighting this, and the sales companies care a lot, so they'll organize a dedicated opposition to you if you try.

> The biggest problem here is information asymmetry.

This gets to the heart of a question I've always had about unfettered markets, and never seen answered.

It's widely acknowledged that markets don't just satisfy demand, they also transfer information. If you know something other people don't, you can make money, but in doing so you'll gradually disperse your unique knowledge until it's no longer valuable. (Either directly, by selling it, or indirectly, as people see that you're consistently willing to make transactions other people wouldn't.) At best, this is a payout for the productive activity of spreading knowledge (the argument for arbitrage). At worst, it's a short-term scam that's self-negating.

This is all true. Timeshares spread information because people noticed "if this is such a great deal, why do you have to pay people to listen to the pitch?" And so timeshares got a horrible reputation with most people. When I talk to hard libertarians, anarcho-capitalists, and so on, this is their argument - it took some time, but the marked worked even with asymmetric information.

But... new information can be created, at least in economic terms. Timeshare pitches now have segments on why this timeshare isn't a scam like the old ones. There are new names for things that basically amount to timeshares. The focus of the scam has moved from high interest to high fees.

And so the scammers constantly 'make' new information that disadvantages everyone who lacks it, and get money spreading that information to the populace. Is the pure-markets system supposed to not have this problem, maybe by correcting too fast to reward the scam? Or is it just accepted that there will be some large and stable amount of scamming at all times?

Markets are just a tool. Entirely unregulated markets exhibit some undesirable properties. Society, through government, has every right to aim to diminish the ill effects of these undesired properties. But it also behooves society to be careful in how it regulates, in order to avoid diminishing the usefulness of this tool. It's a balance. This is not as sexy or simple in principle as either extreme, but it's the right answer.

This is one of those cases where regulation makes sense. I think regulations aimed at improving information symmetry are some of the best. They are fairly low impact; maybe they stomp on an arbitrage opportunity, but they don't limit the solution space nearly as much as regulations that simply proscribe what you can and can't do, for instance.

Basically: the "hard libertarians and anarcho-capitalists" are just wrong. But if they were to rebut with a take down of state controlled economies, I would definitely agree with them about that. The trick is to strike a good balance.

That's also how evolution works.

One of the main reasons I can't buy the "The consumers shouldn't be so dumb" argument is that there's usually a concentrated push back every time the idea of teaching basic financial literacy in high school comes up. I could understand it if people were taught basic personal finance, but most people are not taught these things.

How would you even regulated that? This is the sort of detailed complex gray-zone law that is hard to define and harder to enforce.

A more general increase in the power of contract and what the need to include to make them valid.

You could start by making it illegal to offer prizes to attend real estate sales seminars — decapitating their primary hook. Next, you could require interest rates to be in gigantic letters, and a whole host of other info to be required. You could also make it illegal for real estate developers to also be loan providers.

Force them to, up front, present a very clear, very basic, and in very legible print the exact terms, and exactly how much this will cost per month, per year, and how much interest will have been paid over that time. Including the addition of all fees.

Something similar to the nutrition label.

Require the sort of sheet you get with credit cards. Total annual fee, breakdown, interest rate calculated in a standard way.