10.06.2008

I know what game you're trying to play, here

A local news station reports that retailers are beginning their Christmas sales early in anticipation of a "sluggish" holiday buying season. This, for the retailers, is a smart idea. As the authors of Unplug the Christmas Machine point out, "Advertisers discovered that the amount of money people spent was influenced more by the length of the advertising campaign than the length of people's gift lists" (p.19). So it doesn't really matter how many people we're buying for or how much money we tell ourselves we're going to spend. The longer the stuff stares us in the face, the more likely we are to buy it. This discovery was made during the first big US holiday advertising campaigns of the early 20th century.

Only here's the thing. Couldn't this year be a chance for people to realize that maybe they don't have to do the big huge debt-inducing celebrating they've been doing? And that it can be okay to simplify and the world won't stop?

It's been interesting listening to editorials about Our Current Economic Crisis, and how what really needs to happen is for Americans to get out there and spend. By being good little consumers, we can save the day, the country, AND THE WORLD.

Except that logic seems wrong to me. I mean, maybe it would help the GNP and the businesses who are making less this year than they're used to, but would it actually help us as individuals? Telling us to run out there and spend money on things we may not need and almost certainly can't afford? Because maybe I don't want to jump onto your Hamster Wheel of Disposable Crap, government. And yes, I'm sure all of our insatiable greed for whatever is newest, best, biggest, and shiniest has helped our economy. Until, you know, we saw the consumer debt amount climb and the bankruptcy and foreclosure rates rise. Because that's never bad.

I'm not an economist, at all. But I do wonder what would happen if, once Our Current Economic Crisis settles down, we started making smarter and simpler choices and blew raspberries at those who tell us it's our patriotic duty to be the World's Biggest Consumers.

16 comments:

bawb said... [reply]

My grasp of macro is admittedly tenuous, but I'm inclined to agree--why should saving be selfish? Why don't we take a turn depressing the interest rate and give the Fed a rest?

Th. said... [reply]

.

I say we throw out our economy and get an all new one.

Heather said... [reply]

Amen. Or how 'bout we only buy things for Christmas that we can AFFORD? That'd be novel.

Scully said... [reply]

The problem is that, as a consumer-oriented economy, our economy is heavily weighted towards the 'services' end of the goods & services continuum. Which means that if we don't get out there and spend, spend, spend, employment will go up. I'm not saying it is right, or that simplifying life isn't the answer. But most economists and polticos are in search of a quick/easy fix for right now. They aren't so much worried about the distant future. Kind of like laying tile on a cracked foundation. The tile will probably be fine for your lifetime, it is when the earthquake hits in 30 years that the house will be in deep trouble.

Scully said... [reply]

sorry, that was supposed to read 'unemployment will go up.' I had to write a paper, so sleep suffered.

cooldad said... [reply]

The spending thing is about understanding that consumer spending (using goods and services) is what keeps the economic engine running. That doesn't mean spend unwisely or on credit. This is a primary reason for cutting taxes. The theory being that if Joe Public has more of the money he earns he can afford to buy what he wants, which inturn stimulates the economy and creates jobs as opposed to giving our money to the government in the form of taxes so the gov't can spend it on what they want.

taturner said... [reply]

It's interesting that, in one breath they say that it's patriotic to spend money, but in the next breath, democrats want to raise taxes on those making $250+ a year because it's patriotic. I ask, how do you expect those people to go out and SPEND money when the government is already taking it?!!

DP said... [reply]


This video
really helped me out.

Cicada said... [reply]

DP, that was an awesome video.

I am no financial expert. At all. But I've wondered about this whole "spending to save the economy" thing, too. Take me, for example. I provide a service. I don't work for a company. I rely on people paying me directly for my designs, or for my classes. And unfortunately, the service I provide is mostly a luxury item. People can do their own wedding invites instead of paying me (except that they'll suck). People can get by without beautiful web graphics. So in the grand scheme of things, the service I provide should be one of the first things that people cut out of their budgets.

But that kindof leaves me SOL. So in that way, I think I understand why the government tells us to keep spending. It keeps me and people like me in business. But I don't really understand what the impact on the economy as a whole is; just the impact on me.

That being said, Murray and I have talked about how it's strange that technically, people could be going into debt to pay for our classes or services. They could be spending their money on us unwisely. But we profit from their stupidity. We don't want to---we don't know if the people paying us can actually afford us. It's not our choice. It's theirs. But it's weird to think that because of our service that we've provided for money, a client could be putting themselves in further financial distress. Like we should be accountable somehow, but of course we're not.

Anyway. I'm just rambling. Hey, how about an extra 10% off of my services to anyone who reads this comment? Haha.

Now please excuse me while I go manually spam thousands of other blogs.

Jenny said... [reply]

I have no guilt about not making unnecessary purchases and being more wasteful than I already am. I do think it's sad though that because our country went on this huge spending binge and now we can't keep up with it it's hurting the economy, like how car sales are down 40%. They obviously shouldn't have been that high in the first place though, right?

Science Teacher Mommy said... [reply]

Is Joe Public the same as Joe Six Pack I keep hearing about?

Some Environmental Scientists are pushing governments to recognize factors beyond the GDP to determine the wealth of a country. They believe a whole and healthy economic picture would include a scaled rating of environmental damage, number of people living in relative poverty, and the amount of debt carried by individuals and by the government.

Such a formula would be incredibly complicated, but if the current GLOBAL MELT DOWN is any indication, the US's "real" ranking would be somewhere between Bangladesh and Burma for stability.

CoolBoy said... [reply]

I'm pretty much the smartest guy I know, and in my opinion, I'll agree with Dad. Buying stuff does stimulate the economy, but the key is to not go into debt and screw yourself over. Kind of like what our government has been doing for the past few decades. And keeps doing...over...and over again.

coolmom said... [reply]

So I really should go down to Skinny Raven on Friday and get me some "on sale" Danskos. Just pay cash. The economy will love me and my feet will love me!!!

chosha said... [reply]

But all their debt structure just fell down, Nem. Don't you want to help them re-build it, and their profits, at your expense?

Nemesis said... [reply]

So, um . . . just watched the Presidential debates and they ABSOLUTELY talked about this. Which means I am possibly a genius with my Finger on the Pulse.

Nells-Bells said... [reply]

I also love that the government tries to teach us that yes, we will bail you out (AIG) and you can still take that $400,000 holiday you were planning because, you know what, you deserve it. You've had a rough couple of decades trying to support greed and, inevitably, tear down the economy. Just pat yourselves on the back or just have the masseuse do it for you.

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