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February 4, 2008 KUFM / KGPR T. M. Power Consuming Our Way to the Good Life
Both Democrats and Republicans are trying to rush an economic
“stimulus package” through Congress. The general idea is for the federal
government to get a thousand or fifteen hundred dollar check into the
hands of most American households in hopes that they will immediately
go out and spend it. That, it is believed, will stimulate higher levels
of production in Apparently, just as we were told after the 9-11 attacks, our highest civic responsibility to the nation is still to go shopping. Help your country, spend more! There is something seriously myopic about this formulation. Many would argue that one of the reasons that we are facing the current financial meltdown is that our financial institutions lent out money irresponsibly and we as consumers took it and spent it irresponsibly. The sub-prime mortgage debacle was just the tail end of the debt-financed spending bubble in which most of us have been participating. As home prices flew up over the last decade, many of us refinanced our homes and took out some of the windfall equity provided by those rising home values and spent it on vacations, cars, entertainment centers, remodeled homes, etc. Others yielded to the barrage of credit card offers and “come-on” low interest rates and supported a higher level of consumption by borrowing money at what ended up being ruinous interest rates of 30 percent or more. Apparently all of that borrowing to support consumption was not enough or not sustainable. So now the federal government is going to borrow more money from the Chinese and give it to us to spend and hope that will revive the economy. Borrowing money from much poorer, developing countries to support a consumptive lifestyle we cannot actually afford might be labeled ”decadent” except for the fact that we are not collectively a “leisure class” lazily enjoying a life, free of work. We commute long distances, work long hours, hold multiple jobs, put everyone in the family over age 12 to work and still find that we cannot make ends meet and have to borrow to “live a decent life.” How can that be? The puzzle extends to the public realm too. Because our consumption needs are so high that our budgets are always over-extended, we are very hostile to paying taxes to fund public services. As a result our bridges and highways are crumbling. Our public schools deteriorate as they are starved for funds. We have largely privatized our public colleges and universities, forcing young people to begin their economic lives up to their necks in debt or face an even more damaging choice: foregoing post-secondary education altogether. We are the only developed country without universal access to medical care. Amidst our glittering consumption lifestyle, we accept growing squalor in the public sector. This is a strange position in which the “richest country in the world” finds itself: Overworked, always financially strapped and heavily in debt, and unable to support high quality public services. Consumption levels have clearly risen and the quality of many of those consumption goods has improved. But we do not feel better off. What gives? An important part of the answer is that we judge our well being not in terms of what we or our families have but what we have relative to others. If our consumption levels have risen significantly but that of the people we compare ourselves to has risen noticeably more, we do not feel better off, we feel worse off despite the higher consumption levels. And so we try to catch up or at least try not to slip even further behind. So we work longer hours, send more of the family to work, support politicians who promise to cut our taxes, and borrow more money, all in hopes of closing the gap with those just ahead of us. The problem with this solution is that in a society with significant and growing inequality, all of us cannot improve our position relative to others, no matter how much money we make or how much more consumption we engage in. Everyone cannot be better than everyone else. We cannot all be “above average.” The effort simply puts us on a competitive consumption treadmill that exhausts us but does not improve our sense of well-being. But we dare not quit the race or we will decline in relative status. The collective result of our individual actions makes most of us worse off and, in the process, degrades both the natural and social environments. A lose-lose proposition. This is like an arms race that no one wins but impoverishes everyone and continuously threatens everyone with massive violence. The only solution is to agree collectively to stop the wasteful, self-defeating competitive behavior. But how do hundreds of millions of Americans who pride themselves on being independent and love to hate the government ever arrange to move in that direction? When have we ever heard a political leader urging us to move in that direction? In a world where we and our leaders define us as “consumers,” it seems unlikely that many of us will ever step off the treadmill of competitive consumption. Instead we will wait anxiously for the federal government to borrow some more money from the Chinese and send us our check so that the family can head for the shopping mall. |