Post-Thanksgiving

Well, Thanksgiving holiday has come and gone, and D. is flying back here tonight (yay!).  I quite like the holiday, not least because it is about food and family and not much commercial, but I never have much to say about it.  Because it is a short holiday, and my family's pretty spread out, we don't make a big deal about having everyone swoop in for a frenzy of eating and catching up.  At the same time, we do consider it something important, and not a holiday for being alone. 

So I have generally ended up doing Thanksgiving with my virtual family (these are the people who I wrote about during last year's fires), who are very much into having lots of food in combination with a casual atmosphere and silly party games.  Folks, if you ever want or need to find ways to entertain yourselves while snowed in with no electricity, these are the people to go to. 

Usually we go camping or meet up at the parents' house and smoke-barbecue a turkey, but this year the parents were up north visiting their new grandkid and my own parents, so us younger folks had to fend for ourselves.  It was great.  We converged on the house of mutual friends, overcame a slow oven, a kitchen in the middle of remodeling, and a clogged toilet, and celebrated with table-dancing to OPP, reading stories to the kids, fending off mooching dogs and cuddling cats, protecting the very mobile and energetic toddler from his worst impulses, and joking about the kitchen and toilet.

I don't normally go through the "what I'm thankful for" routine, because I am somewhat fearful of jinxing the things I love, but if I had to count my blessings, these people would be near the top of the list.

Comments

[LiL]

That sounds like a great Thanksgiving.

[Chris Clarke]

Well hell, now I'm afraid I might have jinxed you, Rana.
Does anyone here know a good unjinx utility for OS X?

[Rana]

*grin*

Ah, see, Chris, it's my own weird personal power to jinx people and things. You need not fear.

(Thanks for the kind words.)

[Chris Clarke]

Hey, you should have seen what it said before I edited out all the effusive stuff! :-)

[Harrison]

I quite like the holiday, not least because it is about food and family and not much commercial, but I never have much to say about it.

I was reading that and thinking, yes, that's also a major part of why I like it: the food and the "not much commercial."

Which made me think of that group that goes around promoting a "buy nothing" day, and encouraging people to give each other "inventive," home-made gifts rather than "giving into commercialism" and going out to buy things. Yeah, I'm all for that, right?

Though I'm inclined to like the message, I realize that I don't agree with the group at all. If people cut back on their spending significantly, it crashes the economy, and then many of the people who have cut back on their spending lose their jobs.

The ethical imperative is to spend, it seems, at least within the limits of what you can.

[Rana]

Yes and no. It will crash an economy that rewards the growth of profit, more specifically profit _margins_, rather than sustainability. (That is, a business is viewed negatively if it runs a 10% profit every single year in a sustainable way, but a business that goes insane for several years, with a profit margin of 10%, then 20%, then 30%, will be viewed positively, even if it's clear that a crash is inevitable.) Personally, I'd rather reward the sustainable model and starve the companies (or CEOs) that want to "get rich and get out."

It also depends on what you mean by "spending." Just what is it that you are purchasing? Is it services? Is it goods? If goods, where are the materials for those goods coming from? Is it an inexhaustible resource? If so, is it a good idea to keep purchasing goods made from it, in excess of need? If services, are the people performing the service being paid the full worth of their labor? If not, why not? Is someone else benefiting from their labor, and, if so, is that someone (or institution) able to justify their taking a piece of the pie through what they provide for their employees? And what if the money you spend supports activities that are socially or environmentally dangerous or destructive? Is this money well-spent? If not, would withholding your money from such purchases do greater good than spending your money on these things, or even on similar things?

And so on. If it's simplistic to argue that "buy nothing" will solve everything, the converse is true, too. The answer is to be an informed consumer who thinks about the costs of one's purchases as well as the goodies.

But I think you know that.

[Chris Clarke]

The ethical imperative is to spend, it seems, at least within the limits of what you can.

I see Rana's already said what I was going to say regarding the environmental impact of the consumer culture. So I'll just point out that a HUGE number of economists are worrying that US consumers (at least) are imperiling the sustainability of the US economy by not *saving* enough money. Credit card debt is astronomical, and (by one estimate I read yesterday) 10 billion dollars a year is being spend to pay down interest and finance charges on consumer plastic debt alone. That money would be much better used in retirement plans, health insurance, or just socked away as cash reserves.

I'm no purist: I have a 40 gig iPod and a new handheld GPS receiver. But to suggest that the average person should spend up to their limits regardless of actual need for the items bought is somewhat short-sighted, in my view.

[Harrison]

Well, first, let me say that I was being polemical.

On savings: it's been so bad that the savings rate has actually been negative at times. (Though that can be a bit misleading, because the savings rate does not include non-secured investments.) But it's hard to see how we can alter this much without running the risk of a deflationary spiral (which we be far worse than inflation...). At least not right now, while wages are stagnant/falling.

I'm not an economist, so it's hard to make any determination between competing theories. Most of what I've read indicates that the danger posed by consumer debt is less than critical; the real problem is with government debt. Again, the reason debt is a bad thing globally (not just for an individual over his head) is that it decreases the amount of money that can be borrowed to fund economic expansion. Here it's federal spending that is the issue.

And as for consumer debt -- it's not clear what the solution is. Yes, it would be great if we could save, but, at the same time, we can't afford to see a decline in consumer spending while the economy is so weak. (This is a well-known trap. The economy turns down, consumer confidence drops, consumer spending drops, and the economy gets worse.)

Saying that consumer debt is too high is not the same thing as saying that consumers should spend less. (The "real" problem may be a weak economy and stagnant wages.) Though, again, I'm sure there are competing theories... (Just curious: which economists are advocating for a drop in consumer spending? What sort of decline do they think to be safe?)

And so on. If it's simplistic to argue that "buy nothing" will solve everything, the converse is true, too. The answer is to be an informed consumer who thinks about the costs of one's purchases as well as the goodies.

And informed consumer... would be nice. So would an informed electorate. Maybe you're right, but I don't see how we can get the kind of structural change you're talking about by attempting to "shape" consumer spending through education.

[Rana]

I'm not saying it would be easy. But given the alternatives, and the value of an informed, intellectually curious populace in and of itself, I'd rather try than not.

And I don't see consumer education as happening in isolation from efforts to force structural change by other means -- but I can tell you, that unless the mainstream agrees with those structural changes, they are not going to last.

(But what can I say -- I'm a radical, in that old sense of being someone who wants to reform the system from the roots on up.)

[Harrison]

I'd like to recast that last post a bit: yes, consumer debt is a huge problem, but it's not one that's easy to solve. The debt is a problem because it's a sure indicator, that, if other conditions do not change dramatically, the current level of consumer spending cannot continue. If consumer spending drops, we hit a recession, and then the savings rate is *still* bad because people are unemployed.

We have so many problems like this -- it's probably part of the reason that the chief economist for Meryl Lynch (think I have that attribution right) says that we have only a 10% chance of avoiding "economic Armageddon."

[Rana]

Ah. Well, I'll let Chris handle the debt question. I'm certainly a lousy role model here; while I have several retirement accounts and I'm currently saving aggressively for my internship, my credit card bill is still far too high -- the lingering effects of when I was unemployed. (Bleah.)

[Chris Clarke]

Well, I'd be an even worse role model on the debt question if not for Becky, because I paid cash for everything before I met her. Or maybe that's better. Dunno. Actually, Rana, you're a perfect model come to think of it: the majority of declarations of bankruptcy are by people who have a significant misfortune befall them: job loss, divorce from a wealthier partner, catastrophic medical expenses. You're, like, the average American and stuff.

Harrison, I think it would be interesting to take the "typical" consumer and gauge just how much of each dollar spent went either directly or nearly so to generating 1) any job, 2) jobs in the US, 3) jobs in her local community. I'm guessing even the first would be surprisingly low, the remainder comprising things such as debt service, stock dividends and the like.

I tend to think that the economy is a bad indicator of people's quality of life. I think there are models by which one could posit a wealthy, active, vital society in which there's only enough paid work to keep people employed ten hours a week.

[Rana]

Heck, if I could make enough to pay my bills for only 10 hours a week, I'd be all over it! As it is, I'm paid 4/5ths time so that I have one extra day off each week.

Hmm, now that I think of it, most weeks it's just wasted time, so probably it does work out to about 10-15 actual work hours.

Now, I do realize this wouldn't work for everyone. But given the number of times during my temping period I discovered that my "day's" work really entailed at most an hour or two's real labor, I suspect that this is true for more clerical/admin jobs than not.

Of course, trying to persuade employers to pay the same salaries for "less" work seems very very difficult.

[Harrison]

Harrison, I think it would be interesting to take the "typical" consumer and gauge just how much of each dollar spent went either directly or nearly so to generating 1) any job, 2) jobs in the US, 3) jobs in her local community. I'm guessing even the first would be surprisingly low, the remainder comprising things such as debt service, stock dividends and the like.

That's probably truer during "healthy" economic times.

I work in software, and I see the connection very clearly. Over the past several years, companies (software and non-software) have seen sales decline. When they see sales decline, they cut spending. Their IT infrastructure becomes increasingly inadequate (either because of scalability issues, or because of better software emerging), but they still put off spending until they see sales.

When they see sales, they start to spend on IT projects. Software companies are understaffed right now -- so as soon as they see orders increasing, they start to hire. (IT is a good or bad example, depending on your point of view, because it's used by all sectors of the economy.)

Sorry: the example is rather long-winded and lacks the kind of statistical support you were speculating about. To simplify a bit: I don't think it just a question of how much you spend, but also of when you spend.

Also, Rana, as for role models: that's the crux of the problem. For any given consumer in debt, it's almost certainly in their best interest to spend less. It may well be in the best interest of any well-off individual. But if *everyone* spends less, it's bad for you and for everyone else. So, sure, you want to spend less money, while you want everyone else to keep up the spending spree, at least while the economy is so dependent on it. (Of course what we really want in an economic policy that would lessen the economy's dependence on this level of consumer spending, but that's another question.)

That was my polemical reference to "ethical imperative." (The obvious categorical imperative problem.)

[Rana]

But see, Harrison, I don't think it's "another question." I do honestly believe that it is not inherently a matter of "if I spend less, the economy will suffer." (For one thing, I don't spend all that much to begin with beyond basic necessities -- I can't afford to do so.)

The economy will only "suffer" if we define "economy" as "corporate capitalism predicated on constant growth." And, yes, that is the economic system we're dealing with now, but this is not a problem that's going to go away if we keep saying that to ourselves. I can't change large corporations, or the actions of Wall Street, all by myself -- especially since they are going to fight tooth and nail to prevent changes to a system that benefits them (at the expense of us).

Now, I agree that the negative effects to the people at the low end of the economic food chain are real, and worrisome, and something to take into consideration. Yet in the long run, is an employee more screwed if his or her company stops hiring because it's not selling as much, or because the CEO decides it's going to benefit his bottom line more to send the job overseas?

What I'm trying to say is, you're placing far too much responsibility in the hands of consumers for the success or failure of jobs creation or maintenance. Yes, there are some small businesses that do live on the profit edge and who do care about their employees. And therefore it is probably good that when we can, we shift our spending habits away from big corporations in the direction of such responsible companies.

But really, the decisions about layoffs and such are in the hands of the CEOs and boards of trustees and the likes. So long as those folks are earning 40 times the salary of their average employees, I kinda think that my decision not to spend $30 on a t-shirt is not the economy-shaker you're suggesting it would be, and small consumers like myself are not the best targets of economic reforming zeal (so this argument could probably be used against the Buy Nothing Day people too).

Put more simply, it is not possible for the average person to consume _nothing_. It is also not possible for the average person to make companies hire more workers. But it _is_ possible for the average person, in cooperation with other average people, to shift his or her spending patterns in directions that reward socially responsible companies.

[Harrison]

What I'm trying to say is, you're placing far too much responsibility in the hands of consumers for the success or failure of jobs creation or maintenance.

I'm not placing the responsibility there (as in duty.) (I wasn't serious about the ethical imperative.) It shouldn't be there. But most other economic indicators have been dismal (by and large) over the past four years.

Consumer spending has been at full throttle and it's about the only thing that has made our "technical" recovery possible. If the economy were healthier, it would not be so dependent on this level of spending. It *should not* be this dependent on this level of spending. But every economist I read says that it has been, for better or worse. Otherwise, there would have been another recession, or a longer one, and that always entials means a higher rate of unemployment.

As for the need for change, well, I think we're largely in agreement about that.

[Rana]

Yeah, and I don't think we really disagree about the effect of consumer spending on the current economy, either.

I think most of our disagreement is resting on different perspectives; you're looking more at the now, while I'm looking more to the future.

As I see it, consumer spending is keeping a very leaky boat afloat, a boat that keeps springing more holes than we can patch. Yes, currently we need to keep patching the holes, especially since we haven't thought about how to build a better boat yet. I do agree with you on this.

Eventually, though, (and this is where I've been looking as I've been posting my arguments) it's going to sink if we keep going on as we are; the question is when are we going to change boats. Are we going to have a new one prepared or are we going to find ourselves swimming around clinging to bits of flotsam? Choosing the former course will result in more leaks going unpatched (because that energy is going to building the new boat), but in the long run it looks better to me.

(Much the same could be said regarding environmental issues, but I think I'll leave that for another day.)

[Harrison]

Yes, I think we are in fact in agreement on both points.

Wow, I really hijacked this thread and took it in a different direction! Hope you didn't mind :-)

[Rana]

Not too much. If I had, I'd have started a new post.

Now, about them holiday parties -- did anyone else have a good one? :)

[Harrison]

Had a great one! Had these fantastic fried shrimp/creame cheese (really, it's good) appetizer and a brine-basted turkey.

[Chris Clarke]

I spent time Thursday walking around with my little niece as she held onto a finger on each of my hands. She just took her first unaided steps Saturday, probably because of the inspiring squeaky shoes her grandmother gave her. Friday I partied by myself climbing Mount Diablo. (But Rana's already heard about that one.)

And on the previous subject, I just found this.

[Rana]

Hee. There's more of those, Chris. Go to jimbo's blog (The Cul de Sac) and go to the anti-Xmas site.