US Politics

The United States of Consumption

By Joel S. Hirschhorn
Published December 19, 2006

The motto of the United States of Consumption is "In More We Trust." The contribution of American culture to humanity is consumption obsession.

Our epidemic of obesity, our land gluttonous suburban sprawl, our monster-size environmental footprint, our ravenous automobile addiction, and our heartless greed are symptoms of a deep-seated, sick mental state that keeps the economy humming. And it keeps increasing economic inequality and apartheid.

Mass consumption is also a distraction from the self-inflicted defeat facing working- and middle-class Americans in the class war they are losing. Americans are enslaving themselves with their spending and delusional prosperity.

The rich and super-rich in their McMansions, luxury cars, yachts, swank spas and private jets surely are laughing at how easy it is to manipulate the 80 percent of the population that keeps enriching them.

Many common folks are deluding themselves that they have a fair shot at joining America's super-rich — those households worth at least $10 million. According to an Elite Traveler poll, they will be spending 25 percent more this year than last on holiday parties, travel, and shopping. Among the top holiday spending categories: spirits for entertaining (up 57 percent to $22,300) and yacht charters (up 12 percent to $410,600).

The awesomely affluent will also be averaging $91,100 on holiday jewelry, $36,400 on designer fashions, $52,000 on luxury watches, and $25,700 on flat screen TVs and other electronics. Nearly 25 percent of them will travel by private jet just to shop for holiday gifts. Of course, there are many Americans who do have a good chance of joining the super-rich. They are the rich Americans.

Any regular person who does not understand that Americans are in a class war is out of touch with our economic reality. Rich and powerful elites that are running and ruining our country have the upper hand.

Wiping out the middle class to create a two-class society nationally and globally suits them. The Upper Class can steer most wealth to themselves and spread a small amount around to keep the Lower Class content enough not to revolt.

Ordinary people have a powerful weapon to fight their oppressors, yet have not yet used it. It is their money, more specifically their discretionary consumer spending. The reasons for not controlling and politicizing their spending merit examination. Time is running out to understand why millions of supposedly rational people spend themselves into economic slavery.

The paradox is that though the rich and powerful rig many aspects of the economy, financial markets, and international trade, they remain dependent on consumer spending to create national wealth and keep the economy healthy, because it accounts for some 70 percent of the GDP. In one sense, they are not able to physically force people to spend money. But in another sense they have done something nearly as effective.

They use the mass media, marketing, advertising and technological change to stimulate consumer demand for a host of products and services that people could easily live without. Compulsive consumer spending results from training, conditioning and brain washing that starts in childhood.

In a highly stressful society, consuming becomes a form of self-medication. To conform, fit in and deem oneself successful, Americans unquestioningly and reflexively shop until they drop, borrow until they hurt, and spend until they go bankrupt. They have lost control. Personal and household progress is not measured in terms of real increases in income, savings or net worth (wealth), but rather as the consumption of more stuff.

People may not have good health insurance or economic security or the money for their kid's college education, but they have a large plasma TV, a new cell phone and other electronic gizmos. They are networked and connected, and downloading themselves into economic oblivion.

While the Upper Class spends obscene sums on luxury products and services, the economic system creates relatively low prices for mass consumer goods. The key to this strategy has been globalization that uses low cost foreign labor to satisfy the consumption addiction of the Lower Class.

Americans have lost and will continue to lose good-paying jobs, but are kept in check with low-priced products appropriate for lower-wage jobs. National wealth is created, but not shared equitably with working- and middle-class Americans. Those who own Wal-Mart became billionaires while providing what is necessary to stabilize the Lower Class.

Easy borrowing is the other way to keep the Lower Class spending and in stressful debt. Borrowing is spending. Credit cards, debit cards, ATMs, education loans and seductive mortgages keep borrowed prosperity alive.

Money spent on interest and all sorts of fees pumps up the enormous financial services sector that has replaced domestic manufacturing as the core of the American economy.

Debt is better than chains to keep economic slaves docile. Borrowing for home, car and consumer goods purchases creates massive wealth for the Upper Class, while indebtedness keeps the Lower Class compelled to take whatever jobs the system makes available.

Who paid the $40 million bonus for 2006 given to Morgan Stanley CEO (just part of the $16 billion paid in company bonuses)? Where did the company profits come from?

Ultimately, it was many millions of working stiffs that paid higher prices for goods and services so that fees could be paid to the banking companies producing the enormous profits that enabled those obscene salaries and bonuses in the financial services sector.

Capitalism and the profit motive are fine, but things have gotten completely out of control. Insane corporate compensation saps an inordinate amount of wealth from society. The greed-masters do NOT create wealth – they legally steal it from the system.

This is reflected in this awful statistical reality: The share of the nation's income going to wages and salaries, according to the Commerce Department, has shrunk to 51.8 percent, the lowest share since 1929.

Illegal immigration was another stroke of genius to increase corporate profits. There have always been hordes of very poor people in Mexico and other third world nations. What changed was the decision among the power elites to make jobs readily available to all illegal immigrants that could get into the country.

Political influence was used to ensure that the government would not effectively protect our borders. After gutting labor unions, corporate bigwigs realized that illegal immigrants offered the easiest way to depress all wages for ordinary workers. The icing on the cake was that illegal workers would increase demand for imported, low priced goods.

Another sector creating enormous wealth for the Upper Class is gambling, both legal and illegal. It is at remarkable levels among Lower Class people. This is just another form of spending that is critical to another core economic sector – entertainment and leisure.

Gambling is the opiate of the masses, and local and state governments eagerly sanction gambling to expand tax revenues, necessary to offset the losses due to lower wages and the high costs of providing government services to illegals and the poor.

Speaking of taxes, the more people spend, the more regressive sales taxes they pay. Compulsive consumer spending is important to minimize the tax burden on the Upper Class.

What is the holiday season all about? Wake up! It is not about whatever religious beliefs you have. It is all about spending. The only way to win the class war is to withhold discretionary consumer spending to obtain what is necessary from our mis-representative elected officials.

Stop spending until our delusional president ends the loss of American lives and treasure in Iraq or the congress withholds funding for it, for example. The best gift of all to give to your loved ones is a drastic slowdown in your spending!

A tiny fraction of Americans have tried to shake consumption cravings, but obviously nothing has caught on sufficiently to reform our culture. A group in San Francisco, known as "the Compact," swore off buying new things, with very few exceptions. They have bought secondhand, bartered, borrowed, recycled and reused. As one member said, "And people hate us for it? Like it drives them nuts?" They are accused of being un-American.

Another campaign is Buy Nothing Day. People are urged to take a 24-hour break from the consumption compulsion on the day after Thanksgiving. The book Not Buying It: My Year Without Shopping was a success. Yet these and other efforts have not put a dent in the nation's voracious consumption. In More We Trust remains strong.

All these marginal efforts only offer psychological or spiritual benefits for committed individuals. Like any addiction, ending compulsive consumption is difficult. By politicizing reduced consumption through buycotts, political gains offset any "suffering" from reduced consumption.

So consider tradeoffs between less consumption and political actions that you feel are strongly needed. Your dollars are much more powerful than your votes.

Joel S. Hirschhorn, Ph.D., is the author of Sprawl Kills - How Blandburbs Steal Your Time, Health, and Money. He can be reached through his website: www.sprawlkills.com. Check out Joel's new book at www.delusionaldemocracy.com.

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By jason (registered) | Posted December 19, 2006 at 18:36:07

fabulous essay. You cover a myriad of topics in the US (and Canada) and link them all together quite nicely. I'm not sure the average citizen realizes how close the US economy is to collapsing right now....basically any event or series of events that forces people to do something other than shop, shop, shop and the North American economy would be ravaged.

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By dave (anonymous) | Posted December 20, 2006 at 18:28:38

AKA the US of productivity.
The US out prodouces all the other countries.

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By Brian Gordon (anonymous) | Posted December 20, 2006 at 18:30:11

Great essay. I live in Victoria, and the points apply to Canada, too. Our levels of consumption - and the consequences that accompany them - are positively sickening. The MegaCorps don't go overseas for low wages; they also get lower worker safety standards, lower environmental standards, less public accountability, and officials easier to 'persuade' or coerce.

Vote Green or Die.

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By anon (anonymous) | Posted December 20, 2006 at 22:09:16

Don't forget the sneak tax on poor called inflation, rich people can invest around that, middle class and poor people pay the price for that.

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By David (anonymous) | Posted December 21, 2006 at 12:59:36

Great article. This needs to be on CNN and CBS and Fox television. People just don't see the damage being caused, not to mention helping Walmart shut down American business and empower China on their quest for world supremacy. A chart of personal savings shows the whole story - the last 2 years are hugely negative numbers compared to positive numbers of other years - people are financing their life with credit cards now, and most of that financing goes to buy things totally unnecessay. It's a sickness that isn't apparent because it is advertized to be normal.

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By highwater (registered) | Posted December 21, 2006 at 13:42:46

Sorry Dave. According to the OECD, the US is out-produced by France, Ireland, the Netherlands, Norway, Belgium, and noted economic powerhouse, Luxembourg.

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By highwater (registered) | Posted December 21, 2006 at 13:45:07

And those are just the OECD member states that out-pace the US. Who knows how they fair against China or India.

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By Ryan (registered) - website | Posted December 21, 2006 at 15:33:28

Ironically, the countries with the strongest labour productivity growth also have generous, comprehensive social programs that prevent an extreme wealth division between rich and poor. Apparently making sure everyone has safe, sanitary home environments, access to decent medical care, and good public education is good for productivity. Who knew?

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By David (anonymous) | Posted December 25, 2006 at 15:48:25

The problem in the USA, Ryan, is that at no time I know of in history has the Gov't turned their back on their own country in favor of needing to police the rest of the world, or more accuratly, making sure nobody else can take advantage of mistakes the US has made with their currency and energy needs. There is a distinct feeling that we are perched on the edge, and the blatent ignorance of it's own citizens is proof of how desperate the situation is. But it's the citizens that have unwittenly sown the seeds of this by their ridiculous and unsustainable comsumption and debt load. The US Gov't position is that this orgy must be maintained.

And on the other comment above - the term "US Production" is an oxymoron. Last figures I saw showed the US economy to be 87% service oriented and quickly rising - not much manufacturing going on, and that will really change fast when Detroit dies and Walmart forces more companies out of business.

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By jason (registered) | Posted December 26, 2006 at 21:37:14

this really is an interesting time in history....it seems apparent that like all 'world powers' this one is about to fall. I'm no expert on this stuff, so I'd be interested to hear people's thoughts on what the future in Canada might hold considering our proximity to this falling giant?? Can we weather such a storm?

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By David (anonymous) | Posted January 02, 2007 at 22:29:26

My quick answer, Jason, is that "close" only counts with horseshoes and hand grenades. The CIA World Factbook includes "checkbook balances" of various countries - some where headhunters still roam show positive balances - the USA is negative in the Trillions. If a country has responsible people writing the checks, runs trade responsibibly, and uses their resources to take care of themselves, they will be fine. No longer does the world have to catch cold when the USA sneases. The number one export product of the USA is useless dollar bills - who cares if they tank. Globaloney was an incredible failure concept.

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By highwater (registered) | Posted January 05, 2007 at 00:15:17

Anyone see Tuesday's FP? Guess who's the world's largest exporter for the 4th year running? Guess again. Germany! Who'da thunk? Some financial analysts see the rest of the world "decoupling" from the US economy which will protect it somewhat from a US recession. Canada unfortunately, is still much too closely linked to the US for comfort with 76% of our exports going there. That's down from 84% though, with increased exports to Europe, China and India, so we're heading in the right direction.

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