Tipping the Thrift/Greed Equilibrium

Many of us mocked George Bush for urging Americans to go out and spend money in the days after 9/11, when our economy seemed about to plunge into depression. But you know what? He was absolutely right. Consumer confidence drives our economy, and anything that thwarts that can bring down the whole thing. That was a confidence low point, and a self-fulfilling fear-driven economic freeze needed to be nipped in the bud.

I've been watching, dismayed, as a meme has appeared and thrived during our current crisis. It goes like this: we Americans over-consumed for the past decade or so, and now we are paying the price for it. In the future, we must tighten our belts and be more thrifty, save money, and reduce our expectations of radically improved standards of living.

You probably had trouble focusing on that last paragraph; it's been said so many times in so many places that it's seeped into mass consciousness and turned into neural programming. There is a grain of truth to it, but it's actually an amalgam of four completely separate dynamics:

1. "Post Hysteria Buyer's Remorse"
The housing bubble happened because people who didn't merit credit were foolishly given it, and the resulting bad debt is now an immense fiscal albatross. People ought to recognize that a deal that seems too good to be true generally is too good to be true! We ought to build into our decision-making a longer-range view recognizing inevitable comeuppances! Uh, yeah. Sure. Good luck with that. History shows that exuberant crowds will never be prudent and long-sighted.

2. "The Greedy Pigs Running the Show"
Corporate greed was the egg that spawned foolish consumer behavior. We can say "greed did us in", yet greed (another inevitable component of human nature) is also what made our country rich. Governmental regulation is supposed to channel greed into productive results. It failed, massively. We oughtn't blame greed. We should blame the regulators.

3. "We'll Soon Pass the Baton"
The impending ascendency of China has profoundly affected the national subconscious (it's not yet quite locked into our central vision). Having had so much at stake for so long in the notion of being "Number One", we fail to recognize that it's not a zero sum game. China can be on top and we can continue to grow, innovate, and generally maintain our trajectory. But as a society we sniff an impending moment of doom, and are pre-crestfallen.

4. "We Miserable Sinners"
America retains a Puritan streak in its DNA. Consumption and comfort evoke shame - a reaction thoroughly covered over in good times, but easily returned to amid reversals like this one. The mantra of penitence is a go-to reaction amid all the bad news of layoffs, declining 401Ks, etc etc. We were greedy and bad, so now we pay the price.


Conclusion: "Free spending" is bad. Unworthy home buyers took credit foolishly offered them, greedy financiers built palaces upon foundations of those turds, our day in the sun as a nation is over, and we've all been bad decadent sinners for way, way too long. And therefore we (who aren't, ourselves, mortgage deadbeats, financiers, China defeatists, or stern puritans) must tighten our belts and be more thrifty...yadda yadda. The mash-up of those four psychological factors has created a pervasively anti-consumerist sentiment. And, alas, that's what freezes economies and makes downturns endure. It's remarkably self-fulfilling.

Economic circumstance will, of course, kill off consumer spending and confidence, no matter what. But this powerful sentiment has overtaken actual circumstance, tugging even those who've not yet felt much economic pain into a psychology of economic pessimism. What's more, this mindset whitewashes its own pessimism by calling itself "thrift". Who can argue with "thrift"? Well, all things are best in moderation, including both thrift and greed. But the pendulum of national sentiment is swinging precipitously toward the former, which will make it devilishly hard to reboot the economy. And the timing couldn't be worse. Check out this Slate article describing the threat posed by America's new spirit of thrift.

President Obama, under pressure to strike a middle tone - neither unrealistically rosy nor buzz-killingly dour - has done nothing to kill this fast-spreading meme. And his cool, measured, well-disciplined manner, which in other realms feels like tonic on our national wounds, exudes thriftiness. Bush's "Go Shop!" exhortations are seeming less and less foolish in retrospect.

Don't get me wrong. I'm neither greedy nor consumerist, myself. I personally wouldn't mind a bit if America became a third world economy, if consumerism ground to a complete halt, if we all gave up our plasma televisions, and colorized back into a non-anesthetized society more in touch with the deeper rhythms of life and where spirituality is practiced less as political battering ram and more as an everyday process of loving one's fellow man. Human beings only really show their best side - their divine side - in the midst of duress (remember how lovely New York City was for a couple weeks after 9/11?).

But I recognize that that's not how most of us want things to go. People are starkly unwilling to suffer the duress required to unlock those floodgates. So if we're going to continue to aspire to being rich and comfortable, the only thing to do is to nurture consumerism rather than stifle it. There'll always be downturns in any case, which will season our stew a bit more to my personal liking. So, what the hell; let's keep the cycle cycling...and save our thrifty impulses for faster times. Now, with our pumps in dire need of priming, is not the moment for that.