Americans are hunkering down and saving more. For a recession-battered economy, it couldn’t be happening at a worse time.

Economists call it the “paradox of thrift.” What’s good for individuals — spending less, saving more — is bad for the economy when everyone does it.

Some experts say consumers have been so shaken by how fast their wealth has shrunk, so burned by credit card debt, that they might not resume their robust spending for years, if ever.

“People are not saving; they are building financial bomb shelters,” said Mark Stevens, who runs a management consulting firm, MSCO, in Rye Brook, N.Y.

This article pertains directly to my master’s thesis: first, choices made by the individual that benefit the individual are not the same as those that benefit the economy and vice versa. Secondly, don’t frame the question as saving — frame the question as ‘not buying shit they don’t need and don’t have the money for.’ Americans had a negative savings rate on average for several years. We paid for stuff with credit card debt and leveraging against our houses, and I would receive six calls to refinance my mortgage per day. Every day. The article quotes Cornell’s Robert Frank, who mentions that this frenzy of consumption was unsustainable. Building a fortune on rampant consumer spending, in order to spend more yourself? Just another illusionary bubble that got popped.  And illusions die hard.

Now we’re saving hard to make up for it, and because the media tells us we should be worried (just like it told us to spend spend spend — and the ads are still there) — it reinforces the perception that we are in trouble, and that everyone else is saving, and that conformity effect is a subtle nudge towards not spending — even though the gist of the information here is that you should be spending for the good of our consumer society. Shades of 2001 with buying as a civic duty.

I don’t think that is going to work this time. This Prisoner’s Dilemma is brutal, and humans are conditioned to react twice as strongly to the idea of loss as to the idea of gain.

Matthew Conrad, a financial manager at Complete Wealth Management in Orange County, Calif., says he knows of people who drive a BMW or Mercedes and eat macaroni and cheese for dinner several nights a week. That suggests some are making an awkward shift from free-spending habits and are reluctant to give them up.

Grant McCracken theorized a remarkable idea about consumption, which he called the Diderot effect. The story goes that Diderot had a cozy little study, somewhat ramshackle but pleasing, and then he received a gift of a marvelous dressing gown from a dear friend. This dressing gown, of red velvet, made the rest of his study look shabby in comparison, so Diderot began to replace his study piece by piece until he had a fantastic room that matched the gown. And then he wrote about it.

The Diderot unity is a masterpiece of psychological connection: it asks that objects which are invested with similar qualities and meanings become grouped together and associated with each other, even if there is no actual linkage between them. For example, the BMW has more in common with the Rolex and the Bang & Olufsen coffeemaker than with Kraft Dinner; it implies that someone with a BMW should not be having to eat mac and cheese.

The Diderot effect is when the consumer decides that they need to obey the need for psychological consistency and commitment: when they choose to replace their existing goods with ones that match their lifestyle — or alternatively, reject new goods because they do not fit the existing Diderot unity. If you go down to the local farmer’s market and look for the people buying organic produce, you are going to find more Priuses than Hummers.

Diderot Unity Exhibit A: If I had a million dollars

But we would eat Kraft Dinner. Of course we would, we’d just eat more. And buy really expensive ketchups with it. That’s right, all the fanciest Dijon ketchups! Mmm. Mmm-hmm.

Diderot Unity Exhibit B: Stuff White People Like.


Why Not Start the Weekend on Wednesday?

We are twice as productive as our parents. We don’t have to be twice as rich, twice as consumptive, and twice as dangerous. Why not work half as much and stay the same?

Economists worry that slowing consumption harms the economy. It doesn’t have to.

If this were a gradual process, mass unemployment would not result. People would simply earn less, spend less, wear a few more secondhand clothes, and spend more time reading or going for walks.

And the alternative is trapping ourselves in a mad struggle to run a hedonic treadmill, buying more and more because we always want more than we can sate ourselves with, always comparing ourselves to our neighbors and always coming up short.

According to economists Mark Aguiar and Erik Hurst, leisure time for women has increased by at least four hours a week since 1965. Men have done even better. That may well understate the leisure gains. A hundred years ago, many people would start working at the age of 10 or 12 and work until they died. Now it is common to spend fewer than half our years working; the rest of the time we spend studying, traveling, and in retirement.

The “work less, spend less” movement is winning. It’s a shame it hasn’t noticed.

The way to make people happy in two simple steps: Underpromise, overdeliver.

Here’s Louis CK on Conan talking about how everything in our world today is so AWESOME that when the slightest thing goes wrong we feel DESPAIR.

One of my friends, Dan, worked at a discount retailer when on hiatus from his PhD program. I still remember his rant about how cheap a box of Ralph Lauren shirts were, and how stupidly marked up the prices were. A $20 dress shirt is made in Bangladesh for 20 cents. A $200 dress shirt is also made in Bangladesh for 50 cents, and then they mark the price down by 50% and you think you’re getting a fantastic deal.

Fashion is bullshit, and everyone in the fashion industry knows it.

What seems inevitable is that the pain will worsen as the price reductions provoke questions among consumers of how stratospheric profits must have been when the economy was riding high. How great, really, was the surcharge to consumers for participating in fashion fantasy?

“I was in Saks last week, and there were these staggering discounts and it’s not even Jan. 1,” Tim Gunn, the “Project Runway” host and chief creative officer of Liz Claiborne, said Tuesday, before a discussion on “Redefining the Rules of Fashion in Today’s Economy,” sponsored by the textile manufacturer Dow XLA. “I was told by easily half a dozen sales associates that if I opened a Saks credit card, I’d get another 15 percent off. What I wonder is, “What are the real margins?’

Some people might have interpreted my previous post about the car changing the landscape of America and helping create the obesity epidemic as calling all Americans fat. And how does that square with my previous post on the Body Project (for teen girls) or Reflections (for college women)?

The truth is that Americans as a whole are getting fatter: our environment is built to make it easier to eat more bad food and exercise less (because we made it that way). And the reason it’s most horrible for women is because while everyone around us gets fatter, women’s body images have become stuck on a thin and tall ideal that 98% of women (healthy, normal women) cannot genetically achieve. So American women have to work ten times as hard (spinning, jogging, Pilates, plastic surgery) to deal with environmental pressures.

In times of hardship, fat is attractive; in times of plenty, thin is in. Beauty ideals are always exaggerated and impossible to achieve without a lot of pain. Corset. High heels. Bound feet. Lip piercing.

So when Unilever did marketing surveys before launching their Dove Real Beauty campaign, they discovered that 2% of American women were happy with their bodies. This seems about right: about 2% of women are fashion model-sized and shaped.

Every woman out there now thinks she’s fat, whether she is or not. And it’s now impossible for her to judge accurately what size she should be, due to conflicting responses from media and real life. Vanity sizing is when manufacturers increase the measurements of clothing while decreasing the size number on the tags. And every woman in mass media is young, beautiful, heavily made up and thin, possibly Photoshopped.

2% of Americans look like fashion models. And at the same time, 65% of Americans are overweight or obese; if the numbers continue rising at the same rate, by 2030, 86% of Americans will be overweight or obese.

If everyone around you is fat, your idea of what your body is and what normal is becomes fatter, and the heavier you think you are, the less likely you are to have anti-fat attitudes. But at the same time, the less likely you are to like your body, because of the deep disconnect between image and reality.

This disconnect between image and reality is killing us. The reason people are fat is because our environment encourages it, and our image of ideal body is so insane that we’ve given up on achieving it.

Food is pornographic, an image of manipulable desire, and we’ve gotten used to frozen foods and fast foods and restaurant meals. The average person can be a gourmand. We can buy a pint of premium ice cream for $5. We can’t buy being 5 foot 10 and 135 pounds with a C-cup. But we still, astonishingly, feel bad about it.

Leibovitz and Sontag wrote in 1999, in the preface to their book of photographs of Women:

To be feminine, in one commonly felt definition, is to be attractive, or to do one’s best to be attractive; to attract. (As being masculine is being strong.) While it is perfectly possible to defy this imperative, it is not possible for any woman to be unaware of it. As it is thought a weakness in a man to care a great deal about how he looks, it is a moral fault in a woman not to care “enough.”

Excerpt from longer essay here.

“The medium is the message.”
–Marshall McLuhan

Before last Friday, if you asked me about media theory I would have been able to explain on an intellectual level that the properties of a given medium influence the perception of the content inside.

But something clicked in my head when I was reading Arjen Mulder’s book for class, and I got it. There are: things you appreciate logically, and then things you get fundamentally, and finally things you can explain to other people. And you don’t really, really understand until you can get to the third level.

So Marshall McLuhan came up with this idea in 1964. Everything communicates. Everything we use today is a medium for changing our daily lives in a subtle, barely noticeable, but significant way.

I’ll give you an example:

Why are Americans fat?

Number of cars per thousand people worldwide

Number of cars per thousand people worldwide

The car.

The car changed the shape of America. Suburbs, exurbs, road trips, highways.

Europe was mostly built before the popular adoption of the car. Even now, cities in Europe are walkable and bikeable, and people fit cars in where they can.

You go to the grocery store, and the most you can carry in one trip is what you can put in your bag and take home. With a car, it’s easy to load up on food. It’s easy to make packages bigger, portion sizes bigger, to sell things by the case. I had a CostCo membership in Tucson, and I did use 3-lb bags of ravioli and 4-gallon jugs of olive oil. (CostCo is AWESOME.)

And then you don’t have to walk anywhere except from a parking lot to the store. You couldn’t walk anywhere if you wanted to, everything in your city is probably built on a car scale. Utrecht has about half the population of Tucson, but most of Utrecht fits within a four mile-by-two mile area; Tucson is roughly ten times as large and large stretches of road do not have sidewalks. No one walks.

But a car isn’t a medium of communication, is it?

It is. A car is an obvious symbol of who you are, how rich you are, whether you have kids, whether you like to speed, whether you care about the environment…or not, whether you work on it yourself or couldn’t be bothered. Whether you’re gay or lesbian. Car manufacturers know the personality profiles of the people who buy their cars and target their advertising accordingly. Subaru, for instance, targets the gay and lesbian market.

I have friends who can tell a ’69 Ford Mustang from a ’73 Ford Mustang.

It’s not just to get us from place to place. The car is the medium. It’s the message.

I just spent forty-five minutes writing this post.

Then I googled for “Gay Cars” looking for a link to support my statements above. The first sentence: a quote. By Marshall McLuhan.

“The car has become… an article of dress without which we feel uncertain, unclad, and incomplete.” – Marshall McLuhan

Every so often I allow myself the conceit of thinking my own thoughts are original. They’re not, really. I just haven’t read enough to realize it.

From the BBC: an analysis of why people prefer the same things, driving up demand and creating a bubble. 

In short: we think stuff other people like is stuff worth having. It’s got nothing to do with objectivity. 

This includes fads and trends, like Tickle-me-Elmos and Uggs; stocks and investments, like houses (people price their houses according to what the last three guys in their neighborhood sold theirs for); and people, from popular kids to married men.

Here we see the dark side of the wisdom of crowds — crowdsourcing, political trading, Web 2.0, etc. have been these big buzzwords lately. The wisdom of crowds takes the idea that crowds are smarter than the average individual: when estimating the weight of a bull, the crowd’s guess (an average of each individual’s guess) is more accurate than most individuals, even experts.

But the truth is that while crowds can be wise and useful and accurate, they can also be really really dumb. Surowiecki, in his 2004 book, mentions unreliable crowd results and why they occur. Basically, they can set the standard for what is correct and exclude outliers, and they can overrule the good sense of individuals. It’s important to remember that everything is complex: the crowd is both comforting and helpful, yet dangerous and unreliable. 

And our crowd, these days, isn’t just one farmer’s market in Surrey. It’s the whole damn world.

Flora's Mallewagen, Hendrik G. Pot, oils c. 1630

Flora's Mallewagen, Hendrik G. Pot, oils c. 1630.

Flora’s Mallewagen depicts a historic get-rich-quick scheme: a group of 17th-century Dutch weavers have abandoned their trade to invest in tulips. Not just any tulips: rare tulips of certain lineages, black tulips, tulips infected by a rare disease that creates an intense multi-color pattern, as if the tips of the petals had been dipped in ink. The painter depicts a literal “ship of fools” sailing a cart with the Goddess of Flowers.

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