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Friday, October 31, 2008

The Concept "Consumer"

I have been watching CNBC recently because (a) our personal holdings have declined significantly as have most other people's and I want to know what's up with our declining economy, (b) they have beautiful women anchors and reporters and I am now, as always, a dirty old man, and (c) it is one place where you get intelligent discussion of the issues. 

I was troubled yesterday -- why did it take so long, I wonder -- at the references to you and me as "consumers."  Damn but if that is not a very demeaning term to use for us.  I was struck by the resemblance of that concept to that of "johns," the people that prostitutes service.  We are needy people and our role in the economy is to buy all manner of crap.  We, however, have smartened up and are acting to bring down our personal debt rather than buying more crap. Wall Street is very unhappy about that. Since I am someone who has finally cut the cord on my fanatical desire to own the more toys by the time I die than anyone else in my economic weight class and am focusing relentlessly on cutting debt, I took offense.

One of the things that made it hard for American businesses to get products into Japan during the time the Japanese were dumping everything they made into the US besides the incredibly many obstructions businesses had to get past was that the Japanese consumer wasn't consuming as much as us.  He and she were saving.  That was once, in fact, a virtue we extolled -- "A penny saved is a penny earned," as Benjamin Franklin is reputed to have said  That needs to be revised to "A penny saved is 0.67% of a penny earned," if it was saved in the form of purchasing into the stock market."

The thing that pisses me off about this reference to us as consumers is that we are also workers or as in the case of my wife and me, former workers.  That is of interest to market people only if busineses are increasing or decreasing the number of us they employ.  In this case we are viewed as little more than pawns in the great economic chess game Wall Street is playing by way of selling stakes in, real and contrived (check out the concept of a "derivative") financial instruments.

Can it be any wonder that the Bush Administration, ever the tool of the rich and powerful, treat us with so little respect -- tax cuts for rich investors (the people that control the chess board) being more important than tax cuts for us (pawns).  Anyone who votes for McCain is saying, "I love being a pawn."  Right now, the Bush Administration is working on all manner of ways to deregulate industry by way of favoring the rich and powerful.  We are, after all, nothing more than tools.  Oddly, so are the rich folks but they are so mentally screwed up that they can't quite recognize that they actually drink out of the dirty lake we drink from.

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21 Comments:

Blogger concerned citizen said...

I understand I think... Economics in the political arena is new for me, but a vital subject at the moment, seeing I'm close to being elected to city council. I have been reading this guy. He seems to put economics in terms I can understand. I want to have a handle on the workings of local economy & local government when & if I am elected to the city council, so I'm giving myself a crash course.

What I think is necessary right now (in my humble opinion) is people who can think outside the box, because the status quo just isn't working for the average guy. The concept that we are all just consumers is sickening. We are facing what we ALL know are limited natural resources & consumerism is still the same game as it was in the 18th century! Huh? forgive me for my ignorance, but it seems, economics needs to join the 21st century.

8:44 PM

 
Blogger SusieQ said...

I understand the fundamentals of economics because I see them at work in my own life.

When we watched a third of the money in our retirment fund vanish in a matter of a week or so due to the stock market crash, my husband and I decided to tighten our belts and save our money for fear of what lays ahead.

We have a small business. For more than 20 years at Christmas time we have purchased a number of wreaths to give as gifts to our employees, our friends, and our family members. But Sunrise County Evergreens out of Maine will not be receiving our order for wreaths this year.

We are sure that others are tightening their belts,too, and cutting their expenses and won't be ordering wreaths either from Sunrise County Evergreens. So Sunrise will be laying people off or cutting back their hours, because their business has suffered due to people tightening their belts. Or Sunrise may have anticipated this would happen and have already taken steps to tighten their own belts. And so it goes right on down the line to other businesses including our own in the end I am sure.

I used to shop all the time at Whole Foods which is a high end grocery store featuring organic products. Now I am doing a lot of my shopping at Aldi's. I found out that Whole Foods is feeling the pinch and has had to cut back their employees' hours. They are having to tighten their belts. Aldi's business has picked up though. I noticed they are stocking their store with more of a variety of foods.

The same thing is happening to restaurants in our area. Business is not good, because people are not going out to eat as often. It isn't that people don't have the money to go out and eat. It is because they are afraid and don't know what the future holds for them financially. So, they are buying less and saving their money.

Businesses that rely on credit in order to function are really hurting, because credit is not readily available. The banks are afraid, too, and do not know what the future holds.

Yes it is good for us to curtail our spending and save our money. A penny saved, etc. But when too many of us decide to do it all of a sudden which is what is happening, it hurts the economy and hours get cut back and jobs begin to vanish and tax revenues dwindle and stocks go down in value. What goes around comes around.

Like it or not, our economy has depended on consumerism for a long time. We can't suddenly stop being consumers and start saving our money and expect that it will not hurt our economy. That is how I see it. So, I am not offended nor do I feel demeaned when I am called a consumer. But maybe I am missing something which you, LG, will point out to me most likely.

1:23 AM

 
Blogger The Language Guy said...

All the banks need to do is go back to the practices that made them successful 10-20 years ago -- loan to people with collateral who can pay the loan back. Its easy, really.

Amazingly, the NFL is about to sign off on a $2 billion loan so their can handle their cash flow problems. Apparently the credit crunch is responsible for that.

7:36 AM

 
Blogger SusieQ said...

Ten to twenty years ago and before that even you could get an unsecured loan on just your signature provided your credit was decent.

I heard a story today about a car dealer who after 60 years has had to close his doors and fire his employees because he can’t get his usual loan from his bank to buy cars from Detroit to put on his lot to sell. In the past the bank took as collateral these very cars. But these cars are not good collateral for the bank if they will not sell and the fear is with the bank that there is a good chance they will not sell. Why is this? Because the consumer (there’s that bad word) can’t get car loans like they had been able to get in the past. Credit is tight. In order to get a car loan today, your credit rating has to be exceptional because the banks are afraid to loan money to you otherwise. That eliminates a lot of car buyers. What goes around comes around.

I understand very little about these new financial products and practices which have evolved in recent years, but it appears that the problem we have now started with the housing market and these high risk loans involving ARM’s that were made to people who could not afford to keep up with their mortgage payments in the end. Credit tightened and home values declined which made credit even tighter, because the bank's assets declined in value as a result. Some people have ended up owing more on their home than it is worth. Some of them are simply walking away and letting the bank have the home. That makes matters worse. Since mortgages, the good and the bad of them, had been bundled together and sold as financial products, it is nearly impossible now to determine the true value of these assets. It's a mess, but I think if we can get home values back up there it will help a lot.

12:35 PM

 
Blogger concerned citizen said...

I don't see what is so complicated. So many people saw all of this coming. I mean normal everyday Joe the plumber types
The problem is, us consumers fall for the spin over & over, because we want to. We are as LG puts it, tools.

9:54 PM

 
Blogger The Language Guy said...

As Hegel put it, you can't have masters (lousy Presidents) without their being slaves (tools, as concerned put it). How literally true this is I don't know but I do know that we get the government we deserve. Bush voters, whether acting out fear or some other ignoble emotion and lazy Democrats like me didn't fight for Kerry, re-elected him. I hope they too are suffering thanks to the economic crisis.

6:46 AM

 
Blogger handmaiden said...

I agree with the mindset that espouses sustainability as the only realistic option for the future of the human race. It is our only option & we are forced to acknowledge it if we take a realistic look into our future as a viable species on this planet.

To continue to see ourselves as consumers & allow the faction that controls the economic purse strings to manipulate us into continuing our destructive & largely mindless path of consumption, to be told that we must continue on this path, to consume for economics sake, to consume for the sake of an outmoded philosophy of growth born out of the industrial age or to consume for the sake of ephemeral pleasures... yes, it makes us pawns.

11:44 PM

 
Blogger handmaiden said...

AKA Concerned Citizen

I find this a relevant subject &
I hope you don't mind if I link you.

11:52 PM

 
Blogger SusieQ said...

Handmaiden, sustainability would require that we buy less stuff, wouldn't it? That is, consume less.

But if we do not go shopping, production stops and people get laid off. If they get laid off, they do not have the money to pay their bills and buy necessities. Other industries and businesses are affected then and more people get laid off with the same results. Tax revenues dwindle and government can't meet its obligations to the people. Human suffering mounts.

How do you propose we do sustainability without causing a lot of human suffering? We seem to be caught between a rock and a hard spot here.

12:39 AM

 
Blogger The Language Guy said...

So the rich bastards that created t his problem with all their exotic credit default swaps and derivatives, all of which were just fancy ways of gamboling without the need to go to Atlantic City or Las Vegas, skate and we are supposed to get them out of it. I hope the Democratic party punishes the living crap out of those guys by limiting remuneration during the time they have our money in the form of the bailout.

8:42 AM

 
Blogger SusieQ said...

I think the rich bastards, these CEO's that were given such obscene salaries and bonuses,should be investigated and punished for any wrongdoings they might be guilty of. They had to have known this train wreck was likely to happen.

I think Congress itself should be investigated. Why did Congress wait till the last minute, till it was too late, to write legislation to rein in Freddie Mac and Fannie Mae? The Bush Administration and certain members of Congress including McCain warned that these enterprises were in trouble and needed to be regulated. But people like Barnie Frank denied that there was any real problem.

9:52 AM

 
Blogger concerned citizen said...

How do you propose we do sustainability without causing a lot of human suffering? We seem to be caught between a rock and a hard spot here.

So the other question becomes; How does our current economic system of production/consumption continue with out causing a lot of human suffering?

The advantage of Sustainability is it deals with long term goals as opposed to the current climate of short term goals. There is no such vision in consumerism.

6:18 AM

 
Blogger SusieQ said...

Answering my question with a question is not going to do, because the burden of proof falls on you.

When you and others advocate a dramatic change to a socio/economic system and that change is likely to result in severe damage to the public, it is your responsibility and that of others to show that it would be worth it.

I am not sure there is a scientific consensus at this point to support your claim that sustainability, as it is currently understood, is the only realistic option we have and that we must rid ourselves of consumerism if we are to survive as a species on this earth.

This is not to say that I do not favor conservation. I do. But you appear to be talking about something much more dramatic. It suggests central planning.

12:16 AM

 
Blogger handmaiden said...

susieq

You are the one that said we were caught between a rock & a hard place.

That's why I saidSo the other question becomes;etc... I wasn't trying to avoid your question, I was making a point. The point being there will be suffering either way but a philosophy of sustainability at least attempts to address the unavoidable suffering that I & lots of other people believe will occur if we continue down the present road of blatent consumerism.
I am not sure there is a scientific consensus at this point to support your claim that sustainability, as it is currently understood, is the only realistic option we have and that we must rid ourselves of consumerism if we are to survive as a species on this earth.

There is now clear scientific evidence from environmental science that humanity is living unsustainably, and that an unprecedented collective effort is needed to keep human use of natural resources within sustainable limits. found here
It will not be an easy row to hoe, that is true, but that doesn't mean we should give up on it. I have never claimed to be anything but an idealist. I feel sustainability is our ideal future. Material wealth or consumerism is not the answer to the meaning of life, or the answer to the serious problems facing this world. One thing I like about LG's site is because of his unique perspective sometimes he cuts through the bullshit. Just like he states in his blog description. Unfortunately, in a society that embraces consumerism there is a lot of bullshit to wade through. It just stands to reason.

What is needed is a philosophical shift & that can only come about if we set our goals high, focus on the long term benefits & fight the current BS to get to the truth of the matter. IMO, Change for the better will not come about unless our society is willing to move ahead in that direction.

12:06 PM

 
Blogger SusieQ said...

I can not get it out of my head that if countries like China are to rise up out of poverty someone has to buy what they are producing. The Western world is able to do that, because it has the money at this point. But people who advocate sustainability want the Western world to curtail its consumption, to quit buying. So, I am wondering from where then China would gets its customers. If they can't find them, then I guess they can eat cake.

I said I was in favor of conservation, that is protecting our natural resources for current and future generations. But many of the actions taken by environmentalists do not seem to be backed up with clearly defined evidence that these actions are needed and will produce clearly defined results that will truly benefit human beings.

Many environmentalists seem to be motivated more by a desire to return this planet to a natural state with as few humans hanging around as possible.

Here is an excerpt from an article I ran across today:

"Green bigots operate internationally, just like the more famous fanatics. They are trying to stop a hydroelectric dam from being built in Uganda and they have already succeeded in getting "nature preserves" created in various parts of Africa — which is to say, vast amounts of land where Africans are forbidden to hunt for food because the green bigots prefer keeping the land "natural."


"African economist James Skikwati in Kenya put the case against affluent Western environmental extremists very plainly when he said, "wealthy countries want the Earth to be green, the underdeveloped want the Earth fed." He asked: "What gives the developed nations the right to make choices for the poor?""

Pay attention to how environmentalists are pushing outdated farming practices on the Africans, too, insuring that they will remain impoverished.

Handmaiden, you said "Material wealth or consumerism is not the answer to the meaning of life, or the answer to the serious problems facing this world."

I could give you one example right after another of how material wealth has benefitted humankind and been the answer to some very serious problems in the world. Take for instance the wealth it took to improve our ability to forecast hurricanes and tornadoes and the lives saved as a result of this technology. You can thank a combination of wealth and human ingenuity for that.

Well, it is late and I will close. You are entitled to your opinion about what the world needs. I remain cautious though.

12:09 AM

 
Blogger The Language Guy said...

susieq, you need to do a solid study of how the interests of extremist conservationists and the interests of developed countries intersect. Could be interesting. I have thought a lot about the hypocrisy of the US or WEurope demanding that less developed nations like China and India hold off on development to save the planet (for us).

8:53 AM

 
Blogger handmaiden said...

Interesting, so China uses up it's natural resources & helps pollute the planet to sell crap to us that we don't need, so we can throw it away, there by wasting resources & contributing to pollution. That's OK because that is how it's done?
Sorry, that doesn't work for me. There has to be a better solution then the trend of the current system.

I am not a total critic of the industrial revolution & all that has transpired since. I understand it's benefits to mankind, but I also believe the model(?) we are adhering to cannot hold up forever or even much longer.
I'm not of the mindset either that one day we will all just be taken up into heaven or that the world is going to be destroyed by the Apocalypse at any moment or whatever. So that option is out.

Like I said, sustainability works toward a long term goal as opposed to what I see as a current short term goal. I don't presume to a have a plan to save the world, but I know which direction I want to move in.

I also don't let fear mongers who like to bandy about words like "environmental extremist" & "green bigots" influence what I think is a rational approach to the current world situation. I am also critical of far left fear mongering. We far too often let these extremes dictate over our common sense & rationale & respect for our fellow human beings & their ideas. I admit I've engaged in name calling in the past with glee, but I think I'm growing out of that. I choose to move ahead with optimism, respect & hopefully enough intelligence & common sense to influence the world for the better for future generations.

1:42 PM

 
Blogger SusieQ said...

China is a huge land mass. It is rich with natural resources. One of them is coal which provides 70% of China's energy needs. Coal burns dirty there though and China's power plants are outdated and pollution control measures are lacking.

China is also one of the world's leading emitters of greenhouse gases.

But China has a population of over one billion people and that figure is growing by 9% a year. Over 135 million live on the equivalent of a $1 a day. Additional millions live on barely more than that a day. Economic growth is their way out.

So China has a conflict between environmental protection and economic growth. But the Chinese government is trying to figure out ways to deal with the environmental problem without sacrificing economic growth. Can you say Clean Coal Technology

Not everything that comes out of China is crap. It just seems that way at the Dollar Store. My grandchildren like to go to the Dollar Store. The fun they can have for only a few bucks.

I don't think you are a "green bigot", Handmaiden. But in any movement or cause there are going to be zealots who go overboard. And every movement or cause needs to be watchdogged for that reason.

LG, I didn't know the Western world was demanding that China and India hold off on development. I would have thought otherwise of the US since it is so Free Market (or was until a few weeks ago.)

12:18 AM

 
Blogger The Language Guy said...

I shouldn't suggest that we -- the country -- have demanded that developing countries limit their co2 gasses and the rest. But elements in our country do.

8:07 AM

 
Blogger concerned citizen said...

Handmaiden here

Well, susieq I don't know if we'll ever agree on the right way to further democracy.
(That's what this is all about, right?)

Sustainability is not a quick fix, it's more of a shift in philosophy. I like to think of it as moving away from an inferior mindset.

11:27 PM

 
Blogger SusieQ said...

Awe,shucks! CC, it's been fun wrangling with you. You're a good sport.

Congratulations on your election to the city council. Who knows where this first step will lead. Maybe VP candidate with the Green Party someday?

Till next time...

8:20 PM

 

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