Saturday, February 2, 2008

Another Writer Questions the Anxiety about Decreased Consumer Spending

Hat tip to my friend Jeff who brought this excellent editorial by Katherine Lewis to my attention. A few weeks ago I asked why economists are always acting like spending more is good for the economy - when common sense suggests it's bad for the individuals actually IN the economy. And can trashing the planet be a good idea? It just doesn't add up. Lewis asks the same question.

By KATHERINE REYNOLDS LEWIS c.2008 Newhouse News Service

Economists are fretting that consumer spending might fall for the first time since 1991, pushing the United States into a recession.

Global stock markets are in turmoil, and with reason: American consumers account for about one-fifth of the world economy. The Federal Reserve Board's sudden interest rate cut and the stimulus package being debated in Washington both are aimed at keeping cash flowing from our pocketbooks.

But since when did consumption — our willingness to buy food, clothes, cars, electronics, appliances and homes — become our defense against economic collapse?

It wasn't always this way.

In the 19th century, the word "consumption" meant tuberculosis, notes Stuart Ewen, a historian at the City University of New York.

"The term consume ... meant to use up, to destroy, to lay waste. Consumption really was about destruction," Ewen said. "The idea of using things up in a world of scarcity was anathema. It was not celebrated."

Click here to read the entire essay.

Katherine Reynolds Lewis can be contacted at katherine.lewis(at)newhouse.com)

photo from Garden State Earth Institute

2 comments:

Traciatim said...

Another great place to listen about the same thing (although, it's a little preachy) would be storyofstuff.com . . . I really enjoyed the broad look of how stuff works.

Alicia Sanders said...

Spending more is good only in that case when you have unlimited finance and it is not going harm your financial situation. In all of the other case spending has to be rational. I do not understand those who get tempted by another fancy sale that much that they payday loans online without thinking about possible consequences. We live in times when economy is too unstable to let ourselves relax and spend all up to the last penny. So we should care more. We have to budget in order to be able to afford something more or less expensive just once in a while. We should not spend a lot these days.