Saturday, November 24, 2012

More on Consumption

Back in the 1940s, economists and others worried about what would happen when war spending ended. There was a lot of pent-up consumer spending from the war era. But once every household had a car, a refrigerator, a washing machine, a radio -- what then? There was a real -- and realistic -- fear that the country would sink back into the Great Depression.

One solution was to continue military spending. This led to the Permanent War Economy, which we still have.

Another solution was to make things that broke or wore out. For a long time, many Americans bought a new car every three years, which was the length of a car loan in those days, The joke was your car began to give trouble right about the time the loan was paid off. New cars were very attractive. Remember the 'new car' smell? So you bought one; and Detroit's new car orders determined the American economy for the next year. The industrial Midwest -- the automative, steel, glass and rubber plants in Detroit, Toledo, Akron, Youngstown and Gary -- all depended on cars. The jobs the car orders created, many of them high-paying union jobs, determined much of the country's income. This solution is Planned Obsolescence, which is still with us. Cars last longer than they used to. Clothing doesn't, and electronic equipment is designed to be tossed when the next, new, improved goodie appears.

Planned Obsolescence doesn't work as well as it used to, because the big industrial plants and the good union jobs are gone, or so reduced that they can no longer power the economy. Cheap clothing made in China is not an adequate economic replacement for cars made in Michigan from steel, glass and rubber produced in the US.

Yet another solution was to create new needs. Your fridge still worked just fine, but advertisements told you that you needed a new one, harvest gold with a larger freezer compartment and an ice cube maker. Or you needed an entire separate freezer -- which is, in fact, useful if you buy in bulk or need a place that will hold this year's deer. Not all new purchases are a bad idea.

One of the things driving the modern American economy is advertising and marketing. It's advertising which leads to mobs of people wandering through the Mall of America, looking for something to buy and dragging their unhappy infants with them, so the wee things can learn the importance of buying.

It works on me. In my case, it's mostly catalogues that tell me what new goodies the local pen shop has or what kinds of neat clothing can be bought from J. Jill.

What's interesting in all this is the solutions not tried or tried right after the war and now given up. If you want to pump money into the economy, why not build affordable housing and new infrastructure, like the dams built during the New Deal? Highways don't make a lot of sense today, but light rail and railroads are a great idea. Why not put money into clinics and colleges and public schools and sustainable energy?

The Interstate Highway System was built with federal government money. States and counties continue to build and maintain roads. These roads made suburbanization possible and cars increasingly necessary. Obviously the housing and auto industries benefited. It's government money that pays for the Military Industrial Complex. But there seems to be a limit to how much governments can spend -- and on what kind of goods and services -- before American business gets bent out of shape.

I'd like to see the money spent on war and advertising invested in the huge issues that face us: global warming, peak oil, food shortages, lack of water... We could provide decent jobs for the entire country and rebuild the world.

I did go out today and buy a cup of coffee. Now, I am home and am staying home and not spending money, except maybe to donate to a few good causes.


Blogger Foxessa said...

I ask all the time the same questions, since it seems so obvious an answer to fixing the economy, why aren't we doing it?

There appear to be two inter-related answers:

1) it would give the political party of the current incumbant of the Oval Office all that power of patronage, i.e. job creation, and the gridlocked congress isn't about to allow that;

2) even before we had the war of independence, the south, the slaveholding states and whatever its political party affiliation du jour, was always passionately antagonistic to publicly funded and built infrastructure. It's unconstitutional, according to figures like Calhoun. As well, infrastucture that is for the public good that connects all the parts of a region was inimical to Thomas Jefferson's vision of an agrarian, 'yeoman' national system. Bridges, and all the rest encouraged urbanization and industrialization.

Reading Jefferson Davis's letters and speeches on this, as he opposed Henry Clay and his American System, that proposed just what we are wondering isn't being done, is as chilling as reading it in Thomas Jefferson's papers.

Love, C.

12:02 PM  
Blogger Foxessa said...

P.S. We did spend money yesterday: el V had to buy train tickets to D.C. to interview 'the' scholar of the Cuban participation in the Angolan War of Independence for the 4th and final part of the Angolan radio series.

I had to buy beer at the supermarket so there would be some when he got back, after midnight.

Love, C.

12:07 PM  

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