North America has a problem. A serious problem. We spend more money than we have. Our countries spend more money than they have and our citizens spend more money than they have. The grand bellweather of social climate Oprah Winfrey recently had a show on debt that Kylie was watching. On that show she claimed that 70% of american households are living in debt. Now I'm sure Oprah can afford to pay her fact checkers well, but even if she is overestimating by 50% this number is still astoundingly huge. Only a small fraction of these households are below the poverty line. The majority of them are middle class families.
Unless you do some pretty solid financial planning, it is very difficult to get out of debt once you are in deep. It is pretty rare for someone's income to suddenly jump enough to maintain their level of spending (which was driving them into debt) and to pay off their debts fast enough to get ahead of the interest. (the obvious exception to this is being in debt while going to school). Most people think that this will magically happen at some point, but in reality with every increase in income over time there is a corresponding increase in spending whether this is because of cost of living increases, more kids, more school, rising property taxes (ouch), or because with the raise we can finally afford that new car or tv.
Being in debt produces a chronic anxiety state. Every purchase brings to mind the lack of funds and every trip to the mailbox reinforces the plethora of creditors. A chronic anxiety state perpetuates a void in one's life. Why am I never happy? Why am I always looking to the future? Many people fill this void with consumer goods.
Why is this?
Is it some kind of vestigial hunter gatherer instinct welling up from deep within us and driving us to acquire? To feather our nest or store away those dried berries? I doubt it, and not just because the stuff we buy is non essential to our survival. In fact the purchases that make us temporarily happy are almost non essential by definition. How excited do you get when you buy butter or milk? Pay your rent? Gas bill? OK, I admit that buying a nice rack of ribs gets my dopamine flowing, but what about the equivalent protein in baked beans? No, the rush comes from the extras... a new tv, shoes, skill saw, sweater (kylie!), bike (marc!) or whatever happens to turn your crank.
Occam's razor would suggest a different explanation. One that does not introduce a new entity such as a "vestigial hunter gatherer instinct". Kylie and I caught the end of a really interesting show on the knowledge network called "Growing up Canadian". On that show they talked about the various wants and needs of Canadian kids in the early 20th century. These desires changed radically around 1900. Why you ask? Because of the advent of the
Eaton's catalogue. Kids went from playing with homemade toys and the odd store bought sled to being told what to want by a fancy black and white catalogue. We never looked back. Today millions of dollars are poured into marketing campaigns every year to convince us that we cant live without X, Y or Z.
Now we have come to the part that has really been on my mind lately. Our capitalist economy is built on the health of these companies. Today's global market has amalgamated many of these companies into large corporations. We have been told repeatedly that what is good for the corporations is good for us. Indeed, many of us work directly or indirectly for corporations that require people to continue buying luxury items in order to survive. Our economy is fueled by our own overspending.
So we are faced with a dilemma. Do we as a nation attempt to curtail our profligate spending habits at the expense of our economy? These days increased global competition has brought in cheap consumer goods from overseas, and the corporations' obligation to their shareholders to post increasing profits every quarter has sent many canadian jobs overseas as well. So frankenstein's monster isnt doing the heavy lifting around the house anymore... he is free and running across the arctic tundra (or mexican desert). Our RRSPs are still growing, but it seems like a poor trade for the privilege of paying last months VISA bill with this month's salary.
Who is actually benefitting from all this overspending? International corporations and banks. the globe and mail published a list of the most profitable canadian companies of 2005 and 4 of the top 5 were banks. BANKS! We give them our money to lend to some poor sucker to buy a new car and they still charge us $2 to withdraw some cash. 70% of us owe them money and they are taking in still more hand over fist.
Could we even change any of this if we wanted to? The fashion industry is based on the concept that we need to spend more $ to be happy and succesful, as is the electronics industry and the automotive industry etc. Even if the bulk of the profits from these endeavours are not benefitting canada, our economy is still based on the health of all these companies, which is based on continued overspending by our citizens. Remember the desparate pleas from the white house after september 11 to get out there and buy stuff? Even a couple weeks of change in spending priorities was felt acutely.
This is the dilemma that has been distracting me for the past week or two. We are now living lives that are shaped by the corporations that sell these lives to us. Like the praire kids in 1905, we are being told what to desire. But unlike those prairie kids we are experiencing a barrage of advertising urging us to take on more debt in order to achieve our desires. VISA, Instaloan, 0% financing, no money down... its so easy and it feels so good. And we're just doing our patriotic duty right? RIGHT?
There, maybe now that I've gotten this out I can stop thinking about it for a while. Good thing too, b/c i just got paged.
marc
