Globe and Mail series: Risks are associated with too much consumerism; risks are associated with too little of it

I’ve explored two related concepts in a May 9, 2015 Twitter post, which can be represented as follows:

Consumerism fuels runaway spending

Consumers in debt stop consuming, economic collapse looms

Risks are associated with too much consumerism (in the sense of the compulsion to buy the newest electronic gadgets, bigger houses, and pricier cars)

That is, a May 8, 2015 Globe and Mail article is entitled: “Laurie Campbell: Credit Canada CEO shatters debt myths.”

The article notes:

“Ms. Campbell has come to strongly believe the root cause of Canada’s debt problems lies in consumerism – the compulsion that makes people want the latest electronic gadgets, bigger houses and pricier cars.

“Her only debt is the mortgage on her house in Toronto’s Scarborough Bluffs neighbourhood, and she says she was content to buy her kids’ clothes at Wal-Mart or Value Village when they were younger. Her indulgences? It’s not an extravagant list – she says she likes travelling, and she happily pays for pedicures.

“For many people, however, debt is a habit, and helping people reduce their debt is a process Ms. Campbell likens to dieting, with most people finding it hard to stick at it.

“ ‘You’re talking about lifestyle changes,’ she says. ‘You can’t change your money habits for six months, until you get out of debt, and then go back to your old habits. It has to be a lifestyle, over a lifetime.’ ”

[End of excerpt]

Risks are associated with too little consumerism (in the sense of people spending money to keep the economy growing)

A second May 8, 2015 Globe and Mail article is entitled: “In deep: The high risks of Canada’s growing addiction to debt.”

The article notes:

“Not everyone struggles with debt. In fact, nearly a third of Canadians are debt free. But a small, highly important, share of households are drowning in debt and could pose a major risk to the economy.

“ ‘You really have to look at the extremes, as opposed to just talking about averages. There’s a group of one to two million people out there that really scare me,’ says Moshe Milevsky, finance professor at the Schulich School of Business at York University.

“ ‘If you have enough people that run into financial difficulties, eventually it aggregates and you have cities that are in trouble and you have neighbourhoods that are in trouble and eventually that affects consumption. At some point people that have misfortune stop spending and if enough of them do it, then it’s a risk to the economy.’ ”

[End of excerpt]

Consumer Reports

I’m a big fan of Consumer Reports. The concept of an organization devoted to evidence-based analysis of consumer products and trends appealed to me tremendously, as a teenager in the 1960s. Long after I left behind such 1960s pastimes as reading Reader’s Digest, Life Magazine, Newsweek, and Time (as well as the old version of Canada’s own Maclean’s Magazine, before whatever happened to it, happened to it), I retained my enjoyment of reading Consumer Reports.

About the only time I became dubious was when CR in the 1960s espoused the line of the American Medical Association on all matters related to nutrition. However, I noted, as the years passed, that Consumer Reports in time began to depend more on independent research, related to medical and nutritional matters, rather than accepting the concept of “expert opinion” at face value.

In the late 1960s, during the hippie era when I was at university, I remember encountering a student-published satirical magazine, which among other things featured take-offs on standard magazine ads. The publication included an advertisement for Consumer Reports, but in the case of the latter ad, nothing whatever had been altered in the text, so far as I could tell. I thought that was very clever. I thought, “That’s clever. I like that. Your brain is clearly working. But you haven’t convinced me of anything.”

My fellow students, or whichever batch of hippies put together the text, were making fun of Consumer Reports by indicating that an ad for the magazine could convey the satirical message, of the student publication, with no need whatever to alter the text. The message was – this being the 1960s hippie era – that advertising by Consumer Reports represented an advocacy for consumerism run wild, as was the case with every other form of magazine advertising that was available to us.

Hippie era

I enjoy reading about the concept, that has been occasionally advanced, with greater or lesser amounts of evidence to back up the claim, that the hippie era was created by the Madison Avenue advertising industry, as a way to sell more products. Oh, the irony:

The hippies were the creation of the American advertising industry, according to Thomas Frank (1997).

The concept of an ever-growing economy, as the indicator of happiness and peace in the world, brings to mind the concept of sustainability. The latter concept functions either as powerful rhetoric for more of the same way of doing things, or else is a powerful concept whose back story matches the rhetoric. The concept brings to mind how economy, as a field of study, has changed since the 1960s.

The Changing Face of Economics (2004), Society in Question (2013), and Stalled (2015)

A useful resource regarding these topics is The Changing Face of Economics: Conversations with Cutting Edge Economists (2004).

A blurb for the latter study at the Toronto Public Library website (see link in previous sentence) notes, among other things:

“The interviews and commentary together demonstrate that economics is currently undergoing a fundamental shift in method and is moving away from traditional neoclassical economics into a dynamic set of new methods and approaches. These new approaches include work in behavioral economics, experimental economics, evolutionary game theory and ecological approaches, complexity and nonlinear dynamics, methodological analysis, and agent-based modeling.”

[End of excerpt]

Sociology is a helpful resource for making sense of things, including making sense of economic realities, however they are defined; a good resource in this realm of analysis is Society in Question (2013).

To round out the discussion, it’s useful to be aware of a business-focused, numbers-focused view of things, as in Stalled: Jump-Starting the Canadian Economy (2015). That said, the latter study’s discussion about what income inequality entails appears, to my understanding of the topic, to be dubious.

Click here for the goodreads.com ratings of the latter book >

“Current monetary policy is not going to work”

A May 8, 2014 Globe and Mail article is entitled: “Joseph Stiglitz: ‘Current monetary policy is not going to work.’ ”

The article begins with the following Q & A:

• Q: The debate over economic inequality has gone global since the 2011 Occupy movements. Yet, the last five years have seen little, if any, concrete action by governments on the issue. Why the disconnect?

• A: I think one of the main reasons is that, in the years following 2008 and the global financial crisis, our collective attention was focused on survival. Would the economy recover? Could we get it to grow again? What would we do about employment? There is a political element in this as well. In the first three years of recovery in the United States, 91 per cent of all the income gains went to the upper 1 per cent. For an economy that claims to be a success, this is an outrage. Seventy per cent of Americans believe it is an outrage; they believe something should be done. And yet our fractured politics in Washington and the ideology of the right has put up road block after road block to prevent meaningful reform.

• The good news is that, since 2011, a grassroots movement has developed around the U.S. So, while there may be gridlock in Washington, there is action being taken to roll back inequality in places like Seattle and other cities. I suspect similar forces are at play in countries around the world.

[End of excerpt]

Updates:

A Jan. 29, 2016 Guardian article is entitled: “Was there ever a time when so few people controlled so much wealth?”

With regard to Consumer Reports and the history of advertising, a valuable study is entitled: Advertising at War: Business, Consumers, and \Government in the 1940s (2012). A blurb for the latter study notes:

“Advertising at War challenges the notion that advertising disappeared as a political issue in the United States in 1938 with the passage of the Wheeler-Lea Amendment to the Federal Trade Commission Act, the result of more than a decade of campaigning to regulate the advertising industry. Inger L. Stole suggests that the war experience, even more than the legislative battles of the 1930s, defined the role of advertising in U.S. postwar political economy and the nation’s cultural firmament. She argues that Washington and Madison Avenue were soon working in tandem with the creation of the Advertising Council in 1942, a joint effort established by the Office of War Information, the Association of National Advertisers, and the American Association of Advertising Agencies.

“Using archival sources, newspapers accounts, and trade publications, Stole demonstrates that the war elevated and magnified the seeming contradictions of advertising and allowed critics of these practices one final opportunity to corral and regulate the institution of advertising. Exploring how New Dealers and consumer advocates such as the Consumers Union battled the advertising industry, Advertising at War traces the debate over two basic policy questions: whether advertising should continue to be a tax-deductible business expense during the war, and whether the government should require effective standards and labeling for consumer products, which would render most advertising irrelevant. Ultimately the postwar climate of political intolerance and reverence for free enterprise quashed critical investigations into the advertising industry. While advertising could be criticized or lampooned, the institution itself became inviolable.”

An April 25, 2017 Science Daily article is entitled: “Parents’ use of emotional feeding increases emotional eating in school-age children.”

A summary of the research report from the Society for Research in Child Development, on which the article is based, reads:

“Emotional eating is not uncommon in children and adolescents, but why youth eat emotionally has been unclear. Now a new longitudinal study from Norway has found that school-age children whose parents fed them more to soothe their negative feelings were more likely to eat emotionally later on. The reverse was also found to be the case, with parents of children who were more easily soothed by food being more likely to feed them for emotional reasons.”

An April 25, 2017 Guardian article is entitled: “Backlash after report claims saturated fats do not increase heart risk: Relying on low fat foods to avoid heart disease is misguided, say cardiologists, but critics say comments ignore evidence.”

An April 26, 2017 CBC article is entitled: “Pass the butter: Cutting saturated fat does not reduce heart disease risk, cardiologists say: Focus should instead be on eating ‘real food,’ walking and reducing stress.”