Freaky Friday

America's long-term short-term problem strikes again. According to a report from NYSE reporters there was a strong uptick in sales on Black Friday, one of many U.S. days dedicated to consumption. The article talked about how $41 Billion dollars over the Thanksgiving weekend, up over 7 percent from the previous year. How is it that this is possible, as people stare down the barrel of one of the worst recessions in U.S. history?

One of the problems has to do with the fact that we are so focused on consumerism; Rostow (The Stages of Economic Growth: A Non-Communist Manifesto Cambridge University Press, 1960) suggested that this is the highest form of economic development. Whilemuch has been written on economic development since then, I would argue that few concepts have become so ingrained in U.S. economic policy, as well as in our popular culture. One indication of this was the push from the Bush administration after 9-11 to convince people to continue spending, literally as an act of patriotism.

Recently we had friends up from Habitat for Guatemala, and they spoke about how the impact of the problematic global economy is immediate in Guatemala--doubling transportation prices, increased food prices and increased housing costs. People have had to respond immediately to transportation problems, or have suffered right away from increases in food costs. Luis Samoya, Director of HFH openly wondered when we would see the impacts of the recession, while he was already seeing it in Guatemala.

Two things are notable here. First, we live so well that we can be in denial longer than countries who have weaker economies. By this I do not mean that we live within our means, but our expectations are that we can continue to live beyond our means, and that things will eventually get better--even as we see people losing their jobs. One of the quotes I saw on television was (paraphrasing) "that since things were going to get bad, now was the time to get as much cheap stuff as possible on Black Friday." Americans do not have an economic cushion, we do not save enough, but we have a reality cushion which seems to prevent us from acting for long-term good.

We also have economic measures that continue to focus on short-term consumption as being necessarily good. Housing starts, short-term worker productivity, home sales, car sales, buying goods, etc. (and the list goes on) all are ways of measuring how well we are doing according to consumption. In the mid-90s, a group of economists began using an adjusted, Genuine Progress Indicator (GPI)
as a way to include other measures of well-being into our thinking, rather than just focusing on GDP as our measure of economic well-being. You have to wonder, if we were using more of these indicators of the quality of life in our society, such as credit for volunteerism and housework, leisure time, encouraging lower environmental degradation and pollution, would spending on more things on Black Friday be important?

We need to a) decide what a good life is, and b) be willing to make conscious and proactive changes in how we reach those goals, rather than salivating like Pavlov's dog the minute Black Friday comes along every year.