consumption – The Burning Platform

AMERICAN FREAKSHOW

“When you’re born you get a ticket to the freak show. When you’re born in America, you get a front row seat.” – George Carlin

When we saw the forecast for this past weekend on Wednesday, we quickly booked a room for Friday and Saturday nights in Wildwood. Even though we are headed back down to the beach in two weeks for our annual vacation, we couldn’t pass up an 80 degree day in May. The Montego Bay hotel is one of only a few that are open all year in Wildwood. It’s kind of dumpy, the staff is grumpy and the one elevator takes five minutes to arrive.

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You park underneath and there is always water dripping from somewhere. It always reminds me of that condo tower that collapsed in Miami last year. The rooms are clean and the view from the 5^th floor balcony is spectacular, looking out on the Atlantic Ocean. You get to see a stunning sunrise, majestic sailboats, and dolphins frolicking close to the beach.

Of course it’s easier to see when there isn’t a five story pile of sand in front of your hotel and the beach access is blocked off. It’s normally peaceful when there aren’t dump trucks and other heavy machinery operating from 6:00 am until 4:00 pm. It’s also quieter when your ghetto neighbors in the next room aren’t blasting their music at volume 11. It seems the North Wildwood authorities attempt to defeat Mother Nature every year by replenishing the beach that washes away every winter during coastal storms. So they pile up tons of sand and truck it up and down the North Wildwood beaches all spring, trying to create a decent sized beach by Memorial Day. It’s not working so well this year.

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45% of Americans pay no federal income tax

This isn’t actually a shocker. When 40% of the working age population doesn’t work and another 10% only hold part-time jobs, they aren’t paying any Federal Income taxes. They are paying sales taxes, gasoline taxes, excise taxes, toll taxes, phone taxes, etc. If it was up to me, I’d scrap all income taxes and replace it with a consumption tax. The politicians would lose a tremendous amount of corruptible power. The more you spend, the more you pay. Savers wold be rewarded. I do favor a High Frequency Trading tax on the Wall Street criminals, just like Bernie. We could use it to build Trump’s wall.

Guest Post by Catey Hill

77.5 million households do not pay federal individual income tax

Many Americans don’t have to worry about giving Uncle Sam part of their hard-earned cash for their income taxes this year.

An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)

Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.

Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

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NO ONE TOLD YOU WHEN TO RUN, YOU MISSED THE STARTING GUN

Ticking away the moments that make up a dull day
You fritter and waste the hours in an offhand way.
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way.

Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.

Pink Floyd – Time

I stumbled across two mind blowing charts yesterday that had me pondering how generations of Americans had frittered their lives away, spending money they didn’t have on things they didn’t need, utilizing easy to acquire debt, and saving virtually nothing for their futures or a rainy day. We are a nation of Peter Pans who never grew up. While I was driving home from work, one of my favorite Pink Floyd tunes came on the radio and the lyrics to Time seemed to fit perfectly with the charts I had just discovered.

We were all young once. Old age and retirement don’t even enter your thought process when you are young. Most people aren’t sure what they want to do for the rest of their lives when they are in their early twenties. Slaving away at your entry level low paying job, chasing the opposite sex, getting drunk, and having fun on the weekends is the standard for most young people. But you eventually have to grow up. Because one day you find ten years have got behind you. No one tells you when to grow up. And based on the charts below, tens of millions missed the starting gun.

I graduated college in 1986 and started my entry level CPA firm job, making $18,000 per year. I did live at home for a year and a half before getting an apartment with a friend. I was able to buy a car, pay off my modest student loan debt, go out on the weekends, and still save some money. I was in my early 20’s and had opened a mutual fund account at Vanguard. Anyone who entered the job market from the mid 1970s through the mid 1980’s, which would be the late Baby Boomers and early Generation Xers, had job opportunities and the benefit of low stock market valuations.

P/E ratios of the market were single digits in the late 70s and early 80s, versus 20 today. Dividend yields on stocks averaged 5% for the S&P 500, versus 1.9% today. The Dow bottomed out at 759 in 1980, while the S&P 500 bottomed at 98. A 20 year secular bull market was about to get under way. Baby Boomers and Generation Xers had the opportunity of a lifetime. Even after six years of the bull, when I graduated from college the Dow stood at 1,786 and the S&P 500 stood at 521. I had just begun to invest when the 1987 crash wiped out 20% in one day. It meant nothing to me. I didn’t have much to lose, so I just kept investing.

The 20 year bull market took the Dow from 759 to 11,722 by January 2000. The S&P 500 rose from 98 to 1,552 by March 2000. You also averaged about a 3% dividend yield per year over the entire 20 years. Your average annual return, including reinvested dividends, exceeded 17%. Anyone who even saved a minimal amount of money on a monthly basis, would have built a substantial nest egg for retirement. If you had invested in 10 Year Treasuries, your annual return would have exceeded 11% over the 20 years. Even an ultra-conservative investor who only put their money into 5 year CDs would have averaged better than 7% per year over the 20 years.

Even with the two stock market collapses since 2000, your average annual return in the stock market since 1980 still exceeds 11%. That’s 34 years with an average annual total return of better than 11%. Every person who had a job over this time frame should have accumulated a decent level of retirement savings. That is why the chart below is so shocking. Over 15% of all people 60 and older and 23% of people 45 to 59 years old have NO retirement savings. None. Nada. Zilch. This means 25 million Boomers and Xers are stuck living off a Social Security pittance and choosing between keeping the heat on or eating a feast of Ramen noodles and Friskies. It seems they let 30 years get behind them. They missed the starting gun.

I’m not shocked that over 50% of 18 to 29 year olds have no retirement savings. With the terrible job market, declining real wages, massive levels of student loan debt, two stock market crashes in the space of eight years, and 4% annual returns since 2000, young people today have neither the means nor trust in the system to save for retirement. Their elders had no such excuse. Just a minimal amount per paycheck saved over the last 30 years would have compounded to well over $100,000, even at modest salary levels. It is disgraceful that 25 million people over the age of 45 have saved nothing for their retirement. Far more disgraceful is the median household retirement balance of $3,000 for all working age households. There are 122 million households in this country and 61 million of them have $3,000 or less in retirement savings.

The far worse data points are the $12,000 median retirement balance of aged 55 to 64 households and the $10,100 median retirement balance of aged 45 to 54 households. These people are on the edge of retirement and have less than one year’s expenses saved. There is no legitimate excuse for this pitiful display of planning. These people had decades to save, strong financial market returns, and if they worked for a decent size organization – matching contributions to their retirement accounts. They didn’t need a huge salary. They didn’t need to save 20% of their salary. They didn’t have to be an investing genius. A savings allocation of just 3% to 5% would have grown into a decent sized nest egg after a few decades of compounding.

We know from the data in the chart, it didn’t happen. The concept of delayed gratification is unknown to the millions of nearly broke Boomers and Xers, shuffling towards an old age of poverty, misery and regret. A 64 year old has a life expectancy of about 20 years. They’ll have to budget “very” frugally to make that $12,000 last. The question is how did it happen. I don’t buy the load of crap that you can’t judge people as groups. I judge people by their actions, not their words. I know you can’t lump every Boomer and Xer into one box. Individuals in every generation have bucked the trend, lived within their means, saved for the future, and accumulated significant nest eggs for their retirement. But the aggregate numbers don’t lie. The majority of those over the age of 45 have squandered their chance at a relatively comfortable retirement. These are the people who most vociferously insist the government do something about their self created plight. It’s their right to free healthcare, free food, subsidized housing, free utilities, higher minimum wages, and a comfortable government subsidized retirement. They are wrong. They had a right to life, liberty and the pursuit of happiness. It was up to them to educate themselves, get a job, work hard, and accumulate savings.

The generations of live for today, don’t worry about tomorrow Americans over the age of 45 have no one to blame but themselves. They bought those 4,500 sq foot McMansions with negative amortization 0% down mortgages. They had to keep up with the Jones-es by putting in granite counter-tops, stainless steel appliances, home theaters, Olympic sized swimming pools, and enormous decks. They have HDTVs in every room in their house and must have every premium cable channel, along with the NFL package. They upgrade their phones every time Apple rolls out a new and improved version. They pay landscapers to manicure their properties. They lease new BMWs every three years. They have taken exotic vacations on an annual basis. They haven’t packed a lunch for themselves since they were 16 years old. Eating out for lunch and dinner has been a staple of their existence for decades. That morning Starbucks coffee is a given. A new wardrobe of name brand stylish clothes for every season is a requirement because your neighbors and co-workers are constantly judging you. Nothing proves you’re a success like a Rolex watch, Canali suit, Versace boots, or Gucci handbag. The have it now generations got it then and have virtually nothing now because they acquired all of these things with debt.

Real cumulative household income is up 10% since 1980. Consumer debt outstanding has risen from $350 billion in 1980 to $3.267 trillion today. That is a 933% increase. We’ve had decades of faux prosperity aided and abetted by Wall Street shysters, corrupt politicians, mega-corporation mass merchandisers, and Madison Avenue maggots trained in the methods of Edward Bernays to convince willfully ignorant consumers to consume. And consume we did. Saving, not so much. You can blame the oligarchs, bankers, retailers, and politicians for the fact you didn’t save, but it rings hollow. No matter how much propaganda is spewed by the ruling class, we are still individuals with free will. The older generations had choices. Saving money requires only one thing – spending less than you make. Most Boomers and Xers chose to spend more than they made and financed the difference. When the average credit card balance is five times greater than the median retirement account balance, you’ve got a problem. The facts about our consumer empire of debt are unequivocal as can be seen in these statistics:

Average credit card debt: $15,593
Average mortgage debt: $153,184
Average student loan debt: $32,511

$11.62 trillion in total debt
$880.3 billion in credit card debt
$8.05 trillion in mortgages
$1.12 trillion in student loans

I don’t blame those in their 20’s and 30’s for not having retirement savings. Anyone who entered the workforce around the year 2000 has good reason to not trust the system or their elders. There have been two stock market collapses and every asset class is now extremely overvalued due to the criminal machinations of the Federal Reserve. There are far less good paying jobs. Real wages keep declining. They were convinced by their elders to load up on student loan debt, leaving them as debt serfs. The Wall Street/Federal Reserve scheme to boost home prices and repair their insolvent balance sheets has successfully kept young people from ever being able to afford a home. So you have young people unable to save, invest or spend. You have middle aged and older Americans with little or no savings, mountains of debt, low paying service jobs, and an inability to spend. The only people left with resources are the .1% who have captured the system, peddle the debt, and reap the rewards of consumption versus saving. They may be able to engineer a stock market rally to further enrich themselves, but they can not propel the real economy of 318 million people. Our consumer society is dying – asphyxiated by debt – shorter of breath and one day closer to death.

I’d love to offer some sage advice on how to fix this problem, but it’s too late. Too many people missed the starting gun. More than ten years got behind them. No one is going to come to the rescue of people who never saved for their future. The Federal government has already made $200 trillion of entitlement promises it can’t keep. State governments have made tens of trillions in pension promises they can’t keep. They can’t tax young people who don’t have jobs. Older generations who think the government is going to rescue them from their foolish shortsighted choices are badly mistaken. Their benefits are likely to be reduced because the unsustainable will not be sustained. The 45 to 64 year old cohort who chose not to save can run and run to try and catch up with the sun, but it’s too late. It’s sinking. Their plans have come to naught. They are destined for lives of quiet desperation. There is nothing more to say.

So you run and you run to catch up with the sun but it’s sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you’re older,
Shorter of breath and one day closer to death.

Every year is getting shorter; never seem to find the time.
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over,
Thought I’d something more to say.

Pink Floyd – Time

CHRISTMAS IN OCTOBER – DESPERATE MEASURES

The desperation of retailers grows by the day. I head to Wal-Mart and Giant in Harleysville every Sunday morning at 7:00 am. to do my weekly grocery shopping. I go to Wal-Mart at opening to avoid the freaks we see weekly on the People of Wal-Mart post. The workers at Wal-Mart are only a small step above the customers. They can barely communicate, rarely look you in the eye, and generally act like they are prisoners in an asylum.

I’m in winter/bad times ahead prep mode. I had a load of fire wood delivered yesterday which I wheelbarrowed to the back yard and stacked with my already decent sized stack. Last week I took an empty propane canister back to Wal-Mart to replace it with a full canister. That would give me three full propane tanks. I left the empty tank outside next to the propane cage and went in to pay. The old lady cashier with the gravelly smoker voice told me she would call for someone to get me a new tank.

I went over the cage and patiently waited for a Wal-Mart drone to come out, unlock the propane cage and give me a full tank. Two minutes, five minutes, and eventually ten minutes go by with no one coming out to help me. The cashier pokes her head out the door and shrugs her shoulders and says no one is responding to her calls. What a well oiled machine they have at Wal-Mart. Eventually the old lady abandoned her cashier post and in a painstakingly slow manner proceeded to unlock one bin after another until she found a full tank. I’m sure a line of unhappy customers were piling up at the only register in the garden center while she spent ten minutes getting me my propane tank.

A transaction that should have taken five minutes from start to finish ended up taking closer to twenty five minutes, with another five or six customers also dissatisfied with their extra long wait. This is a perfect example of how not to do business. Maybe Wal-Mart’s problems are bigger than households having less to spend. They are attempting to maintain their profit margins by reducing staff hours, hiring low quality people, and paying them shit wages. In the short run it may keep profits higher, but in the long-run customers will go elsewhere. Except most of the elsewhere stores closed up years ago when Wal-Mart arrived and underpriced them into bankruptcy.

My shopping experience at Giant is generally pleasant. The staff are nice, competent, and have been there for years. They know what they are doing and serve you with a smile. But their store is part of a worldwide conglomerate, so things have changed for the worse over the last four months. They renovated the entire store, creating bigger aisles and moving stuff around. That’s annoying, but after a while you figure out where they moved the stuff you want. The real negative change was the dreaded “Everyday Low Pricing”. This weasel phrase means you will be paying more. This is what the Apple idiot CEO – Ron Johnson – did at JC Penney. It put them on a rapid path to bankruptcy.

The weekly sale items at Giant have virtually disappeared. This has coincided with the drastic increase in beef, pork and fresh produce prices. Since “Every Day Low Pricing” went into affect our weekly grocery bill has gone up 20%. And I am buying far less beef and more chicken. In the past I would stock up on sale items and put beef, pork and whatever was on sale in our storage area freezer. Now I am stuck buying what we need that week. No bargains, just fully priced food items. Be forewarned, whenever you see a store announce “Everyday Low Pricing” you are getting screwed.

The Boos Begin in August & Bells Start Jingling in October

The desperation of Wal-Mart and most of the other mega-retail chains is no more clearly evident than in their relentlessly ridiculous acceleration of holiday marketing displays. I was flabbergasted when I saw Halloween candy, decorations and costumes in row after row BEFORE Labor Day at my local Wal-Mart. Selling Halloween candy two months before Halloween is idiotic and a sure sign of desperation. Retailers have run out of merchandising ideas. I wouldn’t even consider buying Halloween candy until the week before Halloween. Do Wal-Mart freaks of the week actually buy Halloween merchandise in September?

Holidays used to be special occasions that lent a sense of sales urgency for retailers for a week or two, to pump up sales. Now Wal-Mart and the rest of the dying retailers have Christmas, Easter, Fourth of July, and Halloween displays up for 80% of the year. There is no sense of urgency to buy. From September 1 though October 31 there are rows and rows of bags of corporate produced chemicals disguised as candy. I suppose the obese masses buy this crap in anticipation of Halloween, tell themselves they’ll only take one, and then shovel the entire bag down their gullets.

So last week, still a full two weeks before Halloween, Wal-Mart had already converted their entire garden center into a Christmas wonderland of cheap mass produced Chinese cookie cutter Christmas decorations and lights that will blow out after three hours of use. They had also converted aisles at the front of the store to Christmas displays. Who the hell shops for Christmas crap in October? There is nothing like having cheap Chinese Christmas crap available for over two months to create a sense of urgency to buy. Wal-Mart and the rest of the mega-retailers have got nothin. They have no original merchandising ideas. They don’t even try anymore. They source low quality goods from China and compete solely on price. I can’t wait for the Easter candy to appear on Wal-Mart’s shelves in late December.

Black Thanksgiving

Black Friday is dead. Long live Black Thanksgiving. The riots and stampedes by the ignorant masses for toasters and HDTVs on Black Friday are now being replaced by retailers and malls across America opening at 6:00 pm on Thanksgiving. It actually seems fitting. How better to give thanks for our mass consumption, debt financed, materialistic, iGadget addicted society than to open stores on Thanksgiving. Spending time with family is overrated anyway. If you had to spend six hours with cousin Eddie and aunt Bethany, you’d be looking forward to an early opening at Macy’s.

The bullshit message from the mega-retailers is: “We’re not opening on Thanksgiving out of desperation or greed. We’re doing it simply to satisfy the demands of our customers”. It’s a racist national holiday anyway. We should be going to an Indian run casino on Thanksgiving to make up for our past sins. Opening stores and forcing workers to work on Thanksgiving is pathetic, disgusting and a truly desperate measure in this consumer empire in decline. The law of diminishing returns has been invoked upon the mega-retailers that dominate our suburban sprawl paradise.

These retailers can start holiday merchandising three months before the actual holiday. They can open their doors on Thanksgiving, Easter and Christmas. It’s nothing more than shuffling the deck furniture on the Titanic. We’ve allowed bankers, politicians and corporate titans to financialize our economy, gutting the once thriving middle class, sending manufacturing jobs overseas, and convincing the clueless masses that consumer goods purchased with debt is equal to wealth. But, we’ve reached the point of no return. There are 248 million working age Americans and 102 million of them are not employed. Of the 146 million working Americans, 82 million of them make less than $30,000 per year.

While retailers have added billions of square feet since 1989, real median net worth is 5% lower over 24 years. Retailers are attempting to get blood from a stone. The stone is in debt, approaching retirement with no savings and dead broke.

We have one entity that deserves the most credit for destroying the American Dream. Real median household income is lower than it was in 1989. The 2008 collapse was caused by the easy money bubble machine at the Federal Reserve. We had the opportunity to hit the reset button, implement rational economic and monetary policies, take our lumps, and make the banking culprits pay for their crimes. Instead, the easily manipulated masses believed the Wall Street storyline and allowed the Federal Reserve and feckless politicians to save the banking cabal with extreme money printing and debt creation. This has pushed the middle class closer to the breaking point, while further enriching the oligarchs. The Federal Reserve saved their owners and lured the masses further into debt.

The Fed, Wall Street, and Washington DC have successfully driven consumer debt to an all-time high, blasting through the $3 trillion level. Declining real incomes and rising debt are a sure recipe for success.

Our entire economic paradigm is built upon desperate measures. Zero interest rates, $3 trillion of QE, systematic accounting fraud, fudged economic data, and doling out subprime loans to auto renters and University of Phoenix wannabes have failed to revive our moribund economy. Delusions don’t die easily. But they do die. We are reaching the limit of this delusionary dream built upon debt, denial, and deception. Make sure you wolf down that Thanksgiving feast before 5:00 pm. There are HDTV’s to fight for at 6:00 pm.

IF CONSUMERS ARE SO F%#KING CONFIDENT WHY AREN’T THEY SPENDING?

The sheep have been told their confidence is at a 7 year high by the propaganda peddlers working at the behest of the oligarchy. The sheep are also told that 10 million jobs have been added since the GOTUS played his first round back in 2009. The sheep have been told the record highs in the stock market prove that all is well. If the .1% are doing fantastic, some of the wealth must be trickling down. The sheep are told that QE and ZIRP were really to save Main Street and not the bonuses of Wall Street (at record highs by the way). The sheep are told to fear ISIS, Iran, Assad, Putin, and China. The sheep are told U.S. energy independence is just around the corner and to ignore the fact that gas prices have tripled in the last ten years. The sheep are told drones will keep them safe and the DHS militarizing the police is just for their safety and security. The sheep are told guns are dangerous in their hands, but not in the hands of the government. The sheep passively eat their iGadgets and barely bleat while being led to the slaughter house.

The propaganda machine is working at hyper speed as the wheels fall off this out of control bus. But all the messaging, packaging, and lies can’t change the facts. Ignorance about the facts doesn’t change the facts. The oligarchs are getting pissed. You mindless consumers simply won’t consume as much as you used to, even with 7 year 0% interest subprime auto loans, $1 trillion of government loans to generate consumption disguised as student loans, and five credit card offers per week from the Too Big To Trust Wall Street cabal. WTF is wrong with you?

You’ve ruined the storyline used for months about horrific winter weather being the cause of non-spending in the 1st quarter. Once it stopped being cold you were supposed to spend like drunken sailors again. Just like the old days. How could you spend less in July than you did in June? You’ve only increased your spending by a mere 1.8% so far this year. With real inflation on stuff you need to live running above 5%, you’re actually spending far less than last year. No wonder confidence is skyrocketing.

A little examination into the facts behind the Commerce Department report might shed a little light on the truth about the good old American consumer:

25% of all personal income in the country is either a transfer from the government to someone or from a government job. That is $3.7 trillion taken from producers and given to takers. In 2000 this figure was 21%. The relentless increase in Social Security, Medicare, Medicaid, Veterans Benefits and Other will drive this percentage to 30% by 2020.
Real personal income (excluding government transfers) has gone up 2.6% over the last year and this is using the false CPI figure of 1.6% to reach that pitiful number. Using a true inflation figure of 5% yields lower real personal income than last year.
These numbers also fail to recognize the 2.2 million increase in population. On a per capita basis, real personal income is up 1.9% in the last year.
Senior citizens and conservative savers are earning $120 billion less today than they did seven years ago. All the grandmothers eating cat food thank you Ben and Janet. If interest rates were allowed to adjust to market levels consistent with inflation, savers would be generating $500 billion to $700 billion more interest income that could be used to propel economic growth. Per capita real disposable income was $37,582 in May of 2008. It is currently $37,553. Again, this is using the fake BLS inflation numbers, so it is even far worse.

Is it really a shocker that Americans are spending less? The MSM is so captured by the organizations providing their advertising revenue that their faux journalists don’t even attempt to examine the facts and reach logical conclusions. Their job is to cheer lead and make excuses for why their storyline of improvement never plays out. The snow storyline is history. The surge in consumer confidence storyline has been proven false by the actual spending data. Now we move onto the surge in jobs storyline that is proven false by the personal income data. I’m sure back to school season will be a resounding success. Just wait until the holidays. The consumer will surely be back this year. And the beat goes on.

The chart below tells you all you need to know about why this recovery is false. The people who are supposed to be in their peak earnings and spending years have seen their real household incomes decline dramatically since the END of the recession in June 2009. Think about that for a moment. The only people who’ve seen their real incomes rise are those who no longer spend. I wonder if it is a coincidence that government transfers since June 2009 are up 18% and the grey hairs have seen their incomes rise?

The consumer is not back. They are not coming back. The decades long debt fueled orgy of consumption has long since peaked and we are on the long road to perdition. Confidence can’t cure our disease. More debt to cure a disease caused by too much debt will not save the patient. Our disease is terminal.

The Real Reason For The Forty-Hour Workweek

Bernays would be so proud. Huxley would be disgusted.

Via Films For Action

By David Cain / raptitude.com

Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months of traveling.

Because I had been living quite a different lifestyle while I was away, this sudden transition to 9-to-5 existence has exposed something about it that I overlooked before.

Since the moment I was offered the job, I’ve been markedly more careless with my money. Not stupid, just a little quick to pull out my wallet. As a small example, I’m buying expensive coffees again, even though they aren’t nearly as good as New Zealand’s exceptional flat whites, and I don’t get to savor the experience of drinking them on a sunny café patio. When I was away these purchases were less off-handed, and I enjoyed them more.

I’m not talking about big, extravagant purchases. I’m talking about small-scale, casual, promiscuous spending on stuff that doesn’t really add a whole lot to my life. And I won’t actually get paid for another two weeks.

In hindsight I think I’ve always done this when I’ve been well-employed — spending happily during the “flush times.” Having spent nine months living a no-income backpacking lifestyle, I can’t help but be a little more aware of this phenomenon as it happens.

I suppose I do it because I feel I’ve regained a certain stature, now that I am again an amply-paid professional, which seems to entitle me to a certain level of wastefulness. There is a curious feeling of power you get when you drop a couple of twenties without a trace of critical thinking. It feels good to exercise that power of the dollar when you know it will “grow back” pretty quickly anyway.

What I’m doing isn’t unusual at all. Everyone else seems to do this. In fact, I think I’ve only returned to the normal consumer mentality after having spent some time away from it.

One of the most surprising discoveries I made during my trip was that I spent much less per month traveling foreign counties (including countries more expensive than Canada) than I did as a regular working joe back home. I had much more free time, I was visiting some of the most beautiful places in the world, I was meeting new people left and right, I was calm and peaceful and otherwise having an unforgettable time, and somehow it cost me much less than my humble 9-5 lifestyle here in one of Canada’s least expensive cities.

It seems I got much more for my dollar when I was traveling. Why?

A Culture of Unnecessaries

Here in the West, a lifestyle of unnecessary spending has been deliberately cultivated and nurtured in the public by big business. Companies in all kinds of industries have a huge stake in the public’s penchant to be careless with their money. They will seek to encourage the public’s habit of casual or non-essential spending whenever they can.

In the documentary The Corporation, a marketing psychologist discussed one of the methods she used to increase sales. Her staff carried out a study on what effect the nagging of children had on their parents’ likelihood of buying a toy for them. They found out that 20% to 40% of the purchases of their toys would not have occurred if the child didn’t nag its parents. One in four visits to theme parks would not have taken place. They used these studies to market their products directly to children, encouraging them to nag their parents to buy.

This marketing campaign alone represents many millions of dollars that were spent because of demand that was completely manufactured.

“You can manipulate consumers into wanting, and therefore buying, your products. It’s a game.” ~ Lucy Hughes, co-creator of “The Nag Factor”

This is only one small example of something that has been going on for a very long time. Big companies didn’t make their millions by earnestly promoting the virtues of their products, they made it by creating a culture of hundreds of millions of people that buy way more than they need and try to chase away dissatisfaction with money.

We buy stuff to cheer ourselves up, to keep up with the Joneses, to fulfill our childhood vision of what our adulthood would be like, to broadcast our status to the world, and for a lot of other psychological reasons that have very little to do with how useful the product really is. How much stuff is in your basement or garage that you haven’t used in the past year?

The real reason for the forty-hour workweek

The ultimate tool for corporations to sustain a culture of this sort is to develop the 40-hour workweek as the normal lifestyle. Under these working conditions people have to build a life in the evenings and on weekends. This arrangement makes us naturally more inclined to spend heavily on entertainment and conveniences because our free time is so scarce.

I’ve only been back at work for a few days, but already I’m noticing that the more wholesome activities are quickly dropping out of my life: walking, exercising, reading, meditating, and extra writing.

The one conspicuous similarity between these activities is that they cost little or no money, but they take time.

Suddenly I have a lot more money and a lot less time, which means I have a lot more in common with the typical working North American than I did a few months ago. While I was abroad I wouldn’t have thought twice about spending the day wandering through a national park or reading my book on the beach for a few hours. Now that kind of stuff feels like it’s out of the question. Doing either one would take most of one of my precious weekend days!

The last thing I want to do when I get home from work is exercise. It’s also the last thing I want to do after dinner or before bed or as soon as I wake, and that’s really all the time I have on a weekday.

This seems like a problem with a simple answer: work less so I’d have more free time. I’ve already proven to myself that I can live a fulfilling lifestyle with less than I make right now. Unfortunately, this is close to impossible in my industry, and most others. You work 40-plus hours or you work zero. My clients and contractors are all firmly entrenched in the standard-workday culture, so it isn’t practical to ask them not to ask anything of me after 1pm, even if I could convince my employer not to.

The eight-hour workday developed during the industrial revolution in Britain in the 19th century, as a respite for factory workers who were being exploited with 14- or 16-hour workdays.

As technologies and methods advanced, workers in all industries became able to produce much more value in a shorter amount of time. You’d think this would lead to shorter workdays.

But the 8-hour workday is too profitable for big business, not because of the amount of work people get done in eight hours (the average office worker gets less than three hours of actual work done in 8 hours) but because it makes for such a purchase-happy public. Keeping free time scarce means people pay a lot more for convenience, gratification, and any other relief they can buy. It keeps them watching television, and its commercials. It keeps them unambitious outside of work.

We’ve been led into a culture that has been engineered to leave us tired, hungry for indulgence, willing to pay a lot for convenience and entertainment, and most importantly, vaguely dissatisfied with our lives so that we continue wanting things we don’t have. We buy so much because it always seems like something is still missing.

Western economies, particularly that of the United States, have been built in a very calculated manner on gratification, addiction, and unnecessary spending. We spend to cheer ourselves up, to reward ourselves, to celebrate, to fix problems, to elevate our status, and to alleviate boredom.

Can you imagine what would happen if all of America stopped buying so much unnecessary fluff that doesn’t add a lot of lasting value to our lives?

The economy would collapse and never recover.

All of America’s well-publicized problems, including obesity, depression, pollution and corruption are what it costs to create and sustain a trillion-dollar economy. For the economy to be “healthy”, America has to remain unhealthy. Healthy, happy people don’t feel like they need much they don’t already have, and that means they don’t buy a lot of junk, don’t need to be entertained as much, and they don’t end up watching a lot of commercials.

The culture of the eight-hour workday is big business’ most powerful tool for keeping people in this same dissatisfied state where the answer to every problem is to buy something.

You may have heard of Parkinson’s Law. It is often used in reference to time usage: the more time you’ve been given to do something, the more time it will take you to do it. It’s amazing how much you can get done in twenty minutes if twenty minutes is all you have. But if you have all afternoon, it would probably take way longer.

Most of us treat our money this way. The more we make, the more we spend. It’s not that we suddenly need to buy more just because we make more, only that we can, so we do. In fact, it’s quite difficult for us to avoid increasing our standard of living (or at least our rate of spending) every time we get a raise.

I don’t think it’s necessary to shun the whole ugly system and go live in the woods, pretending to be a deaf-mute, as Holden Caulfield often fantasized. But we could certainly do well to understand what big commerce really wants us to be. They’ve been working for decades to create millions of ideal consumers, and they have succeeded. Unless you’re a real anomaly, your lifestyle has already been designed.

The perfect customer is dissatisfied but hopeful, uninterested in serious personal development, highly habituated to the television, working full-time, earning a fair amount, indulging during their free time, and somehow just getting by.

Is this you?

Two weeks ago I would have said hell no, that’s not me, but if all my weeks were like this one has been, that might be wishful thinking.