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Spending Money to Make Money: [Consumer Culture] Is Good?
I am not an economist, I'm just some dude who reads more than he probably understands and tries to maintain a tenuous grasp on the broader issue of What's Going On? in our (America's) economy and the global economy. I'll be speaking pretty much only about the American economy as I know even less about global economics at this time. I may also start to ramble.
Today, listening to WBUR's Here & Now, I was introduced to a fellow by the name of James Livingston and his idea that a culture of spending is what is going to get us out of our current recession, and (as far as I understand his point) could be the solution to no longer experiencing these cycles of Boom and Bust that have basically plagued us since the 1920s.
As I understand the idea, it seems like it's not as revolutionary as it may seem on the surface, but rather an alternate take on sound fiscal policy arising in the face of the demonstrable failure of the theory of Trickle-Down Economics. It is clear that shifting the burden of economic growth onto business through tax incentives and deification has only resulted in business hoarding wealth and playing fast-and-loose with our economy in a never-ending quest to generate more profits for less work. It has led to an alarmingly-widening gap in income and wealth, appalling living conditions for those on the lower end of the richest society on the planet, and the withering of the idea that, if you just work hard enough, you too can be all that you can be. Conditions are being manufactured more and more to prevent that from being possible, so why do we continue throwing the same failed solutions at an unchanging problem?
At its most simple level, an economy runs on demand. Demand for goods translates to demand for jobs translates to greater wealth for the worker which translates to demand for goods, etc. It's a pretty simple idea (if a bit reductionist). Why not reinforce that cycle, rather than stifling it? Why not use this period of unprecedentedly-free borrowing to invest in the things that will put people to work and get the wheel turning again?
Why couldn't we spend our way out of this problem?