Buy Nothing Day

Popular legend has it that the day after Thanksgiving, “Black Friday,” is the busiest shopping day of the year. Anti-consumerist activists have for some years been designating this day “Buy Nothing Day.” This is a day not to go to the mall, not to add to the balance on your credit cards, but rather to start thinking about how to spend this holiday season giving the gift of love, of self, rather than of material goods.

This year, of course, we’re in recession, so is it irresponsible to “Buy Nothing” when the economy depends so much on consumer spending? Well, as Juliet Schor points out in this post on the Center for a New American Dream website, it was financial shenanigans and the housing bubble that caused the problem. For an economic recovery, the pump will need to be primed at a level high above the average consumer.

In addition, many Americans are in hock up to their ears with credit card and mortgage debt, and the wiser option at this stage is to cut down on purchases, pay down debt, and increase the rate of savings, which hovers around zero for Americans. (According to Consumer Reports, in 2006, 23% of shoppers were still carrying holiday-related credit card debt the following March.)

Remember that the cost of every purchase includes not just the price of the item but the price to advertise it, ship it, package it and dispose of it when it breaks down. Much of this cost is in oil, something to think about in this time of global climate change.

And most importantly, real meaning and purpose cannot be found in the mall, or in the exchange of material goods. Real purpose can only be found in human connection, in time spent with friends and loved ones, in volunteering – generally giving the gift, not of stuff, but of self. And that’s the gift that keeps on giving.

(Of course, Jews who observe Shabbat know that “Buy Nothing Day” comes every week!)

Legislate in haste, repent in leisure

The more I think about it, the more I think it's a really bad idea to rush through bail-out legislation the week before Congress breaks for the year. I just think about the Patriot Act and about how a lot of really bad ideas got through there because there was a sense that something, anything had to be done, right now, and we haven't been able to get rid of a lot of it even now. I would rather there be competent leadership on this issue after the first of the year. (Hope, hope, hope.)

Going back to the WashPost article I posted to last night, I wonder how such a large input of money will warp the market and prop up sectors that don't deserve to be propped up. In other words, there have been unintended consequences of every bailout this far - what will the unintended consequences of this bailout be?

I heard on NPR this morning that maybe the $700 billion is totally gone, maybe if these security stabilize they can be sold back to the private sector. Well, that's reassuring. I'm quite sure that they will be sold back at a rate that will allow a hefty profit to the private sector, which then gets to profit three ways - at the beginning by making the bubble, in the middle by getting bad debt off their books, and at the end by buying back recovered securities from the feds at a discount.

And so government of the rich, by the rich and for the rich has not, you can be assured, perished from the earth.

Let 'em jump

Here's an article from the Washington Post explaining how Wall Street machinations, executive branch negligence, congressional greed and the legacy-whoring of Alan Greenspan all combined to contribute to the Wall Street meltdown. And now we're supposed to pay for it.

In an effort to offset the economic strain from these losses [from the bursting of the Internet bubble], the Fed once again rapidly increased the money supply and slashed short-term interest rates to 1 percent -- a level that hadn't been seen in more than 45 years. This enormous monetary stimulus (along with significant federal spending) energized the overall economy, but it also led to the greatest housing boom -- and possible bust -- this country has ever encountered.

(snip)

Once again, the investment banks raked in billions of dollars in fees, giving them incentive to keep lowering underwriting standards, allowing mortgage companies to originate and sell even the most unscrupulous home loans, which Wall Street then dumped onto the investment community. Wall Street never once questioned the ethics of these activities; it too was focused on the enormous rewards that allowed its firms to pay out an unfathomable $62 billion in bonuses in 2006 alone.

The price of all this greed? Sadly, because of the actions of the investment banks, the mortgage industry and the rating agencies, the investment community has now incurred an estimated $1 trillion and more in losses. Even more troubling, housing prices have dropped 20 percent from their July 2006 highs, with the very real likelihood that housing could contract another 15 to 20 percent -- essentially wiping out more than $4 trillion in housing values. This would be the biggest hit since the Depression to Americans' most important asset.

(snip)

Wall Street's actions are now profoundly hurting American families, communities and the entire U.S. financial system. People are being thrown out of their homes. Once seemingly indestructible financial entities are succumbing to the crisis they have created and have jeopardized the stability of the global financial system. Isn't it ironic that the same firms that preached free-market capitalism are now the ones begging for a taxpayer bailout?

The writer is a Wall Street guy so he certainly isn't politically suspect like I am. One could wonder why this wasn't being written last week, or anytime over the past 5 years, really, but who would have heard it through all the Swift Boat politics?

The smartest thing the Fortune 500 ever did was transfer the pension system to the 401(k) system, because that gave a lot more people a stake in the wellbeing of these financial industry reprobates. It's penny ante by comparison, but it would be much harder to sell the bankrupting bail out on the table now if Richie Rich was the only one benefiting from it.

Unless and until I hear someone in a position of authority suggesting, nay demanding that the Bush tax cuts be rescinded now, I will know they are not serious.

And while I'm on the subject, let me ask you one question that may seem gratuitous: Can you imagine anyone less suited to deal with this issue, who inspires less confidence in his competence, understanding, or judgment, than George W. Bush? It is the tragedy of this country's broken political system that, in fact, I can - and she's running for Vice President.

Profit is privatized, risk is socialized

The American economy gave up useful productivity for the sake of inventing new and ever more esoteric and innovative ways to gamble on financial instruments - mortgage securities, derivatives and all the rest. The rest of it was sent overseas. This gives 25 year olds on Wall Street a good living and a lot of CEOs ridiculous packages of salary and benefits but doesn't do *&%$ for the rest of us. Then when the whole contrivance goes belly up, as anyone looking at this from any other venue than from the pages of the Wall Street Journal could have seen coming - guess who gets to pay for it all? You watch - the stock prices of all the remaining banks and brokerage houses will go up in the next few days, because every bad loan on their rolls will be foisted on the rest of us as part of this bailout.

We've been neglecting our infrastructure for 30 years - and it takes bridges falling into rivers to get anyone to spend any money on it. It's clear we need to spend significant amounts of money on roads, bridges, railroads, green and renewable energy etc., and just before the election that may finally allow this to happen, lo and behold, we "have to" spend three quarters of a trillion dollars bailing out Wall Street. So guess what - the money for infrastructure won't be there. I guess flushing the money down the toilet in Iraq wasn't enough for these people.

But dare suggest raising taxes and it's a criminal offense. It all goes on the credit card. If this is really so important, isn't it worth, you know, actually paying for it?

The next time you hear anyone talk about "values" or the cosmetic habits of farm animals, just remember - three quarters of a trillion dollars going to make sure that Mr. Potter's contemporary equivalent doesn't have to sell his fifth house.