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Mon Jan 30, 2012, 08:27 AM

Sirota: Overconsumption won’t save America

Friday, Jan 27, 2012 1:00 PM UTC

To avoid another crisis, we need an economy based on thrift and sustainability not loans and credit card debt

By David Sirota

In 1977, two Boeing 747s collided on an airstrip in the Canary Islands. According to accident investigators, those who survived the initial blast in one plane had time to escape before a fire consumed the wreckage. But eyewitnesses reported that many remained in their seat looking perfectly content — as if nothing was wrong.

Not surprisingly, dozens of these dazed victims were burned to death, and the episode became a reminder of the so-called normalcy bias — a cognitive phenomenon whereby many who are faced with imminent disaster instantly convince themselves that everything is normal and that they don’t have to modify their behavior.

Unpleasant as this anecdote is to recount, it exemplifies the psychology at the root of one of America’s most destructive traits: our obsession with materialism and consumerism. To extrapolate the metaphor, if our damaged economy, record-low savings rate and sky-high personal debt levels are that smoldering plane about to explode, then America’s “shop till you drop” normalcy bias may be engineering yet another avoidable tragedy.

The most recent holiday binge exemplified the impending crisis. Despite persistent unemployment, flat wages and higher prices for necessities (food, healthcare, etc.), America nonetheless went on its usual post-Thanksgiving buying spree.

Read the entire piece at Salon.com

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Reply Sirota: Overconsumption won’t save America (Original post)
City Lights Jan 2012 OP
no_hypocrisy Jan 2012 #1
xchrom Jan 2012 #2
salvorhardin Jan 2012 #3

Response to City Lights (Original post)

Mon Jan 30, 2012, 08:36 AM

1. Part of the challenge is to base the economy on another factor besides consumerism.

Consumerism, that is, the purchase of goods and services, has replaced agriculture and manufacturing as the engine that runs this economy. Stuff has to be purchased in order to keep people from losing their jobs, etc. And that leads to overextension of credit, excess disposal of waste, and materialism generally.

Thrift is admirable and a goal, but realistically we have to have an alternative to shift towards in order to effect it. Ideas like bringing back tariffs to imports are worth looking into to have more manufacturing in this country. Not necessarily to feed our consumerism, but for the sake for exports that are purchased abroad. Other than manufacturing, I'm not certain what could replace consumerism and the service industry to support the American economy.

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Response to City Lights (Original post)

Mon Jan 30, 2012, 09:37 AM

3. Elizabeth Warren: The Over-consumption Myth

There is no evidence of any “epidemic” in overspending—certainly nothing that could explain a 255 percent increase in the foreclosure rate, a 430 percent increase in the bankruptcy rolls, and a 570 percent increase in credit card debt. A growing number of families are in terrible financial trouble, but no matter how many times the accusation is hurled, Prada and HBO are not the reason.

Source: https://docs.google.com/viewer?url=http://www.yale.edu/law/leo/052005/papers/Warren.pdf

Elizabeth Warren interviewed about why Americans are really going broke.

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