Thursday, November 25, 2010

Cheap: The High Cost of Discount Culture - Conclusion

In this final post for our two month discussion of Cheap: The High Cost of Discount Culture and of the cause and effects of cheapness in general, it seems fitting that I share with all readers this link (courtesy of my friend David):

http://blogs.miaminewtimes.com/riptide/2010/11/firstness_insane_florida_woman.php

A woman in Flordia has been camping for three days in order to be the first person into a Big Box store for Black Friday. She has set up a tent in the store parking lot and is essentially living there for three days. In the meantime, the rest of us are quietly preparing our holiday food, planning to spend time with our loved ones, or looking for a shelter that will provide a holiday dinner.

When I read this article, I found myself trying to calculate if she will be saving any money. The cost of the tent, her food, and even the time of the three days itself must be factored into the equation. I ended up deciding that she must be planning on doing a lot of shopping in order for the savings to justify the upfront expenses.

However, she also seems obsessed with being the first person in the store - it is some kind of major achievement or personal best for her (she mentions that "Firstness" is her main priority). Shopping, for her, appears to be the only thing that gives her a sense of accomplishment and validation. She has been completely consumed by the consumer mentality. Maybe she will be a happier person when she staggers out of the door with her loot, but how long will this happiness last?

I would like to end this two month discussion with a final quote from Angelo Pellegrini:

"Instead of getting something as the traditional measure of one's personal success, we shall have the unexplored opportunity of becoming something: better citizens, better members of the human community. Given the means to live in decency and comfort, free of the fear of want, happiness is ...always the necessary consequence of being esteemed as a good human by one's fellows...The unfailing source of life's enrichment must be sought within the self...And while we are here, given adequent food, clothing, and shelter, we must explore the virtue of self-reliance and seek happiness, felicity, tranqility in symbiotic relationships with our fellows rather than in the mere acquisition of material things. (Lean Years, Happy Years, pp. 18-19)."

Happy Thanksgiving to all readers and commentators!

Saturday, November 20, 2010

Cheapness, layoffs, and small businesses

As mentioned in frequent previous posts, in Cheap: The High Cost of Discount Culture Ellen Ruppel Shell emphasizes the need for small local businesses to stimulate local economy. However, she also emphasizes the need for workers to have salaries that provide them with a decent standard of living (she references a few times Henry Ford's decision to pay his employees enough to be able to eventually buy cars). The small businesses put more money back into the local economy and help create a sense of place within a community.

On December 18th, the mayor's office released the city's financial plan:


http://www.nyc.gov/portal/site/nycgov/menuitem.c0935b9a57bb4ef3daf2f1c701c789a0/index.jsp?pageID=mayor_press_release&catID=1194&doc_name=http%3A%2F%2Fwww.nyc.gov%2Fhtml%2Fom%2Fhtml%2F2010b%2Fpr477-10.html&cc=unused1978&rc=1194&ndi=1


Over a thousand city workers will be laid off as in attempt to balance the budget. In the short-term, this will save NYC money. In the long-term, the layoffs may have a more adverse effect on the city economy. As of October, 2010, the NYC official unemployment rate was 9.2%, the lowest in 18 months:


http://www.nytimes.com/2010/11/19/nyregion/19jobs.html?partner=rss&emc=rss

However, the actual poverty rate in NYC as of 2009 was 21%:
http://www.gothamgazette.com/article/economy/20100927/21/3372



The layoffs will increase the rates of both unemployment and poverty by unemploying city workers. However, they may also cause additional unemployment among non-city workers.

In my previous post, I linked to an announcement that Saturday, November 27th is Small Business Saturday. The NYC small businesses have been hard hit by the high rate of unemployment in the city:


http://www.citylimits.org/news/articles/4207/the-life-and-death-of-the-mom-n-pop


While discretionary spending went up around the country last quarter, it dropped 3% in NYC:

http://online.wsj.com/article/PR-CO-20100922-906779.html


New Yorkers are spending less money on restaurants, clothes, and pets (the NYC shelters are filling up with pets from people who can longer afford to feed them). This is affecting small local businesses, who have had to lay off employees and even close.

These businesses will be impacted even more by the layoffs. Many city employees shop in the neighborhoods where they work while at lunch or after work. They also shop where they live (and most live within the five boroughs). In addition to the city employees, the cultural organizations have also had money cut, and may have to lay off employees, which will increase the unemployment rate even further, and erode the discretionary spending population even further.

Many laid-off NYC workers will apply for unemployment. Many will have to move out of the city, and even the state, leaving a smaller economic tax base and fewer people who are shopping locally. As of October, 2010, 37,000 people were living in NYC shelters, including 9600 families:

http://www.coalitionforthehomeless.org/pages/basic-facts-about-homelessness-new-york-city-data-and-charts

These homeless individuals obviously have limited discretionary spending.

It is obvious that NYC must balance its budget and reduce its expenses. This is a time when cheapness and thrift are needed. However, the short-term solution of cutting employee salaries may have more expensive long-term effects.

How can we cut the NYC budget and help the city get back on its feet? If you have any suggestions, you can submit them to the city at:

http://www.nyc.gov/html/misc/html/2010/ideas.html

This is your opportunity to make the money-saving suggestions that you've always secretly thought!

Wednesday, November 17, 2010

Support Small Business Saturday - Nov. 27th

In Cheap:The High Cost of Discount Culture, Ellen Ruppel Shell defends local small business owners in defiance of big box stores.On November 27th, the Saturday after Thanksgiving, NYC asks all New Yorkers to support local small businesses by shopping at their local small business:

http://www.nyc.gov/html/sbs/html/pr/2010_11_08_Small_Biz_Sat.shtml

in order to boost our local economy. NYC, including Brooklyn, has many small restaurants, clothing and craft-based businesses, and bodegas and 99 cent stores. Help keep neighborhood industry diversified by shopping small.

Monday, November 15, 2010

Is Cheapness Always the Best Policy?

Nancy Mitford, best known for Love in a Cold Climate and The Pursuit of Love wrote an early novel entitled Highland Fling. Two of the main characters, Walter and Sally, were a young married aristocratic couple trying to lead the life of gay young things in post WWI Britain. Sally, the more practical of the two, periodically attempted to make Walter economize when they overspent their quarterly allowance. Unfortunately for Sally,

"On the other hand, Walter seemed to have a talent for making money disappear. Whenever he was on the point of committing an extravagance of any kind he would excuse himself by explaining: "Well, you see, darling, it's so much cheaper in the end." (p.14).

In order to save money, Sally volunteered for the two of them to chaperone a house party for some relatives who would be out of the country. Unfortunately, in the middle of the party, the house burns completely to the ground. As Sally comments in a letter "It's too awful all our things being burnt; as Walter says, it would have been cheaper in the end to go to the Lido." (p.154)

Over the years, when I've bought shoes that fell apart, clothes that ripped or shrank, and horrible coffee, I've found myself thinking "it would have been cheaper in the end to go to the Lido". We've all had experiences or purchases where we've regretted compromising and/or settling for second best. Cheapness does not always come without a physical or monetary price.

Sunday, November 14, 2010

Who pays for the freegans?

A previous poster brought up an interesting point. Who pays for the freegans? When you pay rent or a own a home, your money goes to:

  • property taxes (paid by landlord if you rent)
  • utilities (if paid by landlord & included in rent; paid for directly by some renters and all homeowners)
  • police, fire, sanitation, emergency services (included in property taxes)

However, squatters and freegans presumably do not pay into the tax bases that fund these services. While it is great that people are leading cheap lives off the grid, it is not so great that those of us with more conventional lifestyles are funding these alterna-lifestyles. Also, are any of these people paying income taxes? If not, is this fair to those who do pay taxes?

While I have no problem with people dumpster diving, I do have some questions about the ethics of people who use city services without paying towards them. Somewhere along the line, it is not just the big government who gets taken advantage of, but also your fellow citizens. Legalizing squatters so that they can (and must pay into into local services) may be the cheaper way of supporting semi-alternative lifestyles.

Thursday, November 11, 2010

Cheapness, Aesthetics, and Deprivation

Shell and Weber appear to have different ways of defining cheapness. Shell seems to encouraging people to buy quality items that will last for some time, not just investing in something flimsy for temporary gratification. In the long run, buying quality will save money because the item can last for a long time and be repaired. For example, Shell tells the story (p.148) of a friend who bought a wooden bookcase at a flea market; it was somewhat more expensive than a comparably sized-one at Ikea. It was solid oak "sturdy and distinctive" and is still holding books ten years later without its shelves buckling as happens to bookcases made of compressed wood. Since the bookcase is real wood, she can easily strip and refinish it if desired. Although the friend is now wealthy, she has no plans to get rid of the bookcase since it is still so useful.

Weber, on the other hand, seems more attuned to price. She'll walk half an hour to get to an ATM without a surcharge. She reuses tea bags. She worries "If you dine at gourmet restaurants every week, how much will you savor and remember each individual meal?" (p. 264) While writing the book, she "lived on lentils and beans but swore off canned beans (79 cents for four servings) for dried beans ($1.49 for twelve servings."(p.266)

I find this interesting from an aesthetic point of view because tea is literally one of the cheapest drinks in existence, and it tastes terrible if you reuse the grounds. Also, to anyone who is a foodie, it is common knowledge that dried beans taste much better than canned beans. The cooking and canning process destroys much of the bean's taste and texture. Whenever I open a can of beans, I feel guilty not because of the cost but because I am committing a foodie desecration - I am too lazy to plan ahead and boil a several meal's worth of beans.

What is most disturbing is that idea that eating cheaply must be a miserable experience. About a year ago, I read a book called Urban Hermit by Sam Macdonald. Macdonald paid off thousands of dollars in debt and lost over a hundred pounds by eating rice and lentils for a year. His descriptions of his meals, particularly lunch, were the stuff of nightmares. I found myself thinking continously "why doesn't he go to the town library, take out some vegetarian cookbooks from different ethnic cuisines, and stock up on spices at the 99 cent store?" I found myself wondering if any of his co-workers, forced to watch him eat his apparently unappetizing lentil slush during the course of a year, thought of planning an intervention.

Back in the early 1990's, I read "The Unprejudiced Palate" by Angelo Pellegrini. Pellegrini, a University of Washington professor, grew his own vegetables, made his own wine (with someone else's grapes) and advocated living the good life cheaply. In his book "Lean Years, Happy Years," he devotes two pages (p. 79-81) to instructions on how to make an inexpensive and nourishing minestrone with beans and any available vegetables. Earlier in the chapter, he comments that he was

"puzzled at first by such a bland, limited [American] cuisine, I learned later, as a student of American history, the reason for it. Its sobriety, the lack in it, beyond nourishment, of what is pure pleasure, reflected the austere ethic of the early Anglo-Saxon settlers. In that somber view of life, the Puritan ethic, all that contributed to purely sensuous pleasure, such as a glass of wine and pleasantly seasoned food, all that urged one to abandon Calvin and follow Epicurus and seek a measure of redemption in joyous living, was severely censored...So boil the potatos, cook the meat without erotically stimulating seasonings, fill the dinner goblets with water, and let each one rejoice in the austere pursuit of business, the work ethic." (p.64).

For some reason, living cheaply in America has come to mean living joylessly. It has become acceptable (even fashionable) to starve the senses in order to save money.

Wednesday, November 10, 2010

Cheap: The High Cost & In Cheap We Trust

Squatters Equal Freegans?

Lauren Weber, in In Cheap We Trust, devotes a chapter to Adam Weissman and his freegans here in Brooklyn.She went on a trash tour with them in 2008 and even met some women from New Jersey who were inspired to check trash tours after seeing them on Oprah (p. 242). Freegans:

"practice an extremem version of low-cost living. A freegan (the term is a play on vegan) might Dumpster-dive for her food, squat in an unoccupied building rather than pay rent, bike or walk instead of drive, give away and optain clothes at Really Really Free Markets, grow an urban garden, and share skills like computer repair and wild-food foraging." (p. 231).

Squatting, in fact, is a time-honored NYC tradition. The brother of one of my oldest friends lives in a formerly abandoned apartment building that originally began as a squat. The squatters (he was one of them) successfully persuaded NYC to accept their occupation and they now legally live in the building. However, since this took place before the 21st century, my friend's brother was referred to as an illegal squatter rather than a "freegan".

There are also some lower-profile squatters in Queens. I've read online articles about impoverished and homeless individuals who moved into foreclosed homes in Queens. They are growing their own food and living a communal, although off-the-grid, existence. Since I have also seen people in Queens living in public parks and in Amtrak tunnels, I am inclined to be supportive of the communal households, which provide a measure of protection against the weather and starvation.

As I see it, the difference between the freegans and the Florida squatters is that the freegans use the media in an extremely sophisticated fashion. According to Weber:

"Freegan.info welcomes news crews and reporters, even when the coverage ends up being tawdry or hostile. It's kind of working; the website at one point has six thousand subscribers, and trash tours regularly attract twenty to fourty newcomers on top of a rotating groups of a dozen or so regulars." (p. 242).

The Floridians, in contrast, appear to be working families with small children. The man in the NY Times photo is mowing a conventional lawn, not weeding vegetables while clad in a t-shirt bearing an ironic statement. The squatters pay rent and have signed lease agreements acknowleging the fact that they know that their landlord does not legally own the property. Instead of openly proclaiming that they want to become a full-fledged political movement, the Floridians are quietly living off-center values (they are legally squatting)within externally conventional lifestyles under the guidance of a Christian real estate agent rather than a Brooklyn radical.

Is it cheaper for states to allow people to squat in foreclosed house? It is expensive to house individuals and families in shelters. In addition, children in particular are affected by having to leave their home, their friends, possibly their school. In the long-term, these children may lead better lives if allowed to grow up in a secure living environment. Furthermore, empty houses can destroy a neighborhood by serving as havens for wildlife or criminal activity. In the end, the cheapest and best way to boost the economy may be to allow squatters to take over and improve abandoned homes.

Tuesday, November 9, 2010

But what do we spend on?

There seems to be much agreement that we should kickstart the economy by spending. However, no one seems to be very clear about the type of spending that we need to do. I don't think that shopping at a mall is the best way to kick-start the economy. The stores may do well but the individuals just end up back in debt.


However, today's article in the Times:
http://www.nytimes.com/2010/11/09/us/09foreclosure.html

suggests a new way to promote spending while keeping people off the streets and out of shelters. I have thought it would have been cheaper for the government to pay off the mortgages of the millions of foreclosed Americans andd told them that they owned their house. This would have kept the banks solvent and freed up the homeowner to spend money that would otherwise have gotten to an inflated mortagage on home repair, education, retirement savings, shopping in local stores, etc. Those of us who actually paid our mortgage could have been given a bonus for actually paying it. Let these squatters keep their houses and spend economy-boosting money on them!

Does anyone have other suggestions on good ways to boost the economy by spending? Please post.

Sunday, November 7, 2010

Kickstarting the economy by spending

Weber's chapter "Spendthrift Nation" discusses in depth the theories of spending our way out of a recession versus increasing our savings level:

I asked Ron Wilcox, author of the book Whatever Happened to Thrift? ...whether he would suspend his passionate advocacy of thrift in favor of Americans buying their way out of recessions like the one that began in 2007. A new emphasis on saving "will make the recession deeper and longer," he acknowledged. But if people keep spending at very high rates, it'll just kick the problem down the road. I've come down to the view that it still makes sense for American families to save money." (p.207)

The problem is that no one wants to discuss what will happen if we DO NOT save money. The baby boomers will deplete social security.
Gen X and the Millennial Generation may not be able to count on social security in old age. We may see an enormous increase of poor, elderly Americans who spent in their youth (as they were told to do in order to improve the economy) only to be left to starve in old age.

While I am not a student of economics, it seems to me that too many people are trying to apply the model of the economy of the 1930's and 1940's to the 21st century. The country has changed too much for Roosevelt's solutions to work for us.

We have effectively outsourced most of our manufacturing and not come up with any industries to replace it. There is also has also been a major erosion of the American middle class:

http://www.nytimes.com/2010/11/07/opinion/07kristof.html

Encouraging people to recycle tea bags as Weber does will save at most $10/year (you can buy a box of 100 bags for $3 at Trader Joe's). Perhaps individuals should focus on wide-scale financial reform in addition to restarting personal habits of thriftiness.

A previous poster suggested that we spend more. Back in 2008, I expected the government to spend money on the development of solar power in the US and the repair of US infrastructure. I hoped to be able to buy cheap, American-made solar panels by 2012 so that my building could afford to get off the grid. I expected to see bridges repaired, roads resurfaced, loads of solar street lamps making my neighborhood safer, and an end to classroom overcrowding in NYC through the construction of new schools. I expected, in short, a 21st-century version of Roosevelt's WPA program. Because of the great changes in American society, I did not get one.

Do Americans need to spend more?
Will spending more improve our economy?
Is the emphasis on personal thrift a way of escaping from the need to advocate for major reform in the US economy?

Tuesday, November 2, 2010

Pyschology of Spending versus The Psychology of Cheapness

Like Shell, Weber examines the psychology behind consumption:

"The marketing analyst Victor Lebow summed up the official ethos of the era when he wrote, in 1955, "Our enormously productive economy...demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption. We need things consumed, burned up, worn out, replaced, and discarded at an ever-increasing rate." (p.177)

Although this was written about the 1950's, it also sounds like the early 21st century way of life. As I read Weber's book, I found myself wondering:
Is conspicuous consumption a fixed trait in the American national character?
  • Is it tied into being a nation of immigrants - people who have to prove that their lives are better than those they left behind?
  • Will the American economy always be consumption based?
At the same time, I do know Americans who are as cheap as Weber and her family. While they would not necessarily walk half an hour to save an ATM fee, they do cut back in ways that many Americans would find excessive. Yet this extreme thriftiness could be viewed as part of the American character:

"Americans [Ben Franklin] hoped, would forswear the types of luxuries imported from Europe, directing their savings instead toward investment at home. Those investments-in land, labor, and equipment-would increase the productive capacity of domestic farmers and craftsmen. Household, in his view, should make as much as their clothing, furniture, and food as possible, and what they couldn't produce at home, they should purchase from trained artisans who would themselves earn enough to employee apprentices and journeymen at good wages." (p. 35)

People would lead lives of creative, self-sufficient thrift in order that more of their country-men could have better-paying jobs.

  • Is thriftiness a way to get an equitable lifestyle for all?
  • Or is it dependent on cheap foreign labor?
  • Is it possible for something to be affordable but not exploitative of cheap labor?