All photos courtesy of shopsofcameronvillage.com
Peter Eichenberger takes a look at spending, shopping malls, and our current recession.
As the end of this decade will more or less mark the sixtieth birthday of pioneer shopping center Cameron Village as well as the very first credit card purchase ever, at Major’s Cabin Grill in the Empire State Building the same year, 1950, some scritchings on da money mess:
With typically savage ironic synchronicity, I recently found myself at Quail Ridge Books (love the place) in a Christmas return pickle. The more I dug into what I walked out with, James Carroll’s latest, House of War: The Pentagon and the Disastrous Rise of American Power, the more I was struck by parallels between the “defense” morass and the “Economic Crisis,” “Financial Crisis,” or whatever the Meltdown (TM) will be called five years from now. As the shopping center/card synthesis gelled around the same time the Department of Defense consolidated its power, the comparison is timely—and appropriate.
Just as Pentagonian hubris and the Defense contractors worked hand in glove to create a monster that actually compromised actual security, via the appropriately named MAD (Mutually Assured Destruction) security strategy, thermonuclear weapons, and the erosion of the nation’s wealth via a succession of deliberately unwinnable wars, so has shop till you drop consumerism trashed household budgets and added grandly to the credit meltdown in the form of a trillion dollars in unsecured debt tick, tick, ticking, on top of the avalanche that started with the subprime thing.
Since the Fifties, the attentive have watched (and commented), with a sense of helplessness, the gutting of jobs associated with the US’s manufacturing base, from 30%, the same year Cameron Village was launched, to 12% this decade. (The decline was accommodated with burger/mall service jobs.) In the past, US products enjoyed an
unparalleled global reputation. I have an Emerson electric fan that with minimal care should outlast me (unlike current Chinese boolshit, it has lubrication points). No more of that sort of thing, aided by misleading “experts” who greased the way for the launching of the good ship Globalization, grinding now on the rocks, the Euro trashed, the World Trade Organization a smoking hole.
The Depression era kids faded away, taking with them knowledge from the old America, as a batch of suckers were made ready for the harvest. Boomers grew up knowing only faux abundance amid the (until now) endless expanding plethora of piss poor products that came with globalization.
Today, the primary industries the US has remaining, clutched in thin, ragged fingers, are merchandising of fat-burgers, peddling crappy imports and weapons, and a “bail out,” each and every year, with no real substantive, strategic risks, and no enemies except the ones we create by US policies. Every dollar that ends up in China impoverishes this nation and strengthens that which is slowly becoming, by its enrichment, a security threat. All this, of course, to eventually help spawn a well-crafted wave of media-fueled paranoia/fear and its accompanying, predictable round of weapons procurement. Just like we saw with Germany, Japan, the Soviet Union, Vietnam, and those wily Awab Terra-wrists supposedly lurking behind every trashcan. Now China, the antithesis of liberty and home to a third of the world’s population. It’s all the about markets, Bo.
Seems Capital may well have outsmarted itself. A rural aphorism applies now: “Boy, look like yo mouf done wrote a check yo ass can’t cash.” Our country’s conversion from a production economy to a consumerist, service economy helped get us where we are. You played y’sef. The economy is in free fall partially via the US’s transformation from a maker of things to our current vacant and nationally cannibalistic role as a pure shopper, encapsulated thematically in the Krispy Kreme challenge. Safe to say that only this bloated, indulgent nation would institutionalize what started as the daft fraternity notion of stuffing two million calories into 5000 mouths, much to be recycled as vomit, into a fundraiser for a fuggin’ children’s hospital. There is however, at minimum, a fine metaphor for the upcoming zipper of bank failures where one contestant loses his donuts, inducing the one behind to spew, and so forth.
There is a lot of consumerist deprogramming ahead. The good news is there will be tons of downtime to figure out how we outsmarted ourselves.
The path the US took has made retail a key part of the US economy, a major component of the service sector’s 70 percent of all employment. Lacking any real means of creating wealth via production, financing the purchase of more imported junk now counts as “patriotism” according to both the press and the Chimp Faced Wonder Boy after 9/11: “I encourage you all to go shopping.”
This sort of conventional “wisdom” was parroted in the February 1st New York Times’ story, Our Love Affair With Shopping Malls is on the Rocks: “If we don’t spend, we don’t recover…. Fiscal health isn’t possible until money is again sloshing into cash registers.” Since U.S. manufacturing jobs have been supplanted by retail. Retail workers make money to spend, to create more retail jobs so retail workers can make more money to buy stuff, which makes more retail jobs to make more money and so forth – like a snake eating its tail.
The mindless consumption made possible via the recklessness of banks in offering more and more credit to whomever wanted it has created a bitter harvest. All we get from the consensus mongers is to recapitalize the banks so they can once again go into the junk credit business and (they hope) get the off-shore gravy train rolling once
Michael Niemira, staff vice president, chief economist and director of research for the Noo Yawk International Council on Shopping Centers, as reported by the N&O, claimed that excessive consumer spending isn’t to blame for the recession. The real estate boom bust was the cause.
What Niemira didn’t say or “didn’t know,” (like, sure) was that much of credit card debt is also sub-prime and hence part of the “cause,” as banks were throwing plastic to anyone with hands during the boom years, much like stinky mortgages, counting on investors to suck up securitized bad debts like Spaghettios as they happily did – until now. I can’t help observe that Mr. Niemira chose to phrase his point “excessive consumer spending” instead of simply “consumer spending,” suggesting that “excessive” is an integral component of consumer spending and the US economy, certainly true considering that the average US family is sitting on 4, 8 or 11 grand in credit card debt, (depending on who’s counting)—a trillion bucks total—when the fresh gush of newly unemployed citizens of the New Nighted States have to choose between servicing bank credit card debt and putting food on the table. Bah-boom-bah. Already the next wave of foreclosures is in progress – shopping centers. Bye bye banks.
“A lifestyle the envy of the world,” the cheerleaders crow – until the bills come. Hey, dig it, Michigan alone lost 315,000 jobs in eight years. The bill is here.
The US consumers fooled themselves into thinking that the gee-gaws they stuffed into their garages represent some sort of asset, stored wealth, when by virtue that it’s mostly worthless plastic crap, it is actually wasted wealth converted temporarily into another form, whose next trip cannot be reconversion into liquid assets except for pennies on the dollar at the yard-sale (if the owner is lucky) – or the landfill. A common and flippant view on the end of the Cold War was that we outspent “them.” A more accurate rendering presents that it was the force of the people, the citizens of the Eastern Bloc, a social force, that began the unraveling of the Soviet Empire, popular demand, accompanied by leaders at the top realizing the dead end path the arms race was, and is. So it must be with the mess we have spent ourselves into. Once you know the trick, “magic” ain’t magic.
So what are we to do? Obviously, no matter what happens, because of get-rich thinking, en lieu of our trashed manufacturing base retail will remain a large part of the employment and money picture. But the prescient would be well served to observe the growing mound of dead retailers and think ahead of how the US is going to weather this breaking storm. Encouraging people to pile up more consumer debt ain’t gonna get it.
First at hand are the primary requirements of life—shelter and food. My prior prediction of the squatter nation got a boost down in Florida where the flood of foreclosures has bequeathed a glut of empty properties to that state. The owners have reasoned correctly that it is better to have someone in a property than to have it vacant, subject to vandalism and theft of materials, copper wire and such. There is a program underway that is putting the increasing numbers of new homeless into these empty properties.
Then, food. This is something the average citizen right here in Raleigh can do with no help needed from Uncle Sam or NGOs. Land, underutilized land, is something the US is amply endowed with. Crowded, old Europe, unable to feed itself, stays in the game by shifting money around. The US has a different dynamic, one that will serve the people well in what we are heading into.
Forget food stamps. The quarter acre suburban yard could be poised to become a tremendous asset to families struggling to keep abreast of the worsening economic situation. Already there is great interest and increase locally and nationally in just that, ordinary people taking their lives back from their status as vassals to big agribiz, using solar energy directly to create food for themselves and their families. Cuba, subject to the US embargo, implemented a program of urban food production that enabled that impoverished nation to muddle through fairly well under the draconian US policy. The same will work here. It may become a necessity. It’s February. Time to start that garden,
On to the job market. With the collapse of the Paris Hilton world, the long term target of the people should be to begin to force the leveling of the playing field when it comes to the lie of “free trade.” Lacking any clarity from complicit agents in education and the press who should be doing the job, the people need to educate themselves as to how “the inevitability” of globalization was a myth aided by Washington and its sycophants in the press.
The electorate must put the spurs to Congress to negate the automatic advantage held by corporations whose interests lie not with the land they call home, but with profits. The government must be forced, immediately, to cancel the cushy tax deals that subsidize off-shoring in favor of foreign states to the disadvantage of domestic products. Only then will America be able to begin to rebuild its industrial core upon the rubble of the empty promise of the retail nation, certainly for export, but more to satisfy the needs of those who still call her home.
The reemergence of the United States as a maker of stuff is beginning to happen. Refreshingly, children seem to be leading the way via their status as consumers, although passive ones. There are a growing number of Americans who have had enough of poisonous off-shored toys and are contributing to a resurgence of traditional toys, you know, ones that foster imagination and activity. The same skills required to manufacture a toy can be brought to bear on all sorts of products.
Personally, I would hope these tough times bring about a change in the gulf between needs and wants. So much of our financial lives before 2008 was dictated by whim and caprice. Much as a magpie responds to bright objects merely for that reason, so have our citizens. Necessity is bringing about the change, I realize, but I would hope (and believe it to be true) that we will emerge from this with a new relationship with stuff – and the world.
In a former life as an industrial designer, planned obsolescence was explained to me as “a marketing thing” by a schmuck from GM. OK, I understand that the cycle of stuff wearing out creates jobs, but when you think about it, inferior products and the necessity to constantly replace them creates a treadmill, folks forced to work to replace that which could and used to be built to last, as in the old America.
Robert Manning, RIT research professor and director of the Center for Consumer Financial Services, frequently called before Congress, had this to say, “But if we agree with this argument that we’ve got to spend our way out of this, then we haven’t learned a thing.”
We’re gonna be all right, but George H.W. Bush’s New World Order is DOA, stillborn. The US empire is the shortest one ever, lasting not even nine years. We’d be well served by accepting that truth.