We must avert this crisis of responsibility

Serious people are discussing a gathering storm:

The Federal Reserve chairman was on Capitol Hill this morning, testifying at the House Budget Committee about the economic outlook and efforts to structure a program to get consumers and businesses spending again.

One of the most important focuses of Ben Bernanke's testimony — and the issue took on the lion's share of the question-and-answer period — was about what Congress should do to push the country away from recession. ...

The Fed chairman said if Congress wants to act, it should do so quickly and focus the effort on getting consumers and businesses to increase spending in the next year.

So to clarify what's going on here: after an orgy of profligacy that led to the first negative savings rate since the Great Depression, people (aka "consumers") in the US are spending less.  Assuming they're making about the same amount of money, this would appear to indicate that they're either paying off their existing debts or saving money.

Now, to any sane person this would seem like a good thing.  But in a well-functioning corporate/state-capitalist system, this responsible, prudent, rational behavior is a serious crisis that must be averted.

That's a lesson worth thinking about.

UPDATE: A couple of American Enterprise Institute drones argue against any stimulus package, which won't work in part because:

The economic evidence from the 2001 experience suggests this is an ineffective tool. Professors Matthew Shapiro and Joel Slemrod from the University of Michigan found that most rebates were saved, not spent.

Once again, the ominous threat of saving rears its ugly head.

Comments

[petey]

so here we have spending as the actual culture. other societies have chatting by the fire, or saunas, or evenings at the pub (where they will heat your baby's milk for you since it's a family thing, i've seen this) as their socially-binding cultural practices, here we have spending (going to the bar and shouting at the football game with others doesn't count). i don't know. my parents were raised on farms in the distant countryside of a small european country, and seeing to one's own financial security was a kinda high priority. it's a lesson that crept naturally into my bones. i guess i just hate america.

[John Caruso]

Yeah, I'd say "spending as the actual culture" nails it. I often feel like this country is a cultural vacuum—or rather, an anti-culture that annihilates actual culture when it comes in contact. I found that particularly striking after I'd spent a few months in Germany and then came back here...the transition from a communal mindset, where stores close early and people go out to spend hours eating and drinking and talking with each other, to one where the shopping mall is the primary gathering place.

[SteveB]

Is our consumer culture a cause or an effect? American capitalism requires a constant growth rate of at least 3-4% per year, and there's really no way to get that except from constantly increasing consumer spending. So "we" develop a "culture" of constantly increasing consumer spending.

Other countries (Germany, for example) seem to be able to accept lower growth rates, and so don't need to flog their consumers as hard.

By the way, here's a fun exercise to try the next time you watch the news: make up a scorecard, and count how many times various terms used to describe "ordinary" people like you and me. Number one will be "consumers", followed by "voters" (at least in an election year). Another term you might see is "victims" ("victims of the recent flooding"). "Citizens" is never used, unless it's in a story bashing non-citizens, and "protesters" is used only if someone breaks the window at Starbucks. "People" is eschewed, probably because it's not action-wordy enough.

That's how the "culture" is reinforced. There are certain roles laid out for us. 1) Consume and 2) vote, until, through no fault of your own, you become a 3) victim.

[petey]

nice post steve.

" "People" is eschewed, probably because it's not action-wordy enough."

it's got a lefty tone to it too.

[John Caruso]

Steve: That's just what I had in mind when I put quotation marks around "consumers". I find the term offensive and dehumanizing, but also revealing, in that it really does put into sharp relief the role we're intended to play in the economic system.

About whether consumer culture is cause or effect, the quotes I posted the other day from Understanding Power speak volumes to just how artificial the process of "want creation" is. It takes a concerted effort to persuade people that the path to happiness is through greater and greater consumption, because we intrinsically know that the things that really matter to us and give meaning to our lives have nothing to do with spending money.