Set aside conventional wisdom for a moment, and consider a possibility with ramifications so disturbing that America’s leading politicians, economic experts, and media talking heads refuse to acknowledge them in public. To wit: the present economic implosion really WAS caused by inadequate consumption rather than the usual suspects – inflation of the money supply, precipitous suppression of the prime rate, reckless expansion of credit, aggressive promotion of patently untenable mortgages by government, the repackaging of said toxic mortgages by a host of corporate accomplices, the viral spread of risk, astronomical increases in leverage, and computerized hyper-chicanery by our financial “creative class”. This isn’t to say these factors did not complicate or exacerbate matters, but they are not the root cause (indeed, some are symptoms). Rather, it was the beginning of the end of the age of the consumption that made the collapse inevitable.
Yes, despite Herculean efforts to consume faster than ever before, American shoppers just couldn’t keep pace with what was needed for “healthy” economic growth. Thanks to unprecedented levels of productivity, the output of McMansions and Escalades and ARMs overshot the abilities of our seemingly-insatiable markets to absorb them. Was it because too many consumers still cling to antiquated concepts like “frugality” and “modesty” and "thrift"? Certainly not! Having been incontrovertibly discredited by modern economic theory, such incendiary notions have been almost entirely expunged from our national consciousness, and fortunately no one listens to the handful of contrarians who profess them. So we must not let their censorious rantings about the evils of greed distract us from grasping the real catastrophe: in practice if not in spirit, Americans are falling ever further behind in the never-ending race to consume more than enough.
One can be forgiven for suspecting lack of money was the problem. Many years ago, when the economy managed to survive on a restricted diet of savings-based consumption, current levels of spending would have seemed ludicrous. But as mechanization and automation made goods and services cheaper and cheaper, saving before consuming wasn’t good enough to maintain profits or stave off unemployment. Thus, over time, more and more spending money had to be sucked out of the future, and the velocity of money in our globally-interconnected financial nervous system now routinely approaches the speed of light. And America’s creditors were more than willing to fund deficit consumption, right up to the collapse. No, the problem was not one of insufficient money supply.
With plenty of credit available to sop up surging output, why did Americans falter? Could it have been post traumatic shopping disorder? Not enough aisle-time in the day? Were precious hours wasted socializing at Starbucks rather than piling up savings at Target? Did skyrocketing obesity impede the vital flow of human traffic shuffling from parking lots to Big Boxes? Was it carpal tunnel from swiping credit cards? Did renting one more storage locker to stow surfeit stuff not seem worth the adrenalin rush of another 24 hour sale? Was it because auto designers ran out of room for more cup holders?
We may never know what made a once-proud nation of indefatigable shop-till-you-drop shoppers drop out. But even if we did, it’s probably too late to save America now.