The Overspent American

In the movie we watched last class, The Overspent American, Juliet Schor explored how our nation, over the past few decades, have been spending their time spending their money, and sometimes the money they don't have. This movie was from 2003 so a little outdated but in a recent article, two Economists at the University of Chicago School of Business offered new statistical evidence for the "trickle down spending" theory.

The authors conclude that the middle and lower income households of our nation that are exposed to higher consumption by the richer class, also appear to consume more expensive goods.  They talk about what the big problem with the very concept of 'rich goods' is.  We all think we know what rich people buy, but what they really purchase is whatever they please. This leads to extreme variation - from cars to getaways to decorations. People who aren't 'rich' are susceptible to ignoring these distinctions, filtering expensive goods and services through their own conditioned expectations. Flashier cars, bigger houses are not strictly longed by just the wealthy - it's closer to the truth to say that they're characteristic desires of people who want to be wealthy.

Spending importance has shifted from quality to quantity - how much you have versus the quality of your possessions. Is it really necessary to have three big screen high definition TV's? Americans now, seem to throw out the idea of working hard and saving up for something expensive and meaningful but instead will go into debt and forfeit other aspects of their life in order to have the newest, biggest and best items.

Why is it that just because some wealthy people can afford a lifestyle comfortably that the middle and lower income classes feel they need to live that way too? What are other ways to feel rich that doesn't relate to money?