"A growing sense of powerlessness in our lives is convincing most people the system is working only for those at the top" (Robert Reich)

"As I travel around America, I’m struck by how utterly powerless most people feel."

-- Robert Reich, in a new blogpost, "Why
So Many Americans Feel So Powerless"

by Ken

The former labor secretary begins with three cases he diagnoses as examples of people feeling powerless:

A security guard recently told me he didn’t know how much he’d be earning from week to week because his firm kept changing his schedule and his pay. “They just don’t care,” he said.

A traveler I met in the Dallas Fort-Worth Airport last week said she’d been there eight hours but the airline responsible for her trip wouldn’t help her find another flight leaving that evening. “They don’t give a hoot,” she said.

Someone I met in North Carolina a few weeks ago told me he had stopped voting because elected officials don’t respond to what average people like him think or want. “They don’t listen,” he said.

Why does this make people feel powerless? Because we are.

The companies we work for, the businesses we buy from, and the political system we participate in all seem to have grown less accountable. I hear it over and over: They don’t care; our voices don’t count.

In good part, he says, because "we have fewer choices than we used to have. In almost every area of our lives, it's now take it or leave it."

In the workplace, where once upon a time "a third of private-sector workers belonged to labor unions," which gave them bargaining power that in fact extended to many non-union workers:

Companies are treating workers as disposable cogs because most working people have no choice. They need work and must take what they can get.

Although jobs are coming back from the depths of the Great Recession, the portion of the labor force actually working remains lower than it’s been in over thirty years – before vast numbers of middle-class wives and mothers entered paid work.

Which is why corporations can get away with firing workers without warning, replacing full-time jobs with part-time and contract work, and cutting wages. Most working people have no alternative. 

As consumers too we're mostly helpless, with the "muting" of the consumer movement that arose in the '60s "demand[ing] safe products, low prices, and antitrust actions against monopolies and business collusion." He cites the consolidation of the airline industry into just a handful of major carriers, little competition among Internet providers and digital platforms, giant health insurers and hospital chains.

All this means less consumer choice, which translates into less power. Our complaints go nowhere. Often we can’t even find a real person to complain to. Automated telephone menus go on interminably.

And finally, he says, "as voters we feel no one is listening because politicians, too, face less and less competition." In federal, state, and local elections there are fewer competitive "battlegrounds," and in those battlegrounds "so much big money is flowing in that average voters feel disenfranchised." Gone are the days, he says, when "political parties had strong local and state roots that gave politically-active citizens a voice in party platforms and nominees." Our two big parties "have morphed into giant national fund-raising machines."

No, he doesn't pull a rabbit out of a hat at the end. No convenient solution. I sure don't have one. But as always, to have any shot at finding solutions, you have to figure out what the problem is.

Our economy and society depend on most people feeling the system is working for them.  But a growing sense of powerlessness in all aspects of our lives – as workers, consumers, and voters – is convincing most people the system is working only for those at the top.

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What, you say Comic-Connies aren't big spenders? Suddenly my regard for them has jumped!

NYT caption: "Comic-Con attendees lunching near the convention center. Spending by visitors to the five-day convention, San Diego’s largest by far, is about $603, a fraction of that of much smaller events."

by Ken

Hey, almost everything I know about Comic-Con comes from watching The Big Bang Theory -- and that hasn't made it seem any more like a gathering where I would want to, you know, gather. But now comes word that the Comic-Connies stand accused of one of the vilest crimes in Consumerist America: being cheapskates.

I'm not exactly free and easy when it comes to parceling out my free nytimes.com clicks, but I couldn't resist this listing on today's "Afternoon Edition" e-mail:



Awww!

I suppose this sticks out because we generally think of the Connies as among America's free-spendingest suckers consumers, don't we? Now here they are being portrayed as making their pilgrimage to San Diego and keeping their mitts in their pockets! I want to know more!

You want numbers? We got numbers, from Michael Cieply and Brooks Barnes's report, "Large Crowds Spend Little at Comic-Con":

In a recent report from the San Diego Convention Center, where Comic-Con is held, the fantasy fans ranked first in terms of the convention center’s attendance, far outstripping the combined total of its next four largest conventions, expected to be about 62,500 people.

But the Comic-Con fans were expected to spend only about $603 each during a convention that began Wednesday night and ran through Sunday. And that was only a little more than a third of the per-capita spending by those who showed up for the American Association for Cancer Research gathering in April, and similarly lower than per-person spending at the next three largest conventions in San Diego.

A measly $603 for four days? Jeez, no wonder the cancer people have the Connies eating dust! The specifics are no cheerier:

At Comic-Con, dining out is apt to mean eating a sandwich while squatting on a city street. McCormick & Schmick’s, a high-end seafood restaurant across from the convention center, sold wraps from a cart, two for $10. At midday on Thursday, more than 150 people stood in line at a nearby Subway.

“For everything? I would say, like, $50,” said Arnold Duong, a fan who was dining on the sidewalk on Thursday, when asked how much he and each of his two friends had budgeted per day for their Comic-Con experience.

Some penny-pinching attendees may actually turn a profit on the cheap posters, hats, action figures and autographs handed out at the convention. As of 3 p.m. on Saturday, more than 4,000 listings were active on eBay under the title “Comic-Con 2014.”

So what if the Connies are a bunch of penny-pinching tightwads? Here's what (lotsa links onsite):

The Toronto International Film Festival has Bell, L’Oréal, and the RBC Royal Bank among its official sponsors. Sundance this year attracted Chase Sapphire, Acura, Hewlett-Packard and Sprint. At the Golden Globes, guests sip from promotional bottles of Moët & Chandon.

But at Comic-Con, a lower-rent affair, official convention sponsorships are largely confined to media companies or game companies, like NBC and Nintendo, and the giveaways — well, a visitor is lucky to snag some lime-flavored Red Bull or a pack of Stride chewing gum.

At this year’s convention, the Samsung Galaxy weighed in with both a convention sponsorship and backing for events related to a pair of upcoming films, Marvel’s “Avengers: Age of Ultron” and “The Hunger Games: Mockingjay — Part 1.”

Adult Swim, Cartoon Network’s adult-themed programming block, also picked up corporate sponsorship for individual shows from the likes of Intel, Lexus and State Farm. But those products and their companies were kept pretty much in the background as the cartoons took center stage.

“We develop all this stuff with the idea of a sponsor in mind, but not for the sponsor,” said Amantha Walden, Adult Swim’s director of events.

In truth, companies that might flock to a Tribeca Film Festival, which for years was backed by American Express and now has AT&T as its lead sponsor, would do well to stick with the soft sell here, because nobody is buying much.

The Times team notes that "for media companies, which compete as much for eyeballs as for direct spending, a crowd this large can be irresistible, even when it does not have much cash."

“I absolutely feel like it’s a pop culture carnival, and there is an unspoken competition among networks to outdo each other,” said Michael Ouweleen, a senior vice president and group creative director at Cartoon Network.

But if you're looking to score some actual sales, you probably wish you had the cancer crowd rather than the Connies. The Times-ies report glum tidings for "the few consumer brands that took a chance on Comic-Con":

One of those was Chrysler, which sponsored a popular Dodge Challenger simulator attraction in a parking lot promotional spread for the Weinstein Company’s “Sin City: A Dame to Kill For.” Another car company, Hyundai, sponsored a display for “Legends,” a crime series from TNT. And there was a snappy, flame-orange Mini Cooper in the lobby of the Hard Rock Hotel, part of the campaign for “Pixels,” a 3-D action fantasy set for release by Sony Pictures next May.

Yet even the Elio Motors Tadpole, a three-wheeled vehicle priced at a modest $6,800, looked like a reach for some of the Comic-Con types who eyed it on Friday in the doorway of the Hotel Solamar, just a few blocks from the convention center.

“The federal government says it’s a motorcycle,” said a salesman, trying to make a glamour point of the two-passenger vehicle’s exceedingly compact nature. (A rider sits behind the driver.)

“Oh,” said one of three young women who were giving the Elio a look. Then they turned and headed back . . . to the convention.

Now that's a tough crowd, sales-wise.


"THE CAST OF THE BIG BANG THEORY
WAS INCREDIBLY NICE TO US"


What I was hoping for was the characters of The Big Bang Theory at Comic-Con. I guess we'll have to made do with the actors. Says TVFanatic Matt Richenthal: "The cast of The Big Bang Theory gathers here for a photo at Comic-Con. They were incredibly nice to us at the event."

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The return of layaway buying, as explained by James Surowiecki

"The economists Barton Lipman and Wolfgang Pesendorfer argue convincingly that people have a profound distaste for temptation, and are willing to go to great lengths to avoid it. That's precisely what layaway does."

"Americans have been big spenders for decades now, but as Sheldon Garon observes in his new history of consumption, 'Beyond Our Means,' that's in large part because our economic system is set up to encourage overspending. . . . [T]he revival of layaway makes clear that, while many shoppers are prone to spend what they don't have on what they shouldn't buy, they can also be sophisticated about their weakness, and savvy about finding ways to control it."

-- James Surowiecki, in his new New Yorker
"Financial Page" piece, "Delayed Gratification"

by Ken

The whole idea of "layaway" buying has always puzzled me. Layaway, you'll recall, is where you target a big- or biggish-ticket item sold by a participating retailer and make regularly scheduled payments until you've paid for the thing, and presto, it's yours! But you don't save anything by laying away. In fact, you normally pay a service fee for the privilege, while the retailer gets free use of all that money you're paying in while you're making payments.

I noticed that layaway seemed to have made a comeback for this holiday season, and was pleased to see that in the new (January 2) New Yorker, James Surowiecki has devoted his "Financial Page" to the phenomenon: "Delayed Gratification." At last, I figured, I could find out what I've been missing here.

It turns out, nothing much.


Surowiecki reminds us that layaway, which is more or less the exact opposite of the familiar "buy now, pay later" mindset to which most of us have become accustomed, was born in the Great Depression, when masses of Americans, with no access to credit, wouldn't have been able to afford big-ticket purchases any other way. He suggests that the return of layaway at this point in time is no coincidence.

Not long ago, layaway looked like a relic, thanks to the widespread availability of credit cards. The dismal economy has changed all that. As early as the fall of 2008, with the recession in full swing, Kmart started a campaign pushing layaway, and, as shoppers embraced the idea, retailers across the country have made it a big part of their holiday sales drive. Walmart had killed its layaway program for everything but jewelry in 2006. But this year it acceded to reality and brought layaway back.

"The key to understanding the appeal of layaway," Surowiecki writes, "is that most layaway programs require shoppers to make regular payments."

From a strictly financial perspective, layaway looks foolish. As critics point out, if you were to put the purchase on a credit card instead and pay off the amount in full by the time that the layaway period would have elapsed, you could well pay less in interest than the five-dollar service fee that most stores charge. Alternatively, if you don't have a credit card, you could put the money you're going to spend on the product into a savings account or under your mattress. That would save you the service fee and eliminate the risk that you'll have to pay a cancellation fee if you end up not making all the layaway payments.

What this analysis leaves out, however, is the way people actually behave. Even people who can pay off their credit cards often don't, since the whole structure of the credit-card industry is designed to make you irresponsible -- as long as you make a small monthly payment, the bank will carry you. In fact, that's what the bank wants: the profits in the credit-card business come from "revolvers," people who pay a small amount each month and rack up big interest charges -- far more than the five bucks they'd have spent on a layaway service fee. Layaway, by contrast, fosters virtue: it forces you to save, because if you don't make the payment you don't get the product. It's what psychologists call a "commitment device," a way to get yourself to do something that you want to do but know you'll have a hard time doing if left purely to your own devices.

And that really is it. As it turns out, as I said, there really wasn't any mysterious appeal of the scheme which was eluding my detection.

Well, maybe that's not entirely it. We mustn't underestimate the psychological dimension, Surowiecki suggests. "Layaway is also appealing," he writes, "because it helps people target their savings."

In economics textbooks, money is money, which makes it seem as if you could get the same results by making regular deposits into a savings account or even into a jar labelled "Christmas Money." But in the real world most of us rely to some extent on what the economist Richard Thaler calls "mental accounting" -- we split our money into different mental accounts, and treat it differently depending on what account it's in. Money that's in the bank is more likely to be spent on other things, while layaway insures that it'll be spent on one thing.

As Sendhil Mullainathan and Eldar Shafir show in a fascinating essay on the savings habits of low-income consumers, layaway is a popular way of making big purchases (like washing machines), because, if you don't have a lot of money, the presence of a sizable sum in the house or even in the bank means that you'll be constantly tempted to dip into it. The economists Barton Lipman and Wolfgang Pesendorfer argue convincingly that people have a profound distaste for temptation, and are willing to go to great lengths to avoid it. That's precisely what layaway does.

Not surprisingly, Surowiecki manages to divine a somewhat larger lesson in the resurgence of layaway.

It's common to think of American consumers as reckless dupes, myopically focussed on the present and easily led astray by their desires, with the buying binge of the years leading up to the crash proffered as Exhibit A. But consumer choices don't occur in a vacuum; they're always shaped by social and economic norms. Americans have been big spenders for decades now, but as Sheldon Garon observes in his new history of consumption, "Beyond Our Means," that's in large part because our economic system is set up to encourage overspending. And what the revival of layaway makes clear is that, while many shoppers are prone to spend what they don't have on what they shouldn't buy, they can also be sophisticated about their weakness, and savvy about finding ways to control it. They know that sometimes you have to have your hands tied in order to grab what you want.

This holiday season even Walmart relented and brought back layaway. (You can click to enlarge.)

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The Oppression Of Consumerism

Sometimes It Pays To Rethink What we Know

I didn't grow up in a house where books or authors were discussed over dinner. But my friend Danny did. And his parents often invited me over. His father was a professor at CUNY and through him I was introduced to the idea that books were something worthwhile. I was also introduced to the work of contemporary authors and, in some cases, the authors themselves, like Michael Harrington, who wrote The Other America: Poverty in the United States while I was in high school, and The Social-Industrial Complex while I was in college. One of Danny's dad's pals was also Vance Packard, who wrote The Hidden Persuaders, The Status Seekers and The Waste Makers all before we were even in high school, the latter of which I'm reading again, some 4 decades after I first read it and talked with the author about it over dinner.

I was very impressed at the time-- and Packard was clearly ahead of the times. Environmental activist and author Bill McKibben was born the same year Packard wrote The Waste Makers and the just published new edition has an intro from him and his contemporary approach makes a lot more sense today than the way people looked at Packard's work back in the day. Even the concept of "planned obsolescence"-- no matter what you think of Apple's business model-- is reinterpreted by McKibben as "the much more potent idea of 'the planned obsolescence of desirability,' the continuous flow of fashion designed to get people to buy new things even when their old ones work just fine." Could anything be more early twenty-first century? McKibben:

[I]t's not primarily the details that Packard got right, but the broad strokes. He understood what kind of country we were building. He understood, fundamentally, that growth had become its own religion. Even ten years before economists had doubted that the size of the U.S. economy would grow much larger-- FDR had said we had more factories than we'd ever need. But in the wake of World War II, the boom to end all booms (at least until China's) was leaving us with a new theology: "Out of all the anxieties created by the desire to make the economy hum at ever higher levels has come a clamor for 'growth.' Economic thinkers of many stripes have joined in the call. Certainly this is the first time in history that the felt need for growth has been so self-consciously vocalized." A brief recession in the late 1950s had made it clear that we had a new master. "At a press conference, President Eisenhower was asked what the people should do to make the recession recede. Here is the dialogue that followed:

A- Buy

Q- What?

A- Anything

There's not much distance between that moment and President Bush informing all of us in the wake of 9/11 that our job was to go shopping. Packard quotes another leader-- marketing consultant Victor Lebow, writing in the Journal of Retailing: "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 satisfactions, our ego satisfactions, in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever increasing rate."

If there's a moral to this book, fifty years later, it's that No One Can Say We Weren't Warned. If we didn't get it from Thoreau, we should have gotten it from Packard. That we didn't get it is indisputable, and now-- as the Arctic melts and the oceans acidify-- we'll pay the price in ways even he couldn't have imagined.

A McKibben contemporary, author and environmental economist David Korten has very much imagined-- and quite vividly. In his newest book, Agenda For A New Economy, Korten compares the approaches of economists Jeffrey Sachs and James Speth-- tinkering vs transformation-- in regard to the economic collapse our 1% elites have ushered us into. Describing Speth idea's for system redesign, it would be hard to imagine Korten hadn't read Packard at some point.

Economic growth is disrupting the values and living systems essential to human well-being. Beyond a minimal threshold of consumption, distributing wealth equitably and building community, rather than increasing the consumption of stuff, is the key to increasing human health and happiness.

...The operating systems of capitalism must be fundamentally redesigned to internalize costs, distribute ownership, and establish accountability for the human and natural consequences of economic decisions.

Have you been watching the Republican "presidential" debates? Can you imagine asking Michelle Bachmann or Rick Perry to comment? How about Mitt Romney? Skip a few months and try imagining what kind of an answer you would get from Barack Obama.

EXPENSIVE JUNK TO AVOID-- TODAY AND FOREVER

One of the things Roland loves doing when we go to Bangkok, something that basically makes no sense to me at all, is to buy fake Rolex watches and other brand name tokens to the excesses of consumerism. I like buying jade Buddha heads and traditional art. Last night we were pouring over tour books and planning out our trip to Burma and Roland blurted out, "Oh, I bet they have some cheap Rolexes at the Bogyoke Aung San Market or at the Theingyi Zei" (which is even cheaper and offers another Roland specialty that goes right over my head: a snake section that features the fresh blood and organs of various snakes; some live ones are disemboweled on the spot for medicinal consumption). Let a psychiatrist deal with the snake thing. I want to talk about the fake Rolexes. Actually, what I really want to talk about is a story in today's NY Times by Dana Thomas, author of Deluxe: How Luxury Lost Its Luster.

Ms Thomas deals with luxury items made in China and other places that are neither Italy nor France, but not the illegal counterfeits Roland craves, the super-expensive, authorized ones that have become a mainstay of the "democratized," newly middle class, luxury industry. "For more than a century, the luxury fashion business was made up of small family companies that produced beautiful items of the finest materials. It was a niche business for a niche clientele. But in the late 1980s, business tycoons began to buy up these companies and turn them into billion-dollar global brands producing millions of logo-covered items for the middle market. The executives labeled this rollout the 'democratization' of luxury, which is now a $157-billion-a-year industry."
Maybe this is where Bush gets his ideas about democratizing Iraq and the Middle east and any country he doesn't like. This is mostly bait-and-switch production, with the newly corporatized-- rather than democratized-- name brands outright lying, or just deceiving, about where and how their overpriced consumer garbage is made. Example: "To please customers looking for the 'Made in Italy' label, several luxury companies now have their goods made in Italy by illegal Chinese laborers. Today, the Tuscan town of Prato, just outside of Florence and long the center for leather-goods production for brands like Gucci and Prada, has the second-largest population of Chinese in Europe, after Paris. More than half of the 4,200 factories in Prato are owned by Chinese entrepreneurs, some of whom pay their Chinese workers as little as two Euros ($3) an hour."

Luxury brand executives who declare that their items can be made only in Western Europe because Western European artisans are the only people who know what true luxury is are being not only hypocritical but also xenophobic. They are not selling “dreams,” as they like to suggest; they are hawking low-cost, high-profit items wrapped in logos. Consumers should keep in mind that luxury brands are capable of producing real quality at a reasonable price. They know better, and so should we.

I avoid that stuff. Two days ago I noticed my Levys were precariously hanging together in a few sensitive areas by some threads so I braved Roland's scorn, drove over to a K-Mart and plunked down $15 for a new pair of Levys, which I intend to wear 'til they get drafty. And today, like I said earlier, is a Buy Nothing Day at my pad.