Conspicuous Spending: Fading to Black
“Consumption is evidence of wealth, and thus becomes honorific, and…failure to consume a mark of demerit.”
--Thorstein B. Veblen, The Theory of The Leisure Class
Alligator-skin shoes: $200. Candy-painted El Camino, sitting on gold Daytona rims with a ludicrous sound system and hydraulic lifts: $75,000. Chinchilla fur coat, even though it’s California: $600. Being a local celebrity – you know where I’m taking this – priceless.
I didn't buy this. I've never purchased these things. God no. This is what I saw growing up on different occasions. And the allure of it all seemed priceless, against logic, against better judgment, but priceless nonetheless. At least it was priceless to me back then before I found out that a PE ratio wasn’t how many times I played hooky versus dressing to play flag football at school. This was also prior to me coming to learn that a mutual fund wasn’t two friends throwing in $2.50 each on a value meal.
According to data compiled recently by essayist and retired patent attorney Richard Everett, African Americans are projected to have spending power of approximately $1 trillion a year by 2010. That will be a significant increase over the roughly $800 billion Blacks are believed to have spent in 2006.
Point is, without caring where it’s going and sometimes where it comes from, many Americans in general and black Americans in particular -- and on the whole -- tend to spend a lot. This is an anecdotally and statistically verifiable fact from the poorest end of the strata to the most affluent. I make light of this situation because I come from it. I come from neighborhoods where I and millions of other youth were reared.
In these enclaves there were no doctors, no lawyers and no financial consultants. There were only hustlers, gangsters and of course the occasional working-class 9-to-5er or blue collar worker who, through conspicuous consumption, was attempting to emulate the look, vibe and aura of the ghetto-rich. This was and is our own version of the “Joneses.”
There seems to be a sense in the black community and it seems in the community at large that possession is nine-tenths of self-worth.
An August 2007 study by Kerwin Charles, Erik Hurst and Nikolai Roussanov at the university of Chicago found that “a large body of anecdotal evidence suggests that Blacks devote a larger share of their overall expenditure to consumption items that are readily visible to outside observers than do whites. Automobiles, clothing, and jewelry are examples of these forms of "visible" consumption.” It also found that whites with the same incomes consume equal or more from a real cost perspective, although the items are less visible.
I should have known better right? I had a great example because my mother drove an orange 72 VW Super Beatle for the better part of a decade and made me “earn” the things I wanted through incentivized programs such as “chores” and “doing well in school,” imagine that?
But outside was a different story. Then as it sometimes is now, the mentality is “get it now,” “get it fast,” “got it … good” -- just get it. This was the consumer ethos of a black child growing up in the 1980s when Air Jordan shoes were, literally to die for.
Author and social critic Bill Mackibben pointed out also in 2007 through his research that money buys happiness right up to about $10,000 income per capita globally on an aggregate basis. Presumably because one is happy not to be starving. Anything other than that, he asserts, is just buying things. In our country we usually buy “things” in a situation when short-term impulse diverges and falls out of cadence with long-term thinking.
I’m at once loathed and relieved to admit that what I brought out of my childhood as I moved up the educational and social strata was the emotional baggage of not having. Yep, I retained the pathos rather than remembering the goal-laden, gold-starred chart on the back of my apartment door that allowed me to think methodically about what my goals were. Only through hindsight do I learn the lessons from being a kid about the chart that allowed me to arrive at the rationalization that my purchasing journey was more important than my destination, the car I drove to get to my destination and for that matter what I was wearing when I arrived. Consumption charts anyone? Why not reward yourself when you actually deserve it and have reached a savings goal? This seems like something worth doing if we must buy that which we don't really need but really enjoy. Earn it.
I look at these spending patterns approaching astronomical numbers and of course there are aberrations in my community, as well as the larger American community, of people who are frugal and save. But $1 trillion in purchases right up through a recession by a group that is less than 5% of the American populous is an alarming figure for all of us, especially when there aren’t that many similar studies for fragmented groups of whites. This means that if 5% of America is collectively spending $1 trillion by next year, despite a downturn, then look for the savings rates! No really, look out for them because they are so low that we hardly know they exist.
As I look at these numbers, I’m reminded that anything I can wear or sit on is not a long term asset. I’m reminded that it isn’t the mink coats and souped up cars that kill you but the small stuff: premium channels you don’t watch, accessories to clothes you don’t need, small repetitive expenditures over time like morning coffee, eating out, renting a movie, taking it home, putting it down and hitting the Cineplex anyway.
As I look at these numbers, I simultaneously reminisce and peer forward as I think about credit and how it encourages immediate gratification. If you don’t have it, why buy it?
And while I cringe at these numbers and think about all of the sociological, psychological and political origins of why some of my people spend this way, I am reminded that the color of money is not black or white but green and green is associated with growth. From a monetary perspective, none of us will ever grow – wealth or otherwise – through conspicuous consumption.
Now if you would excuse me, I have to return this mink coat, it will be summer soon.