I think American society runs on poor choices

In My Humble Opinion
1

70% of Americans say they are struggling financially

Based on my reading of internet content, lots of people believe that the majority of struggling Americans are reckless spenders. They eat out too much. They buy too many toys. They buy new cars every three years instead of buying used and holding onto it. They are constantly shopping online. They are always trying to keep up with the Jones’s.

Or maybe they made just a couple of colossally stupid choices. Like they took out $100,000 for college tuition only to wind up working at the same retail job they had in high school. Or they spend the same amount of money on a wedding. Even if they are frugal in all other respects, they still deserve to suffer from the consequences of their dumbassery. According to the Judgey McJudgersons who dwell in internet comment sections.

I don’t know if the majority of struggling Americans are struggling solely because they made bad choices. I mean, yeah, I see plenty of poor people waiting for the bus who are wearing namebrand sneakers. But I don’t think they’d be driving a car but for those sneakers. I also think that it is increasingly becoming hard to discern a reasonable choice from a poor choice. Like, yeah, you shouldn’t take out a student loan totaling more than your entry level salary post-graduation. But if your student loans wind up totaling $55K and your first job only pays $30K, did you make a poor choice? Or it is too soon to tell one way or the other?

That said, I’m inclined to agree that a good chunk of the “struggling” demographic is there because they’ve been seduced by the sirens of consumerism. Not all of them, but a good chuck. All the $5 lattes, $20 poke bowls, $800 smart phones, and $500/month car notes are seemingly necessary for some folks to cope with the miseries of life. And to be fair, it takes guts to tune out the sirens when they are your support network. People will drop $100,000 on students loans and weddings because that’s what everyone around them is encouraging them (explicitly and implicitly) to do. Your friends are talking about doing a trip to an exotic location? YOLO, bro! And if you don’t appreciate YOLO, you will suffer from FOMO! I don’t share this specific anxiety, but I get it. It sucks to see other people having fun and “living their best life” while you’re sitting over here eating soggy cornflakes so you can save for your retirement fund. Not everyone can be the rugged individualist who can tune out what “everyone” is up to.

It is certainly fun to beat up on people who make unwise financial decisions. But I’m having a hard time imagining a society like the one Americans have that isn’t highly dependent on some huge fraction of the populace (maybe even 70%) being unwise with their money. Like, if everyone who eats out too much stopped eating out so much, then the restaurant industry would be kicked in the balls. You’d see fewer restaurants and fewer people working in restaurants. If everyone stopped financing new cars and only bought used (or ditched cars all together), then auto plants all across the country would have to lay off thousands of workers. Which would then devastate local economies–from day care providers to real estate markets. If people were to rein in their consumer spending, then many retail job would shrivel up. Amazon workers would have to find some other soul-crushing job. Maybe they could drive for Uber or Lyft? But aren’t those jobs dependent on other people having jobs?

If everyone’s paycheck is ultimately tied to someone spending money they really shouldn’t be spending, then it’s kind of hard to poo-poo Gordon Gekko’s assertion that “Greed is good”. It isn’t morally good, but we are all nonetheless benefiting from it. I don’t think most Americans would want to live in a society where everyone is responsible and only makes “right” choices. We may say we want this, but I don’t think most people have thought about what this would really look like.

What do you think?

2

I think it is just largely inertia and “everyone else is doing it” - combined with an exaggeration of the pros and underestimation of the cons.

If everyone around you is taking out $60,000 in student loans to do a liberal-arts degree, you might feel pressured to go along with the current, even if it is a terrible current. Combine that with cheesy slogans like “higher education is an investment in your future” and you’re on your way. (Yes, higher education is an investment, but there are far better and cheaper ways to get a fully-accredited, solid degree than to plunk down six figures at an Ivy League.)

3

I do not think it is possible to justify irresponsible choices when they have critical consequences like global warming and environmental pollution. Who cares if someone eats out every single night or practically never, or if many cheap, mediocre restaurants close in favor of fewer, better ones? But we must care about food waste and the consequences of industrial agriculture. If someone caves under the spam and fills their house with crap they don’t need, that is their problem, but if that crap ends up in a toxic landfill that is my problem.

I disagree that there is anything bad per se about “spending money” (unless we are discussing hard-core communism), but sometimes it is not obvious how to connect the dots. Nothing wrong with fashionable sneakers, but maybe there is an exploitative sweatshop in the pipeline? Maybe not? How is the customer supposed to know?

4

The only people plunking down six figures at an Ivy League are people with household incomes well into six figures. If your household income is in that range and you have to entirely borrow the cost of your kid’s education . . . Well, that isn’t your first poor choice.

Ivy League educations are generally affordable. They aren’t accessible. It’s the kid with an 1250 on their SAT and so so grades that is likely to lack an affordable choice.

5

These are critical questions I consider frequently, but I can’t say I’ve come to real conclusions, yet. I certainly couldn’t have posed them as well as you.

One thing I sense is that, for many people, spending is the only real agency they have in their lives.

6

I say we try it.

People are talking a lot more about income inequality these days, and how the super-rich have such disproportionate influence compared to the rest of us.

But lest we forget, the super-rich are the super-rich partly (maybe mostly) because we’re falling for the myths of consumerism. We’re the ones who are making them rich and powerful. If we’re struggling because of it, maybe it’s time to stop buying into the ideology that keeps us down here and them up there!

This isn’t to say we should blame poor people for their situation. Like you said, plenty of people can’t realistically spend less, or consume less.

But just imagine what would happen if millions of people opted out of the excesses of consumerist culture and started “being responsible and only making the ‘right’ choices.” It would basically be a revolution! We’d all have to make sacrifices, lots of things might get less convenient than they are now. But I can’t help thinking the benefits would outweigh the costs in the long run.

That’s why I think that spending and consuming less is one of the most radical, ethical, self-empowering things a person can do right now.

7

To answer the OP more directly, why should Joe Random be frugal and save money? So that there is more for others to waste?

Like I was saying, there are lots of dire problems but it is difficult to address them at such a low level. I would buy a good car too if I relied on it to get to work, even if the ultimate problem was shitty public transport, or something even more abstract.

8

Like Manda Jo said, nobody who isn’t already rich is paying full tuition at an Ivy League university – this is a classic case of “the sticker price isn’t the real price.” Moreover, if you can get into an Ivy League school, and your primary goal is financial return on your investment*, you would have to be a fool not to go. The whole point is networking and connections. Elite employers recruit at elite schools.

People do make poor choices that land them with a lot of student loan debt, but those choices mostly involve a) paying full sticker price at run-of-the-mill private schools that do not confer a significant advantage over cheaper schools; and / or b) failing a bunch of classes and not completing the degree, or taking an inordinately long time to complete it.

I’m saying all of this not to nitpick or hijack the thread, but to make the point that it’s not all that easy for most people to KNOW what the good choices are, especially if they don’t have family members or mentors with this knowledge.

  • There are lots of good reasons why a qualified student might NOT want to go to an Ivy League school, but those mostly have to do with wanting a different social or educational environment, or already knowing that you want to do something with your life where such a degree wouldn’t be an asset. I can think of very, very few circumstances where it would be a poor financial choice.
9

In the US, everything has gone up, except wages. All the other 1st world countries have a safety net. Universal health care, housing, higher education, much less crime, etc…

10

For one, taking a bus instead of a car can be a good choice and not a poor one…

11

…?

The benefit to Joe Random in saving money is…that he has more money.

It is better for Joe Random to have $20,000 in a savings account, and zero credit-card debt, than the other way around.

12

I tend to agree. I make roughly the mid-upper end of what my job function does in my area (engineer, non-management) and I have some toys (paid off truck, paid off bike, another bike to be paid off in the next 6 mos) but no kids or anything like that. I see people I work with who are in the same salary grade as me (so I have a general idea of what they make) who have a big house, 2 kids in travel sports, a boat, jet skis, 2 new-ish cars, go on 2-3 vacations every year, and so on. I wonder how it’s possible to do that without being leveraged to the gills. I mean, sure, a lot of them are 2-income families (so basically pulling down 2x what I do alone) but that’s just so much more shit than I have. I don’t feel “rich” so much as I generally don’t have to worry about money, but I can easily see being stretched thin if I spent money on all the things they do.

13

This is mostly true, but not always.

Many years ago, when student debt was barely a blip on the radar, I read an article in which a woman complained about how she would never repay her student loans. Her degree was from the University of Chicago – admittedly not “Ivy League” but a top-tier school with tuition to match. She majored in Social Work.

There are a lot of good things you can say about a career in social work. Making good money is not one of them. It really doesn’t matter too much who your employer is.

I remember thinking at the time that she could have gone up to road a bit and gotten her degree from the Jane Addams School of Social Work at the University of Illinois at Chicago. Her tuition would have been a lot lower, and the Jane Addams school may well be more prestigious than the University of Chicago.

14

The thing is that if everyone lived like you (and me), then we wouldn’t enjoy the quality of life that we currently enjoy. My salary is tied to people buying big houses, toys, cars, and vacations.

So while I can cluck my tongue at people for buying shit they don’t need, I feel like I can’t cluck at them too much.

15

From the OP:

This, ultimately, is the issue. This argument about student loans is ignoring the elephant in the room. I live in a very, very poor part of the country and I work for our local community college teaching GED classes. So I see a lot more of this than I care to. Here’s my observations. Forgive me in advance if this comes across as a stream of consciousness.

We are a social animal and to that end we like to be like our neighbors, friends, and even strangers we see on the street. Keeping up with the Joneses indeed. That’s why fashion and design trends are, well, trends: people like things that other people like even if the value obtained from those things only comes from fitting in with society.

The $5 lattes is a perfect example. A can of Folgers costs maybe $8 at my local Safeway, which is not the cheapest store in town. If one is used to paying for $5 lattes at Starbucks that can of Folgers, paired with an $10 Mr. Coffee from Wal-Mart, will pay for itself almost immediately. Yeah, it’s not a exactly the same, but not hard to make frothy hot milk and mix the two. But that’s not what people do. They go to Starbucks because their friends go to Starbucks and they see the ads for Starbucks and… and… and… Brewing a pot of coffee first thing in the morning is no longer standard for coffee drinkers, in my experience. Again, in my small, economically depressed, rural, poor county drive-through coffee stands are HUGE: there are literally dozens within a 15 mile radius of me, and this is a town of 20k people. And of course now everyone has to buy the special, higher-priced Pumpkin Spice whatevers because it’s the “in” thing. Yeah, it might taste good (I think it tastes like ass, but I’m a coffee snob so what do I know), but so does numerous other combos that don’t cost as much. Pumpkin Spice itself has become part of our cultural identity.

It’s part of our culture. It’s what is “cool.” Does it make financial sense? Of course not. But people don’t think that way. Same with the newest iPhone that costs the same as a small used car. Does it make financial sense to buy one? Of course not. But not having one makes one a social pariah. I’m dead serious. I’ve had whole classrooms discussing the merits of the newest phone offerings, and then decrying the one student who still used an old Motorola Razr. That one student didn’t have a $200/month phone bill, but he was also made to feel like an outcast because of it.

From the link in the OP:

I disagree that someone making $30K / year is anywhere within spitting distance of “middle class,” unless they are living frugally and have a home and car that’s paid off. While there are numerous definitions of middle class (we’ve discussed it here before), home ownership, personal and retirement savings, and at least halfway decent health insurance are usually part of that definition. 30K / year isn’t going to give someone those benefits.

And therein lies the problem: someone making $30K/year, who should likely be taking extra money and putting into a savings account, an IRA, and making similar wise choices isn’t being told “hey. you’re poor… might want to think about not blowing $500/month on Starbucks and iPhone payments.” No, these people are told they need these things, they deserve these things, and that having them will make their lives easier and better. Whether or not they do those things is subjective, but I argue they do not.

So yes. I think America runs on poor choices. The Christmas advertising season is in full swing; just observe how much money literally the whole fucking country is being encouraged to spend ostensibly to celebrate the birthday of a long-dead Palestinian. Most Americans will spend a large amount of money that they otherwise would not because it’s part of our cultural identity. Just like buying lattes and Big Macs and iPhones and new cars every few years is all part of cultural identity.

16

The consumerism in this country, and the constant, unrelenting sales pitches certainly contribute to a lot of poor choices.

I decided to make 2019 a minimalist year, meaning that I tried not to buy any non-consumable physical items that would take up space in my home. The exercise has made me acutely aware of how much we are constantly being bombarded with the message that we need more stuff. I started referring to “the people who want you to buy stuff” as a way of recognizing and identifying those messages. Just last week, I noticed that the little news scroll that runs in the elevators in my office building is about 90% consumer news - and that’s in addition to the advertisements. Most of the “news” is about new products, or the latest gadget innovations. It’s all designed to get you to buy something.

I can’t deny that consumerism is the engine that runs the U.S. economy, but I also think that we’re making it harder and harder for people to differentiate wants and needs. We’re also making it harder for people to define happiness - would I be happy if I just had the latest smartphone or the snazziest car? That seems to be what the media is telling us. Then we end up with a nation of unhappy people because their happiness depends on an ever-increasing pile of stuff. Fortunately, we’re one of only two countries in the world that permits advertising for prescription drugs, so you can be sure there’s a pill for that.

17

In addition to this, people who splurge like to criticize people who don’t. If your friends ask you, “Hey, we’re going out for coffee together, wanna join?” and you either decline, saying, “Sorry, I can’t afford a $6 latte, I’m trying to build up my savings” or go but don’t buy something, they will make you feel small, or shun you as a cheapskate or just “not one of our kind” from that point on.

18

To piggy back on this, lots of people think that where one goes for grad school is much more important than where they go for undergrad. So they’ll go the inexpensive public university route for undergrad and then blow their financial wad on an expensive grad school program. Like the A.R.T Institute at Harvard.

19

This is my understanding of what’s happened in the last ~30 years.

The % of jobs that pay $20/hr or more (inflation adjusted has shrunk).
The % of able bodied adults in the labor force has shrunk
The % of jobs that are contract or permatemp has grown.

Meanwhile

Regressive taxes have gone up. FICA taxes, property taxes, sin taxes, fuel taxes, etc all went up.
Wages stagnated

And most importantly

The cost of housing, health care, child care and real estate skyrocketed. Most everything else declined in price. People like to talk about how its because people buy iphones, but its really beacuse a house that used to cost 100k now costs 500k, or because you used to be able to get good health insurance for $80/month and now you need $600/month for junk insurance with a 5k deductible. Or how now you need both parents working, which means you need 1k a month for daycare.

IMO that is what it really comes down to. Housing, health care, child care and real estate have skyrocketed in price. Meanwhile regressive taxes have gone up, wages have stagnated, and ‘good’ jobs are becoming rarer and rarer.

Job security is also much harder than it was in the past. Nowadays you never know when there will be a round of layoffs.

20

I can see from your location where that’s a good choice. See my location? When I worked (I’m retired now), it would take me 2 hours or more one way to get to work and back on the bus.