The Ghost of Christmas Spending

Posted by: Billy Hollis

I notice (via Instapundit) that retail sales had only a modest increase of 3.6% this Christmas season. The increase lagged behind 2005 and 2006. The NYT predictably calls this "bleak", but I don't see why it should be taken that way. First, it's still growth, and roughly in line with economic growth during the period. Simple math will tell you that retail sales can't grow at 8% indefinitely while growth is down around 4%. If it did, retail sales would eventually become the entire economy, which is obvious nonsense. Of course, NYT reporters generally don't seem to take math beyond basic arithmetic into account in their stories. Not surprising; when I taught calculus as a graduate student, I don't recall a single communications major who was ever in my class, or in that of any of my colleagues. Second, I'm not the least bit surprised that retail spending during Christmas is only growing at a modest rate, and I would not be at all surprised to see it begin to shrink in the years ahead, or at least fall below the rate of growth. My reasoning is simple. I want people to stop giving me stuff. I've got too much stuff already. Consumer goods are cheap. So cheap that as a young adult, I would never have believed it would get to this point. It's not just electronics. Clothing is cheap. I paid fifteen bucks a pair for Levis in college, and I'm paying less than twenty bucks a pair for Wranglers on Amazon (which I like better) thirty years later, which means my inflation-adjusted price is less than half of what I was paying then. And I have quite a bit more disposable income now. Media is cheap, food is cheap, most anything I want to buy is cheap. Inflation adjusted, a bicycle for one of my sons is less than one third the cost that my parents paid for me to have a bike, and today's bikes are much nicer. As a result, if we want or need something around here, we buy it. Only big ticket items are excepted, and that's now down to things like plasma TVs and refrigerators. The result is that we have more clothes than we can wear, more DVDs than we can watch, more food than we can eat, and more gizmos than we can figure out how to use. We don't need any more, and increasingly, we don't want any more. Too much stuff is a burden. Just finding a place to put it is hard. Remembering where it was put is even harder. Organizing it soaks up the most valuable asset we have now, which is time. This makes gift giving quite difficult. Most of the people I know are in the same boat, which means finding something they want to have, but don't already possess, it really hard. We gave a lot of gift cards this year, because the alternative is to spend time finding something we think might be appropriate, and half the time the recipient just pretends to like or want it when the first thing they think when they see it is who they can re-gift it to, in order to get rid of it as fast as possible. I'm pretty sure our Christmas gift spending has fallen quite a bit in the last five years. We still gather with the extended family and still exchange gifts, but several relatives have dropped out of the process. Plus, the customary amount has not gone up in a long time, which means it's going down in inflation-adjusted terms. And I'm seeing strong signs that most of the participants are now seeing the whole process as merely symbolic. Except for some of the younger relatives getting things for their young children, there's just not any real need for much of anything.(*) If this phenomenon is as common as I think it is, then I'm expecting Christmas spending to become quaint in two or three decades. Why spend money to get something as a gift that's more likely to be a burden than a boon? No doubt New York Times writers will then interpret it as economic gloom. Unless a Democrat is president at the time, of course.