Holiday Spending Spree

In closing the books on 2010, the best that might be said was that it was better than 2009. This was a year that cemented a certain narrative of the past decade, one that has coalesced since the fall of 2008 and could be heard from the lips of everyone from Oprah to Obama: Americans had been living beyond their means, using their homes and cheap credit as a piggy bank, and with the Great Recession, the bill of
summer fashion 2011 has come due. What lies ahead is years of belt tightening to compensate for those years of excess.

The online figure is telling, and the percentage was especially high in apparel, such as clothing and shoes. Buying apparel used to require going out and trying stuff on. But in a period when we have scolded ourselves with tales of inappropriate spending, the availability of online shoes (Zappos, anyone?) and clothing means you can escape the quandary of shopping when the cultural message is not to.

The belief that Americans overconsumed and are now tightening their collective belts has, of course, some basis in fact. In the two decades before 2008, the amount of debt carried by Americans did go up significantly, and in the two years since, the savings rate has gone from a low of 1% to nearly 6%. And in the past two years, millions have suffered for the debts they took on in the flush years. Mortgage delinquencies soared and are now nearly 10% of outstanding loans. Credit-card default rates went up as well, to more than 9%.
How then to explain why so many of us think otherwise? There is a strong strain of modest Puritanism in our culture, one that has always been uncomfortable with the material excesses that erupt from era to era: consumption is a vice and has a price.

But it's also important to note that this bout of self-flagellation is taking place against a different global backdrop, one that sees countries from China to Brazil blazing their own trails while the U.S. seemingly plods along. It's been shown that people assess themselves in relative terms, by how much they have compared with their neighbors more than by how much they have. Today, Americans have a
power balance surfeit, but relative to the world as a whole, the slice is shrinking.