Affluenza: The All-Consuming Epidemic Read online

  Our equivalent of Gothic cathedrals are the megamalls, which continually replace smaller shopping centers, drawing customers from ever-greater distances. Typically, they cover areas of formerly fertile farmland that produced bumper crops instead of traffic jams. Indeed, 137 acres of prime American farmland are lost to “development” every hour.3 When a new megamall opens, the pomp and ceremony rival anything Notre Dame or Chartres might have witnessed in medieval times.

  The Super Mall in Auburn, Washington, opened in October 1995 to a stampede of a hundred thousand shoppers. The crowd gathered under a model of Washington’s 14, 410-foot Mount Rainier. Rising above the Super Mall’s front entrance, the imitation mountain provided one show that the real thing could not: a display of fireworks, set off as soon as the ribbon-cutting ceremony was over.

  In a spirit of boosterism that would have impressed Sinclair Lewis’s Babbitt, speaker after speaker extolled the wonders of the new shopping center, the biggest in the state. “The number of shoppers expected to visit here over the next year exceeds 1.2 million,” bubbled Auburn’s mayor, who added that “committed shoppers can shop till they drop in 1.2 million square feet of shopping space.” Along with a new racetrack and casino in the area, the mall was expected to become a “destination attraction” for vacationers from the entire western United States and Canada. It would, they said, create four thousand jobs and “improve the quality of life throughout the region.” Thirty percent of the expected business would come from tourists who would each spend about five hours and more than $200 at the mall.4

  FUN FOR THE WHOLE FAMILY

  The thousands of eager shoppers on hand for the opening wore bored and impatient expressions during the speeches but pushed eagerly through the open doors when the rhetoric stopped. One woman said she was “really excited about the mall because this is something we haven’t had in this part of Washington. We were waiting for something like this.”

  “We said, ‘If we build it, they will come,’ and they did,” said a happy shopkeeper. Another explained that the hardwood floors “add a little sense of excitement to the mall. They’re much easier than walking on tile or granite and make the Super Mall really special.” She hoped children would enjoy it, “because shopping has become such a family experience that’s really important.”

  Really. And it’s a good thing, too, since we Americans now spend six hours a week shopping and only forty minutes playing with our kids.5 “Shopping malls have really become the centers of many communities,” says Michael Jacobson, founder of the Center for the Study of Commercialism, in Washington, D.C. “Children as well as adults see a shopping center as just the natural destination to fill a bored life.”6

  WHAT ELSE MATTERS?

  “If you’ve seen one mall, you’ve seen them all,” sneer critics, but “committed shoppers”(some psychologists say they should be committed) disagree. They’re willing to jet across the country for new shopping experiences. So much so that some airlines now offer package flights to shopping meccas like Potomac Mills, a giant “discount” mall divided into sections that are euphemistically labeled “neighborhoods.” Potomac Mills bills itself as the “number-one tourist attraction in Virginia,” with more visitors each year than Shenandoah National Park, the most visited site in the National Park System.

  The host of Affluenza, Scott Simon, visited Potomac Mills while filming the television program. Shoppers were eager to answer his questions about where they came from and what they thought of the mall. None of the people Simon talked to were sweating profusely. But all seemed infected by shopping fever, often the first symptom of affluenza.

  Two women from Dallas, Texas, said they’d been at the mall for three days straight, while their husbands golfed nearby. “We’re always looking for a bargain. You’ve got to know the brands and we have experience, we’re proud to say,” they proclaimed. “I didn’t need anything. I just went to shop,” said a man with a cart full of merchandise. “Whatever I like I buy.” “I bought a lot more than I planned to,” another woman admitted. “You just see so much.”

  Yes, you do, and that’s the idea. It’s why big malls sell much more per square foot than do their smaller counterparts. Seeing so much leads to impulse buying, the key to mall profitability and to the success of big-box stores like Wal-Mart. Impulse: a devilish little snake that cajoles first, then bites later when the credit card bill comes due. Only a quarter of mall shoppers come with a specific product in mind. The rest come just to shop. “What else matters?” asked one of the ladies from Dallas, only half in jest.

  “I came here with one overriding interest, to spend money,” said a proud teenage girl, who was getting rid of the hundred dollars her mother had given her for this particular spree. “I like to shop,” she explained. She’s not alone. One poll found that 93 percent of teenage American girls rate shopping as their favorite activity.7

  An older couple passed by with a shopping cart piled to the brim. “This is only half of what we’ve purchased,” the man said cheerfully. “We brought a long list of things to buy,” his wife added, “and then we bought a lot of stuff that wasn’t on the list.” They were examining the fold-out map Potomac Mills provides to shoppers, saying, “We’d be lost without it.”

  But Potomac Mills is a mere mini-mall compared to the Mall of America in Bloomington, Minnesota, America’s number one visitor attraction. With 4.2 million square feet of shopping space (one hundred acres), our biggest mall (“Where It’s Always 72 Degrees!”) spreads over an area the size of seven Yankee Stadiums. It employs ten thousand people and attracts forty-two million visits a year. The Mall of America is more than metaphorically a cathedral; some people even get married there. It is also a world-class affluenza hot zone.

  In the Age of Affluenza, nothing succeeds like excess. “Good malls are usually the most profitable kind of real estate there is,” says one Los Angeles real estate consultant. “Good malls are money machines.”8 Good, he points out, means bigger. Because of that, the frenzy to attract megamalls pits city against city, each offering sweetheart deals in hopes of capturing tax revenue later on. To win such deals, mall developers compete for the most-profitable stores. According to the Sacramento Bee, the Seattle-based Nordstrom Company received $30 million in direct subsidies and incentives to put a store in Roseville, California’s, Galleria Mall. Why?“Nordstrom does the highest sales per square foot in the industry,” says mall developer Michael Levin. Most people, says Levin, will drive only about half an hour to a mall, “but with Nordstrom, they will drive much farther.”9

  HOME SHOPPING

  Of course, these days you don’t have to drive at all (or fly either) to shop, though most people still do. But while malls, and vast discount megastores like Wal-Mart and Costco, still boast growing sales (and still drive smaller, locally owned stores out of business), Americans are doing a whole lotta shopping right from their couches. Eighteen billion mail-order catalogs flooded our homes last year, about seventy for every one of us,10 selling everything from soup to nuts (to refrigerators to underwear). “Buy Now, Pay Later!” they shout. While some of us resent their arrival, most Americans eagerly await them and order with abandon. In some cases, we even pay for the catalogs (such as Sears’s) so that we can pay for what’s in them. In 2005, mail-order catalog sales are expected to total $143 billion.

  Then there are the home shopping channels. Critics mock them as presenting a continuous succession of baubles on bimbos, but for a sizable percentage of Americans, they’re the highlight of our cable TV systems, and they’re highly profitable. And to think someone once called TV “a vast wasteland.” That was before the shopping channels, of course.

  Mail-order catalogs and shopping channels carry a lot more than products. They are highly effective carriers of affluenza. Next time a catalog comes, check it with a high-powered microscope.

  CYBERSHOPPING

  In the past several years, a new affluenza carrier has come online. And it threatens to someday outdraw malls, catal
ogs, and shopping channels combined. The intense frenzy with which the ubiquitous Internet has been embraced as a shopping center can only be compared to that which followed the discovery of gold in California and Alaska, or oil in Texas. Americans now spend an average of eleven hours a week online, and much of that time is spent shopping—nearly half of Internet sites are now selling something.

  During the 2003 affluenza season, consumers spent $17 billion online, nearly double what they spent four years earlier. Now that’s growth! E-spending for the Thanksgiving weekend 2004 was up a third from 2003.11 For the year, e-sales topped $50 billion.12 That’s still only a tiny fraction of total retail sales ($3.4 trillion), but soon Internet shopping should eclipse catalog sales. Everything imaginable (and some things unimaginable) can now be bought online.

  Much of it can be bought from eBay, the biggest winner in the online shopping sweepstakes. The company has been in existence for only eight years, but it did $23 billion in business in 2003. It offers such fanciful purchases as kangaroo scrotums ($10) and Paul McCartney’s germs from a used tissue. Every second, $729 worth of goods is sold on eBay.13

  SHOPPING AS THERAPY

  When Scott Simon visited Potomac Mills, the mall was running one of the cleverest ad campaigns we’ve ever seen, featuring an alluring actress named Beckett Royce, whose persona combined bubble-headed ditziness with a winking “joke’s on you” sophistication. “Shopping is therapy,” she intoned, lying on a couch. “Listen to that little voice in your head: SHOP, SHOP, SHOP.”

  Royce’s monologues mocked the shopping channels and catalog shopping, but definitely not shopping at Potomac Mills. She pranced between its aisles, grabbing item after item, then added up what she’d bought and chirruped, “I spaved a hundred dollars!” Spaving means spending and saving at the same time, she explained, suggesting that at Potomac Mills everyone could become a “spaver.”

  “The more you buy, the more you save,” proclaimed an ad for Bon-Macy’s, a Seattle department store. As our next chapter demonstrates, large numbers of Americans apparently believe this mathematical impossibility. Beckett Royce is no fool; she gets paid plenty to persuade the credulous that “spaving” works. Simple mathematics says otherwise. But then, math scores have been falling.

  And, as we discover in our next chapter, the road to bankruptcy is spaved with good intentions.

  CHAPTER 2

  A rash of

  bankruptcies

  Uh oh, we’re in the red, dear

  On our credit card it shows

  Christmas is almost over

  But the debit line still grows.

  —“ALTERNATIVE” CAROL

  from the Center for a New American Dream

  (to the tune of “Rudolph,

  the Red-Nosed Reindeer”)

  On the Monday after Thanksgiving, Janet Jones, Jason’s mom, drops him off at school, winds her way through heavy traffic back to the mall—a fairly new one, built in 10 BHP (Before Harry Potter)—and enters, eyes wide for sales. She carries the wish list Jason wrote for Santa Claus. Making sure Mom knew what he wanted, Jason printed a copy of the list for her and left it, as if by accident, on his bed.

  The first purchases go fine, and by her reckoning Janet has soon saved a hundred dollars, but when she tries to buy the mountain bike, there’s a hitch. “I’m sorry,” says the smiling clerk, “but you’re over your limit on this card. Do you have another?” Momentarily embarrassed, Janet reaches in her purse. “No problem,” she says. “I’ve got several.” She remembers the slogan “Some things are priceless, but for everything else there’s MasterCard,” and hands hers to the clerk, who runs it through a scanner. “Sorry,” the young woman says with a sympathetic look. “Same results. Insufficient credit remaining.” Janet looks quickly around, hoping no one has seen her in this predicament, and muttering, “There must be some mistake,” walks out of the bicycle shop.

  On the way home from the mall, she passes the offices of Consumer Credit Counseling Service and wonders if it might be time.

  If she’d gone inside, she would have found things humming. These days, Consumer Credit Counseling Service (CCCS), a network with 1, 100 offices in several countries, gets plenty of referrals—people who have gotten themselves deep in debt and do not see any way out.

  PLASTIC NATION

  According to Marielle Oetjen, a former member of the CCCS staff in Colorado Springs, Colorado, “One of the first things we do when people come here is cut up their credit cards. . . . The whole availability and ease of credit makes it hard for people to remember that they’re dealing with real money.”1

  Oetjen removed a large box from a shelf and poured the contents on the floor— hundreds, perhaps thousands, of cut-up credit cards. The average American possesses 6.5 credit cards, for a nationwide total of 1.2 billion.2 One in three high school seniors and 83 percent of college undergraduates have cards. The more you have, the more you’re likely to be offered. The son of coauthor Thomas Naylor was sent an offer for a card when he was only twelve! A steady stream of such offers fills American mailboxes, each offer with its own incentives: frequent-flier miles, introductory low interest rates, lower minimum payments. According to the Guinness Book of World Records, one American now has a whopping 1,497 credit cards, a dubious honor.3

  “There’s a lot of marketing ploys from the credit card companies to not only encourage customers but have those customers carry as much debt as possible,” Oetjen says. That’s how the companies, the banks, make their money. Say you spend $2,000 on a typical credit card (at 18 percent interest), and make minimum payments to pay it off. It will take you eleven years, and you will end up paying double the original price. And that’s if you never buy anything else with the card.

  “The credit card companies push instant gratification,” Oetjen points out. “Buy it now. Don’t worry about it. Pay it off in little monthly installments. You can take as long as you want. You can handle it. That’s the ethic that’s being pushed. That’s what most of the folks that come in here get caught up in.”

  In fact, fewer than a third of Americans avoid interest by paying off their credit card balances each month (though 55 percent usually do).4 The average American household carried about $9,000 in credit card debt during the year 2002, for a total of $764 billion. Even college students average $2,500. Total American credit card indebtedness tripled in the 1990s.5

  The news was even worse for Cindy and Keaton Adams, an attractive young couple with two children who were in many ways typical Consumer Credit Counseling Service clients. They turned to CCCS in 1995 when they found themselves $20,000 in debt and unable to make credit card payments. “We started out thinking we could finance the world,” Keaton says. “And we tried, but it didn’t work.”6

  It almost never does.

  It all started when Keaton got a Mervyn’s credit card at the age of eighteen. “With that,” he says, “I managed to get a Visa card, and Cindy managed to get a Visa card, and we ended up with lots of Visa cards.” They began buying plenty of things, all on credit. Besides credit card purchases, they found a way to get financing for new cars. “But it wasn’t just ‘Let’s get a nice $8,000 car,’” Cindy confesses. “It was ‘Let’s try and finance the nicest car we can get.’”

  But what they got was deeper and deeper into debt, until finally a debt collector just asked, “Why can’t you pay your bills?” Keaton says it made him stop and think. When the debt collector suggested Consumer Credit Counseling, he took her advice. It was hard to watch their credit cards being cut up, Keaton and Cindy say now, but they’re glad someone did it.

  IS AMERICA BECOMING A DEBTORS’ PRISON?

  The situation that faced the Adams family is not all that unusual these days. According to the Los Angeles Times, Americans are “straining under record debt loads amassed in a spending binge powered by the booming economy.”7 Current bankruptcy rates exceed those experienced during the Great Depression.

  Rising debt, says one economist, is the “so
ft underbelly” of the U.S. economy. A soft underbelly covered with little red dots, as shopping fever leads to another affluenza symptom, a rash of bankruptcies. Six million Americans are as close to bankruptcy as the Adamses were. Each year, in fact, more than a million and a half people—up from 313,000 in 1980, and including one of every seventy Americans— file for personal bankruptcy, more than graduate from college. That’s been the case since 1996. Every fifteen seconds, an American goes bankrupt8. On average, the debt load for such filers equals twenty-two months of income.9 Ninety-two percent of bankruptcies are filed by middle-class Americans. About half of them are the result of reckless spending; the rest come from sudden medical bills (40 million Americans still lack health insurance) or a job loss. In response to the situation, lending institutions have successfully lobbied Congress to make it harder to declare bankruptcy, while at the same time they continue to push their customers toward financial ruin.

  In 1980, U.S. household debt stood at 65 percent of disposable income. Today, debt is 125 percent of income. “Families are overextending themselves as never before as indicated recently when total household debts surpassed total after-tax incomes for the first time in history,” writes Los Angeles Times reporter Leslie Earnest.10

  A PENNY SAVED—BARELY

  There is a strange irony at work in contemporary America: The more incomes rise across the board, the less we save. It should be the other way around. Fatter paychecks ought to leave more dollars for savings accounts. Not so. When the film Affluenza was produced, Americans were saving just under 4 percent of their incomes, half the German rate and only a quarter that of Japan. That seemed, at the time, very bad news, since the savings rate had been about 10 percent as recently as 1980. But today our national savings rate hovers near zero and in some months falls below that line.11 Steve Lohr of the New York Times reports that Americans now save only 0.2 percent of their personal income—about $1.50 a week on a salary of $40,000.12 Meanwhile, residents of the European Union save 12 percent, and impoverished Chinese, Indian, and Pakistani workers save a quarter of their incomes.