Shiny Objects: Why We Spend Money We Don't Have in Search of Happiness We Can't Buy by James A. Roberts
Published November, 2011.
According to James A. Roberts, professor of marketing at Baylor, we have evolved into a nation of irresponsible spenders. The central thesis of Shiny Objects is that many of us have replaced traditional values of community, family, and hard work with those of thoughtless consumption.
The rise in household debt, and the increase in hours worked by family members, is the result of a choice to consume more.
To bolster his arguments Roberts cites some of the following statistics.
Increased Home Size: The average square feet of new U.S. single-family homes increased from just over 1,600 square feet in 1975 to over 2,500 square feed just before the mortgage meltdown (it dropped down to 2,400 square feet by 2010).
Credit Card Addiction: The average American household credit card debt is over $15,000. Over half of households carried an unpaid balance in the past 12 months. Average credit card debt carried by college students is over $3,000.
Personal Debt: Our addiction to personal debt has grown dramatically over the past 60 years. In 2010, the per capita non-real estate debt (which includes credit cards, personal loans and student loans, but excludes mortgages and home equity loans), was over $10,000. In 1948 this debt burden stood at just over $1,000 (in 2010 dollars). Our credit card debt since 1980 has increased 285%.
Roberts sees our rise in indebtedness as primarily a moral failing, brought on by the desire to consume and live beyond our means and the availability of easy credit. Shiny Objects is a call to recognize our addiction to spending and consumption, and to change our behaviors by dedicating ourselves to live within our means.
So what is not to like about Shiny Objects?
My main complaint is that Roberts fails to take into account the larger structural changes in the cost of living, changes that I think are much more important in understanding the increasing economic difficulties of most families. The growth in household debt and the commensurate decline in savings has been driven by rapid increases in the costs of housing, education and healthcare.
Perhaps the best indicator of the change in household economics are the increasing costs to raise children. According to a USDA report Expenditures on Children by Families, 2010, it costs on average a total of $227,000 to raise child from birth to age 17. This is up from $185,000 in 1960 (in 2010 dollars). Part of what accounts for this increase are the dramatic run-up of housing, child care and education, and health care costs. Today, child care / education and health care account for 17% and 8% respectively of the costs of raising kids, as compared to 2% and 4% in 1960.
The real story is not our buying of useless baubles with credit cards and McMansions with crazy mortgages, but of families sacrificing to afford houses in towns with good schools. Yes, some people may spend irresponsibly on things they don't need (and finance this spending with credit cards), but most of us are working longer hours and taking on more debt to pay for housing and the increased costs of health insurance and education.
The rise in economic stress that Roberts identifies is not the result of bad values, but of increased costs and stagnant wages.
Although I disagree with Roberts conclusions in Shiny Objects, I think that his book is worth reading for those of us who are trying to understand how larger forces and personal decisions impact and determine individual and family economic well being. Roberts is an engaging writer, passionate about his subject, and is able to cite a range of interesting statistics and experiments (some of which from his own research) that demonstrate our propensity to make bad personal economic decisions.
What are you reading?