This quarter, the eighteen freshman in Professor Nicholas Leither’s Critical Thinking and Writing course at Santa Clara University worked together in a collaborative effort to study how the endless consumption of food, money, and technology have an effect on our culture and our happiness. As we begin our final quarter of the 2014 academic year, we are examining the advantages and disadvantages that result from consumerism, over-consumption, and excess.
We often buy things saying, “I need this!” or “I just have to have this!” but then our purchases end up in the back of our closets or on a shelf, untouched. Compared to Americans sixty years ago, we take up more than three times the amount of space per capita; yet our super-sized homes do not have enough space for all of our belongings, causing us to spend twenty-two billion dollars in the personal storage industry (Hill). Our lives become unnecessarily complicated with this excess, consuming us and distracting us from what is truly important. We get so caught up in our own decadence that we forget to ask the fundamental question: does this endless consumption bring us happiness?
The phrase “there is always room for improvement” has brought Americans a long way. These improvements have dramatically changed technology, the standard of living, and the average lifespan. All of this, of course, would not be possible without wealth. Despite being stereotyped as grossly excessive, excess has allowed technological and social growth. Expansion of medical technology within the medical sector has increased life expectancy in the past century. New drugs and vaccines have eliminated deaths from common diseases and infections that were once harmful. They have a huge impact on third world populations, one example being Malaria. Even prosthetic devices have allowed amputees to walk, swim, and run marathons, and hearing aids have enabled the deaf to hear clearly.
When it come to the advancement in prosthetic design and construction, namely the emergence of more sophisticated materials, we can see how our culture of excess can often allow us to pursue things other than individual wants and desires. Because we put a major emphasis in the expansion of technology, we develop new ways to integrate it in other fields.
Social media has exploded, news travels in seconds over the world wide web, and Facebook connects individuals scattered across the globe, having a total of 1.11 billion users as of March 2013. The drive for excessive wealth has brought us into an age of technological innovations that controls our day to day activities.
All these advancements in technology and in our standards of living might set Americans on a path to longer and more comfortable lives, but not necessarily happier ones. The root of America’s culture of excess is the attitude of quantity over quality in regards to food, money, and technology. In fact, unhappiness results from the endless and overwhelming desire for more. Young adults and the working class have become so mesmerized by the idea of living in exces
s that they neglect the awareness needed to overcome this cultural plague and recognize the magnitude of their choices. More importantly, they ignore the little things in life that surrounds them and fail to appreciate what they have. Daily activities such as food choices, monetary status, and technology use have become habitual instead of conscious decisions and have clouded our judgements. This has slowly, but surely led Americans to disregard what really matters in the world such as individual health, our environment, and appreciation of our lives and each other’s presence.
Status is defined as the relative social and professional standing of someone in America. It has become the measuring stick for one’s happiness. Americans have become obsessed with constantly striving for a higher class, consequently consuming their life and career. Americans have based sophistication on the food they eat, the technology they use, and the money they posses has given people an illusion of their happiness. However, when one stops striving for a higher status, their happiness fades as they never lived their life in the present and enjoy life. Status-seeking imposes negative externalities that cause people to work too hard and consume too much when judged by the criterion of economic efficiency (Arne). Constantly striving for status does not lead to a happy life but instead a life filled in excess.
A new study by Cameron Anderson, a professor at UC Berkeley, found that respect from peers and being a valuable contributing member to society has a greater effect on happiness then appearances and monetary wealth. The study discovered that constantly chasing wealth to improve one’s socioeconomic status does not necessarily bring contentment or have an effect on their peers’ happiness. Herman Edward Daly, an ecological economist, explored the same idea that “people’s concern for social status generates excess levels of economic activity and, by extension, natural resource depletion and environmental degradation” (Arne). However what actually matters to one’s happiness is the idea that “ the respect, admiration and feeling of powers from others within our face to face groups” (Kennelly). This idea of respect suggests that having the highest status is actually not that fulfilling, despite all the time one spends trying to achieve this status. Being a valuable, contributing member to your community and those who are an important part of your life, will give you a sense of contentment. Knowing that you make a positive impact to those around you is what allows to feel satisfied with your life and thus happy; something obsession or excessive status can not do.
This Is Water
1. Pick out or select (someone or something) as being the best or most appropriate of two or more alternative
2. Decide on a course of action, typically after rejecting alternatives
(New Oxford American Dictionary)
“Choosing” is the focus of David Foster Wallace’s commencement speech to the Kenyon College Class of 2005, titled This Is Water. Wallace presents the idea that “learning how to think really means learning how to exercise some control over how and what you think” (This Is Water).
Wallace introduces his ideas with a parable that includes an older fish passing two younger fish and greeting them, asking how the water is; later the young fish asks each other “what is water.” Straight to the point, Wallace reveals that “the point of the fish story is merely that the most obvious, important realities are often the ones that are hardest to see and talk about” (This Is Water). The audience is then warned about the monotonous routines and petty frustrations that cloud the lives of adults day after day. This is where choosing what to pay attention to becomes important. Rather than just focusing on how miserable we are when standing in a line or when stuck in a traffic jam, we can choose what we are going to think about and how we can get meaning from our experiences. We are advised to take advantage of these opportunities as a time to think rather than be annoyed with the situation as we normally do as our natural default setting.
Wallace’s ideas portrayed in his speech exemplify the importance of our daily choices, more specifically the choice to be aware. Americans today lack the awareness that is necessary to recognize that living in excess should not be our main concern. Similar to This Is Water, this idea of excessive consumerism has been instilled in our daily lives and has led us to neglect our surroundings and what truly matters in life. Our “natural default setting” is to strive to get more in life and make as much money as possible. Instead of being aware of the technology, money, and food that revolves in our everyday lives, we are constantly striving for more. Rather, we should be taking time to examine the “water” that surrounds us.
Here at Santa Clara University, students have also fallen prey to constantly using an excessive amount of technology. When surveyed, all the students responded that they had at least a phone and a computer in their dorm room, in addition to some having a TV, Wii, Xbox, Playstation, or tablet. With all this technology, it is not surprising that 51% of students spend 3-5 hours a day on their phone or computer. Even more extreme, 45% of students spend six or more hours a day with their faces glued to the screen. These students are always wanting more time to check the newest information online or watch their favorite show. One student declares, “I spend so much time on my phone and computer. Time just escapes me when I am online. I want time to do more activities, but I also can’t go a day without using technology”. Only one student out of thirty-three surveyed spends less than 2 hours a day with technology. This student realizes the importance of enjoying life without the excess of technology and admits, “I went a week without my phone once and it was so much nicer being able to genuinely enjoy those around you without the distractions of unnecessary websites like Facebook.” Despite the differences in what technology they have in their rooms or how many hours a day they spend with technology, all Santa Clara students surveyed agree that SCU students, as well as other college students, are obsessed with technology.
Along with excessive amounts of technology usage, students at Santa Clara University (SCU) can also easily access excessive amounts of food from the dining hall or the on campus grocery store, the Cellar. A survey done by SCU students showed that students aren’t eating a well-balanced diet, but rather 75% of the students have been found to be eating unhealthy snacks and foods on a regular basis. On top of an unhealthy diet, 25% of SCU students have been found to be constantly snacking instead of eating three structured meals a day (Renschler). With the freedom to choose what and when they eat, college students find themselves eating constantly even when they aren’t hungry. This constant eating is only accelerated by daily stress. One student even commented on how she “[does not] stop eating” (Lidia Diaz Fong). The constant excess of food and food choices causes over 75% of students to feel guilty, unhappy, and lethargic about not only eating food but also by their insatiable need for food. Students at SCU are not content with eating three balanced meals. They constantly want more. Coincidentally, eating more in turn adds to more unpleasant feelings. Like so many things, more just doesn’t ever seem to be enough.
Students unable to control their eating habits in college during their first year tend to experience the phenomenon called the “Freshman 15”. This combined with newly found independence on food choice and social habits causes women and men alike to gain weight during their first year of college. On average 51% to 72% of freshman gained weight over their freshman year (Smith). Gaining weight is not limited to first year college students only, but rather can be applied to all college students. All college students are at risk of gaining “an average of [6.6 pounds] of body weight per year” (Hoffman). Excess food at colleges leads to an increase in students’ weight, which can harm their physical and emotional health and is often accompanied by unhappiness.
At Santa Clara, there are students who must take out loans because their parents are not able to cover all the costs, and, as a result, many of these students work during the year to pay off their loans. Then there are students whose families can afford the tuition, providing their child with the alleviation of stress of working to pay off loans. Based on a survey taken of a group of Santa Clara freshmen, about 47% needed financial aid to be able to attend, and 30% received the financial aid they needed. On top of that, 76% of the students did not have to take out student loans. This shows that despite the high price of this university, many families are wealthy enough to fully support their kids and let them focus on school instead of forcing them to also get a job during the school year. Also, 11% of these students needed on or off campus jobs, and about 50% of the kids are getting a monthly allowance. Despite Santa Clara’s large endowment, the cost of school is still very high.
In the same survey, SCU students have revealed that tuition isn’t the only expensive thing they face in their daily lives. Their favorite brands of clothing are among Polo Ralph Lauren, Lulu Lemon, Brandy Melville, J Crew, Urban Outfitters, Free People, and Nike. What we wear might not be necessary to some to display status, but to others like Christian Hellmers, a freshman student at SCU, “our status isn’t necessarily directly correlated to what we wear, but there are trends that many kids follow which may give off the impression of what clothes are popular.” Let’s be honest. You might not want to spend 100 bucks on a pair of trendy jeans. Then again, there’s that little voice in our heads that say, “But just think of who will look at you.”
No matter which college campus you set foot on, you will be surrounded by technology: students using their ID cards to buy food, others texting their friends on their phones, and some doing work on their laptops. This is what is out in the open; behind the closed doors of the dorms, lies the various gaming systems and social networking sites on which countless hours are spent. We have become so reliant on technology, that it has become normal to let it control us. Our technology usage has become excessive with the fact that a “recent survey concluded that on average, an adult … checks his or her phone over 150 times a day” (Cleverley). Our obsession with technology is detrimental to communicating effectively with each other when face to face. With our reliance on communication through computers and cell phones, “social skills, speaking confidence, and non-verbal gestures will be replaced with abbreviated acronyms and emoticons”(Cleverley).
While the negative effects of striving for excess are certainly clear through today’s experiences with food, technology, and money, the line between obsessing over what we want, and actually being content with what we already have, blurs when we consider the positive effects of goal setting resulting from personal ambition. The American culture’s high standards of living is an example of how advancements that were made through striving for a better life have directly resulted in a plethora of advancements. We wouldn’t have efficiently traveling cars without first having carriages, and convenient smartphone texting before starting out with old-fashioned handwritten letters. Striving for more has actually allowed humans to progress further than ever before. These technological advancements were only achievable through individuals’ dedication to innovation and an understanding that people desired more than what they already had.
This idea that striving for more encourages negativity and dissatisfaction with one’s life further blurs when we take our own lives and modern day philanthropists into consideration. In a survey done around Santa Clara University regarding feelings of contentment and the process of striving for more, the results proved that while many people are discontent with their lives and are choosing to strive for more, there are some who are also extremely content (Aspiras). Interviewees said setting goals and subsequently achieving them brought them contentment(Tenorio and Huber). What’s interesting to note is that these goals were set on a day by day basis and followed a constant recurrent pattern. The goals that the interviewees set were relatively small daily achievements in comparison to larger end result goals. It seems that contentment is more about the small, daily challenges and achievements, and less about grandiose dreams.
Still, philanthropists often have big, grandiose dreams to change the world. They often aim to further social causes in order to positively impact their local or national community. This specific process of striving to fight social injustices, therefore, causes positive interaction within the world and is beneficial to individuals in a community. It might bring happiness simply because it’s not personal. A big dream for your betterment may not be the same as a big dream for the betterment of others–at least when it comes to happiness. Through the actions of philanthropists like Oprah Winfrey and Bill and Melinda Gates, it is clear that being ambitious by setting goals produces an environment that is conducive to a positive attitude and an influential life. However, even though we can reflect on our own choices and understand that philanthropists are able to donate to worthy social causes for the improvement of human life, there are still some other factors to consider when arguing over the effects of striving for more.
Cars, cell phones, and medical miracle drugs are devices that have helped our lives become better, longer, and more productive. However, this newer and better technology comes with a curse. The best technology is reserved for those who can afford it, essentially capitalizing it into a rich reward system. And it recirculates; as children grow up in environments that are either luxurious or impoverished, they become polarized in their perspectives on the usage of technology. This not only provokes socioeconomic differences, but also perpetuates (and is perpetuated by) capitalism (Lynn 1). Indeed, top companies often target their ‘innovations’ for the middle class and above–that’s where the money is, right? This has led to increased competition for companies that target the opposite demographic: frugal, minimal, and lower-class volume seeking companies like Nokia. However, some advancements in technology, like medicine, are held back from the lower class because of income and America’s private health care system. Other developed countries with socialized health care can provide top notch care with the newest drugs and state-of-the-art medical devices. With so much funding into biotechnology and biomolecular engineering, shouldn’t the mission be to allow everyone to afford it? And if you’re poor and can’t afford health care, you can understand why striving to be rich is a reasonable goal.
The constant search for knowledge and innovation has created a tunnel-vision where ethics, happiness, and simplicity are often a second priority. Humans, as ‘Wisdom Kings’ desperately try to reach a full potential, are eagerly seeking the future (Margaret 2). Yet, the more wires we attach to our lives, the more stressed we become with complexities of daily life. Isn’t technology supposed to make our lives easier? How about safer? Guns and weapons of mass destruction are ethically cloudy in inherent purpose as well as actual use. Weapons, even when holstered in a belt or a silo, have historically created tensions with sanctions, power, greed, and dominance proportional to the length of the sticks. Not only have we developed a dependence on technology, but also as a side effect developed a dependence on the stimulation of discovery. More stimulation leads to needing more stimulation, keeping us on the fast track whether we like it or not.
Even the Internet can be dangerous. The fact that there are clinics that specialize in the psychological treatment of computer-based addictions, such as the Center for Online and Internet Addiction in Pennsylvania is testament that the things we use, we often use to excess (Griffiths).
Take cell phone. Sure, they are undoubtedly considered an essential tool in our lives. Without them, we would feel lost, disconnected, a step behind all of their peers. But when is it too much? According to the Morningside Recovery Rehabilitation Center, the average American spends 144 minutes a day using their phone (Borreli). Nearly two and a half hours, or 10.4% of the average American’s time is spent staring at a screen, and for what? If we took just thirty minutes of this time to exercise instead of responding to a text right away, American society would be much healthier and happier. More directly damaging is the fact that cell phone usage while driving a vehicle accounts for 23% of car crashes in the United States (Borreli). This use of phones is directly hurting and killing Americans through excessive use of what we dub a basic essential of our lives. Moreover, those who have smartphones often have to enter binding contracts with service providers leading to more stress. There are fees and penalties for using excessive data which is the lifeblood of smartphones. Additionally, people who use smartphones are always thinking about the newest version of what they already have.
Everyone loves food. Wouldn’t you love to go to your favorite place to eat every single day, and get whatever your heart desires, even if it is the most expensive thing on the menu? The real question here is, do you really need to? According to nbcnews.com, it is now evident that “Americans spend nearly half of their food budget eating out” (Young). Eating out too much is not necessarily a bad thing. However, when a large fraction of money goes to Taco Bell instead of a healthier place such as the grocery store, that’s when one starts to worry. Furthermore, we as Americans have no limits with our food, constantly giving in to our desires for more to eat. For example, something that was as simple as a slice of pizza, has now evolved into an ideal creation that gets “more fanciful with newer and newer toppings” (Nandy). Nowadays, you can get pizzas such as a Hawaiian Pizza, one that has ham and pineapple on it, or one could go as far as getting over five toppings and ordering “the King Arthur’s Supreme at Round Table Pizza” (roundtablepizza.com). Simplicity has disappeared, and Americans are faced with the dilemma of food getting more and more complex. As food continues to change, so do we, as we constantly strive for more and more, until we eventually want too much.
Nowadays, most Americans typically eat food that is already pre-prepared for them, or in other words food that is not healthy because it is not made with natural ingredients. Processed foods are on the rise, and Americans have “nearly doubled the amount of processed foods that they ate thirty years ago” (Lovelady). Processed foods are beneficial for people who are financially struggling in terms of today’s economy, due to the low cost in price, and this has become evident in supermarkets, restaurants, and many other stores nationwide. Also, processed foods contain trans-fats, which are the “worst type of fats… they raise your bad cholesterol and lower your good cholesterol” (mayoclinic.org). The main reason why Americans continuously consume so many trans-fats is because they are in so many processed foods, because they are known to “lengthen the shelf life of many foods” (Jones-Shoeman). The fact of the matter is that Americans are quite lazy, and if a little unhealthy substances can save a trip to the supermarket, most people are willing to take the chance of eating something unnecessary.
Obesity is a growing problem in America, and it is seriously impacting the way Americans are living their lives. Merriam-Webster defines obesity as a condition characterized by the excessive accumulation and storage of fat in the body (Merriam-Webster). This condition, gained easily through excess food consumption, can become extremely detrimental to the quality of one’s life. America is one of the most obese countries in the World with 69% of the adults being overweight and a whopping 36% of Americans being obese (Shah). This obesity doesn’t usually come from nowhere; approximately 17% of children aged 2 to 19 years old are obese. (Shah) With a high percentage of obese children in our country, and if not careful, our generation is on its way to possibly pass the 36% of obese people that currently live in the US. Obese people have to deal with a lot of challenges in life, including not being able to perform daily activities such as walking, but the issue that haunts them the most is the health issues they encounter.
The health problems that obese individuals face are vast. These problems include: type 2 diabetes, high blood pressure, heart disease, sleep apnea, strokes, cancer, kidney disease, fatty liver disease, pregnancy problems, etc. (Shah). Many of these are due to an excess consumption of food that can easily cause death. Many of these diseases can alter someone’s life by putting him or her into a wheelchair, crutches, or even a motorized vehicle. But the health concerns are one thing. The daily physical and emotional challenges someone faces who is obese can be downright terrible. If you are lucky enough to be thin, just imagine how carrying around an extra fifty or even 100 pounds might change your life. We often fail to notice the things we’ve grown accustomed to. Eating Cheetos and cheeseburgers tastes great in the moment. But the effects slowly chip away at our bodies and our minds.
Not only does obesity hurt the health of US citizens, it also severely damages their wallets and more importantly the wallet of America. Obesity costs the US 21% of the National Health Care budget, which turns out to be about 190 billion dollars annually (Shah) and 14 billion dollars of that budget is spent solely on childhood obesity. These mind-boggling facts about obesity really make us students step back and look at obesity from a much more serious and concerned perspective both financially and physically. Obesity is not something that should be taken lightly, and food is, unfortunately, not the only thing that is (consumed) used in excess in America.
Although it can be hard to go through a breakup or traumatizing event, emotional eating is not the answer. “Emotional eating is eating for reasons other than hunger,” says Jane Jakubczak, a registered dietitian at the University of Maryland (Feature). In college, I hear a lot of girls talking about emotional eating, but I never understood how much science was behind the term and how dangerous it can be. “Instead of the physical symptom of hunger initiating the eating, an emotion triggers the eating,” Jakubczak claims (Feature). Due to this non-natural symptom of hunger, people excessively eat food that they think will change their moods. These foods are commonly known as comfort foods and they can be tremendously unhealthy for you. “Comfort foods are foods a person eats to obtain or maintain a feeling,” says Brian Wansink, PhD, director of the Food and Brand Lab at the University of Illinois (Feature). Wansink also adds that “comfort foods are often associated with negative moods, and indeed, people often consume them when they’re down or depressed.” The main food associated with comfort food is chocolate (Feature). The most obvious side effect of eating too much chocolate is calories, but other side effects include dental problems related to the high sugar content, nervousness and irritability related to the high caffeine content, and gastrointestinal discomfort related to excessive consumption over short periods of time. These side effects can really hurt emotional eaters in the long run, making the short-term happiness of snacking really a huge negative in the long term. Emotional eating is only one of the small things in life that can make you happy in the short term, but doesn’t seem to be beneficial later on in one’s life.
Even though receiving that pay check at the end of the week feels great, it’s not a true source of happiness. Most people think that money is essential to our survival and that the more you have the happier you will be; however, having excess cash doesn’t necessarily make people feel any more content in the mornings. The effect of happiness resulting from more money caps at $75,000 (Luscombe). People who make below this amount have been observed as more depressed, but for those who make $75,000 or more a year, their scale of happiness seems to plateau. Also, people quickly adjust to a higher standard of living and eventually get bored and tired of it (Frank). They have so much already that buying more and more makes the effectiveness of the product’s satisfaction output less. Whenever there’s an environmental shock, such as a hurricane, the wealthy tend to work out their issues with minimal loss of happiness, but in daily life, there doesn’t seem to be much of a difference.
It’s no surprise that many people can’t handle receiving large sums of money without blowing it. It has been seen time and time again with professional athletes and lottery winners. They make a tremendous amount of money in a short period of time and consequently waste it on useless items until they have a reduced amount of money they had than before their winnings were introduced. Antoine Walker burned through $110 million; Vin Baker spent $93 million; and Mark Brunell originally made $50 million but is now $25 million in debt (Davis). All of whom were professional athletes and are now struggling financially. Also, about 70 percent of Americans who quickly win a large sum of money, such as the lottery, will lose it within a few years according to the National Endowment for Financial Education (DeLuca). Not only do we struggle with controlling our urges when we are presented with large sums of money, but we also don’t gain a substantial amount of satisfaction in our daily lives as a result of an increased income.
Many dream of earning enormous sums of money and strive towards this end without regard to other factors of their daily satisfaction. The American Dream is the possibility that if you work hard enough you will be happy. Though many people cling to this traditional imagery of the American Dream—that if you work to get what you want, you will be happy—others have realized working for nothing more than accumulating wealth rarely equates to happiness. In fact, the quest for unfathomable wealth not only fails to impress our peers, but also can lead an individual into having an unsatisfied outlook on life, resulting in more unhappiness. The 2012 documentary, The Queen of Versailles follows the Siegel family and depicts exactly the idea that the extremely wealthy who continue to strive for even more money are unhappy.
The Siegel family, owners of Westgate Resorts, is attempting to build the largest single family owned home in America, deemed the Versailles house. Jackie Siegel, 30 years younger to the 78-year-old CEO of Westgate Resorts, David Siegel, explains to the cameras, “[w]e are busting at the seams!” (The Queen of Versailles) They are determined to upgrade from their 26,000 square foot mansion into a home three times as large, modeled slightly after the Palace of Versailles (Scott). Jackie, a stereotypical trophy wife, is concerned solely on appearances of the Versailles home, hoping to express the family’s wealth through the exterior aesthetics of the house and frets over what paintings and furniture will decorate the interior.
Meanwhile, the 2008 recession hit David’s timeshare corporation enough to cause concern for the Siegel’s and lay off hundreds of Westgate employees. While Jackie exclaims, “the kids might have to go to college!” David quietly wonders if they will be able to afford college when the time comes. Jackie ignorantly continues to ask for more money and shops until she drops. She hardly notices when David tells her that she should spend less because they really will be in serious trouble if the recession continues to affect his profits much longer.
Some millionaires focus on giving money back to the community and donating to worthy causes, but Jackie Siegel decides to expand their home into the largest building owned by a single family which includes ten kitchens, thirty bathrooms, tennis courts, and, of course, a bowling alley. Everyone remembers the days when we fantasized about making enough money to afford our dream house, but seeing the reality of the ridiculously wealthy lifestyle alarms us more than causes us envy. Reviews of the documentary show how a variety of Americans react to the intriguing, yet disturbing images relayed directly from the lives of the top 1%. Most reviewers are “largely entertained” by the hilarious ignorance and hubris displayed by various members of the Siegel clan (Rotten Tomatoes). This goes to show money in and of itself won’t be buying respect anytime soon.
Cars are universally a symbol for American ingenuity and exponential improvement of technology. Every American has been in a car, and nearly every American family owns at least one car (Chase). They are an integral part of our lives that allow us to work and live in separate places, take vacations, get around quickly, and do things in the spur of the moment. While these are positive things, excessive use of cars is detrimental to us and the planet as a whole. While we have all heard of arguments against motor vehicles because of harmful emissions and excessive use of gasoline, it doesn’t end there.
Americans spend excessive amounts of time in their cars which deprives them of valuable exercise and often takes away an opportunity to form human relationships. For example, the average American worker who commutes to work sits in traffic when they could be at home spending valuable time with their families. This excessive use of cars leads to unnecessarily congested city streets, highways, and automobile accidents which causes direct injuries. The nature of the obsolescence employed by car manufactures inherently creates dissatisfaction from the owners of cars. An American driver buys a car one year, only to see a newer, better version of their car come on the market just a handful of months later. This can create a cycle of wanting and striving. For the last century, motor vehicles have driven America into its position as an economic and social powerhouse, but at a great cost to many of those who buy them.
In 2008, the housing market in the United States crashed. Similar to other collapses that have challenged the American economy (The Great Depression, The Panic of 1893, etc), the world economy was in jeopardy. How could something so terrible have happened? In our modern times, it seems like there should have been warning signs that would have predicted the downfall. So what happened?
Credit default swaps were invented. Credit default swaps are essentially insurance against the collapsed company bonds (Davidson). CDS, as they are known, became a very dangerous tool. As Credit Default Swaps are insurance bonds, and companies rarely collapse, “…that’s zero money down and a profit limited only by how many you can sell” (Davidson). So in essence, companies were selling insurance against something that was unlikely to happen and would in the short term gain a profit. Excess was so easy that some companies did not have a backup plan if and when things went wrong. Something did go wrong.
Enter a new character in our play: AIG. AIG was a CDS broker. While most companies would buy and sell CDS, AIG would only sell them. The last element in the equation comes in the form of the American homeowners. Picture a middle-class family. This family sees a very
nice house that is far out of their price range. Desire and sometimes even greed tells them they need it, and banks give them the money to buy it through tricky terms like CDO’s and MBS’s. But people skipped over the fact that they could not afford such houses. So people began to default on their debt and soon, “mortgage-backed securities and collateralized debt obligations became nearly worthless. Suddenly that seemingly low-risk event-an actual bond default-was happening daily. “The banks and hedge funds selling CDSs were no longer taking in free cash; they were having to pay out big money” (Davidson). AIG did not have enough money to cover the defaults and defaulted themselves. As a result, all the banks that had bought insurance from them were left up a creek and unable to keep money moving around the economy. This reverberated around the world and the global economy threatened to shut down.
Thus it became a reality that American consumerism and the desire for excess threatened not only the country, but the world at large. The greed of the consumer combined with the greed of the banks, which then combined with the greed of CDS brokers. This combined greed almost crashed not only the American economy, but the global economy. Our culture, which encouraged Americans to spend money they did not have, nearly demolished the economy which we had spent so much time and effort to make a global force. While there were many factors which led to the recession and it is certainly easy to blame the banks who were lending out faulty loans and taking advantage of the people’s lack of foresight, it was the American people who wanted these loans in the first place and forced a lifestyle which was beyond their means. Of course, it wasn’t all their fault. How can you blame someone for wanting a better a life, especially when there were all those “financial experts” out there telling them they deserve it and can afford it? Sure, there is nothing wrong with the pursuit of the American dream, yet when it is coupled with a sense of entitlement and a disregard for limits, it can lead to disaster. Therefore, it is time for our culture to grow more aware and become cognizant of the effect which each individual can have. We now live in a time of interconnectedness, and it is the responsibility of all of us to know the consequences of what some of our excessive wants have on those who are still in need.
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