CHAPTER 15
The Age of Affluenza
Advertising separates our era from all earlier ones as little else does.
—CONSERVATIVE ECONOMIST WILHELM RÖPKE
Any space you take in visually, anything you hear, in the future will be branded.
—REGINA KELLY,
Director of Strategic Planning, Satchi and Satchi Advertising
It’s morning in America,” announced the 1984 TV commercials for Ronald Reagan, whose message that Americans could have their cake and eat it too had overwhelmed the cautious conservationist Jimmy Carter four years earlier. And indeed, it was morning, the dawning, you might say, of the Age of Affluenza. Despite economic ups and downs, the last twenty years of the twentieth century would witness a commercial expansion unparalleled in history. Those Reagan commercials, small towns and smiling people in golden light, seem quaint now, more like the sunset of an old era than the morning of a new one. For one thing, there are no ads to be seen anywhere in the America pictured in those political commercials, no billboards, no product being sold except Reagan. That’s not America anymore.
Reagan’s decade may have been that of supply-side economics, but it was also the decade of demand creation. Yuppies were made, not born. “Greed is good,” chirruped Wall Street’s Ivan Boesky. The message of Reagan’s first inaugural ball and Nancy’s $15,000 dress was clear: It’s cool to consume and flaunt it. The tone of ‘80s advertising echoed the sentiment: “Treat Yourself. You Deserve a Break Today. You’re Worth It.” Look out for number one.
ADFLUENZA
That advertising’s prime purpose is to promote affluenza is hardly a secret, as even its proponents have frequently stated in different words. As Pierre Martineau, the marketing director for the Chicago Tribune, put it back in 1957, “Advertising’s most important social function is to integrate the individual into our present-day American high-speed consumption economy.”1 “The average individual doesn’t make anything,” wrote Martineau in his classic text Motivation in Advertising. “He buys everything, and our economy is geared to the faster and faster tempo of his buying, based on wants which are created by advertising in large degree.” This was no critic of advertising expressing himself, but one of its most prominent practitioners.
“Our American level of living is the highest of any people in the world,” Martineau went on to say, “because our standard of living is the highest, meaning that our wants are the highest. In spite of those intellectuals who deplore the restlessness and the dissatisfaction in the wake of those new wants created by advertising and who actually therefore propose to restrict the process, it must be clear that the well-being of our entire system depends on how much motivation is supplied the consumer to make him continue wanting.” Were Pierre Martineau still alive, he would doubtless be proud to see how much motivation is now supplied to keep consumers “wanting.”
If, as the old saying goes, “a man’s home is his castle,” then Madison Avenue has battering rams galore. Two-thirds of the space in our newspapers is now devoted to advertising. Nearly half the mail we receive is selling something.
THE HIGH COST OF MOTIVATION
You could call it couch potato blight. The average American will spend nearly two years of his or her lifetime watching TV commercials.2 A child may see a million of them before he or she reaches the age of twenty. There is more time devoted to them now—the average half-hour of commercial TV now has ten minutes of commercials, up from six two decades ago. And there are more of them—faster editing (to beat the remote control clicker), and the increasing cost of commercial time has shortened the length of the average ad.
They are phenomenally expensive: a typical 30-second national TV commercial now costs more than $300,000 to produce—that’s $10,000 per second! By contrast, production costs for an entire hour of prime-time public television are about the same—$300,000, or $83 a second. Commercial network programming is somewhat more expensive but can’t hold a candle to the cost of the ads. Is it any wonder that some people say they’re the best thing on TV?
Moreover, it costs companies hundreds of thousands of dollars every time their ads are broadcast during national prime-time programming. In fact, thirty-second slots during the Super Bowl sold for as much as $4 million each.3 Advertising, the prime carrier of the affluenza virus, is now a half-a-trillion-dollar-a-year industry worldwide, with the United States accounting for about a third of the total. Procter & Gamble alone spent nearly three billion, and Comcast, Verizon, Toyota, GM, Chrysler, ATT, News Corp, and Berkshire Hathaway all came in at over a billion each.4
It’s paying off. In 1997, when NPR’s Scott Simon asked teenagers at a Maryland Mall what they were buying, they ran off a list of brand names: Donna Karan, Calvin Klein, Tommy Hilfiger, American Eagle. A recent study showed that while the average American can identify fewer than ten types of plants, he or she recognizes hundreds of corporate logos.5
WELCOME TO LOGOTOPIA
In the effort to create demand, marketers now seek to place commercial messages everywhere. By 2000, outdoor advertising was a $5-billion-a-year industry (and growing at a rate of 10 percent a year), with more than a billion spent on billboards alone. “Outdoor advertising is red-hot right now,” says Brad Johnson in Advertising Age. “There’s a shortage of space available.”6 Nearly fifty years after Lady Bird Johnson’s Beautify America Campaign, our landscape is filled with more billboards than ever. The ad critic Laurie Mazur calls them “litter on a stick.” “From a marketers perspective, billboards are perfect,” says Mazur. “You can’t turn them off. You can’t click them with remote control.”
Mazur points out that marketers themselves say the ad environment has become “cluttered,” so smart sellers look for ever-new places to put ads. Schools, as discussed in the chapter “Family Fractures,” are one target, reached in a myriad of ways, including corporate logos in math text books: “If Joe has thirty Oreo™ cookies and eats fifteen, how many does he have left?” Of course there’s a big picture of Oreos on the page. The publisher might want to add another question: How many cavities does Joe have?
“Advertising is just permeating every corner of our society,” says Michael Jacobson, coauthor with Mazur of Marketing Madness. “When you’re watching a sports event, you see ads in the stadium. You see athletes wearing logos. You see ads in public restrooms. Some police cars now have ads. There are ads in holes on golf courses. And there are thousands of people who are trying to think of one more place to put an ad where nobody has yet put the ad.”7
THE MARKETERS’ MOON
The extreme idea for advertising placement, says Jacobson, “is the billboard that was proposed for outer space that would project logos about the size of the moon that would be visible to practically everyone on earth.”
When the moon fills the sky like a big pizza pie, it’s—Domino’s! Imagine a romantic walk at night in the light of the full logo.
For now, the idea of logos in outer space is still a marketer’s pipe dream, but, says Jacobson, “What is the limit? Maybe outer space, but down here on earth we’re willing to accept just about everything.”
Night of the Living Consumer
Perhaps the biggest expansion of commercialism in the Age of Affluenza is occurring on the Internet. Ads are popping up like mushrooms on the information highway. In 2012, for the first time, total spending on Internet ads exceeded $100 billion, up from $72 billion in 2010. Nearly 40 percent is spent in North America. By 2016, more than a quarter of all advertising dollars will be digitally directed (it’s one dollar in five currently).8 And of course, this doesn’t even consider the phenomenal increase in e-mail spam that all of us are tearing our hair out over these days. What was hailed as an educator’s Eden has become a seller’s paradise instead, as e-commerce attracts billions of investment and advertising dollars.
There is, admittedly, a bright spot in this grim scenario. We don’t know about you, but since President George W. Bush signed the “Do Not Call” legislation in 2003, and we signed on, we’ve stopped getting those irritating dinner time calls from people who want to clean our carpets or sell us something we don’t need. Apparently, even market-worshipping legislators were tired of having their dinners interrupted.
HYPERCOMMERCIALISM
Our hypercommercial era is one in which images are everywhere, and “image,” as tennis star Andre Agassi says in the sunglasses commercial, “is everything.” The daily bombardment of advertising images leaves us forever dissatisfied with our own appearance and that of our real-life partner. “Advertising encourages us to meet nonmaterial needs through material ends,” says Mazur. “It tells us to buy their product because we’ll be loved, we’ll be accepted, and also it tells us that we are not lovable and acceptable without buying their product.”9 To be lovable and acceptable is to have the right image. Authenticity be damned.
Back in 1958, a prominent conservative economist and staunch defender of the free enterprise system warned that the twentieth century might well end up being known as “the Age of Advertising.” Wilhelm Röpke feared that if commercialism were “allowed to predominate and to sway society in all its spheres,” the results would be disastrous in many ways. As the cult of selling grows in importance, Röpke wrote, “every gesture of courtesy, kindness and neighborliness is degraded into a move behind which we suspect ulterior motives.”10 A culture of mutual distrust arises.
“The curse of commercialization is that it results in the standards of the market spreading into regions which should remain beyond supply and demand,” Röpke added. “This vitiates the true purposes, dignity and savor of life and thereby makes it unbearably ugly, undignified and dull.”
Only by limiting the scope of its reach, claimed Röpke, could the free market system be expected to continue to serve the greater good. Extreme commercialization, the very sine qua non of our era, would, if not kept in check, “destroy the free economy by the blind exaggeration of its principle.”
FINANCIAL COLLAPSE
In 2008, of course, it almost happened. Thirty years of deregulation, privatization, and tax cutting came to a head when the economy nearly collapsed following a major financial crash. “Capitalism at bay,” sounded the alarm from The Economist. In the wink of an eye, trillions of dollars in financial wealth disappeared overnight. The precipitating incident was a sudden increase in mortgage failures, as many families were increasingly unable to make their house payments. In the years before, the authors of this book had warned that overextended borrowers were getting into big trouble.
To anyone watching the economy, this was not news. It was clear that real median wages for American workers had been stagnant for more than two decades, even while productivity doubled, since all the gains in income and wealth had accumulated at the top. Nonetheless, Americans had not stopped consuming more; indeed, through the nineties they spent as if there was no tomorrow. People were positively giddy about their ability to consume more in 1997, when the film Affluenza was first released. But greater consumption did not rest on higher incomes; rather, it was driven by more members of the family working, longer hours of work, and a massive expansion of consumer debt.
Much of this debt was fueled by rising housing prices. Those just entering the market were investing more than they could afford on the hunch that the price increases would continue indefinitely. Those already in the market, believing the value of their properties would continue to rise without limit, financed their consumption sprees by taking out second mortgages. These strategies were temporarily successful, but ultimately the growth of inequality and the flat growth in real median income caught up to them. People could simply not afford more expensive housing, and many could not keep up with their existing debt. The housing market fell as we, and many others, warned that it would.
After the crash, we were called by interviewers in the United States and from as far away as Norway and Brazil, credited with having predicted the financial crash. We had done no such thing; we only suggested that many individuals would lose their shirt. We were clueless about the possibility that these individual failures could take the entire economy down. But they did.
In the Age of Affluenza, the champions of deregulation and the “greed is good” ethic of Ivan Boesky had been quietly gambling away America’s finances. For a clear, probing, and deliciously funny examination of all this, see the wonderful Whoops! by the British author John Lanchester.11
Arguing that limits on financial speculation (in place since the Glass-Steagal Act of 1933 had put a firewall between commercial and investment banks) would kill the goose that laid the golden egg of the booming housing market, the bankers lobbied Congress to repeal that law and to ban the effective regulation of new financial instruments called derivatives, which allowed the continual bundling and resale of home mortgages, opening up increasing capital to loan out new and even more risky mortgages to potential homeowners.
They did this by pushing homeownership on lower-income Americans, often for homes that were well beyond the buyers’ means. In some cases, this included wholesale dishonesty (Banker: “Sir, what is your annual income?” Buyer: $30,000. Banker: “You need an annual income of $60,000 to be approved for this loan. Why don’t we just write down that you make $60,000 a year instead?” Buyer: “You can do that?” Banker: “Sure, just sign here. You deserve a better house.”) For all of this chicanery, the speculators took home fabulous bonuses, sometimes equal to what the average American earned in several decades.
The consumers’ feverish expectations combined with the bankers’ greed to create ever-more-risky mortgages that were then bundled with supposedly safer mortgages to create supposedly fail-safe derivatives, which earned AAA ratings from less-than-diligent oversight agencies. Meanwhile, a few smart investors realized what ticking time bombs these derivatives would be if enough mortgages failed. They were allowed to purchase what was essentially insurance on the derivatives (whether they owned them or not—imagine being able to buy fire insurance for every house in your neighborhood). Big insurance firms like AIG, initially unaware of the risks contained in the derivatives, were happy to sell trillions of dollars’ worth of this insurance, known as “credit default swaps” in bank parlance.
We knew nothing about this, but its implications were huge. When individual mortgages began to fail, the supposedly safe derivatives also failed, taking down some of the banks that had sold them. Then, the holders of credit default insurance tried to collect on the failed derivatives, bankrupting firms like AIG, which did not have nearly enough funds on hand to meet their obligations. The whole house of cards, based on the values of affluenza—materialism and greed—fell apart. But the greediest, the purveyors of the crisis, didn’t suffer. They were bailed out by the victims—everyday workers—to the tune of $700 billion. Remember another Golden Rule: Those with the gold make the rules.
Although they did take a short-term hit, the big banks are back in business. Wall Street has successfully protected itself against a new round of regulations that would have reinstituted Glass-Steagal and other economic protections. The housing market is starting to reheat, and we could see déjà vu all over again, to use the immortal expression of Yogi Berra. The financial crisis, like the World Trade Center attacks of 2001, did temporarily slow the march of affluenza, but only by imposing a round of fear-induced involuntary simplicity.
One senses that the American people have learned little from their brush with the deadly virus; indeed, the lesson for our politicians seems to be either that we are not deregulating enough or cutting rich Americans’ taxes enough (Republicans), or that we simply need to spend our way back to the future (Democrats). But these two “solutions” are simply two sides to affluenza’s counterfeit coin. Instead, the questions that need answering are
1. Austerity for whom? Conservatives seem to believe it is the poor who must be austere rather than the rich, whose greed promulgated the crisis.
2. Stimulus of what? Growth of what? In an age of ecological limits we cannot simply continue to grow. Progressives should be asked, “What should grow and what must shrink?”
But in the Age of Affluenza, these are precisely the questions we are least likely to hear.