Covid did a number. I’m not talking about suicides or drug abuse or other much publicized ways the epidemic left its mark. None of that is insignificant. But, it is worth turning our attention to more widespread effects, those evident in the way a broad spectrum of people are reacting to the plague that they withstood. The most immediate effect is in attitudes. An awful lot of people are feeling they better have as many nice days now as they can. More than ever they want what used to seem like indulgences. Experiences, purchases, dreams of all types are more likely considered worth doing. Right now!
Ally Bank, whose online platform started allowing customers to create savings buckets for different goals in 2020, said users create about 50% more experience-oriented buckets such as travel and “fun funds” versus those associated with longer-term planning. Delta Air Lines reported record revenue in the second quarter and Ticketmaster sold over 295 million event tickets in the first six months of 2023, up nearly 18% year-over-year. An article on the front page of the Wall Street Journal describes Ibby Hussain’s attitude. Instead of saving for a down payment like he expected to after turning 30 and getting engaged in the past year, he splurged. First, he bought a $1,600 Taylor Swift Eras Tour ticket and then he spent $3,500 on a bachelor-party trip to Ibiza, Spain. “I might as well just enjoy what I have now,” he said.
Josh Richner said he greatly lowered his retirement contribution to afford a trip that included a $7,000 Alaskan cruise so his family could see the ice caps, which have been melting. “I’ve never spent that much on a trip before.”
It isn’t always luxuries, pie in the sky extravagances. Widespread willingness to spend whatever it takes is one of the current causes of our inflation. Consumers are disregarding price leaps in groceries, at restaurants, vacations, hotels, air travel and anything else they might normally show caution about. Why save for the future? It’s now or never.
Not just spending. That job that never matched up to what was hoped for, those countless hours given to the company in the hope of future advancement, why bother? It’s nuts. Why keep your job if it doesn’t go along with your expectations? 25 is the new 35 when it comes to work week hours. 22 million Americans now work part time. Only 4.1 million of those would prefer a full-time job. That statistic is unprecedented. It is six times the normal ratio. The reasons are not always far flung. Earlier in the pandemic, amid lockdowns and restrictions, some workers may have had their hours cut and realized they preferred a less demanding schedule.
There are a variety of reasons people tell themselves about why they are working less. Family responsibilities, the realization that they don’t need all the goodies they thought they had to have, having time for things that are more important to them means more than time eaten up at work. Senator Paul Tsongas has been credited with this aphorism. “No one on their deathbed ever said, ‘I wish I’d spent more time at work. No person ever says they wish they had worked harder. I never heard a dying man say, ‘I wish I’d spent more time at the office.’” Lately, many seem to find wisdom in that. Very recently the “quit rate” has moderated after spiking in recent years but there are no statistics on how many workers are unwilling to give their boss extra hours.
Companies making consumer products have been completely surprised by the lack of price resistance they now encounter. It is a dream come true for marketers, a chance to make a buck, a lot of bucks. Before they had to cautiously pursue price increases. No longer. The marketplace is undaunted. Yes, there are countervailing forces. High tech people being laid off, worrisome data of all sorts. And most recently, statistics are showing that, but nevertheless people want to spend and spend. The previous assumptions of sellers no longer apply. It defies all logic. Except the logic of a widespread fear that we might be dead tomorrow.
Will it pass? Probably. It always does. Prices will get too high. So, the desire to live it up will fade into a temptation rather than a need to plunge ahead. And very possibly old motivations will return, like keeping up with the Jones, meaning working your butt off and gathering together your savings. People will have to work to stay in the game. That’s assuming marijuana use will not keep growing. The same for Adderall and Fentanyl and alcohol. When the meaning of life is having pleasure while you can, having as many nice days as possible, drugs provide relief from the bored malaise resulting from so many free hours. It is easy to blame Purdue for Oxycontin, and Mexican immigrants for bringing Fentanyl, and Big Pharma for the ADHD nonsense feeding amphetamines to millions, but none of this would be possible if the market wasn’t there, without widespread consumer desire for altered consciousness. Normally the willingness to party continuously is limited by the need to go back to work.
I am assuming all of this will eventually change. More and more the focus on our mortality will fade into our unconscious and the need to pleasure ourselves will become less desperate. However, we cannot be certain that we will go back to the old ways so quickly.
Following the Spanish Flu and the horror of World War I, the United States had inflation in 1918 and 1919. I am not an economist so I am certain there were other explanations, as there are for our current inflation. But I should add that this was followed by the Roaring 20’s. And we all know how that decade ended. Is history repeating itself?
I am not sure just how important what I have described, fearing our mortality, is influencing our current culture. In times past, people turned to more and more prayer when they felt anxiety. Since the 80’s fears of death have led people to jog and control their sugar and cholesterol and all kinds of exotic practices and herbs they read about. That became a substitute for religion, bringing new definitions of virtue and vice. These strategies assumed we could do something about it, prevent early disease and extend our lives by going along with the new rules. There was no certainty about exactly what needed to be done, and plenty of foolishness. However, making the effort was not doubted. Not everyone practiced this religion, but the payoff was clearly understood. Making the effort was seen as worth it.
Covid was different. It demanded drastic action, closing down work places, schools, shopping, travel, restaurants, movie theatres—basically the substance of our existence, something that has never happened before in our lifetimes. Surprisingly, considering how extreme it was, many people took it in stride. Despite the nonsense pumped out by “experts”, everyone knew that no one knew what to do other than make guesses based on dubious data. People were willing to support the extreme measures that they were told were necessary either because they were convinced, or wanted to believe, or were forced by the government to follow its guidelines. It took a huge panic for us to accept the disassembling of our lives as we ordinarily lived it.
Many of our recent problems, such as the chaos resulting from broken supply lines and the inflationary effect of shortages, have pretty much passed. It isn’t altogether panic about tomorrow driving the live for today attitudes. Many had forgotten how sweet free time can be. They don’t want to work the long hours that defined their existence pre-Covid. They have tasted again the freedom of childhood. So what about the consequences. The hard-working Asians were eventually going to surpass us anyway.