Okay gang, only a few shopping days left to make this the biggest grossing holiday in the history of capitalism. And so far, so good. Running the numbers in mid-December, Mark Zandi, chief economist at Moody’s Economy.com, predicted this year’s Christmas sales will beat 2004 by a robust 6 percent.
Similarly, the National Retail Federation, the world’s largest retail trade association, revised its holiday sales forecast upward in late November and projected the same 6 percent increase over 2004, to $440 billion. For November and December, that’s sales of over $7 billion per day or, figuring a 12-hour sales day, well over $500 million per hour.
On the economic side of things, cash registers ringing at those record levels generate higher paychecks and more job security for the 23 million Americans who work in retail, the sector that employs one of every five
More than that, the good news snowballs past retail as that 20 percent of the workforce does better and spends more, thereby creating more jobs and more income in the other areas of the economy. It’s what economists call the multiplier effect, the process by which any new increase in income ends up expanding total incomes in the economy by three or four times that amount as each person spends his new income and creates new income for the next person.
On the social end, other things being equal, those enhanced paychecks and higher levels of job security are directly correlated with fewer family breakups, less crime, fewer suicides, less poverty, and, overall, a lower level of human misery. As
And rich trickles down, unavoidably, even if liberals won’t admit it.[1] Let’s say, for example, that a rich guy puts a big red bow on an $82,000 Cadillac XLR convertible for his wife for Christmas. Aside from creating envy among the neighbors and relatives, what’s also created in the first round, automatically, by that $82,000 in spending is exactly $82,000 in new income, with roughly three-quarters of it going to labor. And in due course, by way of successive rounds of spending, that $82,000 turns into three or four times that much in new income, with the vast majority of it, again, going to labor.
The Pope’s not happy about any of this. Speaking to a large crowd gathered in St. Peter’s Square in early December, just as Christmas sales were getting some traction, Benedict XVI, fully decked out in fancy papal regalia and surrounded by billions in art and assorted treasures, warned against creeping materialism and what he called the “commercial pollution” of the holiday season.
On both counts, economically and morally, the good pontiff may be a bit off base. What’s worse than Christmas shopping and its subsequent job creation is inadequate Christmas spending and unemployment. Further, as regards the Pope’s disapproval of some guy getting a few sweaters and a snow shovel under the tree at Christmas, it seems that a re-reading of the sentences about the log and the speck is in order at the
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D’Alessandro suggested a sale of these obscure but valuable items in order to keep some struggling parishes afloat, especially since many of those churches and schools are in the red only because the bill has come due for the misdeeds of generations of priests and a hierarchy that looked the other way.
In terms of economics and the reduction of human misery, the purchase of a XLR convertible, 0 to 60 in 4.9 seconds, does more to cut joblessness, spread the wealth, and get rid of poverty than a string of Roman basements and vaults full of old figurines covered with cobwebs.
I’m no theologian, but for the church to denounce the alleged materialism of the average Joe while it hoards its own pile of gold seems like a perfect illustration of the hypocrisy that Jesus spoke about: “Why do you see the speck in your neighbor’s eye, but do not notice the log in your own eye? You hypocrite, first take the log out of your own eye.
[1] Editor’s Note: Or, more accurately, pulls people up. Comments Ayn Rand on the “Pyramid of Ability”:
Material products can’t be shared, they belong to some ultimate consumer; it is only the value of an idea that can be shared with unlimited numbers of men, making all sharers richer at no one’s sacrifice or loss, raising the productive capacity of whatever labor they perform. It is the value of his own time that the strong of the intellect transfers to the weak, letting them work on the jobs he discovered, while devoting his time to further discoveries. This is mutual trade to mutual advantage; the interests of the mind are one, no matter what the degree of intelligence, among men who desire to work and don’t seek or expect the unearned.
In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns. But the man who works as a janitor in the factory producing that invention, receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men between, on all levels of ambition and ability. The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains. Such is the nature of the “competition” between the strong and the weak of the intellect. Such is the pattern of “exploitation” for which you have damned the strong.
