And now it is clear what the economy of the US depends upon – it is advertising. Ad revenues drives the internet, it has caused newspapers to be bereft of sustenance, and it will inexorably be withdrawn from television once streaming becomes an unstoppable force. Those who have the highest profit margins appear to advertise the most. Hence the proliferation of pharmaceutical ads intended to draw consumers to the latest pill or injection allowed by the Federal regulatory bodies. You also see advertising for automobiles blanketing the airwaves. That is due in part to the business model requiring local dealerships. The local dealerships keep trying to wrest market share from other dealers (and car brands). Of course, the ads for the car brands are meaningful reflections of the American public. Who doesn’t want to be highlighted as the most masculine consumer out there, and the high energy products of the Dodge division will be sure to rub off on you if only you buy our cars.
Now, we see the next phase of advertising. All of the sports betting sites are showing off how much fun you can have by throwing your money down a black hole by selecting their site as your bookie of choice. I feel sorry for the underworld. One by one their markets are being usurped by legal ways to lose your own money.
Another area of the economy where money appears to be sloshing around is in the world of Medicare supplemental insurance. How many older celebrities can be resurrected on ads convincing gullible seniors to turn all of their health care needs over to a local HMO, who will be sure to have your best interests at heart as they try to glom onto yet another sucker. This is one where both the advertising dollars are at work, and the phone banks work actively too. We are some of the rare individuals who will answer calls on our landline for unfamiliar numbers. Since my wife is just about to become Medicare-eligible, we are receiving a large number of calls offering to assist her in her choices. My experience has shown the more effort made to separate you from your money, the more money is available to be made. With the plethora of people actively involved in trying to steer your decision, it is obvious Medicare is a gold mine for many companies.
For decades, the American economy has been dependent upon consumer spending. It was things that drove the economy, things manufactured in this nation. Now? As much money is spent on transient things as is spent on real items. Look at cell phones. The service that is sold can afford to underwrite the hardware (actual cell phone), and you end up paying the service a multiple of the price of the physical hardware. Of course, you are also paying for the signal being available, so energy and materials are used to build and maintain transmission towers. This is the hidden portion that backs up the handy signal you depend upon.
Just this year, we’ve seen the first crumbling of the “everything is available whenever you want it economy”. We’ve all been exposed to the barren shelfs in supermarkets, where product is totally unavailable at any price. From cream cheese, to canned cat foods, to infant formula, and toilet paper, we’ve seen what can happen when demand exceeds the ability of companies to deliver product in an efficient manner. In our spoiled society, we grow petulant when we are told we can’t have something the instant we want it. We look for scapegoats, and often it is the politicians in power who are blamed for any and all failures in supply chains. It is surprising how much we are in favor of free-enterprise solutions up until the time of a failure. Then we expect the government to have been anticipating problems, and are ready to throw the rascals out of office if they failed in their response.
In the coming years, many more things will either be unavailable, or only available at a price well above what we remember. We will see more things manufactured in the US, but will find out the cost is greater due to the higher costs in this country. The short-term memory of the US consumer and voter will once more blame the government for the higher prices, blissfully ignoring their previous desire to locally source the manufacture. We will have many chances to learn patience, and learn to be grateful for what we do have. I’m afraid, though, that we are so spoiled we will strike out in anger if we are told something is not available, or is much more expensive. Look at our experience with gas prices. People were not willing to take responsibility for their decisions to buy ever-larger vehicles. No, it became a huge crisis when the price of gas deviated from what people viewed as their right – to keep consuming energy without dealing with the true costs. We in the US are particularly spoiled – we view the rest of the world as our pantry, and expect all others to bow down before us since we are so exceptional. Except we are no longer that exceptional nation sharing our cornucopia with the rest of the world. No, we view it as our due to be able to consume on demand with no limitations. It will be difficult to adjust to a world with limits, but that is where we are.