Is the recession turning us into a nation of scrimpers and savers? Are Americans renouncing consumerism and being reborn as anti-materialists?

I tend to agree with Rob Walker, whose “Consumed” column in the Dec. 12, 2008 New York Times Sunday Magazine came to this conclusion: not yet. At this point, Walker said, people’s “evident hesitation to spend seems more like a function of fear than of frugality.” He notes that debt loads may be down a few bucks, but so is access to credit; and while a few of us are going without luxuries, “there is also news that others are going without fulfilling our doctors’ prescriptions.”

And of course, thrift is relative. Another recent Times piece reported that certain hedge fund investors are taking up the simple life by selling their yachts.

One thing I’ve learned from a recent flurry of media interest in my 2006 book, Not Buying It: My Year Without Shopping is that the already frugal are getting a hit of long-deserved attention. Radio call-in show listeners tell me that they’re gardening and canning, dressing from thrift stores, and recycling last year’s holiday cards. This indicates they must have been thrifty at least since last spring (when they planted the gardens) or even last Christmas, when they packed those cards away in the closet. Or maybe they’re just slow at throwing things away, which turns out to be a useful character flaw in a recession.

It is hard for me to imagine we are all going to start saving our holiday cards or return to Depression era values. After all, consumer credit was invented to get the economy out of that slump – and advertisers and other attitude adjusters had to work to convince people to use it. During the 1950s, renewed indoctrination got us to embrace another crucial element of the consumer economy: disposability. When Dixie cups first popped out of coffee machines, people washed them and took them home to reuse. Advertisers were brought in to teach us that a re-used paper cup was “unsanitary.” And then during the 1990s and 2000s we got used to believing the bottom would never drop out and we could buy on credit forever.

There’s some good news here: if we can be convinced to be spendthrifts, we can also relearn thrift. Or moderation, anyhow.

Because, even though I spent a whole year buying basically nothing—it was a form of ordeal art, you could say—I do not recommend absolute abstinence from shopping. Sex educators and dieters will tell you that abstinence doesn’t work. The appetite returns, and then you really can’t control yourself. You end up pregnant or fatter than you were before. It’s not a solution.

So are we condemned to our over-consuming ways? Rob Walker says it’s fear, not a new morality of frugality, that’s keeping our wallets shut. But fear may change our values toward frugality.

Something’s gotta give. Because, the way we’re going, we can’t sustain the economy, our personal budgets, and the planet all at once. The economy depends on consumer spending for two-thirds of the GNP. It needs us to shop. But we can’t afford to keep shopping (we can’t even afford to buy food and send our kids to college); our personal debt is crushing us. And then there’s the poor Earth. The growth economy that produces, ships, propels, and disposes of things at an ever-increasing rate will soon outgrow its finite environment.

We have no choice but to drag the macro-economy into balance with the limits of our pocketbooks and our planet. And that will require an attitude change.

Weirder things have happened.  Just ask anyone who saved string and soap shards during the Depression and now owns a 20,000-square-foot house and two cars, all mortgaged to the sky.

Jared Bernstein has just joined UP’s board of directors. He is a senior economist at the Economic Policy Institute and author of  just-released “Crunch: Why Do I Feel So Squeezed (And Other Unsolved Economic Mysteries)” Below is an excerpt from the TPM Cafe Book Club at http://tpmcafe.talkingpointsmemo.com/tpmcafe-book-club/ where Jared, Barbara Ehrenreich, and others discuss today’s economy in terms of real people.

Let’s Talk “Crunch”

By Jared Bernstein – April 7, 2008, 9:56AM

First, I want to thank TPM’s Andrew Golis for setting up this book club. Second, I want to thank Brad DeLong, Barbara Ehrenreich, and Alan Viard for agreeing to post along with me on “Crunch” over the next few days (Tyler Cowan is a “maybe”—I’m hoping he will post some responses too).

A bunch of “Crunch” is me answering real people’s questions about the economy—not wonk’s questions, but actual questions gathered from folks who are interested in matters economic but not necessarily schooled in them. The questions range from the definitional: “What’s GDP; how’s unemployment defined,” and “What does the Federal Reserve do, anyway?” and the timely: “What are bubbles and what is a recession?” There are behavioral questions, like “Should I give money to a homeless person or hire an undocumented worker?” as well as policy questions and solutions, like “Do other countries really spend less than we do on health care with better results?” or “Are budget deficits really a problem?”

And, of course, “Why do I feel so squeezed?”

 Please click on the link to view the entire discussion:

http://tpmcafe.talkingpointsmemo.com/tpmcafe-book-club/

The soothsayers have slaughtered the ox and are examining the gloppy entrails for signs: Rising unemployment, a falling dollar, weak consumer spending, the credit crisis, a swooning stock market. Could there be something wrong here? Could we actually be approaching a, god forbid, recession?

To which the only sane response is: Who cares? According to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical – or at least the newspapers’ standard – definition of a recession, which specifies that there must be at least two consecutive quarters of negative growth in the GDP. But most of the public employs the more colloquial definition of a recession, which is hard times. If hard times have already fallen on a majority of Americans, then “recession” doesn’t seem to be a very useful term any more.

 The economists’ odd fixation on growth as a measure of economic well-being puts them in a parallel universe of their own. WorldMoneyWatch’s website tells us that, for example, that “The GDP growth rate is the most important indicator of economic health. If GDP is growing, so will business, jobs and personal income.” And the latest issue of US News and World Report advises, “The key… for America is to keep its economy growing as fast as possible without triggering inflation.”

But hellooo, we’ve had brisk growth for the last few years, as the president always likes to remind us, only without those promised increases in personal income, at least not for the middle class. Growth, some of the economists are conceding in perplexity, has been “de-coupled” from mass prosperity. Growth is not the only economic indicator that has let us down recently. In the last five years, America’s briskly rising productivity has been the envy of much of the world. But at the same time, real wages have actually declined. It’s not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.And what about the unemployment rate? The old liberal faith was that “full employment” would create a workers’ paradise, with higher wages and enhanced bargaining power for the little guy and gal. But we’ve had nearly full employment, or at least an unemployment rate of under five percent, for years now, again, without the predicted gains. What the old liberals weren’t counting on was a depressed minimum wage, impotent unions, and a witch’s brew of management strategies to hold wages and salaries down.

Now if those great and solemn economic indicators – growth, productivity and employment rates – have become de-coupled from most people’s lived experience, then there’s something wrong with the economists, the economy, or both. The clue lies in the word “most.” We have become so unequal as a nation that we increasingly occupy two different economies – one for the rich and one for everyone else — and the latter has been in a recession, if not a depression, for a long, long time. Not all economists can bring themselves to admit this.

I suspect that America’s fabulous growth in productivity is another illustration of the disconnect between economic measures and human experience. It’s been attributed to better education and technological advances, which would be nice to believe in. But a revealing 2001 study by McKinsey also credited America’s productivity growth to “managerial innovations” and cited Wal-Mart as a model performer, meaning that we are also looking at fiendish schemes to extract more work for less pay. Yes, you can generate more output per apparent hour of work by falsifying time records, speeding up assembly lines, doubling workloads, and cutting back on breaks. Productivity may look good from the top, but at the middle and the bottom it can feel a lot like pain. 

When employees are squeezed hard enough, then you have the possibility of a genuine recession as technically defined. People buy less, so growth declines, to the point where even the economic over-class has to sit up and take notice. This is happening in Japan, where a recent Wall Street Journal headline announces: “Growing Reliance on Temps Holds Back Japan’s Rebound: Firms Increasingly Add Part-Time Workers; Spending Power Lags.” The U.S., where consumer spending accounts for 70 percent of the economy compared to a little more than half in Japan, is even more vulnerable to a downturn in personal consumption.

What is this fixation on growth anyway? As a general rule of biological survival, any creature or entity that depends on perpetual growth is well worth avoiding, lest you be eaten alive. As Bill McKibben argues in his book Deep Economy, the “cult of growth” has led to global warming, ghastly levels of pollution, and diminishing resources. Tumors grow, at least until they kill their hosts; economies ought to be sustainable.

Apocalypse aside, the mantra of growth has deceived us for far too long. What it translates into is: Don’t worry about the relative size of your slice, just concentrate on growing the pie! Now, with a recession threatening even more suffering for those who are already struggling, may be the perfect time to get out the pie-cutter again.