Spending our way to wealth
President Franklin Delano Roosevelt, pictured here in a 1932 "whistle stop" in Maryland, was the first of a string of chief executives to advocate for a consumer economy to raise wealth.
TEXT OF STORY
Scott Jagow: Everyone knows what this country stands for: Life, liberty and . . . shopping?
Shopper Woman: It's part of the pursuit of happiness -- the desire to consume.
Shopper Man: Part of the joy of living.
Shopper Woman #2: One of the highlights of my life is to go shopping!
It wasn't that long ago that being thrifty was America's number one virtue. So, what happened? Marketplace's Sarah Gardner takes us back in time.
Sarah Gardner: It all started in the 1930's. Franklin Roosevelt might have been the first president to think of Americans as "consumers" as well as citizens.
President Franklin D. Roosevelt: If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the marketplace.
The Great Depression had ravaged the American economy, and the White House saw hope in a bold new economic theory.
Harvard historian Lizabeth Cohen:
Lizabeth Cohen: FDR, and many who advised him, felt that the best route out of the Depression was putting money in consumers' pockets so they could, in a sense, buy us out of the Great Depression.
So-called "Keynesian economics" took hold -- a theory that promoted spending, both private and public, as a way to stimulate the economy.
Newsreel voice-over: Tens of thousands of men on one single payroll have money for themselves and for their families to spend . . .
As America mobilized for World War II, spending became downright patriotic:
Newsreel voice-over: Fresh buying power floods into all the stores of every community . . .
By 1950, Harry Truman proudly told Americans the medicine was working.
President Harry Truman: In the last 50 years, the income of the average family has increased so greatly that its buying power has doubled.
American presidents continued to celebrate consumerism during the Cold War. Remember the so-called "Kitchen Debate" between then vice-president Nixon and Soviet leader Nikita Kruschev?
President Richard Nixon: In order for both of us to benefit (interrupted by Russian)... For both of us to benefit (interrupted by Russian)... You see, you never concede anything!
In front of a model of an American home at a Moscow exhibition, the two leaders spontaneously debated whether communism or consumerism was the winning strategy.
Nixon: There are some instances where you may be ahead of us. There may be some instances -- for example, color television -- where we're ahead of you.
If there ever was a chill in consumption's presidential embrace, it was Jimmy Carter. Faced with an oil crisis, job losses and stagflation during the 70's, Carter's instinct was to try to wean people off the gravy train.
President Jimmy Carter: Too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns.
Carter was defeated by a landslide the next year.
His successor, Ronald Reagan, showed his political radar was more in tune when he repeatedly asked voters:
President Ronald Reagan: Are you better off than you were four years ago?
American consumerism, however, may have achieved a new level of presidential support in George W. Bush. After the attacks of 9-11, Bush asked Americans not to ration consumer goods or plant victory gardens, but to continue participating in the American economy. Five years later, he was even blunter:
President George W. Bush: And I encourage you all to go shopping more.
Spending is now more than patriotic -- it's become the American way of life.
I'm Sarah Gardner for Marketplace.