I really, truly want to have sympathy for those individuals who bought mini-mansions during the 90's, only to see the value of said "McMansions" dwindle to something akin to a 100 year old coal shanty in Dupont. The problem is that I don't. Now I do see why having millions of foreclosures is bad for our economy in general, and tragic for many industries specifically. That doesn't change the fact that, once again, our society is engaged in rewarding bad behavior. It doesn't stop there though.
In my mind, the single biggest problem our society faces in an over-reliance on consumer consumption as a driver of economic growth. I'm not anti-consumption, but I am anti-stupid consumption. Yes, I think, for example, that Ipods are great...I don't have one (I have two "other brand" MP3 players)...but I've purchased them for my kids over the years and they seem to be wonderful products. However how many Ipods are sold each year simply because someone simply wants the 'newest, coolest' Ipod? That's just one example of one consumer product, and I could go on, but the underlying point is the same. We just consume stupidly, not out of need, but out of some bizarre desire that leads some to believe that happiness can somehow be found in isle 14 of your local WalMart.
It's not just consumers and retailers that share the blame here: government has done more than it's part. Just look at a very basic element of the tax code:
You get a tax deduction for borrowing money to buy a home or if you take out a home equity loan to buy "stuff"
You actually have to pay tax on money that you don't use for consumption but instead put away and save for a rainy day
Yes, we've managed to intertwine our consumption uber-alles mentality into our very tax code.
Now someone could take all of this is just being the ramblings of a freak (me), and that's okay. However there is more to this than simply my twisted observations. On a very macro level, this is killing our economy. We are the largest debtor nation on Earth in part because we simply love to spend. Our savings rate is among the lowest in the developed world and we maintain a negative balance of trade with nations like China who are thrilled to turn their third world into first world economies by selling us lead painted toys and cadmium-laced jewelry. Anyone out there actually think the Chinese government is our "friend"?
On a more micro level, we have raised generations believing that the worth of a person lies in the kind of clothes they wear, what kind of car they drive, and what neighborhood they live in. We've taught people that the best jobs don't involve getting dirty. Funny, but when my furnace is out, the most valuable person on Earth isn't a stock broker or corporate CEO, it's my plumber. We've taught people that somehow consumption = happiness. The problem is that consumption is like an opiate: it may make you temporarily high, but over the long term all it really does is make you want more of the drug (in this case, consume more).
All of the above noted, I've been just as guilty as the rest when it comes to consumption. I'd like to believe though that my eyes have been slowly opened over time. I've had help, mind you, over the years from several different directions that have taught me that mindless consumption is just that: mindless. It also helped that, when growing up, we simply didn't have a lot. Personally now I'm in a much better place than I was growing up, but I have seen that true happiness never comes from something outside...it always comes from within. That's not something you can pick-up at WalMart, and it's not made in China.