William Wordsworth wrote his complaint about the masses despoiling the Lake District in 1807. I leave to the reader's imagination what his reaction to day-trippers coming by the London and North Western Railway would have been, or what lament he might have written about roller coasters being built at Blackpool Pleasure Beach. But with prosperity comes stuff for its own sake, and positional competition, and laments for what is lost, and fretting about What It All Means. Thus Book Review No. 8 considers Dalton Conley's Elsewhere, U. S. A.: How We Got from the Company Man, Family Dinners, and the Affluent Society to the Home Office, Blackberry Moms, and Economic Anxiety. Don't have to worry about any spoilers with that title. The book has a publication date of 2009, although the work on it appears to have finished before the housing bubble popped, and thus readers get an attempt to use every shiny model of social behavior (positional arms races! behavioral economics! information cascades!) to understand -- albeit not to consider reforms -- a way of life that might have already become history. Turn to page 84.
We all have to buy into this economic pyramid to keep it running. And since many of us enjoy decent, long-run returns on our 401 (k)s and our home values -- while simultaneously afflicted by fraud anxiety -- we tend to go along with the program and hope it all works out in the end.
Oops.
Come the next economic recovery, the substitution effect of a pay increase dominating in labor supply decisions -- which Professor Conley commingles with the fraud anxiety he refers to, and reinforces by the ability of improved communication to blur boundaries between work and home -- might again be counteracted by the income effect, something that is unlikely to surprise regular readers of Cold Spring Shops.
