Tag Archives: consumption

McMansions and the “inconspicuous consumption” of the 1990s

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One aspect of McMansions that is frequently discussed is the tie between such houses and larger patterns of excessive consumption. Here is a quote from a CEO of a Pennsylvania construction company that does just this:

“The new-home industry will have to respond to the market for smaller lot size and efficient home construction,” Wagman said. “We’re past the building of McMansions. That type of inconspicuous consumption is so ’90s.”

To be honest, I didn’t quite know what this term “inconspicuous term” meant. I know what conspicuous consumption as it is a common sociological term first introduced by Thorstein Veblen in his 1899 work The Theory of the Leisure Class. So I went digging around Google for the meaning of this term and how it relates to Veblen’s term. This piece from The Economist in 2005 argues that conspicuous consumption is now much more complex in wealthy, Western societies and so inconspicuous consumption still shows off wealth but in more subtle ways:

As well as traditional conspicuous consumption and “self-treating”, Ledbury Research identifies two other motives that are driving buying by the rich: connoisseurship and being an “early adopter”. Both are arguably consumption that is conspicuous only to those you really want to impress. Connoisseurs are people whom their friends respect for their deep knowledge of, say, fine wine or handmade Swiss watches. Early adopters are those who are first with a new technology. Silicon Valley millionaires currently impress their friends by buying an amphibian vehicle to avoid the commuter traffic on the Bay Bridge. Several millionaires have already paid $50,000 a go to clone their pet cat.

Who knew that spending lavishing to show off one’s wealth and status had become so difficult? In 2008, Virginia Postrel says something similar:

The shift away from conspicuous consumption—from goods to services and experiences—can also make luxury more exclusive. Anyone with $6,000 can buy a limited-edition Bottega Veneta bag, an elaborately beaded Roberto Cavalli minidress, or a Cartier watch. Or, for the same sum, you can register for the TED conference. That $6,000 ticket entitles you to spend four days in California hearing short talks by brainy innovators, famous (Frank Gehry, Amy Tan, Brian Greene) and not-so-known. You get to mingle with smart, curious people, all of whom have $6,000 to spare. But to go to TED, you need more than cash. The conference directors have to deem you interesting enough to merit one of the 1,450 spots. It’s the intellectual equivalent of a velvet rope.

As for goods, forget showing off. “If you want to live like a billionaire, buy a $12,000 bed,” says a financial-planner friend of mine. You can’t park a mattress in your driveway, but it will last for decades and you can enjoy it every night.

So we’ve moved away from garish displays of spending to more exclusive but somewhat more hidden ways to display wealth.

If we return then to the quote from the construction CEO, what exactly was he getting at? A few thoughts:

1. If he is adhering to a similar definition as The Economist piece or Virginia Postrel, then he is suggesting that McMansions were a more subtle display of wealth. But it seems that a lot of the criticism of McMansions comes from the idea that the owners are trying (desperately) to flaunt their wealth in the form of their large, garish house. So is McMansion buying a conspicuous or inconspicuous act? Might there be different opinions if we talk to the buyers/owners of such homes (after all, people need to live somewhere) versus McMansion critics (but people don’t have to live in mass-produced, poorly designed homes)?

2. He suggests that the inconspicuous consumption of McMansions took place during the 1990s. The late 1990s is where the term McMansion started to take off but the houses themselves seemed to receive the most attention from roughly 2000 to the start of the current economic/housing crisis. Perhaps the 1990s get singled out here because of a good economy in the latter half of the decade but much McMansion building and purchasing was still taking place until recent years.

(3. I wonder if he simply didn’t mean to say “conspicuous consumption” and said “inconspicuous consumption” instead.)

(Amazon also has a 1997 book that uses this term as a title: Inconspicuous Consumption: An Obsessive Look at the Stuff We Take for Granted, from the Everyday to the Obscure. Interestingly, it is written by Paul Lukas, the mind also behind Uni Watch, a blog with the tagline of “The Obsessive Study of Athletics Aesthetics.” It appears Lukas is still writing about the same topics for ESPN.com but I haven’t seen his material featured in years. When it was more prominently featured, I would read his thoughts quite often.)

A narrative about McMansions at the heart of the economic crisis

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With an ongoing economic crisis and housing slump, there are plenty of stories about who has been hit the hardest. But one writer suggests that perhaps we can’t just simply say that those who were excessive in their consumption and purchased McMansions are the only ones affected:

With an ongoing economic crisis and housing slump, one target of blame is McMansion buyers. But one writer suggests the economic crisis affects more people than just those who consumed beyond their means:

The nation’s lingering housing foreclosure mess is too often about folks with McMansion-size aspirations and duplex paychecks, granite counter appetites and laminate budgets.

And when we hear that one of the nation’s hot spots for foreclosures is Prince William County, we nod knowingly, thinking of the vast tracts of huge new homes and the dreamers who drowned in them.

But the other day, I met some of the folks who lost their homes or are fighting with banks to try to keep them. And McMansion isn’t what comes to mind.

The rest of the story goes on to describe the stories of a few people who lived more modest lifestyles and yet have still fallen into housing issues.

I would be interested in seeing some figures about what kinds of homes or types of owners are those who have experienced the most foreclosures or mortgage difficulties. Is it really McMansion owners or others? We hear quite a bit about regional differences, such as high vacancy rates in Florida and high foreclosure rates in certain states or cities, but less about other factors.

In reading this one particular story, I wonder why people might be quick to jump on people like those who live in Prince William County (a wealthy county – this Wikipedia list has it as the 14th highest county in the country in terms of median household income). How much of this is a moral judgment leveled against McMansion owners and houses more broadly? With this housing crisis, it now looks like McMansions are also a bad economic deal, adding to the other issues that critics say McMansions have.

An argument for why we should be hearing more about falling home prices

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The last several years have seen many stories published and produced about homes and home values. But Dan Froomkin argues that we should be hearing even more about how home values continue to fall:

You might not know it from reading the news, but the nation’s housing prices are in free fall again…

Despite the fact that the nation is officially in a period of economic recovery, the latest data show that home prices are diving. One recent survey pegged the decline at 0.7 percent per month; another found prices down 5.8 percent between August and October.

One analysis found  home values will likely drop more than $1.7 trillion this year, on top of the $1.05 trillion drop in 2009. That would bring the loss in wealth to $9 trillion since the June 2006 market peak, when the housing stock was valued at about $24 trillion…

Dean Baker, co-director of the liberal Center for Economic and Policy Research, tells me the story isn’t getting nearly as much coverage as it should — if nothing else because “as you see a drop in home equity, you also see a drop in consumption.”…

What that means is that another trillion-dollar loss in housing wealth — something that could easily happen by next fall — translates to $50 billion to $70 billion less consumption; sort of an anti-stimulus.

This is obviously not good news. I wonder what Froomkin would say the value is in having Americans hear this story more often and with more emphasis: would people be moved to act in certain ways, like making requests of politicians to do something or trying to get out of homeownership?

A link is made in this story between home values, consumption, and jobs. So if this is a vicious cycle that involves these three factors, where do we begin in trying to reverse the trend? With tax cuts – or extensions of tax cuts? It sounds like the one issue that would help out the others is jobs. If more people had good-paying and stable jobs, they would spend more overall and some of these issues of home values wouldn’t be as much of a concern.

h/t Instapundit

What the advertising in the magazines you subscribe to says about you

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One book one of my classes is recently reading, The Suburban Christian,  offered this simple method for measuring your consumption levels (or perhaps what you aspire to consume): look at the advertising and the goods for sale in the magazines that you subscribe to.

This reminds me of something I noticed a few months into my first subscription to The Atlantic. I like this magazine for its reporting and commentary but I noticed that the advertisements were for luxury items I had no hope of buying and had never really even dreamed of buying. These goods were on par with the commercials that suggest that buying your spouse a Lexus with a giant bow on the top is the appropriate Christmas present.

This diagnostic would seem to fit with Juliet Schor’s ideas in The Overspent American about reference groups. Schor argues that media, television in particular, has presented Americans in the last few decades with a distorted view of the middle class. The typical TV middle-class family lives in a large house, seems not have any financial problems or even worries, has all sorts of popular consumer objects, and it is hard to tell if they even work. The average American watches these kinds of shows and starts comparing themselves to these middle-class TV families and raising their consumer aspirations to match what they see. Similarly, magazine advertisements suggest a certain lifestyle or things that the average American needs. These pitches can have a subtle but marked impact on who we compare ourselves to and what we think we need.