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Economics, OWS

The Tryptophan of Black Friday

I didn’t want to talk about this.  I swear I didn’t.  Every year passes and I see this spectacle occur and I feel like I Iose a bit of my soul, but I just want to wait until normalcy returns and the memory fades away for another 365 days.  Enough is enough though…

Black Friday is one of the worst examples of Americana that has ever been created.  Period.

Personally, I wish I could stand in line for hours to get a door buster to buy Black Friday for $50 (regularly priced $11.4B), along with the wood I bought with my “buy-two-get-one-free” coupon,  and the gasoline I bought for 0% off (at least one thing isn’t on sale on Black Friday), go into a Walmart parking lot and burn Black Friday in a huge bonfire.  And it would be a really, really, huge bonfire given how excessive Black Friday has become.

In economics, there is a phenomenon called the “winner’s curse.”  Basically, the term is used to describe situations where a winning bid in an auction (think EBay) exceeds the value of the item purchased.   Or in the words of post-Fugees, pre-seclusion Lauryn Hill…“you might win some, but you really lost one.”  This occurs most often because of incomplete information or emotional decision making on the buyer’s part.  Either the buyer doesn’t know that they might be buying a lemon, or they are so excited by the prospect of getting the chance while others do not, that it doesn’t even cross their mind to check for the lemony zestiness.

Well, Black Friday is the ultimate winner’s curse.

Let’s start with the emotional.  If I offered you $40 to hold my spot in line for hours at the Department of Motor Vehicles on one of your few vacation days, I think there’s a 95% chance that I would be met with a hearty, hold your stomach and wipe your eyes, laugh…if I’m lucky.  Even more likely would be a quick dismissal, and a look of…are you crazy?  Yet as crazy as I admittedly might be, that is essentially what people are signing up for on Black Friday.  That doesn’t make a lot of sense to me.  It can’t only be the dollars saved by braving the stampeding crowds which appeals to people, can it?   When America turns into a massive flea market for a day, it’s not surprising that people find pleasure in finding a deal.  Any deal.  And beating someone else to the deal.  Literally…beating (or shanking, shooting or pepper spraying depending on your preferred use of deadly weapon) someone else to the deal.  And all of a sudden, there you are, showing your butt crack climbing over someone to get to a $2 waffle maker that you’ll use twice, maybe, before it makes its case for clemency as a future yard sale item.

It’s a nationwide feeding frenzy, to the point that it resembles a pack of animals in the wild feeding on the carcass of  captured prey, except that, in this case, the people doing the “feeding” are the actual prey.  And this is the incomplete information aspect of the winner’s curse.  While we may think that we are getting a great “deal,” in fact, we don’t actually know how much damage we are doing to ourselves in the process.   Black Friday is a brilliant marketing gimmick of a “holiday” to reinforce to a lot of Americans (the 99%?) the tremendous desire to continue spending money they don’t have.  Instead of saving, like normal people (i.e., the rest of the world), we spend.  Our economy depends on it.  But what good is it if you have lots of stuff and 3% annual GDP growth, if you, personally, are deeply indebted.   All that does is enrich the 1%.  Notice, I am not even arguing whether the goods are worth buying or not.  I may not think they are, but that’s for each individual to decide.  And I am not necessarily advocating “buying nothing” as some other do.  All I am saying is that if we don’t connect the dots and recognize that buying stuff on credit that one cannot pay back, at big retailers that care more about their bottom line than the well-being of Americans, then there will always be more people camping out for hours in front of Best Buy willingly giving away their (economic) independence instead of camping out fighting for (economic) justice.  We are getting played in the worst way, like a sort of Stockholm Syndrome where we no longer even realize we are being played.  Or as it was captured more succinctly: “death, destruction, poverty, oppression….OHHH SOMETHING SHINY!!!!!”

Ironically, if we adhered to the original intent of the term Black Friday, we might have been saved from this winner’s curse.  In fact, it was not until the go-go 80s of Ronnie and trickle down that the term was repurposed to mean the day that all retailers became profitable:

“In 1966, Black Friday was the name the Philadelphia Police Department gave to the Friday after Thanksgiving.  The police hated the day — massive traffic jams, overcrowded sidewalks, lots of shoplifters — all because downtown Philly stores were filled with shoppers taking advantage of the first holiday sales.

The goal was to make it a day that shoppers wanted to avoid…”

Ah….the good ol days!

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Discussion

2 thoughts on “The Tryptophan of Black Friday

  1. agree on everything 100%. this behavior is completely irrational on so many levels. while it is certainly possible to point the finger at what i only describe as predatory advertising by retailers, the majority of the blame for the fiasco otherwise known as “black friday” falls onto consumers. it is amazing that people fall for the same thing every year. what the 99% don’t realize is that they collectively have political and economic power in the form of purchasing power; the $52 billion in sales receipts demonstrate this. the power, however, reveals itself when that money isn’t spent rather then when it is. the large majority of that $52 billion, as you correctly point out, is, through one channel or another, eventually funneled to the 1% who laugh all the way to the proverbial bank. folks need to sit on their cash just like the rich folk and corporations are doing now. yes in the short term the economy is likely to suffer, but it will hopefully expedite and precipitate the major recalibration for which so many, most notably OWS, are calling. without these revenues, politicians and corporations will be more likely to listen; we cannot just keep feeding the beast. i won’t even touch the fact that >95% of the consumer goods that were purchased this weekend were made overseas.
    the BIGGEST issue that needs to be addressed is how americans define happiness. as a nation, we define self worth through the (mostly useless) things that we own versus the talents we possesses or the good deeds we do for one another. at the end of the day the problems of consumerism in this country are as much a moral problem as they are an economic one. we need to shift what we value away from consumption and towards personal enrichment independently of whatever economic legislation is passed (or not passed these days). how to do this is the real challenge.

    Posted by dorian | November 28, 2011, 1:48 pm
    • I think the comment re where the consumer goods are purchased is a big deal and thanks for mentioning it. The accompanying issue to that is how much do these companies actually employ people, contribute in taxes, and overall, what good they provide to society. With that, the only area of mild disagreement I would have with your comment is that people don’t necessarily need to sit on their cash (assuming they have it), but instead could choose to spend at companies that provide benefits to society and are not a net drag due to negative externalities. Reducing spending and increasing saving…yes. But someone has to spend something or else economic activity grinds to a halt. At least, if we spent our money at “good” companies, we wouldn’t be directly shooting ourselves in the foot repeatedly.

      Posted by chico | November 28, 2011, 5:05 pm

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