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by Rob Horning

21 Aug 2009

Yves Smith noted a WSJ article reporting diminishing retail sales and heralding the new austerity in American consumers. This tidbit didn’t quite fit the frame: “A cashier at Target in Los Angeles checks the authenticity of $100 bills.” Counterfeiting is not exactly the act of an austere, frugal consumer, though it may be the act of debt-starved one. 

Zero Hedge unleashed a long analysis of “the stratified American consumer” last weekend, making the useful point that the way the designation “American consumer” is thrown around tends to conceal the fact that it is not a homogeneous group. Statements like “Major retailers reported that American consumers are continuing to hunker down” from the WSJ article are not especially useful, because it is extrapolating a universal mental framework from aggregate macro data. (The same problem arises when a negative savings rate is extrapolated into “all Americans are spendthrifts,” a rhetorically tempting logical leap I’ve certainly been guilty of.) Zero Hedge:

A drill down of disposable net income (after tax) and net worth, demonstrates why any discussion of “generic” consumers should be much more properly phrased as an observation of the “Wealthy” and “Everyone else”. The disposable income difference between the richest 10% and even the next richest decile is staggering: a 3x order of magnitude….
While 10% of the population collects 40% of disposable income, it represents 57% of net worth! This is an impressive conclusion: on a lowest common denominator, the Net Worth variance between the 10% of the population that make up the wealthy and the 50% that comprise the middle class is over 8x! No wonder the aspirational consumer was the most vibrant retail category at the peak of the bubble: if the middle class can not accumulate 8x the net worth it needs to migrate into the top decile, it can at least dress like it. Unfortunately, it did these purchases on credit and is now paying for it (or not).

The upshot of this analysis is not surprising, but worth reiterating: that the data trends tracked regarding consumption reveal consumerism as a middle-class phenomenon driven probably by status envy of the upper-middle class for the upper-upper class. That the gap is widening means that the consumers now discovering austerity aren’t liking it very much and that there is no paradigm shift to a culture of maximum utility extraction. Also worth noting: The lower classes (the bottom 40% who consume 12% of what’s consumed in America) are statistically and economically irrelevant. I wonder if there is a social corollary to that—beneath a certain income point, one’s subsistence-style consumption becomes anonymous. The thought inspires in me a classic middle-class fantasy of the escape into squalor, a la the George Orwell of Down and Out in London and Paris: the dream that subsistence living is automatically authentic, and this authenticity compensates for the misery of relative deprivation.

The conclusions drawn in the Zero Hedge post seem ominous: The recession has hurt the lower and middle classes more than the wealthy, and has merely increased the wealthy’s advantage. Calls for a consumer-led recovery will draw on their increased spending power, and when that spending shows up in the data it will mask the fact that more people in America are making do with less—suffering the new frugality at the conspicuous spenders’ expense.

Is it safe to say that the wealthy have managed to game the system yet again and avoided a significant loss of wealth, while maintaining sufficient access to credit? If in fact that is the case, a case could be made for a consumer lead-recovery, granted one that is massively skewed to the 10% of the population which consumes 42% in the US.

At that point, all the talk of the era of frugality will be over, even though more of us will be living it. What the Zero Hedge scenario means, as some others have remarked (now I can’t find the links, grr), the U.S. will become more like Brazil—a wealthy elite, with a monopoly on the social power that comes from the power to spend in a consumer society, living in gated communities with elaborate collections of luxury goods, with bodyguards for their children and so on, while the rest of the population is increasingly impoverished.

It reminds me of Baudelaire’s The Eyes of the Poor, the poor family staring in at the lovers in their leisure at a “dazzling” cafe, whose decorations depicted “all history and all mythology pandering to gluttony.” Increasingly, we are becoming that poor family, spectators of the heroic consumption of the upper classes. Thanks to the inexpensiveness of media entertainment, we consume the cheap images of their class status and derive what gratification we can.

The eyes of the father said: “How beautiful it is! How beautiful it is! All the gold of the poor world must have found its way onto those walls.” The eyes of the little boy: “How beautiful it is! How beautiful it is! But it is a house where only people who are not like us can go.” As for the baby, he was much too fascinated to express anything but joy—utterly stupid and profound.

Meanwhile economic forces cement the boundary between us and those in the cafe enjoying the splendor, continue the redistribution upward, making sure we can do nothing but marvel at wealth.

by Nick Dinicola

21 Aug 2009

I recently renewed my Xbox Live gold account, and I was reminded of the first time that I signed up for it just over a year ago. A friend came to visit and brought Battlefield: Bad Company, and convinced me to sign up for a gold account right then and there. It was easy but only because I already had a silver account and wireless adapter. Getting to that initial point required more effort and money than it was worth. In that short span of a year, online connectivity has become a major selling point for games and consoles. Nearly every new triple-A game has some form of online play, either competitive or cooperative, and even some multiplayer-only games have jumped from the PC to the consoles. The consoles themselves embrace the online world with a mix of downloadable games and community features. Yet, for all of this hype and support, there are many unnecessary hurdles a customer has to face before getting connected. Hurdles that can easily scare someone away, and that have consistently gone untended. Despite their apparent interest in the online space, Microsoft, Sony, and Nintendo are shooting themselves in the foot.

Microsoft, arguably, has the most invested in its online offerings. There are many aspects of Live that make it an actual community and not just a mish-mash of anonymous people playing the same game. The party system and standard headset encourage communication among players, and the avatars give people a unique visual identity in addition to their chosen gamertag. Members can watch movies from Netflix, with more from Facebook, Twitter, and Last.fm coming in the fall. The “Summer of Arcade,” a five week period which highlights certain Xbox Live Arcade games, has become a yearly promotion, and 1 vs. 100 has emerged as a popular community game that appeals to gamers of every ilk. Yet entering this online world is costly. The hard drive, a necessity when it comes to downloadable games and content games, is prohibitively expensive, as is Microsoft’s official wireless adapter. Even then you only get a silver account, to get a gold account and actually play online with others you have to pay a yearly fee. There’s a workaround for people who don’t want to pay for the adapter, but with all the focus placed on Live and its features, people shouldn’t have to want a workaround.

Sony has invested just as much, if not more, with a couple ambitious projects. There’s Home, Sony’s attempt at social networking through games, and in what is perhaps the biggest thrust towards online gaming, the PSP Go will only play downloaded games. It’s easier to get online with the PlaySation 3 since the console comes with a hard drive and wi-fi built in, and the PlayStation Network has a good selection of games, movies, and re-releases of original PlayStation games. Sony even has its version of the “Summer of Arcade” titled “Spring Fever.” While Sony is risking a lot with its online features, support for these features is rare (with the exception of the PSP Go since it’s not out yet). Many gamers have forgotten about Home since there are never any major promotions or events to encourage people to visit. Original PlayStations games are rarely released, so Sony has failed to capitalize on gamer nostalgia in that regard. There’s no standard headset, making many multiplayer games oddly quiet. And the 20GB model (which, it should be noted, has since been discontinued) has no built-in wi-fi, so anyone unfortunate enough to buy that model has to figure out for themselves how to get online. Not an insurmountable problem, but one that shouldn’t exist considering how much Sony has invested online.

Nintendo is seen as having the least to offer online, and this holds true when compared to Microsoft and Sony. The biggest draw of the other consoles is their competitive multiplayer, something lacking on the Wii since most of Nintendo’s focus has gone into the Wii’s online stores: There’s WiiWare for small games made exclusively for the console, the Virtual Console for re-releases of older games, and DSiWare for games or applications made for the portable. The Wii also has built-in wi-fi, so getting connected is incredibly easy. There’s no standard headset, but since there are very few games that even offer online multiplayer, this isn’t as big of a problem as it is for the PlayStation 3. Yet even though Nintendo has a much narrower focus towards its online features, it still has its fair share of unreasonable issues. The Wii doesn’t store credit card or billing info, so you have to input that information every time you want to buy something, a repetitive task nearly unheard of in this age of online shopping. There are no demos, a fact made worse when you take into account the number of sub-par games released to the service. Friend Codes are a twelve digit code that identify you console, but they’re different for every game that uses Nintendo’s Wi-Fi Connection, so if you play multiple games online you have to keep a record of multiple Friend Codes. In addition, Nintendo doesn’t promote its online service at all. Microsoft has its “Summer of Arcade,” Sony has its Spring Fever,” but no downloadable game for WiiWare receives any promotion by Nintendo. It’s as if the service doesn’t exist.

As more focus is put into online features, it should be made easier to get online and access those features. But while each company has a lot to offer, they seem unwilling to support those offerings beyond simple marketing, and Nintendo doesn’t even that. I’m sure there are many people who have a 360 that uses the blades system. They’re the kind of people who only use their console one in a while, and have no desire to pay for all the peripherals needed to connect online, or compete with others not on the couch next to them. Convincing these people to get online will be difficult, if not impossible, if these hurdles remain.

by Chris Barsanti

21 Aug 2009

It’s often said about ambitiously failed works of art that they have greatness in them. That but for the grace of the muses – a better edit here, a dialogue tweak there – the work in question would have been able to vault that shadowy and indistinct line that separate those things which ultimately worked and those that didn’t. This isn’t much help to the filmmakers, of course, because such statements are often left vague and fuzzy, the speaker trailing off into an indecipherable musing on what exactly it was that left them so nonplussed.

In the case of Quentin Tarantino’s Inglorious Basterds, the film doesn’t just have greatness in it, there’s mighty rivers of greatness simply leaking out of the thing. Its multi-lingual dialogue sings and trills with dangerously poetic abandon. The spine-shivering soundtrack is heaped high with deeply wonderful slabs of tweaked Morricone and Schifrin, not to mention an excitingly repurposed David Bowie track from his “Let’s Dance” period. There’s at least two Oscar-worthy performances in here, and that reckoning doesn’t even take into account watching Brad Pitt – as a flinty Appalachian officer leading his titular band of Jewish-American soldiers around the Western Front scalping Nazis – having more fun than he’s been witnessed experiencing on-screen since the early 1990s.

by Tommy Marx

21 Aug 2009

Dancing with the Stars has recently released the names of the contestants for the new season, and questionable celebrity status aside, two of them are one-hit wonders (and one is an almost).

Macy Gray reached national prominence after “I Try”, the second release from her debut album, spent half a year on the Billboard Hot 100, eventually peaking at #5. The single won her a Grammy Award for “Best Female Pop Vocal Performance” in 2001.

Unfortunately, with the exception of a featured role on the Black Eyed Peas’ “Request Line” (which stalled at #63), none of Macy’s subsequent singles have cracked the Hot 100. She has remained busy, however, acting in movies including Training Day and Lackawanna Blues in between recording albums. She has also guest starred on That’s So Raven, American Dreams, and other television series from time to time.

by Thomas Hauner

20 Aug 2009

//Mixed media
//Blogs

The Sound and the Warmth: An Interview with Cardiknox

// Sound Affects

"New York's Cardiknox are taking more steps in their goal of world domination. With their debut record Portrait out, the band are dreaming big, wanting to transcend the indie pop scene.

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