The received economic wisdom is that a recession is a bad time to save money. As the economist John Maynard Keynes argued, thrift is no virtue in a recession.
Edward Glaeser makes this point in a New York Times Economix blog post, which is all well and good. It’s the points he makes immediately thereafter that aren’t good. At all.
“Encourage your wealthy neighbors to buy new Cadillacs. Each car they buy will mean a little less bailout money that we’ll have to come up with.”
A Cadillac is a GODAWFUL CARBON SPUME (to the tune of about 15,600 lbs per year if driven 15,000 miles) … almost 3 times worse than a Prius.
The 1908 Ford Model T got 25 miles per gallon. The average I calculated of six Cadillac models is 15 city/22 hwy. The Cadillac doesn’t even do as well on the highway as a car from 100 years ago!
Encourage people to buy a Cadillac? No. No no no no. 15,600 times no.
Glaeser also suggests “a good round of Easter and Passover presents.”
I counter-suggest that Glaeser take a look at The Story of Stuff. Or, just skip to some of the handy facts from it, like this one: In the past three decades, one-third of the planet’s natural resources base have been consumed.
Or the estimate that it would take 3 to 5 planets to sustain the current U.S. way of life and consumption. I wonder: does macroeconomics have models for acquiring other planets?
Got money? Buy a bicycle. Weatherize your house. Buy a compost bin and start using it. Most of these support local economies and are better in the long run than Cadillacs, holiday gift schlock, and similarly harebrained “spur the economy” ideas.