Money Cant Buy Happiness. Er, Can It?

By PAUL KRUGMAN
CAMBRIDGE, Mass. -- A few weeks ago my wife and
I finally gave in to the pressures of modern
life and acquired a cell phone. But it turned
out that once we had the thing we had a few
questions -- questions we couldn't get answered,
because customer service was swamped with
similar calls from the thousands of other people
who had recently signed on.
Meanwhile, my parents started calling
contractors about some minor work on their house
-- only to be told that every carpenter and
plumber in the area was booked well into next
year.
Talk to almost any middle-CLASS American, and
you will hear similar stories -- about poor
service, excessive traffic, overpriced housing
and so on. In fact, there seems to be a sort of
rising chorus of complaints about the annoyances
of prosperity -- complaints, in effect, that
spending lots of money isn't as gratifying as
people expected it to be. Most of this is petty
stuff, but it is just possible that the chorus
of complaints marks the beginning of a broader
shift in attitudes -- a shift that will be
healthy if it doesn't come too quickly.
Of course, people don't complain about the
disappointments of prosperity unless they are
prosperous, and in a way all this whining is a
symptom of a remarkably successful era in
American economic history. Still, you don't have
to be an ascetic to wonder if there isn't
something a bit manic about the pace of getting
and -- especially -- spending in fin-de-siècle
America.
Even the dry statistics suggest that something a
little strange is going on. Consider: we are now
eight years into an economic expansion. Consumer
spending traditionally lags behind the economy
as a whole in boom times, because families
figure that times will not always be that good
and that they should save for a rainy day.
This time, however, consumers are leading the
charge: while the economy expanded an impressive
4 percent between the first quarter of 1998 and
the first quarter of 1999, consumption grew 5.5
percent, and spending on consumer durables --
cell phones, bathroom fixtures, S.U.V.'s and
home entertainment systems -- surged an
incredible 12 percent.
There are at least two reasons to question
whether America's consumption boom is really a
good thing.
One is that by conventional standards, the
typical American family is being a bit, well,

imprudent in spending so much -- indeed,
personal savings, never high in this country,
have now disappeared almost completely. True,
millions of families have seen their wealth
surge because of a soaring stock market, but
while more people than ever own stock, most
still have no significant personal stake in the
market.
You might argue that ordinary families are
spending freely, despite sluggish wage growth,
because they believe that prosperity is here to
stay. But survey evidence suggests that many
workers remain nervous about job security