Is Christmas a Big Deal for the Economy?

There’s a quaint old story that you may have heard before:

A wise man provides a valuable service to a king, and in return the king offers the wise man anything he can ask for. The wise man smiles and thanks the king for his magnanimity, but says he only asks that one single grain of wheat be placed on the first square of a chessboard, then two grains on the next square, and then three grains on the third square, and so on until the chessboard is filled up. The king shrugs at this odd request, but orders that it be so. As a meager portion of grain is placed on the first few squares everyone thinks the wise man has chosen foolishly. But as more and more spaces are filled with increasing numbers of grains it dawns on them that the quantity of wheat is more and more substantial. The wise man has, after all, gained a great boon in a surprising way!

 

This story illustrates how hard it can sometimes be to judge quantities. And the same difficulty arises with respect to the economic effect of various stimuli, including Christmas shopping. Here’s a clip from a recent news report from ABC News:

With only six days left before Christmas, holiday shoppers are flooding the malls and local stores. Nearly half of shoppers have not finished their Christmas shopping yet, and the traditional biggest shopping days — Black Friday, Cyber Monday, and Green Monday — are all behind us. The outlook seems to be that it’s shaping to be a robust season for the economy.

We’ve heard before that “holiday shopping” provides a big boost to the economy. I found one site that says it is “the largest economic stimulus” of all:

Christmas is typically the largest economic stimulus for many nations around the world as sales increase dramatically in almost all retail areas.

But just how big a deal is Christmas retail sales and the boost it gives to the economy? We get a pretty good answer from the Census Bureau’s report on Retail Sales. The link shows the source of the data, which is probably about as complete and accurate a tally as exists. My chart illustrates the trend for last year:

 

[Source: US Census Bureau]
[Source: US Census Bureau]
You can see the uptick there at the right edge of the chart — signalling the month of December. But does that really look like a big deal? December is the month with the highest total, but not by much. One of the sites I link above contends that the holiday shopping season accounts for nearly 20% of all US retail sales. That is true — if you define the holiday shopping season to include nearly 20% of the year and include all sales during that time as “holiday shopping.”

December sales were $371 billion, or 10.3% of the annual total. The monthly average was around $301 billion. The month with the lowest sales total is February, which is not surprising simply because it has only 28 days. If you consider that people eat food and brush their teeth and change their socks and replace lost umbrellas and damaged smartphones in December just as they do in every other month — and that most of the money they spend in December is spent on the same things they spend money on in every other month — it comes clear that the December boost is only about $69 billion or 1.9% of annual sales. That is a far cry from the exaggerated nearly 20% claimed by the news story.

I once had a heated argument with someone about the economic boost associated with hosting a Super Bowl. He insisted the effect was astounding because of all the people who would be eating food in restaurants and staying in hotels and riding in cabs and so forth. I agreed that those activities were all helpful spurs to economic activity. But I asked him, “Do you know another time when people eat at restaurants and stay in hotels and ride in cabs? Every single other day of the year!” He just wouldn’t hear it, and when I showed him numbers, he wouldn’t consider those either.

So, chalk up the hoopla about holiday shopping to another lazy, routinized news story. Remember that what really boosts an economy is ordinary people going about their ordinary lives. No government initiative or specially negotiated deal works as well as a fair system where everybody is working and paying and living and dying like normal. And is it asking too much to have them work and pay and live and die in a couple of decent rooms and a bath (and affordable health care and good public education)? Anyway, the datasaur doesn’t think so.

 

Christmas is a big deal, by the way, in terms of religious and cultural significance. My friend Mike Mercer at Internet Monk has the first perspective. A savior coming to Earth doesn’t happen every day! And here’s a brief taste of that trove of glorious Christmas music that, if you avoid malls and big box stores, more than balances the bad Christmas music.

 

I’m going to be singing this and several other wonderful songs at our church’s Christmas Eve service, under the guidance of our excellent director, Edward Atkinson.

 

So, Merry Christmas to all!

 

 

Harking back to my opening story, do you have any idea how much wheat the wise man accumulated by the time the chess board was filled? The answer is not what you expected unless you thought about it: only 2,080 grains!

You’ve probably heard the story, or some variation of it, in which the man gets an astounding amount due to compounding. But to accomplish that he would have needed to ask that the amount be doubled: 1, 2, 4, 8, 16, 32, 64, 128, etc. By the 64th square, that amounts to 9.2 raised to the 18th power. Ya gotta pay attention to detail!

 

Thoughts While Christmas Shopping

This is not one of those things about Christmas being too busy and bustling and commercialized. It is not one of those about little moments of joy that “made my day.” It is more of a follow-up to some other things I’ve observed recently.

 

Someone on my Christmas list has an interest in military history. And so I found myself browsing online for “best books of military history.” Google returned a long list of results, and there at #1 on the list of relevant sites was “The 14 best non-fiction military books of all time” from wearethemighty.com. I was not impressed. I don’t claim to be any kind of expert about military history, but just off the top of my head I could name several important books that were missing and could see other problems with the list.

There was only one book by a non-English speaking writer (“The Art of War” by Sun Tzu) and only three about military experiences occurring before living experience (Sun Tzu, “1776” by David McCullough, and Barbara Tuchman’s “The Guns of August.” Four of the 14 were published since 2000. Sun Tzu’s “The Art of War” is to military literature what macaroni and cheese is to food. It is what Cancun is to world travel. The person behind the list clearly hadn’t made a very serious survey of the subject, but he had no hesitation to publish world-wide a list of very recent, very predictable, very America-centric books and call them the “best non-fiction military books of all time.” Of. All. Time.

This dilettante-ism reminded me of an article I read a couple of years ago in The American Conservative. You can read the whole article if you follow the link, but the essence is seen in this excerpt about the level of scholarship currently observed in America’s military leadership:

They have learned what they do on a monkey-see, monkey-do basis and know no more. What defines a professional—historically there were only three professions, law, medicine, and theology—is that he has read, studied, and knows the literature of his field. The vast majority of our officers read no serious military history or theory. A friend who teaches at a Marine Corps school told me the most he can now get majors to read is two pages. Another friend, teaching at an Army school, says, “We are back to drawing on the cave wall.”

 

I don’t mean to single out the military for being unprofessional or un-serious. I recently wrote that America is generally a Half-Fast Nation with un-serious people in many fields of endeavor. The idea is relevant to the military, too, though I’m sure there are many (including the person on my Christmas list) who want to take the subject seriously. I vouch only for the not-seriousness of the list of 14 books. I accept William S. Lind‘s word that the problem goes deeper.

And to be fair, several of Google’s other listings were better. I think my favorite was from the site called The Art of Manliness. Their list of 43 books about war every man should read started well with Xenophon’s “Persian Expedition,” also called “The Anabasis” and “The March of the Ten Thousand.”

“In 400 BC, 10,000 Greeks are hired as mercenaries by Cyrus the Younger in his attempt to steal the Persian throne. They won the battle but Cyrus is killed in the fighting, stranding the entire Greek force thousands of miles and dozens of hostile countries from home. Xenophon is elected to be a leader of the troops and encourages them to fight their way home. All sorts of wonderful tactical thoughts and stories of leadership and bravery are shown in their journey home. Xenophon was a student of Socrates and philosophy so this book is a chance to see those teachings in action.”

I don’t want you to think the datasaur has some snobby, affected inclination toward ancient affairs. No. What’s wonderful about “The Anabasis” is that, at many points in the narrative, when the situation seems desperate, someone jumps up onto a wagon or onto a horse and shouts, “Greeks! Listen to me!” and then delivers a compelling speech about how honor and reason and duty obliges them to take a certain course of action, and they all shout, “OK! Let’s do that!” How great would it be to live in a society where honor and reason are compelling arguments, and where people agree on what they mean?

 

Someone else on my shopping list has a penchant for social activism. So I did a google search for relevant items. I found several sites offnosjwering t-shirts and other gear adorned with slogans relating to “Social Justice Warrior.” And it turns out that most of them ridicule the idea of social justice in one or the other of two ways. One way is simply to declare animosity to social justice by making fun of it or cursing it or calling  people who are concerned with it bad names. The second is by encouraging the people who are nominally concerned with social justice warriors to trivialize themselves.

I think what’s going on here is complicated. There probably aren’t that many people who honestly oppose the idea of “justice” or “social justice.” I won’t say there are none, because the news this very morning reveals a juror in South Carolina who declared in a letter to a judge that his conscience would not allow him to convict a man who shot another man who was no threat to him and had done nothing to offend him. (Did I mention the killer is a white police officer and the victim a black man named Walter Scott?) We don’t know what was going on in the juror’s mind — whether it was a perverted sense of white privilege or a perverted sense of cop privilege. But there wasn’t anything close to “justice” for Walter Scott.

But anyway, I think the term “social justice warrior” reflects badly on two groups of people and pretty much ignores the principle of social justice. On the one hand are the critics who make fun and criticize. On the other hand are the silly and self-important types who talk about social justice and immediate turn it into self-privilege. A recent example of this is the writer to the forum Quora who seeks to proscribe use the words “Train Wreck” because his or her grandfather was injured on a train and now the words “trigger” some unhappy visceral reaction. To their credit, most of the responders on Quora reasonably suggested that the words “train wreck” should remain in use and the questioner ought to grow some thicker skin and practice discernment.

 

So. We’re in a state where a very vital concept (social justice) is made ridiculous by people who claim to care about it. I probably won’t be ordering any t-shirts for the people on my Christmas list. But I will continue to think about this and other issues. I will continue to try and learn all that I can, and to share my thoughts in ways that might be useful to others.

Peace on Earth, and Good Will to Men!