All "Stuffed" Up, the Infirmity of Affluenza

People can get caught up seeking the lifestyles of the rich and famous. For some, it's a disease.

Take Marv S. He was earning a six-figure salary as an association director on the East Coast. But he wasn't doing so well that he could afford all the $700 suits he was buying or the $200 shoes or the $100 neckties.

When entertaining clients, he wouldn't just buy drinks. He'd rent a yacht, book a band, and hire a caterer.

"It was the stuff that made me feel good and impressed the hell out of a lot of people," Marv says.

The first time he declared personal bankruptcy, Marv owed $60,000 in unsecured debt. The second time, $300,000.

For 17 years, Marv has been recovering from an affliction some have called "affluenza"--a dysfunction in which individuals obsessively pursue material gains. Affluenza is an ever-escalating urge for more. And when there's always more to want, you're never satisfied.

"It's kind of a fix," Marv says. "If you're feeling good, then you need to go out and buy a bunch of stuff that you may or may not need to enhance that good feeling. And if you're feeling crummy, to make you feel better, it's the same thing. It's clearly an addiction to these feelings."

Consumed by spending

John de Graaf, a Seattle television producer and co-author of the book "Affluenza, The All-Consuming Epidemic," says many Americans are addicted to a "gotta-have-it-now-no-matter-what" mentality spurred by relentless advertising and easy credit.

"The message is to consume," de Graaf says. "The messages always tell you, 'You work so hard, you deserve it. Go get it.' But not, 'Hey! It's going to put you in debt, and you're going to be in more trouble.' They don't tell you that."

Mounting evidence attests that Americans are spending beyond their means.

"The average American gets 40,000 commercial messages a year," says Betsy Taylor, president of the Center for the American Dream, a group in Takoma Park, Md., that promotes wise consumer behaviors. "So we are living in a culture that is from dawn to dusk quietly and persistently sending us the messages that we'll be happy if we buy. Not that we'll be happy if we save."

To sustain their spending, American consumers withdrew $312 billion from their home equity in 2004 through loans and cash-out refinancing, according to Federal Deposit Insurance Corp. estimates.

The Federal Reserve Board reported that outstanding consumer credit in revolving, open-ended loans hit a record $797 billion in February 2005, more than double the mark 10 years earlier.

Suffering savings

And as debt rises, savings dwindle. Get-it-now has replaced delayed gratification.

Between 1995 and 2004, Americans' nonmortgage interest payments went up nearly 43% to $188 billion, according to Bureau of Economic Analysis data. Meanwhile, personal savings dropped almost 64%, or more than $149 billion.

In 2004, personal savings in the U.S. amounted to 1% of disposable personal income, down from 4.7% in 1995, and by the end of 2005, the savings rate fell to minus 0.5%. According to the Commerce Department, it was the first time the measure was negative since 1933.

With their focus on members, not shareholders, credit unions are in a good position to help individuals deal with affluenza, de Graaf says.

"I think there's an advantage, a concern for the long-term health of their members and financial stability of their members," de Graaf says. "It behooves them in that sense to try to help advise members against wholesale profligate economic behavior."

Taylor agrees.

"It's a very pernicious culture, and I think credit unions actually could play a wonderful role," Taylor says. "People often just need help saying, 'No.' "

Published March 27, 2006