Black Friday comes early this year as some retailers open their doors Thanksgiving night in hopes of cashing in. Holiday spending and what it could mean for the economy.


  • James Roberts Professor of marketing and W.A. Mays Professor of Entrepreneurship at Baylor University's Hankamer School of Business, and author of "Shiny Objects: Why We Spend Money We Don't Have in Search of Happiness We Can't Buy"
  • Ylan Mui Washington Post's consumer reporter
  • Mark Zandi Chief economist of Moody's Analytics and author of "Financial Shock" and the forthcoming book, "Paying the Price."
  • Ellen Davis Vice President of the National Retail Federation


  • 10:06:56

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. I wonder what you'll be doing Thanksgiving night. Some retailers are hoping that the answer is shopping. They'll open their doors at 8 p.m. on Thursday. It's one of many gimmicks to cash in on the busiest shopping day of the year at a time when retailers and the economy need a boost. Joining me here in the studio to look at holiday shopping, its importance to our economic outlook, Ylan Mui of The Washington Post and Ellen Davis of the National Retail Federation.

  • 10:07:44

    MS. DIANE REHMJoining us from KWBU in Waco, Texas, James Roberts of Baylor University, and, joining us from his office in West Chester, Pa., Mark Zandi of Moody's Analytic. We do invite your calls, questions, comments. Join us on 800-433-8850. Send us your email to Join us on Facebook or Twitter. Good morning to all of you.

  • 10:08:26

    PROF. JAMES ROBERTSGood morning, Diane.

  • 10:08:26

    MS. YLAN MUIGood morning.

  • 10:08:27

    MS. ELLEN DAVISGood morning.

  • 10:08:28

    REHMAnd turning to you first, Ylan Mui, as we've said, retailers are doing everything they can, including opening their doors on Thanksgiving night. What do you think of this idea?

  • 10:08:45

    MUIWell, I think that what you're finding is that they're really trying to sort of extend the season. So not only are they opening earlier than they ever have before, but they're also trying to create new days even after Black Friday to entice people to shop. So we've got Thanksgiving openings. We've got Black Friday. That's followed by Small Business Saturday, then Cyber Monday, and now there's a new thing called Green Tuesday.

  • 10:09:09

    REHMGreen Tuesday?

  • 10:09:10

    MUIWell, Green Tuesday where people are being encouraged to buy sustainable, eco-friendly products. So, you know, you're going to find all kinds of promotions and deals throughout the next few weeks. And so if you are -- if you decide to stay in on Thanksgiving Day or sleep in on Black Friday morning, there's still going to be plenty of time for you to go out and hit the sales.

  • 10:09:29

    REHMEllen Davis, how important is Black Friday to retailers?

  • 10:09:35

    DAVISFrom a numbers standpoint, Black Friday usually represents about 10 percent of the holiday season. But, certainly, retailers know that this is an incredibly important day because that's when a lot of people, millions of people, head out to go shopping. Certainly a big day for sales, but also, Black Friday helps give people a taste of everything that's left to come during the holiday season -- what products are going to be hot, what promotions people are going to be interested in, what colors and sizes are selling well.

  • 10:10:05

    DAVISSo retailers understand a lot of trends by what happens Black Friday weekend, and consumers usually can save quite a bit of money as well.

  • 10:10:12

    REHMHow about online shopping? How does that figure in, Ellen?

  • 10:10:17

    DAVISThe online sector is really a bright spot in the retail industry and has been for the last several years. It continues to chip away at the overall retail share and now represents close to 10 percent of retail sales. But what a lot of retailers are telling us, and they're telling their investors as well, is we don't care if you shop in our stores, on our websites, through our mobile app.

  • 10:10:38

    REHMJust shop.

  • 10:10:38

    DAVISWe just want you to shop with us. So that's why you see retailers like Macy's and Apple, of course, and a lot of other department and discount chains, really focusing on a variety of ways to get people to shop in the hopes that they can just make it convenient and provide a lot of information.

  • 10:10:54

    REHMAnd, Mark Zandi, turning to you, how important is holiday shopping to the economy as a whole?

  • 10:11:03

    MR. MARK ZANDIVery important. It sets the tone for the coming year. Consumer spending is a vital part of the economic activity. Kind of do the arithmetic, about 70 percent of GDP, the value of all the things that we produce, is tied up in consumer spending in one way or another. So what consumers decide to do or don't do during the holiday season has a big impact on retailing, on the (unintelligible) economy, particularly as we go into the new year.

  • 10:11:30

    REHMAnd, James Roberts, to you, you're the author of the new book titled "Shiny Objects: Why We Spend Money We Don't Have in Search of Happiness We Can't Buy." Considering the economy, are we going to see consumer spending in the same old way?

  • 10:11:55

    ROBERTSYeah. I mean, again, if we went back to your previous guest, Ellen Davis from National Retail Federation, they're predicting about a 2.4 percent increase in Christmas spending. So I think it's kind of back to the old ways. I think, for a lot of us, we see blue skies on the horizon, and we have what I call is consumer short-term amnesia. After every economic crisis we've had -- we have a couple every 10 years -- we end up -- actually, our spending end up going to higher levels than previous to that recession.

  • 10:12:25

    ROBERTSSo, yeah, I think we'll be back at it, hitting it hard again and looking to find happiness at the mall, online or from a catalog.

  • 10:12:31

    REHMAnd, Mark Zandi, we just learned that the economy grew at a somewhat slower rate this third quarter. Could that have an impact on consumer spending?

  • 10:12:46

    ZANDIYou know, you would think -- you'd like…

  • 10:12:47

    ROBERTSYeah. Oh, I'm sorry, Mark. Go ahead.

  • 10:12:49

    ZANDINo. I was just going to say that the key, I think, for consumers is jobs. That's the number one driving force behind how aggressive consumers are in their spending. Of course, the job market is soft, and that's one of the principal reasons why consumers, while they're out spending, they're doing their part, they're not doing it with a lot of gusto. They're still being cautious. So the key here is whether we create more jobs, bring down unemployment. That'll be vital to determining how aggressive consumers will be in their spending.

  • 10:13:23

    REHMDo you want to add to that, James?

  • 10:13:26

    ROBERTSYeah, there's a vast machine called Madison Avenue that spent about $130 billion this year to convince us that happiness can be purchased. We do, again, as consumers have short-term amnesia. We're seeing some bright skies on the horizon, although I worry about some of the things going on over in Europe. But I see it to be a big Christmas season and shopping as usual.

  • 10:13:49

    REHMSo, Ellen, how do you see it?

  • 10:13:52

    DAVISWell, to James' earlier point, the National Retail Federation is expecting sales to increase 2.8 percent, not 2.4 percent. And that's important because, while it's slightly above the 10-year average, this is not going to be a normal holiday season. We're still seeing consumers responding in many of the same ways they were in 2008 and 2009. People are very focused on finding a good deal. They're very educated. They're making sure that they know what they want to buy before they go into stores.

  • 10:14:20

    DAVISThis is not the mentality we saw in '06 and '07 when people were just walking in the stores without a budget and buying the merchandise that they thought that they might want to put under the tree. And that creates a special challenge for retailers. It's not like we're seeing consumers return with gusto. It's very -- it's a very challenging environment. And to Mark's point, you know, there are a lot of other economic factors, including unemployment and the stock market and the super committee, that are all impacting consumer confidence right now.

  • 10:14:50

    REHMAnd to you, Ylan, I wonder about all these predictions, 2.4, 2.8. What if consumers disappoint?

  • 10:15:02

    MUIWell, they have before. They have obviously during the financial crisis and during the tryst of the recession. In fact, it's funny. I remember talking with a colleague back in -- this must have been 2005 or 2006, and we said, you know, the only way retail sales could ever decline is if the population actually shrank. Well, we were proved wrong in pretty short order, pretty quickly. So, you know, there's always that danger for consumers, that there could be some shock to the system, that something going on, either in Washington or something that happens in Europe, could sort of provide that extra scare that causes consumers to close their wallets.

  • 10:15:37

    MUISo far, what we found is that they've been pretty resilient and that even though they're concerned about the state of the economy and the future of the country, that they've been able to eek out retail sales increases, actually for the past 16 months. But we're waiting for that other shoot or drop, and that feeling hasn't gotten away yet.

  • 10:15:55

    REHMMark Zandi, what about the super committee's failure to reach agreement and the subsequent drop we've seen in the stock market?

  • 10:16:08

    ZANDIYeah, I think the failure by the committee has a number of different negative consequences. You mentioned the stock market. Clearly, that's a problem. Stock prices play a key role in terms of the thinking of consumers, obviously high-end, wealthier consumers. Perhaps, though, more importantly, the failure of the committee does call in the question whether the payroll tax holiday we got this year will be extended for another year as the president has proposed. That's a lot of money to consumers.

  • 10:16:40

    ZANDIIf that's not extended, consumers are going to have to shell out about $110 billion more in 2012 than they did in 2011 to pay their payroll taxes. In -- you know, in a well-functioning economy with unemployment lower, I think they could do that in a reasonably graceful way. But in this economy that's struggling to create jobs, I think that's going to be more difficult. So that's going to be key, as whether Congress and the administrating -- administration can come together in the next few weeks and extend that holiday.

  • 10:17:10

    ZANDIIf they can't, that'll be a problem. The other thing that's in jeopardy, because of the failure of the super committee, is the extension of emergency unemployment insurance benefits. That's another $50 billion to very stressed households in 2012 that they got in 2011, they won't get in 2012 unless that's extended. So that's also very important. So there's -- the committee's failure does have, potentially, some very significant negative implications for consumers if policymakers don't act in the next few weeks.

  • 10:17:36

    REHMAnd what about the disappointment of those who got to go to work that night, Ylan? Not everybody is happy about this.

  • 10:17:48

    MUIRight. One thing we've seen this year is actually a sort of backlash against Black Friday or an effort to try to save Thanksgiving. There are some people who feel like all of these sales and all of the shopping is encroaching into our secret holiday, and they've actually started some campaigns. There's been a Target employee who started a campaign on, who's mad about the fact that he would have to go into work 11 p.m. on Thanksgiving Day and sort of miss Thanksgiving meal with his future in-laws.

  • 10:18:16

    MUIAnd he was going to impress them, and that would look bad. So that's one campaign that's been started. Another home chef out of New Jersey started a campaign called Respect the Bird that's calling on us to stop going from ho, ho, ho to -- stop going from trick or treat to ho, ho, ho so quickly. So there have been a number of things that people are doing to save the holiday.

  • 10:18:37

    REHMWashington Post consumer reporter Ylan Mui. We'll be right back.

  • 10:20:04

    REHMAnd we're back with a first posting from Facebook, from Vera, who says, "I feel it's totally asinine for these retailers to be opening more than normal business hours on Black Friday. By this action, they're creating more stress to the holiday season, especially with respect to their employees. I do never attend any Black Friday early-bird openings nor shop any stores. I much prefer shopping local merchants." Do retailers expect a backlash, Ellen Davis?

  • 10:20:50

    DAVISWell, this -- to Ylan's point earlier, this has -- this conversation has certainly stirred up a lot of controversy on both sides. On the one hand, you have some consumers who were upset about early openings and some employees. Although what we're hearing from retailers is that a lot of their employees are completely fine with going to work late on Thanksgiving night. Many of them will have already been able to enjoy Thanksgiving with their families. They're looking forward to the holiday pay. They're looking forward to not having to go to bed and then get up in the very early morning to go to work.

  • 10:21:21

    DAVISAnd, according to our research, you know, retail is an extremely customer-focused industry, and people like the idea of going shopping at midnight on Black Friday. We're expecting about 152 million shoppers this upcoming weekend. And, according to our research, the number of people who shopped on Black Friday at midnight tripled from 2008 to 2010. So there's certainly consumer demand. And that's why we're seeing some of these earlier openings, but...

  • 10:21:49


  • 10:21:50

    MUIActually, there was a new research out by Deloitte that found that, of the people who plan to go shopping over this weekend, 17 percent of them actually plan to go on Thanksgiving Day. And a quarter of them plan to be at midnight black opening -- the midnight Black Friday opening. So you are seeing folks who are embracing this. And one thing we were talking about before the show started was that this is sort of similar to what happened, actually, in the movie industry, is that back in '80s, the movie studios tried to compete with each other to attract more folks to their Christmas blockbuster films.

  • 10:22:21

    MUIAnd they started having the openings earlier and earlier and earlier until they started opening movies on Thanksgiving Day itself. And now, you know, we all go see movies on Thanksgiving Day and don't think twice about it. You're seeing the retail industry start to adopt that model.

  • 10:22:33

    REHMHere's an email from Terry in St. Louis, Mo., who says, "Why do these retailers think I'm going to change any habit developed over the decades? I believe it's sad we've come to this. Isn't Black Friday and the weekend enough? I understand the economy is in the dumps and retail extremely important. But my hope is that people reject the idea of shopping on Thanksgiving evening and at midnight Friday morning. I see stories about people camping out in the parking lot of Best Buy. Don't these folks have anybody to see at Thanksgiving?" James Roberts.

  • 10:23:21

    ROBERTSYeah. I mean, I think what's been lost in this entire discussion is this idea as what does this spending -- what kind of impact has it had on our well-being? If you look at my book, "Shiny Objects," on page seven, I have two graphs, the ones that, I think, are very telling about all this spending. The one shows gross domestic product. As Mark mentioned, it's about largely made up of personal spending, about 70 percent.

  • 10:23:43

    ROBERTSAnd if you look at our gross domestic product in this country from 1970 to the present day, it has almost -- it has skyrocketed upwards with only slight dips for every recession that we've had every couple of 10 years. But now, if you look at the graph that's next to that, we see, as our personal income, our personal spending has increased exponentially from 1970 to 2011. If you look at our happiness, our happiness is flat line.

  • 10:24:08

    ROBERTSWe are no happier today than we were back in 1970 despite ever-increasing piles of material possessions. What that -- how I refer to that is this is a materialism-happiness disconnect. So we're spending a lot more money, but we're no happier than we were 40 years ago. And, really, to be truthful about -- not only are we not more happy, we are more depressed, stressed and anxious about our lives than we were 40 years ago when we spent a lot less money.

  • 10:24:35

    REHMAnd does that kind of unhappiness exponentially increase during the holiday spending period, James?

  • 10:24:46

    ROBERTSYeah, definitely. We can all tell the stories about the stressful, you know, getting together with relatives we don't see all the time, getting the meals together, worrying about our presents and how much money we spent on each other. I think if we can step back for a second, take a little bit more of a moderate approach to holiday spending, I think we'd all be a lot happier.

  • 10:25:03

    REHMDo you agree with that?

  • 10:25:05

    MUIWell, one thing I wanted to point out is that some of the sort of campaigns to take back Thanksgiving have been sort of more humorous or more -- not tongue-in-cheek, but sort of lighthearted. But there are some -- there is a connection to the Occupy Wall Street movement, where Black Friday has sort of become part of the anger that people are feeling against Wall Street. And there's actually a plan to occupy some retailers on Black Friday, particularly retailers that are publicly traded, retailers that they feel are, you know, in the pockets of Wall Street.

  • 10:25:38

    MUIAnd so, for example, they pointed out Abercrombie & Fitch, they pointed out Neiman Marcus, they pointed out Wal-Mart as some stores that they plan to either boycott or actually occupy on Black Friday. So that's something that, you know, is sort of tapping into the current unrest in the country. But it's also something that retailers need to be aware of as they, you know, plan their security and safety for their customers on Black Friday.

  • 10:25:57

    REHMAnd, Ellen, I would imagine they are.

  • 10:26:01

    DAVISThey are. NRF has been working very closely over the last several weeks with the Department of Homeland Security. Retailers have extensive crowd control and crowd management guidelines in place. Protests are not new to our industry. Everything from a concert nearby affecting traffic at a restaurant to what retailers who are near the current Occupy Wall Street movement have been going through for the last couple of months, companies are very familiar with responding to crowd control issues. And many of them have very extensive plans in place.

  • 10:26:34

    DAVISBut the National Retail Federation has released guidelines again on handling any kind of crowd control issues and protests. And at the end of the day, what this is really about for Black Friday, from a retail standpoint, is protecting the safety and security of their customers and their employees.

  • 10:26:49

    REHMAnd their employees. Wasn't there a guard who was actually trampled several years ago?

  • 10:26:55

    DAVISRight. Several years ago, a temporary employee working at a retail store was run over by a crowd on Black Friday morning.

  • 10:27:02

    ROBERTSYeah, that -- I talk about that in my book, and it kind of shows you the kind of excitement that can be stirred up by retailers with the -- literally, the door crashers or the door smashers...

  • 10:27:11


  • 10:27:12

    ROBERTSThat's what happened and -- at Wal-Mart, and that's had a backlash. And I think retailers have taken a step back and say, we need to be a little careful about how we handle our crowds and how we get people excited about upcoming sales, particularly on Black Friday.

  • 10:27:24

    REHMMark Zandi, during the Bush years, the administration told Americans to go out and shop. Is that the way to save this economy?

  • 10:27:38

    ZANDIWell, you know, economists call this the paradox of thrift. In a very near term, when the economy is struggling, we don't want consumers pulling back. We want people to be spending and behaving as they have historically because if they pull back, then, of course, retailers and others cut back on jobs. That lost income causes consumers to pull back even more. And that's the fodder for recession. So it's very important for consumers to stay in the game and do their part.

  • 10:28:06

    ZANDINow, of course, longer run, it's very -- also incredibly important for our economy, for consumers to spend judiciously, to save and to manage their financial affairs well. And, of course, we did not do that over the last -- really, over the last couple of decades. And one of the key reasons for the great recession and all the suffering we've been going through economically in recent years is because we overdid it. We took on -- many of us took on too much debt, and we aggressively overspent, aggressively spent.

  • 10:28:40

    ZANDISo it is very important to be judicious long run and save and be prepared for paying for your child's college education or your own retirement. So, you know, it's a balance. In the near term, we want consumers to be out there doing their part. But in the long run, I think it's very important that they work hard to manage their financial affairs appropriately.

  • 10:29:01

    REHMBut, James, go ahead.

  • 10:29:04

    ROBERTSYeah, I was going to step in on that one, too. Edward Abbey said something, I think, that's particularly pertinent to how we manage our money as a government. He said that growth for the sake of growth is the philosophy of the cancer cell. It can't be maintained, and it only can lead to devastation. So my sense of it is that we have to be very careful to think and to take advice from a government that is trillions of dollars in debt as far as how we should handle our own personal spending.

  • 10:29:30

    REHMAll right. Here's an email from Bobby in Dallas, Texas. This for you, Ellen Davis. He says, "I would caution your listeners to scrutinize the quality of merchandise discounted on Black Friday events. The normal practice of retailers is to have a few high-quality items on hand to bait customers and overstock lower quality items in the hopes of clearing the shelves of these products at a higher profit margin.

  • 10:30:11

    DAVISWell, that's -- in the industry, we call that a loss leader. And what that means is that on Black Friday, you will typically find a handful of extremely discounted merchandise -- from toys to electronics to apparel -- that will bring a customer into a store. Of course, that customer can always just buy the $10 Tickle Me Elmo and walk out the door, and that's one way to do it. But retailers are also hoping that when you go in for that very low priced item, that you'll find a couple of other things that you want to wrap and put under the tree as well.

  • 10:30:41

    DAVISIt's not a matter of quality, of merchandise quality. It's simply a matter of pricing and promotions. And that's something that retailers leverage all holiday season long, but a loss leader is very prominent on Black Friday because we know that that's the type of promotion that gets people into stores.

  • 10:30:58


  • 10:30:59

    MUII think you're seeing retailers do a lot of really innovative things this year in order to get people inside the doors. For example, you see Barneys creating Lady Gaga's workshop where you can buy Lady Gaga ornaments. And there's a big -- large tent shaped like her wig that they've established inside the store. You're also seeing folks like Old Navy on the other end of the spectrum hand out 3-D goggles to shoppers so they can look for a special deal. So there's many ways that retailers are trying to entice people in the store besides just offering a good deal.

  • 10:31:29

    DAVISAnd giveaways, too, this year.

  • 10:31:30

    REHMAnd giveaways.

  • 10:31:30

    DAVISOld Navy is giving away. Old Navy, J.C. Penney, Abercrombie & Fitch all have very interesting, unique Black Friday promotions and giveaways.

  • 10:31:38

    REHMAll right. We're going to open the phones. First to Brent. He's in Cincinnati, Ohio. Good morning to you.

  • 10:31:48

    BRENTGood morning. Thanks for taking my call, Diane.

  • 10:31:50

    REHMYou're welcome.

  • 10:31:52

    BRENTI want to get back, hopefully, to the point of thinking of the employees and spending time with family. I'm so grateful that I have the opportunity -- I hope you hear my boy in the background...

  • 10:32:05

    REHMI do.

  • 10:32:06

    BRENT...that I have that, that I have that opportunity, and I think it's just a shame that a holiday that was never about gift-giving -- there's a place for that, but never about gift-giving -- has been taken over by this and to the point where other folks don't have that quality of family time that I sometimes take for granted.

  • 10:32:29

    REHMHow do you respond to that, Ylan?

  • 10:32:32

    MUIYou know, I think that we've been seeing this -- not just for this holiday season, but over the past few months, a sort of theme of consumer empowerment, where consumers are feeling like I can stand up and I can say I'm going to take control of the situation, whether it's Bank of America's $5 debit card fees and the petitions and the sort of viral nature of that campaign, or whether it's I'm going to take back Thanksgiving and the campaign on that garnered 200,000 signatures or the Respect the Bird campaign that's got, you know, thousands of likes on Facebook.

  • 10:33:03

    MUISo consumers are really sort of realizing that I can harness the power of social media in order to create the change that I want to make. And I think that's been a new theme that we're seeing this holiday season.

  • 10:33:14


  • 10:33:15

    DAVISI absolutely think Ylan is right. But what's interesting with this year is that we're coupling some people's desire for, you know, people not to work on Thanksgiving with millions of people's desire to go shopping at midnight on Black Friday. So there are very two separate schools of thought at play here. And there are actually a lot of retail employees that have said, hey, if I can go to work at 11 o'clock on Thanksgiving night and get off at seven o'clock Black Friday morning, I can spend the whole day with my family then. So there are actually a lot of people that aren't that upset about it.

  • 10:33:47

    REHMEllen Davis of the National Retail Federation. You're listening to "The Diane Rehm Show." And to Pete in Charlottesville, Va. Good morning.

  • 10:34:01

    PETEHey, Diane, this is Pete in Charlottesville. How are you doing today?

  • 10:34:03

    REHMI'm good. Thanks.

  • 10:34:05

    PETEI'm just in the process of fixing up a couple of birds for tomorrow. Anyway, thanks for taking my call. I have a comment, and it's for all of your -- it's for you and all of your guests. I really appreciate your show, and I really appreciate the forum that you've put out there for the past several years. But I have to tell you, not once during the discussion have you or either of your guests used the term citizen.

  • 10:34:26

    PETEYou've used consumers. The woman that was just speaking out said consumers are fighting back. Well, consumers aren't supposed to fight back. Consumers are just to consume. Citizens have responsibilities and rights, and I think we're really losing sight of that.

  • 10:34:41

    REHMThat sort of goes back to the point you were making, Ylan, about people taking charge of their own spending habits, their own beliefs in what's important and so on.

  • 10:34:58

    MUIThis is actually something that has come up several times over the past year. I've heard it more where we've had readers or folks say, you know, why do you refer to folks as consumers as opposed to citizen or residents or people? And I think the -- one of the reasons we do that is because when we're talking about how do we manage our money and we're talking about do we spend it, do we save it, what should we do with it, we're looking at folks from a consumer standpoint as opposed to, let's say, a voter standpoint or a political standpoint. But it is a very good point that other folks have made.

  • 10:35:28

    REHMAbsolutely. Pete, I'm glad you called. Thank you. All right. To Rochester, N.Y., and to Iddy. (sp?) Good morning. You're on the air.

  • 10:35:39

    IDDYGood morning. Well, I let out a big cheer when that gentleman before me spoke. I think that the woman who just responded has consistently spoken in a worldview that is very threatening to our democracy and has become increasingly common. This is the holiday of Thanksgiving. It's the one national -- my voice is shaking because I've spoken on the radio before, but I'm very upset with the entire tenor of this conversation.

  • 10:36:11

    IDDYIt goes to the heart of what is going on in this country. We have a country, not a brand. And when you talk about us constantly as consumers or employees, that undercuts our unity as a country of citizens. This is a day where we unite together, regardless of our religion, in Thanksgiving. There are limits. You cannot lower your prices in a time of economic depression or recession and say then that people are choosing to go and shop because they love to get up at midnight. That is ridiculous.

  • 10:36:56

    REHMJames Roberts.

  • 10:36:57

    ROBERTSYeah, you know, Iddy, I agree with you 100 percent. My book "Shiny Objects" addresses that subject precisely. I talk about how our love of money and material possessions is the major stumbling block to our path of -- on our path to happiness. We do need to take back. We live in a consumer culture, and we have been victimized by being concerned -- by being referred to as consumers, not citizens. So both you and Brent and Pete have a very good point, that happiness is not going to be purchased at the mall, online or from a catalog.

  • 10:37:28

    REHMJames Roberts. He is professor at Baylor University, author of "Shiny Objects: Why We Spend Money We Don't Have in Search of Happiness We Can't Buy." Short break, right back.

  • 10:40:04

    REHMAnd as we talk about Thanksgiving Day shopping, here's a message on Facebook from Meagan, who says, "I don't go and won't go on Thanksgiving. I go Friday morning at 6 a.m. I'm home with my family by 9 a.m. for breakfast." Here's another from Tom in Newport News, Va. He says, "It's always a double-edged sword for the worker. On one hand, extra pay on the holiday, on the other hand, no holiday.

  • 10:40:44

    REHM"Most workers prefer the pay, especially on Thanksgiving, which is one of those holidays when people are forced to endure relatives who are annoying." Ellen.

  • 10:41:01

    DAVISYou know, it's -- this is just -- we were just talking. This has stirred up such a debate among a lot of Americans. And what will be interesting is the National Retail Federation will be coming out with data on Sunday that will tell us what time people were actually at the stores on Friday. Last year, the number was almost 10 percent. The year before, it was 3 percent. If that number continues to grow, I think retailers will probably -- you know, we'll see some of these store openings continue in the next few years.

  • 10:41:31

    DAVISBut if we see that number become stagnant or pull back at all, you know, retailers will evaluate this practice. It's -- this is an industry that's really all about responding to what customers want.

  • 10:41:42


  • 10:41:42


  • 10:41:43

    MUII think...

  • 10:41:43

    REHMGo ahead, James.

  • 10:41:44

    ROBERTSOh, I'm sorry. I didn't mean to just jump in...

  • 10:41:45

    REHMThat's all right.

  • 10:41:46

    ROBERTS...but I definitely agree with the sentiments that Meagan and Tom are talking about. Tom's talking about more money. As human beings, we have a tendency to grab the smaller reward in lieu of -- instead of waiting longer for that bigger reward, and so that's just who we are as human beings. But I think that what we have to remember here is that happiness is not going to be purchased through consumption.

  • 10:42:09

    ROBERTSHappiness comes from having feeling good about who we are, having happy, solid, stable relationships and giving back to the community. And so these working later hours and spending more money -- not only do they not make us more happy, they actually run counter to our well-being.

  • 10:42:25

    REHMAll right. To Jim on Long Island. Good morning to you.

  • 10:42:30

    JIMGood morning, Diane. Thank you so much. I listen to the show every day here in my retail business, which I've had for 25 years.

  • 10:42:36

    REHMI'm so glad. Thank you.

  • 10:42:38

    JIMAnd there's a sign on my door -- as there is every year -- that says, we never open on Black Friday due to moral considerations.

  • 10:42:46

    REHMDue to moral considerations. What about Saturday, Jim?

  • 10:42:52

    JIMWe're open Saturday, yes. But this whole, you know, how you're -- one of your guests there said consumer empowerments. I just have to say that is manipulation of people by business for profit. It's a joke to say this is consumer empowerment. This is a culture of consumption. And, by the way, even when I did open, the first few years I had my business, no one comes to my small little retail store. They're all at the malls. This is not helping small business in any way, shape or form.

  • 10:43:20


  • 10:43:21

    MUIYeah. I think that small businesses have felt exactly what this caller is feeling. It's that it's very hard for them to compete with the blockbuster deals on Black Friday. So one thing that actually started last year by American Express is something called Small Business Saturday. And this year, 89 million people actually, according to their surveys, plan to shop at small businesses, small local merchants on Saturday. They figured give Friday to the big-box guys. We'll take Saturday.

  • 10:43:48

    MUIAnd many retailers are giving special deals for consumers and sort of, you know, mimicking some of the promotions that the bigger guys are doing, but focusing on small local businesses. And, actually, the Occupy Wall Street folks said specifically in their Facebook messages that they do not plan to boycott or to protest small businesses. They're looking only at the big guys.

  • 10:44:07

    REHMMark Zandi, can you talk about the difference to the economy from the big-box stores and the small retailers?

  • 10:44:19

    ZANDIWell, you know, it cuts in lots of different directions. The big retailers have been very good at providing a wide array of products at low prices. Their -- been able to open up global supply chains and bring in products from faraway places like China and Europe and South America. And so they've been very helpful in providing consumer choice, and at very, very low prices. And that's a very clear benefit. Of course, you know, this is -- as I said, it cuts in both directions. It is very hard.

  • 10:44:57

    ZANDIThe competition has been very severe, and it's been very hard on smaller retailers. And, you know, that's a very significant adjustment for many communities across the country because small retailers were -- have historically been kind of the backbone to many communities. So there's pluses and minuses. I mean, I think, in general, at the end of the day, the efficiency and price benefits will win the day. But, you know, that's -- but the questions of whether that's good or bad are something that are above my pay grade.

  • 10:45:29

    REHMJust to follow up on that, Mark, Chris in College Park, Md., writes, "Funny. But it sounds as though our economy is so twisted that our survival now depends on our consumerism." How is that sustainable, Mark?

  • 10:45:51

    ZANDIIt's -- well, you know, it's not only selling to U.S. consumers. It's -- our long-term growth really depends on our ability to sell what we produce to consumers and the rest of the world. And, in fact, it's important to realize that U.S. consumers have kind of led the way for our economy, for the global economy for, really, the past quarter century. We've -- our consumers have spent very aggressively, lowered saving rates, borrowed a lot of money and have led the way. I think that's over.

  • 10:46:24

    ZANDII think, going forward, our consumers are going to do their part. They're going to spend roughly their income. I think they'll have to save a bit more. So if we want to be a thriving economy with jobs, good-paying jobs, we're going to have to figure out how to sell what we produce to consumers overseas, in the -- in those parts of the world where consumers are just really now becoming part of the middle class. Their incomes are rising. They're getting to the point where they can start buying the kinds of things that we produce.

  • 10:46:51

    ZANDIBut -- so our focus is going to have to shift away from the American consumers in terms of driving things to producing things for the rest of the world. And I think we can do that, and I think we're well on our way. But it will be an adjustment. And as we can see by recent events, it's, at times, a very painful adjustment.

  • 10:47:10

    REHMAll right.

  • 10:47:11

    ROBERTSYeah. I...

  • 10:47:12

    REHMGo ahead, James.

  • 10:47:12

    ROBERTSI wanted to say I agree with Mark. It's the -- we're going to have to sell elsewhere. Seventy percent of American families now live from paycheck to paycheck. To ask American consumers to continue to be the catalyst behind the American economy would be like asking, would it be akin to a mother lion eating its children? Eventually, we can't do it. We need to look elsewhere. American consumers are out of control. Mark was mentioning about savings. Yeah. We need to do a lot better job on savings.

  • 10:47:39

    ROBERTSOur savings rate last quarter was about 5 percent. Probably 15 percent would be something we'd need. And I'm guessing that once we see the blue skies on the horizon, that will go back to pre-recession savings of probably zero to maybe in the negative range.

  • 10:47:54

    REHMYlan, do consumers, do retailers really make money on Black Friday?

  • 10:48:03

    MUIWell, they certainly make a lot of sales on Black Friday. I think that reason why it's called Black Friday is because, historically, it's the day when retailers start to go into the black. They start to make money for the year. The holiday season accounts for about 20 percent of annual retail sales for the industry. However, for individual retailers, it can count -- account for as much as 40 percent of retail sales, so -- of annual sales.

  • 10:48:25

    REHMOh, I see. I see.

  • 10:48:27

    MUISo it can be really, really important for individual stores, individual chains.

  • 10:48:31

    REHMAnd that's because they're offering these big discounts, I gather.

  • 10:48:36

    MUIWell, the big discount is what's getting people inside the door, but where they're really making their money is because we're just buying more things than we were during the rest of the year.

  • 10:48:45

    REHMAll right. To Rox in Jacksonville, Fla. Good morning.

  • 10:48:50

    ROXGood morning. Love your show. I'm Rox of Spazhouse, and I host a yearly podcast called Rox of Spazhouse vs. Black Friday for And I have noticed, if anything, there's a really cool sort of -- I go out, and I interview the people standing in line before the doors open up. And it's almost -- it's a festive, and almost like a circus, atmosphere. You know, I'll hit several stores and just see what people are buying for, you know, the sales and stuff, and...

  • 10:49:30

    REHMSo, I mean, you're out there. What time of the night are you out there?

  • 10:49:36

    ROXLast year, I was out earlier because my family and I, we have Thanksgiving. And we went to Michaels because my mom wanted something, and they were open Thursday, Thanksgiving. And then we drove by Best Buy. And there is a line around the building already before, you know, midnight on, you know, Black Friday, so I will go out anywhere from the early night. And then my sister and I will head out, like, 3, 4 in the morning.

  • 10:50:11

    REHMAnd what do you buy?

  • 10:50:14

    ROXWhat do I find? I find a lot of families. Oddly enough, it's almost like a flash mob, you know, where, actually, people get together, and it's kind of festive.

  • 10:50:29

    REHMWhat do you think, Ylan?

  • 10:50:31

    MUII think -- Rox, I think you're absolutely right. And I think what this means is retail is entertainment. Retail, for a lot of people, is like going to the movies. It's spending time with your family, looking for a good deal. I mean, if you think about the retail stores that have done really well over the last several years, you think about being entertained. You think about Apple. You think about Build-A-Bear. You think about American Girl. You think about Disney.

  • 10:50:55

    MUIThose are all retailers where you walk into their stores, and you have an experience. And that's why, you know, you hear about some of these stories, opening late Thanksgiving night, early Black Friday and people wanting to go there because they get the same type of feeling as if they go to a movie theater or a bowling alley, you know? They're going to have a good time.

  • 10:51:14

    ROBERTSYou know, I think you're exactly right, Ylan. You got to remember what happens when we shop. I do a lot of research in the area of compulsive buying, but we could also call it shopping addiction. People are addicted to shopping. And why is that? We have such a festive environment with -- if it's this time of the year, we have Santa Claus, we have music, and we have other people. We're buying, and we're having fun. And we're eating.

  • 10:51:37

    ROBERTSAnd our brains release endorphins, such as epinephrine, serotonin, dopamine, that actually give us sensations of pleasure. So we can become addicted to shopping just like we do to alcohol, cigarettes and drugs.

  • 10:51:49

    REHMVery interesting. And as our caller -- our call screener says, rather creepy.

  • 10:52:02

    REHMAnd we have an email from Bea, (sp?) who says, "If you don't want to shop at midnight, for goodness sake, just stay home. But don't condemn those who may enjoy it or benefit from it. Good grief." Ylan.

  • 10:52:21

    MUII think it's helpful to go back to how some of this started. Before the midnight openings, et cetera, as online retailing became really popular, retailers started experimenting with offering special deals online-only on Thanksgiving Day. And the way they touted it was that if you're done eating and you're sitting back watching football or whatever you may be doing...

  • 10:52:43

    REHMOr you're bored.

  • 10:52:44

    MUI...or you're bored or you want to get away from those annoying relatives, you can hop on eBay or you can hop on Amazon and buy a deal. And as they saw that people wanted to purchase those things and saw that sales on Thanksgiving Day online were actually doing well, then you started to see this spillover into actual in-store openings.

  • 10:53:00

    REHMYlan Mui, she is the Washington Post consumer reporter. And you're listening to "The Diane Rehm Show." And now to Cincinnati, Ohio. Good morning, Patricia.

  • 10:53:15

    PATRICIAGood morning. Thank you for taking my call.

  • 10:53:17

    REHMYou're welcome.

  • 10:53:18

    PATRICIAI have to laugh a little bit. This is kind of off track what I originally called in. But, you know, I use to spend between, I don't know, $2- to $5,000 every year during the holidays because I was a professional. And that was back when I used to be a middle class wage earner. But after two job layoffs and now making the same amount of money as what I was making 27 years ago, and the fact that now all of my family, we all work shifts.

  • 10:53:42

    PATRICIAWe all work six, seven days a week. Our family can't even spend holidays together. My son will have Christmas Eve off, but he has to work Christmas Day. I may have to work the next day. So it -- at this point now, because of the loss of income, but also the resulting anger of splitting apart families, that we can never even be together anymore because of the economy and because of the fact that we're now no longer citizens -- we're just slaves to Wall Street -- a lot of us have backed off.

  • 10:54:09

    PATRICIAI mean, for a long time, I've only -- I try always to support local businessmen, local restaurants and avoid all the chains. I'm at the point now where, you know, the local business that I can support is Goodwill and all of the, you know, consignment shops and whatever. So, you know, I know that there's been a lot of talk about, you know, the consumers need to open up our wallets. Well, all of the economists have been wrong because all things are no longer equal.

  • 10:54:34

    PATRICIAIt's not the same as it was 30 or 40 or 50 years ago when you lost your job. You're going to be nickeled and dimed to death. You're going to be punished. You're going to be put into jail if you can't pay your debts. It's an all-out war against poor Americans.

  • 10:54:47

    REHMMark Zandi.

  • 10:54:49

    ZANDIWell, you know, I think, she's hit on a very important point, and that is that there has been a very significant skewing of the distribution of income and wealth. But there really are two consumers out there -- I'm simplifying, obviously, but there are those that are doing very, very well. If they have any debt, it's a 30-year fixed rate mortgage loan at a very low interest rate. They've got a job. Their incomes are fine.

  • 10:55:14

    ZANDIAnd then the other group of consumers' households are under a lot of pressure. You know, they've had difficulty holding on to jobs. If they have a job, they haven't gotten a pay increase in a long time. They have a lot of debt. So I do think that it's very important when we consider how we address our nation's fiscal problems. And, you know, that's going to require government spending cuts and some tax revenue increases.

  • 10:55:42

    ZANDIWe do that through the prison of what it means for the distribution of income and wealth, what it really means to these households that are under tremendous financial pressure, because the pressure is intense, and it has gotten worse. And so I think the sentiment she's expressing is very, very important with respect -- for a lot of reasons, but also with respect to how we think about how we're going to address our fiscal problems.

  • 10:56:03

    REHMLast word from you, James Roberts.

  • 10:56:07

    ROBERTSYeah. It's kind of funny that I would choose my last word to quote Albert Einstein, but I think you'll appreciate this. And I think this sums up my book "Shiny Objects" very nicely. He said not everything that counts can be counted, and not everything that can be counted counts.

  • 10:56:25

    REHMThank you. Thank you, all. James Roberts, he is the author of 'Shiny Objects," Mark Zandi, chief economist of Moody's Analytics, author of the forthcoming book "Paying the Price," Ellen Davis, vice president of the National Retail Federation, Ylan Mui of the Washington Post consumer reporter. And from our house to your house, have a wonderful, safe family Thanksgiving. Thanks for listening, all. I'm Diane Rehm.

  • 10:57:06

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn. And the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is And we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.

Related Links

Topics + Tags

Most Recent Shows

A Push To Improve America’s Nursing Homes

Thursday, Sep 28 2023The Biden administration has released a proposal  to raise standards in nursing homes. Why one expert calls it the most significant development for the industry in decades -- and why it might still not be enough.