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The cost of the good life
Spending on stuff seems a never-ending spiral in America; there's always something new to buy.
September 12, 2003: 12:30 PM EDT
By Gordon T. Anderson, CNN/Money Staff Writer

NEW YORK (CNN/Money) - From the start, Americans have been terrific consumers, with a culture based on getting and spending and getting some more.

George Washington, for example, ran up large debts buying linens for Martha and horses for himself. Jefferson stocked Monticello with the best European wine, books, and home furnishings. Even frugal Ben Franklin was acquisitive enough to be called "America's Founding Yuppie" by writer David Brooks.

In a nation of shopaholics, however, there have also been those – from Puritan ministers to hippie naturists -- who challenged the notion that the "good life" is synonymous with "good stuff."

Now, a new generation of social critics is again arguing that it's unhealthy, and economically unsustainable, for a culture to be consumed by consumption.

"When salaries went up in the 1990s, the savings rate actually went down," noted John De Graaf, co-author of the book "Affluenza: The All-consuming Epidemic." "We were making more money, but spending it even faster."

The thrust of the argument, said De Graaf, is that "overconsumption has led to a constant expectation of more and more and more."

Depending on your view, that signals either materialistic madness or just a go-getter economic culture. But this much seems clear: the list of things Americans covet keeps growing.

To illustrate, here is an anecdotal look at consumption trends in five sectors:

Home electronics

In the early 1960s, the color TV was a new marvel. A good one cost around $400 in 1965, which was a princely sum (worth about $2,300 in current dollars). Still, RCA's annual unit sales rose from 90,000 in 1959 to more than 1 million five years later.

Today, flat-screen plasma TVs are the object of many desires. A 42-inch Sony cost $6,000 at Best Buy recently, and aficionados can pay twice that for bigger screens with more bells and whistles. A 50-inch model from Samsung cost $8,000 -- nearly four times as much as those early color TVs.

Real estate

According to the National Association of Realtors, the median price of a U.S. house in 1968 was $20,100. Today, it's about $170,000. Using inflation-adjusted dollars, that's a 60 percent increase.

In the early 1960s, a four-bedroom house in one middle-class New Jersey suburb sold for $19,000. Last year, the same house sold for more than 20 times that figure.

In those days, a family was said to be "rich" if they bought a home for $50,000, which converts to $265,000 in current dollars -- far below the modern norm in many leafy suburbs on the East or West coasts.

In fact, the once-rare million-dollar home is almost common. In the year 2000, there were 313,759 such houses in the country, according to the National Association of Homebuilders. There are even more today.

Travel

In the 1960s, the jet engine opened up previously unheard of travel possibilities. Americans started flying to Europe in ever-rising numbers.

Today, Paris is passé. To be well-traveled means to have visited exotic locations.

Scads of companies now sell cruises to Antarctica. Departing from the tip of South America, rates begin at around $3,500, plus the cost of getting there. A Web search of tour operators reveals that many vacation packages for the upcoming season are already sold out.

Fewer than 4,000 people a year visited the Galapagos Islands in the 1960s. Today, Darwin's favorite archipelago attracts more than 60,000 guests annually, at costs ranging from a few thousand dollars to $35,000 or more for a chartered private yacht.

Even Mt. Everest -- defined as the most remote place on earth before Edmund Hillary and Tenzing Norgay climbed it in 1953 -- has had more than 1,200 people reach its peak. One "elite trek" costs about $6,000 to get to the base camp, plus equipment to make the ascent.

Automobiles

In the 1960s, many upper-middle-class motorists aspired to own elegant sedans. The 1965 Lincoln Continental had a sticker price of $6,166, about $36,000 in current dollars.

The Continental is no longer produced, but a good substitute might be the Lexus LS-430. Manufacturer's suggested retail price: $55,700, before options.

Events

In 1966, author Truman Capote threw a party at the Plaza in New York, called the Black and White Ball.

 
Then and now: Are price increases outpacing inflation?
 

  INFLATION ADJUSTER  
How much would: $
in: be worth today?

It's hard to overstate the fame of the event or its attendees, but it has since been widely known as the "Party of the Century." According to the New York Times, the gala cost Capote $16,000. That's the equivalent of $91,000 today.

Last year, financier Ralph Whitworth wanted to surprise his wife Wendy (a CNN producer) for her birthday. So he got Paul McCartney to play at a party in San Diego. The price of Sir Paul's services: $1 million, paid to the Adopt-a-Minefield foundation.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.