The Perils of Gifts
He’s making a list, checking it twice, gonna find out who’s naughty and nice. He knows when you’ve been sleeping, he knows when you’re awake… Haven Gillespie (words) and J. Fred Coots (music) in 1934
Xi Jinping, president of China and leader of the Chinese Communist Party now knows everything about the hopes and dreams of 1.4 billion Chinese citizens using China’s social credit system and mass surveillance.
“Wait, what?”
Oh, never mind. Santa knows all of these things about everyone so that’s OK. One thing the songwriter Gillespie never claimed in his song was that Santa knew what presents you wanted or needed. Sure, kids wrote him letters to the North Pole, but they didn’t always get what they wanted, even if they were good.
One survey found that 3 out 5 Americans admit that they got gifts they don’t want ($152 billion worth). Also, 3 out 5 Americans lie about liking a gift they didn’t want. And yet, the Wall Street Journal reports that Christmas spending is up 8.5%. People producing gifts is great for the economy, although less than half of them will be appreciated. Should we be applauding this part of a recovery?
If Santa doesn’t know what to get people, how are the rest of us supposed to know? The short answer is, I think, we don’t. If we get gifts wrong most of the time, and these are to family members and close friends, how is it possible for others to get it right with people they don’t even know?
For example, when the government gives gifts, i.e., transfer payments, they ought to know whether: 1) we can afford them; 2) we don’t have unintended consequences; and, 3) we want them. Let’s focus mostly on the last one.
The federal government spends enormous amounts of money and much of it is gifts from one group of people to another group (transfers). For example, half of federal spending goes for Social Security, Medicare and Medicaid, about $3 trillion in 2021. Other income support programs include food stamps, Unemployment Compensation, Child Nutrition, Child Tax Credits, Supplemental Security Income, Student Loans and federal retirement and disability civil servant programs. These cost $645 billion annually.
Admittedly, the government transfers that are cash are more likely to be liked. Even for Christmas cash gifts, only 61% are appreciated. That still leaves 40% who are dissatisfied with their gift.
It gets even worse as the distance between the giver and receiver widens. As Williams Easterly pointed out in The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, “aid to third world countries are designed primarily to reflect the interests of the donors (‘The Rich’) and their perceptions of what is best for the recipients.” Thus, despite spending billions of dollars by the World Bank, the International Monetary Fund, and the U.S. Agency for International Development, most of the money is siphoned off to corrupt officials leaving the citizens worse off.
Perhaps, as we debate current large spending packages, we should make sure that the “gifts” we intend to shower on people are at least desirable. If Santa doesn’t know, and we don’t want to just dictate what people should have based on the rich and powerful’s perceptions, let’s at least be humble.