Here are the main points:
We are actually usually pretty bad at giving gifts people actually want:
"Gifts that people buy for other people are usually poorly matched to the recipients' preferences. What the recipients would willingly pay for the gifts is usually less than the givers paid. The measure of the inefficiency of allocating value by gift-giving is the difference between the yield of satisfaction per dollar spent on gifts and the yield per dollar spent on the recipients' own purchases."
Stimulus spending is actually counter-productive
"At least the Christmas stimulus strengthens the economy, right? Wrong, says Waldfogel. If all spending justified itself, we would pay people to dig holes and then refill them -- or build bridges to unpopulated Alaskan islands. Spending is good if the purchaser, or the recipient of a gift, values the commodity more than he does the money it costs. Otherwise, there is a subtraction from society's store of value."
The second point could actually be made to counter the arguments for a government stimulus as a way to combat unemployment.
The article makes some useful suggestions - give gift cards instead of gifts. And gift cards to charities for the affluent who already have everything they need.
I just want to make some counterpoints:
- The best gifts are gifts I have received and loved but would never have gotten for myself. My sister gave me the generous gift of a New Yorker subscription - which I loved and have continued today. Or last year my sister-in-law took all of my wife's weekly updates she sends out to friends and family (with a brief summary of our week with pictures) and created a beautiful bound book for us. In other words, sometimes others can spend money on us much more efficiently than we can spend on ourselves. Admittedly, this requires pretty deep understanding of the recipient and usually the giver has to have some skill to do so.
- Sometimes the recipient just has no money for many needs let a lone wants, so its all of the sudden pretty easy to give that person something they really, really want because they need and want a lot. I think children qualify pretty well on that count. So, you can use Christmas as a way to introduce a little magic in their lives and a way to satisfy the parental desire to indulge them while blaming the indulgence on Santa Claus.
- Christmas as stimulus is a stimulus if you have 10% unemployment, people aren't working because nobody wants want they're selling. If we use the holidays as an opportunity to spend a little more than we otherwise would have, getting a bit more money into circulation, then it should help as a stimulus. And the pay someone to dig a hole argument doesn't make complete sense because it is better to pay someone to do something 100% useless if the alternative is that they stay at home feeling 100% useless, unneeded and unwanted. At least they are working. But obviously, the better we are at spending stimulus toward things people want and need the richer we become. For example, last year I gave my parents tickets to community theater - they loved it, it helped keep the local actors working and my parents just don't do this kind of stuff on their own - stimulus, stimulus, stimulus.
- Christmas as a way to build and strengthen relationships. If you give something personal to someone, even if they didn't exactly want it, I think "it's the thought that counts" really counts, especially if the gift is really thoughtful. Homemade gifts apply here quite well.
But I think the article makes some good points. Gifts to charity for people who really have the means to buy what the want (especially if you don't have any special insights that would give you the ability to give them something they just wouldn't have thought to buy for themselves) is a really, really good idea.
Or you know, I'm 38, I'm really past the point where all I want for Christmas is a lot of good times with my friends and family. (I remember getting really annoyed when my parents would say something along those lines... :-))...
And you know, I can go ahead and buy the new Motorola Droid phone for myself for Christmas.