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Saving was once something practiced by the well-to-do minority of the population —because only they could afford it. In the new economy, so many Americans are so well off that savings and loan accounts have grown to $46 billion, v. $10.9 billion ten years ago. Time deposits at mutual savings banks and in commercial banks, postal savings and savings bonds add up to another $160 billion or so—all money that can be spent. Even old folks, many of whom once lived on their children, now have a comfortable income from corporate, federal, state and local retirement funds totaling almost $75 billion.
The Status Symbols. Savings are only one factor in keeping consumer spending high. One of the big new things economists talk about is "discretionary income" —what Americans have left over after they pay taxes, feed, clothe, house and transport themselves and buy whatever else they consider necessities. In the new economy, the necessities themselves are so numerous that the consumer price index now contains 300 items (v. 200 in the 1930s). Nevertheless, the U.S. in 1958 spent only two-thirds of its total $311 billion disposable income on necessities. All the rest, a staggering $104 billion, was discretionary income to be spent as people chose. With the migration to higher income brackets that has put close to 50% of the taxpayers in the bracket above $5,000 annually, discretionary income is a constantly rising figure, will jump to $116.6 billion next year.
This income has caused a great change in what sociologists like to call the status symbols, the material possessions by which a family can show its success. Once it was usually a car—the bigger the better. But now, says McCann-Erickson's President Marion Harper Jr.. "the status symbols are beginning to pile up six deep," include boats, summer homes and swimming pools (53,000 built in 1958). They are the symbols of the new "reward" spending. As part of his reward for hard work, today's U.S. consumer feels justified in buying luxuries that yesterday's wage earner dared not even contemplate.
Rambling Rambler. The changing symbols of status showed up in new car sales. Detroit's output tumbled 26.7% to only 4,250,000 cars for the year. Both Ford and Chrysler lost money in the first nine months (though Fords were selling so fast at year's end that the company will end up in the black). Motorists found plenty of reasons not to buy, and some complained that 1958's creations were too long, too low, too chromy, too powerful, too high-priced. A truer reason was that Detroit was slowed by its own excellence. Practically everybody who wanted a car already had a good one, or two—and they took a long time to wear out. With no pressing reason to buy, cars were postponable items—except as they offered something new in the way of status symbols.
The industry's success story of 1958 was the fast rise of the small car, which provided transportation, economy and snob appeal all in one package. The buglike