Is Christmas bad for the economy?

The lyrics to one of my favorite Miles Davis songs — Blue Xmas (To Whom It May Concern) — go something like this:

Blue Christmas

That's the way you see it when you're feeling blue

Blue Xmas

When you're blue at Christmas time you see right through all the waste, all the sham, all the haste

And plain old bad taste

That happy tune popped into my head today as I was reading this cool holiday feature called Santanomics, an ongoing series by The Atlantic on "the connections between economics and the holiday season."

The first installment, written by Derek Thompson, deals with the inefficiencies of the retail sector around the holidays.

Here's how Thompson puts it:

Close your eyes and imagine a totally make-believe world where families just like yours have a long wish list. But in this fantasy universe, they spend the whole year not buying what they want. Rather than spread their purchases evenly, they wait until the last six weeks of the calendar to do half of their shopping. They accumulate unwieldy towers of goods from overstuffed malls in a graceless display that involves rushing into an electronics aisle, shoving aside a small mother, and excavating a cardboard box, like a vulture swooping over a crowded carcass. Half of the purchases are gifted to friends and family in a show of love, but a great deal of the recipients hate their presents, anyway. It doesn't work out much better for the stores, who encourage this sordid behavior by slashing prices at the same time that they have to hire additional workers to clean up the mess. What civilized society would ever go through with this parade of indignities year after year?

Ours, naturally! So, Merry Christmas.

What's the economic theory at work here?

If people spent more evenly throughout the year instead of buying a bunch of crap that many recipients don't event want, they would "put more goods in the hands of people who truly value them and improve social welfare."

So the way Christmas is currently organized, this retail argument goes, may be bad for the economy.

Read the whole Atlantic story here, grinches. 

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