Predictably, small business failures mirror this seasonal trend, adding to the nation s income inequality. I should point out that a disproportionate share of small business owners are women, minorities and the working poor. It is liberal constituencies who are being hurt by these booms and busts, and this should compel liberals everywhere to spread out their spending over the whole year, especially among small businesses. There are other economic problems as well. Social custom prevents people from asking others what kind of gifts they want, so they often have no idea of the recipient s wants, tastes or needs.
Suboptimal gifts range from wrong dress sizes to inedible fruitcakes to snowy water balls.
This market failure represents a significant and tangible cost to society. To solve this problem, more and more people are resorting to gift certificates. But when everyone exchanges gift certificates, they might as well forgo the fiction of gift-giving and buy their presents themselves. Reusable and recyclable merchandise would save society money, but that would hurt the Christmas industry, which is why they don t market these items. The environmental reasons As the last paragraph suggests, using items once and throwing them away incurs not only an economic cost, but an environmental cost as well.