Downvote me all you want, but the bubble was caused by the desire of the people to consume outstripping their ability to create value. Advertising aims to increase the desire to consume.
"Advertising aims to increase the desire to consume."
That statement is false (or more correctly, not necessarily true). Take toilet paper for example, you see a lot of marketing for toilet paper, but I seriously doubt the total market size for toilet paper is really being increased dramatically via marketing.
No, the advertising isn't meant to make people wipe their asses more, it's to steal market share from competitors. Consumption in this case has not risen, only redirected to another producer.
So no, not all advertising aims to increase the desire to consume in general, it simply increases the desire to consume a particular product, very possibly at the expense of other consumption.
Furthermore, there is substitutability of goods - if Bob's Toilet Paper works as well as Joe's Toilet Paper, and costs 30% less, consumers are reducing overall consumption (by dollar value) thanks to Bob's shrewd marketing. Not all advertising results in a net loss for the consumer.
It is patently false to claim that all marketing acts explicitly against the interest of those it advertises to.
You're claiming that Google/Schmidt is being a hypocrite for condemning over-spending, while being in the marketing business himself... as if his work naturally leads to consumers overextending their finances.
I'm telling you here that marketing does not at all necessarily encourage spending beyond one's means - and in fact in many cases saves consumer money. What Schmidt does is really morally very neutral, I do not see the need to single him out for it.
I am saying that encouraging consumption does tend to lead to over-consumption. Equilibriums exist in textbooks, but in the real world there's a clear tendency for oscillation in economic markets. If you're pushing one way, yeah, you're a part of the problem when things go over the line in that direction.
Advertising is nowhere near neutral in its effects on consumption. Sure, it may have some minor effect that reduces consumption, but taken as a whole that's not what it does at all.
Note here this is different from what you're reading into my position. I'm not saying marketing is inherently bad. But I am saying that it does push in a direction, and too far in that direction is bad.
Which of those statements is false?