Rich People on Spending Sprees May Find One Day That Income Inequality Bites Them in the Wallet

[xchrom]

http://www.alternet.org/economy/rich-people-spending-sprees-may-find-one-day-income-inequality-bites-them-wallet




For the past five years, the market for luxury goods has been on a roll, even as the rest of the economy sputtered. Fancy cars are flying off the production lines. Tiffany and Prada are in the pink. Even Big Tobacco is in on the action, doing brisk business in high-end cigars. Consumer spending is up! the latest headlines shout. Rejoice! But wait — if a big chunk of this is driven by sales of luxury goods, is that ultimately a good thing for the economy?

Despite the Great Recession, the U.S. has remained the world’s number-one nation for luxury goods consumption. The 1 percent has never had such fawning attention and splendiferous choices. The stock market returns of 2013 only served to further escalate the spending sprees of the wealthy. That's great for them. But what about the rest of us?

Well, we don't really count, according to the banksters. If you'll recall, back in 2005, the number-crunchers over at Citigroup released a report on the economy that made it all clear. The report announced that there is "no such thing as the U.S. consumer." Notions like "average" consumer and "average" debt were totally irrelevant. America, they explained, actually consisted of two groups: the rich and everybody else. There was no reason to worry about the second group, because what it did just didn't matter much. The richest 1 percent made as much every year as the bottom 60 percent combined. They called the group with all the power the "plutonomy".

"Economic growth is powered by and largedly consumed by the wealthy few," the analysts said. Just like it was in the Gilded Age and the Roaring Twenties. The idea was simple: the rich alone can keep the economy humming. Who cared, in that case, about income inequality? Thinking along those lines, many conservative neoclassical economists over the years have argued that income inequality is actually necessary for growth because it puts money into the hands of capitalists who will do things like create jobs and spend their money, which supposedly helps everyone out eventually. Trickle-down economics, some call it.

[FatBuddy]

1. can you turn a necktie into a noose?

pitchforks are probably rather affordable for the 99%

[valerief]

2. Pitchforks can always be stolen, if need be. nt