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Has the American economy turned into a “plutonomy”?

This makes the point I used to make about the nannies and the danger to full nanny employment if we tried to injure the talent.

I told everyone they would move to St. Petersburg.

Liquidity moves markets!

Follow the money. Find the profits! 

No one would listen!

And now, my intuition has been proven correct thanks to this article from Salon,

We depend on the rich consumers!

Without them there is no financial global hypereconomy. The “no-rich”, the multitudinous many, depend on them to support reality as we know it.

From salon:

“In 2005, three Citigroup analysts — Ajay Kapur, Niall MacLeod and Narendra Singh — answered yes. They explained: “Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S … Often these wealth waves involve great complexity, exploited best by the rich and educated of the time.” According to the Citigroup experts, a plutonomic economy is driven by the consumption of the classes, not the masses: “In a plutonomy there is no such animal as ‘the U.S. consumer’ or ‘the UK consumer,’ or indeed the ‘Russian consumer.’ There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the ‘no-rich,’ the multitudinous many, but only accounting for surprisingly small bites of the national pie.” The Citigroup analysts speculated that a plutonomic world economy could be driven by the spending of the world’s rich minority, whose ranks are “swelling from globalized enclaves in the emerging world.”The data support their analysis. According to Moody’s Analytics, the top 5 percent of American earners are responsible for 35 percent of consumer spending, while the bottom 80 percent engage in only 39.5 percent of consumer outlays.”

Salon Link

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