Wall Street Journal 8/10/2011 p. B1
[excerpted] "Luxury shoppers, while a small segment of consumers, wield an outsized impact on the broader economy, earning roughly 50% of the total income in the U.S. and making 48% of total expenditures, according to Citigroup estimates...
"'We believe that high-income consumer spending is at greater risk as the top 20% of income earning households own 89% of equities,' Citgroup analyst Deborah Weinswig wrote in a research report Tuesday"
MAJIA HERE: The spending power of the wealthy in comparison to the rest of the country reinforces the thesis that the US is a PLUTONOMY
Citigroup described the US as a Plutonomy in a document dated October 16, 2005 titled, “Equity Strategy: Plutonomy: Buying Luxury, Explaining Global Imbalances.”
The document describes a world “dividing into two blocs—the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest” (p. 1).
The U.S. is a “key” plutonomy characterized by
[quote from document] "...disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions." (pp. 1-2) [end quote]
The productive and consumptive capabilities of the larger population within plutonomies wane in significance relative to the wealth accumulated by the few through technology that replaces workers, financial “innovations” capable of accumulating wealth outside of production (e.g., through securities transactions), and through overseas colonial exploitation of resources and labor.
More recently, The International Forum on Globalization (IFG) issued a report in 2001 critically describing the evolving “plutonomy” characterized by corporate power and the unfettered influence of “a new dangerous class of politically dominant billionaires”:
[begin quote] “Plutonomy.” A newer threat cited for the first time by the board was the astonishing emergence of a new dangerous class of politically dominant billionaires. Operating on a global scale, as well as within countries, these oligarchs are increasingly able to relate to the world nearly as if it was their own feudal enterprise, generally out of view, and with few controls. Recognizing the realities of resources limits, many of these individuals now see their profit opportunities as no longer solely dependent on corporate economic growth, but equally on systemic control of vital resources, including food and water."
Citigroup (2005, October 16). Equity strategy: Plutonomy: Buying luxury, explaining global imbalances. Retrieved from http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-Plutonomy-Report-Part-1
International forum on globalization. http://www.ifg.org/pdf/IFG-2011-Strategic-Program-Plan-8pg.pdf