Monday, May 24, 2010

Evidence of the Plutonomy

HEADLINE: Consumer spending trend is a shaky foundation for economic recovery
Analysts say the upswing in buying is largely by affluent people snapping up luxury items and delinquent homeowners who have extra money since they aren't making their mortgage payments

May 16, 2010By Don Lee, Los Angeles TimesReporting from Washington — "Increased consumer spending has fueled hopes that the current economic recovery will keep getting stronger, but behind the encouraging numbers is a little-noticed reality: Much of the new spending has come not from America's broad middle class but from a small slice of affluent people at the top.

And upper-crust spending, while welcome, can be worrisomely volatile: Since it involves luxuries, not everyday necessities, the buying can suddenly shrink if something such as the recent stock market plunge panics affluent shoppers...."

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