The real cash incomes and wealth of middle class and working class have stagnated since while there has been a spectacular rise in income and wealth for the owners, managers, and servants of capital. Realitybase readers know that I think this is in large part due to unbalanced foreign trade and even more to globalization by exposing Americans to foreign labor competition. That view is vigorously denied in public by banks, other business organizations, their trade groups, editorial boards, economists, policy elites, and other guardians of conventional wisdom. Our thesis is that the rich are the dominant drivers of demand in many economies around the world the US, UK, Canada and Australia. These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries.
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Wait, now that I look around, I see that Yves Smith at Naked Capitalism posted about this on October 15, , almost three years ago, and called for people to protest the annual meetings of the American Bankers Association. Just google it. Nothing that surprising, economically speaking, except for maybe the fact that their reaction, far from being outrage, is something bordering on gleeful. This equal voting power seems to be a pretty serious concern for their plans.
They go on to say: A third threat comes from the potential social backlash. To use Rawls-ian analysis, the invisible hand stops working. Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Pluto-participant.
Why kill it off, if you can join it? But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. Could the plutonomies die because the dream is dead, because enough of society does not believe they can participate? The answer is of course yes. But we suspect this is a threat more clearly felt during recessions, and periods of falling wealth, than when average citizens feel that they are better off.
There are signs around the world that society is unhappy with plutonomy — judging by how tight electoral races are.
But as yet, there seems little political fight being born out on this battleground. The population at large might still endorse the concept of plutonomy but feel they have lost out to unfair rules. In a sense, this backlash has been epitomized by the media coverage and actual prosecution of high-profile ex-CEOs who presided over financial misappropriation.
To this end, the cleaning up of business practice, by high-profile champions of fair play, might actually prolong plutonomy. Note the perspective: what could go wrong. Lest we wonder who inititated class warfare. Share this:.
CITIGROUP PLUTONOMY MEMOS PDF
Wait, now that I look around, I see that Yves Smith at Naked Capitalism posted about this on October 15, , almost three years ago, and called for people to protest the annual meetings of the American Bankers Association. Just google it. Nothing that surprising, economically speaking, except for maybe the fact that their reaction, far from being outrage, is something bordering on gleeful. This equal voting power seems to be a pretty serious concern for their plans. They go on to say: A third threat comes from the potential social backlash.
LEAKED CITIBANK MEMO PLUTONOMY PDF
Bakazahn Plutonomy: A Leaked Citibank Memo There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. Practically every country in the world is taking at least halting steps towards trying to do something about it. In a sense, this backlash has been epitomized by the media coverage and actual prosecution of high-profile ex-CEOs who presided over financial misappropriation. Fortunately, this is already happening. They posit a few reasons for this change: Outsourcing, offshoring or insourcing of cheap labor is done to undercut current labor costs. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time. For one thing, its not even clear if the Plutonomy Memos constitute protected copyright material.
Origins[ edit ] Plutonomy entered the language as late as the s in the work of John Malcolm Forbes Ludlow. In this book, he shows a strong long-term trend toward more concentrated income and wealth. Some economists took issue with this diagnosis. In a paper, which he wrote for customers of his new employer, Bank of America Merrill Lynch , one of the largest wealth management firms, Kapur and his team defended Piketty against critics. In their study "Piketty and Plutonomy: The Revenge of Inequality" they state that in the long term the drivers of the further concentration of wealth are intact, including globalization and capitalism-friendly governments. However, they warn that in the short-term there is potential for a backlash. One reason is that the US central bank Federal Reserve is reducing their asset purchases.