It has been suggested many times that the United States functions as a “plutonomy.” The word is a portmanteau of the words plutocracy and economy, meaning the economy hinges on the wealthiest of the wealthy. It has been argued that it has actually been that way all along. Some recently published figures indicate that recent positive economic activity has everything to do with the richest of the rich.
Plutonomy has nothing to do with cartoon dogs
The word denotes the economy revolves around a small number of very rich people. Good reasons exist to think that the positive signs in the economy have had everything to do with what the richest of rich people are doing. The Wall Street Journal reported on the findings of Moody’s of consumer spending patterns. The richest 5 percent have spent about 37 percent of all consumers spending for the last 20 years. The bottom 80 percent only spent about 40 percent. Only 10 percent of the population makes about half the total income in the U.S.
The numbers work
A 2006 Federal Reserve study by Arthur Kennickell found 70 percent of the wealth in the nation was owned by 10 percent of the population. For every dollar worth of wealth, 90 percent of the populace holds collectively 30 cents. Reagan’s trickle went up and was no trickle but rather a tidal wave.
We the rich people
Historians such as Howard Zinn and others have posited that the Founding Fathers were all the wealthiest of the wealthy. Taxes to the crown cost them more than the commoners. They revolted and established a new nation where they would be able to start an oligarchy of privilege. James Madison himself estimated only a third of Americans were in favor of the Revolution. It is in the nature of republics to encourage aristocracies. If there is a universal predictor of the collapse of a society, it is the wealthiest few taking economic ownership of the economy.
More information on this topic
Wall Street Journal: http://online.wsj.com/article/SB20001424052748703988304575413432696177258.html
Federal Reserve: http://www.federalreserve.gov/pubs/feds/2006/200613/200613pap.pdf – PDF, requires Adobe Reader
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