Specifically, the quote in the article that comes from a Citigroup publication entitled "Revisiting Plutonomy: the Rich Getting Richer" drove me to take a brief look at the document. I found these gems:
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. Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries.So the upper 10% of the population drive purchases... I guess that explains why food prices really aren't a bother then.
The latest Survey of Consumer Finances for 2004 from the Fed, just released, shows that the richest 20% of Americans have gotten even wealthier since the last survey was conducted in 2001, and continue to enjoy a disproportionately large share of both income (58%) and wealth (68%). We should make clear that we have no normative view on whether plutonomies are good or bad. Our analysis is based on the facts, not what the society should look like.Hmm. Yeah, this isn't the way the world should be, it just kinda is... and therefore we should accept that and try to make money off it. I see.
This lies at the heart of our plutonomy thesis: that the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia, countries that have an economically liberal approach to wealth creation. We believe that the actions of the rich and the proportion of rich people in an economy helps explain many of the nasty conundrums and fears that have vexed our equity clients recently, such as global imbalances or why high oil prices haven’t destroyed consumer demand. Plutonomy, we think explains these problems away, and tells us not to worry about them. If we shouldn’t worry, the risk premia on equity markets may be too high.
Well, this doesn't provide any political capital at all, does it? I mean, if a politician ran on a campaign of taxing the top 10% of the population in order to provide better lives for the bottom 90%, he'd never win, right? I mean, it would be dumb to shoot for a majority of voters in a democracy, right? Yeah. That logic doesn't seem to hold. I wonder why politicians don't try to rein in the plutocracy? I wonder why they don't pick the issue that could get 90% of voters behind them?
I wonder indeed.