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Wed Jun 27, 2012, 05:35 AM

 

"The economy" doesn't need you: Top 5% do 37% of consumer spending.

U.S. Economy Is Increasingly Tied to the Rich

Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years.

According to new research from Moody’s Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.

By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.

http://blogs.wsj.com/wealth/2010/08/05/us-economy-is-increasingly-tied-to-the-rich/


I keep seeing people here write things like: "How stupid corporations are, who do they think is going to buy their products if there are no jobs?"

Here's what you don't get: They don't need *you*. Not as a worker, and not as a consumer.

Corporations aren't like family businesses; the big shareholders have no particular attachment to them, or their particular business model. GM made more money on finance than it did making cars; cars were just the excuse for the finance.

If there's no middle-class to buy the accoutrements of middle-class life, money just moves to where the rest of the money is -- Walmart will take care of the bottom 80% & for the top 20%, an ever-larger menu of status-coded 'consumer choices' will be offered -- gold-plated strawberries and automatic nose-pickers, whatever.

If you don't have money, you're outside the market, but the market still exists.

Mexico ran that way for 100 years -- a small westernized elite and a slightly larger class of folks who served the elite and ran the bureaucracies, shops, etc -- and a largely impoverished mass who lived outside the regular economy -- through crime, selling gum, begging, picking through the garbage dumps, doing odd repair work -- whatever it took to get by.

It *can* happen here, & is -- the air from the bankster heist is being let out slowly, all over the world -- here a city declares bankruptcy, there a school system is privatized, over there public spending is cut to the bone -- and the dominoes just keep falling. The depression isn't over, it's going to continue for years, because the global ruling class wants it to.

This is the better future your parents and grandparents spent their lives working to provide for you. Little did they know that they were really doing was working to build the power of the ruling class.


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Reply "The economy" doesn't need you: Top 5% do 37% of consumer spending. (Original post)
HiPointDem Jun 2012 OP
KG Jun 2012 #1
HiPointDem Jun 2012 #2
Zalatix Jun 2012 #3
HiPointDem Jun 2012 #4
Zalatix Jun 2012 #5
HiPointDem Jun 2012 #6
Zalatix Jun 2012 #8
HiPointDem Jun 2012 #9
Zalatix Jun 2012 #12
HiPointDem Jun 2012 #14
Zalatix Jun 2012 #15
HiPointDem Jun 2012 #16
Zalatix Jun 2012 #18
HiPointDem Jun 2012 #20
Nye Bevan Jun 2012 #35
Zalatix Jun 2012 #36
Nye Bevan Jun 2012 #37
xchrom Jun 2012 #7
Make7 Jun 2012 #10
HiPointDem Jun 2012 #11
joshcryer Jun 2012 #13
October Jun 2012 #17
HiPointDem Jun 2012 #22
Scootaloo Jun 2012 #26
mmonk Jun 2012 #19
HiPointDem Jun 2012 #21
w0nderer Jun 2012 #23
quaker bill Jun 2012 #24
HiPointDem Jun 2012 #25
joshcryer Jun 2012 #27
HiPointDem Jun 2012 #28
snappyturtle Jun 2012 #34
GeorgeGist Jun 2012 #29
HiPointDem Jun 2012 #30
DCBob Jun 2012 #31
Zalatix Jun 2012 #33
raccoon Jun 2012 #32
HiPointDem Jun 2012 #40
laundry_queen Jun 2012 #38
WI_DEM Jun 2012 #39
Downtown Hound Jun 2012 #41
HiPointDem Jun 2012 #42
baldguy Jun 2012 #43
geek tragedy Jun 2012 #44
HiPointDem Jun 2012 #45

Response to HiPointDem (Original post)

Wed Jun 27, 2012, 05:51 AM

1. 'U.S. Economy Is Increasingly Tied to the Rich' - because they won't let the rest of us

have any money.

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Response to KG (Reply #1)

Wed Jun 27, 2012, 06:00 AM

2. precisely. 'all your money belongs to us'.

 

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:01 AM

3. Then we don't need the economy. This is why we need a LONG bout of hyperinflation.

 

Destroy the value of money and wipe out the life blood of the Plutocracy.

Or else you will wind up seeing what life is like when the economy doesn't need you - and that is far, far worse.

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Response to Zalatix (Reply #3)

Wed Jun 27, 2012, 06:17 AM

4. hyperinflation doesn't hurt the plutocracy. they *create* hyperinflation as an attack

 

on other countries' currencies.

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Response to HiPointDem (Reply #4)

Wed Jun 27, 2012, 06:18 AM

5. They create a limited hyperinflation.

 

If money becomes worthless worldwide, they've got nothing to pay their troop thugs.

Without that, you're screwed.

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Response to Zalatix (Reply #5)

Wed Jun 27, 2012, 06:19 AM

6. unfortunately, the transition would kill millions. a minor detail.

 

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Response to HiPointDem (Reply #6)

Wed Jun 27, 2012, 06:21 AM

8. That's going to happen anyway. Might as well put their skin in the game.

 

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Response to Zalatix (Reply #8)

Wed Jun 27, 2012, 06:23 AM

9. no, it doesn't have to. unfortunately, people are so worried about sunscreenpolicy

 

in tacoma and oreos with colored filling and all the other million fake news items held up to distract them from things that actually matter.

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Response to HiPointDem (Reply #9)

Wed Jun 27, 2012, 06:30 AM

12. I wish that were the case.

 

Many working class people actually actively hate politicians who talk about protecting the working class.

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Response to Zalatix (Reply #12)

Wed Jun 27, 2012, 06:37 AM

14. because theyve been taught that colored oreos are more important.

 

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Response to HiPointDem (Reply #14)

Wed Jun 27, 2012, 06:40 AM

15. If you got rid of colored oreos and all those other petty distractions

 

the populace would be even more determined to fight against their self-interest.

Do you really think that colored oreo stories would be replaced by Progressive messages instead of Capitalist propaganda?

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Response to Zalatix (Reply #15)

Wed Jun 27, 2012, 06:42 AM

16. public discussion is organized around escapism and distractions. silence would

 

force people to look at their actual lives instead of fake crap.

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Response to HiPointDem (Reply #16)

Wed Jun 27, 2012, 06:44 AM

18. There wouldn't be silence. The void would be filled with Koch-approved propaganda.

 

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Response to Zalatix (Reply #18)

Wed Jun 27, 2012, 06:49 AM

20. it's already filled with koch approved propaganda. silence is silence.

 

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Response to Zalatix (Reply #3)

Wed Jun 27, 2012, 09:18 AM

35. We *need* hyperinflation?

That is batshit insanity, even by the standards of DU economics threads. Of course the "plutocrats" can protect their assets against hyperinflation, by buying gold, other commodities, and inflation-linked Treasuries. While at the bottom end of the scale, the poor and the old will be unable to afford food and rent.

Oh, and hyperinflation paved the way for World War 2.

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Response to Nye Bevan (Reply #35)

Wed Jun 27, 2012, 09:59 AM

36. They can't control anything they're not physically sitting on, in that kind of situation.

 

And World War II has absolutely nothing on what the world will be like if America, much less the rest of the world, becomes the kind of PLUTONOMY where the economy has left 90% of the populace behind. The way we're going the rich will live inside their protected castles while the rest of the world is starving or at war with itself over the scraps the rich leave them.

Think Mexico - except worldwide.

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Response to Zalatix (Reply #36)

Wed Jun 27, 2012, 10:11 AM

37. What's to stop them buying gold or commodities through trusts based in the Bahamas, for example?

And even if they do need to "physically sit on" assets, they can buy physical gold and store it somewhere.

I absolutely guarantee that the top 1% would understand, plan for, and thrive through hyperinflation a lot better than the bottom 90%.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:20 AM

7. Du rec. Nt

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:24 AM

10. That's backwards. The bottom 95% account for far more spending than the top 5%.

Sixty-three percent of consumer outlays vs thirty-seven percent.

We don't need the top 5%.

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Response to Make7 (Reply #10)

Wed Jun 27, 2012, 06:26 AM

11. the top 20% apes the top and despises the bottom. as long as they get their vig

 

most of them will be fine with you picking bottles at the dump.

the most concentrated money wins, because money buys slaves that will do your bidding. concentration is in the top brackets, not the bottom ones.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:36 AM

13. The top 5% is something like 15 million Americans.

They couldn't make it without the other 285 million, not with the standard of living they've come to expect.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:44 AM

17. So, what can we do?

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Response to October (Reply #17)

Wed Jun 27, 2012, 06:52 AM

22. who is "we"? without organization, there is no "we".

 

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Response to HiPointDem (Reply #22)

Wed Jun 27, 2012, 07:14 AM

26. That's helpful. Thanks!

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:48 AM

19. But the bottom spends more of their income just to survive (higher percentage of what they make).

So it is more efficient to put more in their hands and it will expand the economy.

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Response to mmonk (Reply #19)

Wed Jun 27, 2012, 06:50 AM

21. the ptb don't *want* to expand the economy. they want to kick you out of the economy.

 

and take your share.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:57 AM

23. k&r for reading later n/t

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 07:02 AM

24. This makes an unfortunate amount of sense

I run a very small business in my spare time. I make and sell jewelry. I mostly sell at art festivals. I am the owner and the jeweler, there are no employees, though I have paid my daughter to photograph my stuff occasionally.

For the first few years I worked to crack the code of how to sell to 80%, and make it pay. I worked to produce an array of attractive products that I can sell between $25 to $40. I managed to produce some fairly attractive stuff that sells reasonably well.

At these shows I see crowds of 30,000 to 75,000 people over a weekend, the vast bulk of which seem to fall somewhere in the 80%. I do sell stuff to them, but never enough to really make it pay.

To impress the judges and satify some of my artistic drive, I also make much more elaborate work with more pricey materials. It is still modest stuff for the market as I only use gold for occasional decorative parts, and don't mess with diamonds or other very high end gems. I shoot for a price point between $300 and $1000. (some art jewelers start well north of $1000 and go up from there)

I don't sell alot of this stuff either, but when I do, the check is large and the profits are vastly better. Personal experience is that I can pay myself twice as much an hour selling to folks in the top 20% than I can selling to folks in the bottom 80%. There aren't as many of them, but they do show up with cash ready to buy.

The mix I have works and the business makes profits, and each year I have run it the returns are better. But this has come in part by changing focus, I steadily spend more and more time making higher end stuff because that is where the money is. My preference lies in the other direction, but I would have folded my tent and gone home if I had kept that as a focus. There is money to be had there, but there is not much, and it is unpredictable and much harder to get.

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Response to quaker bill (Reply #24)

Wed Jun 27, 2012, 07:10 AM

25. i actually read something maybe 8-10 years ago talking about how 'the market'

 

was becoming bifurcated -- low end & high end. predicting a winnowing out on the low end, and how operations like mcdonalds were no longer a good bet, high end retail was better because there was room for more variety there (i.e. it would just be a couple of fast food 'choices' or retail 'choices' for the low end & more variety at the the top).

it was jp morgan or someone like that doing the analysis.

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Response to HiPointDem (Reply #25)

Wed Jun 27, 2012, 07:20 AM

27. This is good. The bottom will eventually discard the structures that the top owns...

...yet the bottom manages. Once they realize, simply, that they're getting the raw end of the deal.

Food, technology, and resources are going to be so cheap eventually that there won't be a top structure that can make money off of it.

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Response to HiPointDem (Reply #25)

Wed Jun 27, 2012, 07:26 AM

28. and to the person saying everything is going to be so cheap no one can make money

 

off it i say lol.

heard that one when i were in kindeygarten, along with the electric cars we were all gonna have & how universal peace would come once the bad commies were out of the picture

power never lets loose

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Response to quaker bill (Reply #24)

Wed Jun 27, 2012, 08:50 AM

34. I'm a sculptor and I've come to this conclusion too. I figure I'm going after the

market with the people who have the money....it's sickening but.....

After 30+ years doing this work I realize that lower incomes can't
support the little niceities as often, if, at all. This is too bad because
I always had inexpensive items available so just about anybody
could buy a piece. Matter-of-fact I had enough of those ready to
cover the cost of the venue...it ALWAYS worked...but it wouldn't
today. My conclusion is that I'm going to get back some of the
money that should have been ours! Is that crazy or what?

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 07:47 AM

29. The remaining 63% isn't needed?

That's some messed up thinking.

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Response to GeorgeGist (Reply #29)

Wed Jun 27, 2012, 07:54 AM

30. if the top 5% does nearly 40% of the consumer spending, and consumer spending

 

is 70% of the economy, what percent do you think the bottom 50% spend?

according to irs data, they take home about 14% of adjusted gross income, so it ain't much. and it doesn't matter. 'the economy' continues without them.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 08:20 AM

31. I was suspecting something like this was going on.

Thats why there is such a disconnect between the improving economic numbers and the plight of regular folks out there who have almost nothing. This a serious problem since it masks the crisis affecting the majority of citizens.

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Response to DCBob (Reply #31)

Wed Jun 27, 2012, 08:32 AM

33. I've been screaming about it for years. Finally, someone published this warning.

 

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 08:28 AM

32. Not sure I buy this. One of the comments I thought


interesting:

"This is intuitively not correct. I think you have to double-check the basis of this article. Let me put it this way: there are only so much rich households in the country. By comparison, the vast, vast, vast majority are middle, upper-middle, or lower-income households. The spending by the bulk of these households will far surpass the combined spending of the super-rich. So, there’s something just plain wrong about the basis of this story. I suspect what’s driving the incorrectness of the article is that housing is included in “consumer outlays.” When you control for housing, and focus only on things like food, clothing, and auto (necessities and conspicuous items), you’ll get a vastly different picture."


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Response to raccoon (Reply #32)

Wed Jun 27, 2012, 02:28 PM

40. in 2011 the top 5% took home about 32% of total income. what's so intuitively

 

incorrect? small number of households, large amount of disposable income.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 10:27 AM

38. Holy god the comments on that article

are seriously barf-worthy.

The methodology is suspect. What do they mean 'outlays' and 'transfer payments'? I want to see exactly what they are including in 'spending'.

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 10:36 AM

39. maybe if the rest of us made a decent salary we would have more pull and spend more

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Response to HiPointDem (Original post)

Wed Jun 27, 2012, 06:24 PM

41. So in other words, 63% of the economy is tied to the working class?

Ah, I would say they need us.

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Response to Downtown Hound (Reply #41)

Thu Jun 28, 2012, 04:56 AM

42. The bottom 50% of the income distribution takes home about 13% of all income. The top 1% takes

 

home about 23% -- almost double what the bottom 50% does.

The top 20% takes home 60%.

They don't need us.

http://www.politifact.com/truth-o-meter/statements/2010/dec/10/bernie-s/bernie-sanders-viral-speech-says-top-1-percent-ear/

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Response to HiPointDem (Original post)

Thu Jun 28, 2012, 05:49 AM

43. The Top 5% have 62% of the country's net worth

Last edited Thu Jun 28, 2012, 07:14 AM - Edit history (1)



And 72% of the wealth. It's because these people are doing only 37% of the spending is the reason the economy is hurting.

This is just more proof that we should tax the hell out of them. The Top 5% are the parasites that are sucking the rest of us dry.

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Response to HiPointDem (Original post)

Thu Jun 28, 2012, 06:52 AM

44. Nonsense. 63% of spending comes from

ordinary people. Even a 10% reduction UN business is disastrous.

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Response to geek tragedy (Reply #44)

Thu Jun 28, 2012, 01:45 PM

45. the bottom 50% takes home about 13% of all income, less than the top 1%, who takes 23%.

 

they don't need us.

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