It has been posited many times the United States functions as a “plutonomy.” The word plutonomy is a portmanteau of “plutocracy” and “economy,” meaning an economy based on a plutocracy, which means the richest few command the economy. It’s been argued that it was always that way. Recent figures indicate that the richest few are what have driven any relative improvements in the economy.
Plutonomy has nothing to do with cartoon dogs
What the term plutonomy implies is the economy is driven by and depends on a small number of the wealthiest individuals. Good reasons exist to think the positive signs in the economy have had every little thing to do with what the richest of rich people are doing. Moody’s keeps track of consumer spending patterns, and found some interesting things, according to the Wall Street Journal. The richest 5 percent have spent about 37 percent of all consumers spending for the last 20 years. A scant 40 percent was from the bottom 80 percent. Only 10 percent of the population makes about half the total income within the U.S.
The math works
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 each dollar worth of wealth, 90 percent of the populace holds collectively 30 cents. It seems Reagan’s trickle went upward, and it was no mere trickle; it was a tidal wave.
We the rich individuals
Historians such as Howard Zinn and others have posited the Founding Fathers were all the richest of the wealthy. Taxes to the crown cost them more than the commoners. Thus, they revolted and established a nation in which they would enjoy an oligarchy of advantage. James Madison estimated only a third of Americans were actually for the American Revolution, the rest being either opposed or indifferent. It is in the nature of republics to encourage aristocracies. If there is one universal harbinger of doom for a society, it is a growing and vast disparity between the wealthiest few and also the numerous poor.
Additional reading
online.wsj.com/article/SB20001424052748703988304575413432696177258.html
en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
federalreserve.gov/pubs/feds/2006/200613/200613pap.pdf – PDF, requires Adobe Reader
