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Monday, August 4, 2008
Interesting AP story today about a kind of "trickle-up" effect: when the economy gets sour enough, the pain eventually sets in for the wealthiest segment of the population. And because of the massively inequitable distribution of wealth in our society -- with the top 1o percent of households representing 25 percent of consumer spending and the top fifth of households earning half of all income -- when the rich start to curtail their lavish ways, it has serious repercussions throughout the economy. With the decrease in consumer demand that this segment represents, companies start dropping the ax on us little people. And guess who's better able to weather a tough economy, the paycheck-to-paycheck family of modest means who lose their source of income, or the high-net-worth individuals with thick investment portfolios who now have to choose between the impulse buy of a $1700 purse and a last-minute $1700 weekend in the Hamptons?