The first is a thirty-five-page document from October 16, 2005 titled, "Plutonomy: Buying Luxury, Explaining Global Imbalance".
Available as a PDF here: http://ifile.it/8nkxqh3
The report starts off:
The World is dividing into two blocs - the Plutonomy and the rest. The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.
Equity risk premium embedded in "global imbalances" are unwarranted. In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc. This imbalance in inequality expresses itself in the standard scary "global imbalances". We worry less.
There is no "average consumer" in a Plutonomy. Consensus analyses focusing on the "average" consumer are flawed from the start.
We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization.
The second, issued on March 5, 2006, is titled "Revisiting Plutonomy: The Rich Getting Richer".
Available as a PDF here: http://ifile.it/23gm078
The latest Survey of Consumer Finance data was released Friday 24th of February. It shows that the rich in the US continue to be in great shape. We thought this was good time to bang the drum on plutonomy.
Back in October, we coined the term 'Plutonomy' (The Global Investigator, Plutonomy: Buying Luxury, Explaining Global Imbalances, October 14 2005). 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 favourable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries. Also, new media dissemination technologies like internet downloading, cable and satellite TV, have disproportionately increased the audiences, and hence gains to "superstars" - think golf, soccer, and baseball players, music/TV and movie icons, fashion models, designers, celebrity chefs etc. These "content" providers, the tech whizzes who own the pipes and distribution, the lawyers and bankers who intermediate globalization and productivity, the CEOs who lead the charge in converting globalization and technology to increase the profit share of the economy at the expense of labor, all contribute to plutonomy. Indeed, David Gordon and Ian Dew-Becker of the NBER demonstrate that the top 10%, particularly the top 1% of the US - the plutonomists in our parlance - have benefited disproportionately from the recent productivity surge in the US.
Both reports go on to say--paraphrased--that "things are only going to get better for the rich while things get worse for everyone else since everyone else will spend what little they have at greater and greater rates thanks to the easy availability of shit to spend everything on and pressure from the current culture of having to spend-spend-spend to keep up with everyone else and that's so fucking cool, you guys, like omg."