Sunday, November 29, 2009
Here we have the concise expression of the capitalist retail ethos: if you aren't capable of spending a lot of money on conspicuous consumption, you're not a person. Instead, you are only important to the extent that you facilitate the production, delivery and marketing of those products for the wealthy. Or, conversely, in a negative sense, to the extent that you interfere with it, in which case, the police power of the state is called upon to take immediate action.
The holiday shopping season may just prove a little merrier than expected.
Investors are betting that upscale shoppers will open their wallets this Christmas season after pinching pennies a year ago. Shares in luxury retailers Tiffany, Saks and Nordstrom all rose Wednesday ahead of the official start of the holiday season today, Black Friday.
"We're resting our (upbeat outlook) on the upper-income consumer, who seems to be holding up pretty well," says Dan Greenhaus, chief economic strategist at Miller Tabak. His thinking: A 64% runup in the Standard & Poor's 500-stock index since March 9 has restored some of the wealth lost in last year's financial meltdown, boosting confidence and spending power among the rich.
"Well-to-do Americans are feeling much less of a crunch," agrees the research firm Penn Schoen Berland.
But it sees a big divide between high- and low-income households. In a survey of 1,002 consumers, Penn Schoen Berland found that those earning more than $70,000 a year plan to increase holiday spending 27% this year. Those earning less than $40,000, by contrast, are slashing spending 14%.
"The vast majority of spending in this country is done by the upper-income consumer," Greenhaus says. "People feel a lot better this Christmas than they did last Christmas."
Of course, the story is a confirmation of what we already know, that Obamanomics is a neo-Reaganite policy designed to transfer even more money from the lower levels of the pyramid to the very top. Wage earners, except those in the upper reaches of income, are subsidizing investors and the institutions that serve them. It calls to mind a headline that accompanied a Nicholas von Hoffman commentary about Steve Forbes' flat tax proposal about 15 years ago: Under a flat tax, only fools will work.
Sadly, the same can be said to be true of Obamanomics, except that, as we all know, we must all work for a wage, no matter how adverse the circumstances, in order to survive. Obama, Summers, Geithner and Co. are cynically relying upon that universal truth to restructure the US economy for the benefit of an elite that compares to the robber barons of the late 19th Century in terms of its exclusivity. Last time around, it resulted in World War I and the Great Depression. Where will it lead this time?