Saturday, May 1, 2010

Citigroup on "Plutonomy"

Plutonomy: where the rich rule with the support of the government. (Obviously, a derivation of the word "plutocracy.") Bill Moyers was just talking about this on his show and referenced a series of reports from Citigroup on the subject. (Ironically, taxpayers now own the majority of Citigroup!) When something becomes so obvious that investment houses start to build investment strategies around it, then you know it's for real, and in this case, we have a problem.

I have no problem with people making the most of their available opportunities and becoming rich, evenly astonishingly so. I only care that we have fair playing fields, and a government that is not in the hip pocket of a few. From one of the Citigroup papers:

"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 favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries."

Click here to access Citigroup's report on plutonomy.