> Ajay Kapur, global strategist at Citigroup, says the US is a
> "plutonomy", an economy powered by the wealthy. While the average
> consumer devotes 7.8 per cent of their total expenditure to
> energy-related products, high-earners devote just 6 per cent. "They
> account for the bulk of consumption and are relatively unscathed by
> high oil prices," Mr Kapur says.
I don't believe this. I don't get how "high-earners" account for the bulk of the consumption since there are so many more low-earners than high earners. I also wonder what he counts as "energy-related" products. Everything that has to be brought in by truck is an energy-related product. Almost everything that is eaten (raised with help of pesticides and chemical fertilizers) is an energy-related product.
Katrina struck right around labor day. Labor day is when Xmas shopping starts now. Xmas shopping defines whether a lot of retail businesses make it through the year. Do I feel more expansive or less expansive than before Katrina? What about all the folks who have lost their jobs and houses? What about the downward pressure on wages and upward pressure on rentals for folks who have been displaced and the places they were displaed to?
Sure, the reconstruction may have a stimulative effect, but given the massive corruption that will go along with that, we may be sure that most of the money will be siphoned off into very few pockets.
The real question now is "can they find an alternate universal currency."
Joanna