In a report called "The Plutonomy Symposium Rising Tides Lifting Yachts," Ajay Kapur, Citigroup's global strategist, says

the balance sheets of the rich are "in great shape, and will get much better," which is why he recommends going out and buying stocks of companies that cater to that very select market. Spending by the uber-rich overwhelms that of the average consumer and helps explain why the U.S. economy has continued to do well and the U.S. dollar hasn't collapsed even in the face of the current federal budget deficit, a negative savings rate, global imbalances and high energy prices, he says. The United States is one of the plutonomy countries countries whose economies are powered by a relatively small number of rich people. - Angela Barnes, "Want wealth? Invest in the uber-rich," The Globe and Mail, October 2, 2006 Citigroup Plutonomy Report Part 1 Oct 16, 2005 - 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. [...] Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1. the world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time.

2. 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 technologydriven productivity, and globalization. [...] 4. In a plutonomy there is no such animal as "the U.S. consumer" or "the UK consumer", or indeed the "Russian consumer". There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the "non-rich", the multitudinous many, but only accounting for surprisingly small bites of the national pie. [...] i.e., focus on the "average" consumer are flawed from the start. http://www.scribd.com/... Here's the key part, mentioned in the Moore film, where CitiGroup frets about us pesky "laborers" could some day push-back, that we might demand fair treatment and pay for all our productivity: Citigroup Plutonomy Report Part 2 Mar 5 2006 RISKS -- WHAT COULD GO WRONG? Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was -- one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be feltthrough higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization -- either anti-mmigration, or protectionism. We dont see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.

http://www.dailykos.com/story/2009/10/04/789523/-CitigroupsShocking-Plutonomy-Reports-h-t-Michael-Moore
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