Wealthy push retail market

From the Houston Chronicle:

"The stars are aligned for the wealthy," said Howard Davidowitz, president of Davidowitz & Associates, a national retail consulting firm in New York. "Who's gained most from capital gains tax cuts? The wealthy. Whose houses have gone up the most? The wealthy. The wealthy are a lot wealthier. Why not buy an $8,000 TV? No problem."

And it's partly because of the strength of the luxury market that retail analysts predict a 4 percent to 5 percent increase in overall holiday spending. Even the average consumer is expected to spend a bit more per gift this year compared to last year.

Magaly Fuentes is certainly doing her part to bring up the holiday sales numbers.

On Thursday, she picked up a few things at Zadok Jewelers: a $17,700 white gold and diamond Cartier watch and a diamond necklace, totaling 24.5 carats, which cost much more. She bought them "just for fun."

"I made too much money in the last months," explained Fuentes, whose family owns oil and real estate businesses in Mexico and the United States.

Even though this very mainstream article seemingly tries to sugarcoat the depressing reality by throwing in a statement or two to the effect that "the average consumer" is also spending more, the truth comes through loud and clear: thanks to Bush's love-the-rich economic policies, the only people buying things in a big way right now are the wealthy. This is not good news. A healthy economy cannot be driven by upscale purchases only.

In fact, this report makes the central problem of neo-liberalism glaringly obvious. The idea behind "trickle down" theory is that the government should adopt policies that favor business and the rich--the assumption is that they will take their welfare payments and invest them in things that will make the economy grow. To be sure, some of the giveaway money goes in that direction. As the above quoted article demonstrates, however, a great deal of that free money goes toward the purchase of crap.

"Crap" is also a good word to describe neo-liberalism. Consequently, it's also a good word to describe Bush's economy.

For the rest of the article, click here.

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