By Derek Thompson | The Atlantic
What’s there to say about an economy where $190,000 sell like hot cakes and half-price Mercedes can’t find a buy? Or one where $5,000 earrings can’t sell, but $58,000 gold bracelets won’t stay in stock?
The ultra-rich have practically bought themselves out of the normal economy, Bloomberg reports, and while the rest of the top 10% (those making between $150,000 and $250,000) remains hunkered down with the rest of the country.
But why shouldn’t the rich have their own economy? For many reasons — economics of superstars, global capital markets, and so on — the wealth of the top 0.X% increasingly has nothing to do with the wealth of everybody else. In April, Scott Winship presented this awesome chart explaining the incredible wealth of the world’s billionaires by plotting them along Dubai’s Burj Khalifa. Here’s what you get. The upshot is that the world’s 0.01% are so much richer than the 1% that the pictures on the right make it look like Mitt Romney is joining the rest of the of the 99.9% in the lobby.
The Atlantic‘s Matt O’Brien graphed this phenomenon a few months ago when he calculated how the 0.1% compared to the 1% and GDP per capita.
Conservatives argue that income inequality doesn’t pose a direct threat to the fortunes of the typical family. That might be true. But pictures like this make you wonder why, if we’re going to have marginal tax rates, it makes sense to stop under $400,000. The real explosion of wealth takes off in the millions and billions of dollars. The ultra-rich can afford their own exosphere of luxury stores. They can’t afford even tropospherical taxes? I’ve got nothing against super-duper wealthy people effectively creating their own shadow economy. They’re earned it rather literally. But it’s weird to witness this breakaway wealth and determine that the way to fix public finances is to ask them to pay less.