A quick follow up to last week’s Hackonomics discussion, where we looked at how little alleged wealth inequality there is in America.
Part of our critique was that dividing the US into quintiles was a variation of the median/average error, and only served to hide the exhorbitantly greater wealth, income and consumption of the top few percent. To that end, there are two peices of evidence I want to point you towards: One anecdotal, and one data driven.
The first one is THE ONE PERCENT, to be shown Thursday night on Cinemax, at 6:30pm Eastern (and throughout the month). The film is directed by Jamie Johnson (yes, Johnson as in the Johnson Johnson & Johnson). Its his follow up to his "Born Rich,” shown on HBO in 2003.
Here’s the Cinemax description:
Four years after turning his camera on himself and other affluent
youths in his documentary Born Rich, filmmaker Jamie Johnson presents
this look at the "wealth gap": the growing divide between the rich and
the poor in America. In this film, the 27-year-old heir to the Johnson
& Johnson fortune explores the political, moral and emotional
rationale that enables a tiny percentage of Americans–the one
percent–to control nearly half of the wealth in the entire country.
Along the way, Johnson collects the points of view from a wide variety
of Americans, ranging from media mogul Steve Forbes and Kinko’s founder
Paul Orfalea to Florida taxi drivers and Chicago residents in danger of
losing their low-income homes. (TVG) (NA)
Looks to be rather intriguing.
One last thing: In the original Hackonomics, I buried the detailed spending habits of the of the upper echelon of wealth in America. I suspect you will find this data a bit more unequal than the quintile nonsense we saw from Alm and Cox.
Here is how this group spent their money as follows:
Dollars Spent Category - 2007 Spending per Affluent Elite Household
Summer Spending * 2007 * 2005 Change 2007/2005
Activity % $ Spent % $ Spent $Change %Change
Yacht Rentals 10.60% $384,000 9.50% $317,000 $67,000 21.14%
Redecorating 44.90% $129,000 30.90% 137,000 ($8,000) -5.84%
Villa Rentals 15.70% $106,000 13.80% $79,000 $27,000 34.18%
Excursions 25.80% $103,000 22.70% $79,000 $24,000 30.38%
Jewelry/watches 73.70% $94,000 63.20% $63,000 $31,000 49.21%
Luxury Cruises 47.50% $92,000 43.10% $71,000 $21,000 29.58%
Charitable Giving 97.50% $82,000 98.40% $52,000 $30,000 57.69%
Rentals 12.10% $82,000 11.80% $64,000 $18,000 28.13%
Services 67.70% $61,000 48.70% $49,000 $12,000 24.49%
Entertaining 93.90% $56,000 92.40% $39,000 $17,000 43.59%
Luxury Hotels 95.50% $48,000 93.40% $36,000 $12,000 33.33%
Luxury Resorts 84.80% $41,000 82.60% $23,000 $18,000 78.26%
Services 53.50% $38,000 47.40% $26,000 $12,000 46.15%
Apparel/accessories 92.40% $34,000 86.80% $16,000 $18,000 112.50%
Audio/visual 51.50% $31,000 50.70% $14,000 $17,000 121.43%
Wines and Spirits
Entertaining 86.90% $24,000 77.00% $19,000 $5,000 26.32%
Wines and Spirits
Consumption 84.80% $17,000 74.30% $11,000 $6,000 54.55%
2007 2005 $Change %Change
Total Luxury Summer
Spending/Household $622,202.02 $399,187.50 $223,015 55.87%
*Percentage of those surveyed spending in this category
Survey of Households with Net Worth $10 Million +
Prince & Associates (2007)
Yeah, that consumption spending looks pretty egalitarian to me! I got your top quintile RIGHT HERE.
A Gaping Divide: Straddling Capitalism’s Fault Line
By GINIA BELLAFANTE
NYT, February 21, 2008
The One Percent
February 19, 2008 | 06:31 PM (EST)
Borrow and Spend
NYT, February 11, 2008, 12:42 pm
Consumption and Income Inequality
Economist’s View February 10, 2008
What is wealth?
Saturday, May 22, 2004 | 08:34 AM
Interesting new site coming from Frank Cioffi, the PR and media relations guy, and former tv news journalist: Tech Investor News.
Its been quite a while since our last edition of Blog Spotlight: Tonite, I am pleased to present Yves Smith’s naked capitalism.
Yves is a refugee from a big Wall Street iBank, and has put serious time into a well known consulting firm. I have been particularly impressed with Yves coverage of the monoline insurers (Ambac (ABK), MBIA, FGIC). As you will see, her thoughtful post below reflects both his sharp wit, worldly banking experience and insight into this sector.
This is part of our ongoing short list of excellent but somewhat overlooked
blogs that deserves a greater audience. I hope you find it as illuminating as I have . . .
Posted by Yves Smith at 8:55 AM, Feb 19, 2008
Ever since Eliot Spitzer threatened the troubled monoline insurers
that he’d break them up, everyone has acted as if that’s a viable
But this talk of a split reminds me of movies about Hollywood, where someone buttonholes a producer with his pet idea:
it’s like Flashdance, except you reverse it: the girl is a Hispanic
ballerina who started stripping to pay her student loans…."
Like the film proposal, the break up notion is still at the high
concept stage, little more than, "let’s separate the muni operations
from the rest."
And while admittedly Ambac has had only the long weekend to work on its plan, the update as of Monday evening via the Wall Street Journal suggested that the group is flailing around.
Category: Blog Spotlight