Monday, July 19, 2010
Even the rich getting cheap
Motoko Rich, NYT, July 16, 2010, says the wealthy used to be spending like drunken heiresses but now are scaling back as this mess grinds on.
The Top Five Percent (households over $210K) account for a third of consumer spending. Now THEY are skittish.
Those earning over $90K, spent $145 a day in May, then in June, that dropped to $119.
The feeling that the worst is over has abated, one source said.
Of course, it’s a vicious cycle—people stop spending, which causes a slowdown or drop, then more cuts in spending.
Weirdly, in spring of 2009, the rich spent more than they saved. But less well-off consumers saved. This gave the rich spending power. This spending caused an uptick.
Others say the rich have less control over events than this.
All I know is—it’s ramen all the way, my darlings. Hold the caviar.