A tale of two recoveries: The super-rich are spending again, but gloom persists for the rest

[Cali_Democrat]

http://finance.yahoo.com/news/Twotrack-economy-97-apf-670270394.html?x=0&sec=topStories&pos=3&asset=&ccode=

Two-track economy: 9.7% unemployment, $200K cars
A tale of two recoveries: The super-rich are spending again, but gloom persists for the rest

WASHINGTON (AP) -- For the super-rich and everyone else, the economic recovery is taking place in two very different gears.

A British company is betting there's a market in North America for a $200,000 sports car built with Formula One race technology, announcing Thursday that it will unveil the very expensive new toy late next year.

"Following any recession, there's a resurgence," said Ron Dennis, chairman of McLaren Automotive. "We intend to catch that wave."

For most people, though, the economy's still a clunker. A new Labor Department report said more than 11 million Americans are now getting unemployment benefits.

<snip>

There are other signs of the economic split:

-- Luxury clothing stores outpaced others last month and brought in more money than expected. At Nordstrom, sales at stores open at least a year surged 10.4 percent. Sales only rose 2.4 percent at Target, and 1.2 percent at J.C. Penney.

-- Business at high-end hotels is coming back much faster than at mid-price or budget hotels, says Patrick Scholes, an analyst at FBR Capital Markets. Revenue at luxury hotels was up 7.7 percent last week from a year ago. At less fancy hotels, revenue fell.

-- While overall U.S. auto sales were up 13 percent for February, luxury brands did even better. Revenue rose 32 percent for General Motors' Cadillac brand, nearly 14 percent for BMW and 17 percent for Honda's Acura. Sales of the Lexus were up 5 percent while overall sales at Toyota fell because of widespread recalls.

Confidence in the economy has risen most among wealthier Americans, said Jonathan Basile, an economist at Credit Suisse. Rising stock prices are helping: The S&P 500 index has surged more than 70 percent since its bottom last spring.

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[Warpy]

1. That's exactly the sort of pattern that finally got them a 90%

top marginal tax rate to get us out of the Depression. I hope history repeats itself because the only way to have a strong middle class is to create one by scraping obscene wealth off the top and recirculating it for the common good.

Let them keep spending money like it's water, let HGTV keep showing yuppie couples like the ones last night buying $2,000,000+ marble palaces with built in movie theaters, let them keep living the ostentatious new money lives we've all come to know and despise as tacky beyond belief.

It's the only way to get popular support for a return to a sane tax policy.

[Newest Reality]

2. I agree with your points wholeheartecly ...

Doesn't this outrageous kind of increasing, luxury consumption support raising taxes for the upper percentile?

Since they are swimming in a honey-gold surplus that, based on the sales increases, allows such the purchase of such decadent opulence, (what I would call hyper-discretionary spending) it sound to me like an excellent argument for a strong and persistent movement to channel wealth for the common good.

This will not go on, one way or another. We can't live on the urine, (no matter how refined) that they excrete as it trickles down on us all. While I realize that this is pipe-dreaming, we are going to see resentment and anger and mounting social decay as this overly conspicuous parade of wealthy consumption continues to grow. Their expensive baubles are niche-oriented and not in the kind of volume that will amount to much more than tiny mouse farts for us lowly commoners, (or whatever derogatve term the privileged few might like to use these days).

[RexS]

3. Good, I was afraid the uber-rich were becoming bored with us poor working slobs.

Better to keep their minds entertained with billion dollar bobbles and trinkets, then how fucked the normal person is in America. They might become truly depressed and stop spending that 33 million for a new jet airplane for their daughter. Then who would save the economy? Not me, brother can you spare a dime?