The Plutonomy — aka. that Top One Percent

(11 am. – promoted by ek hornbeck)

I’m just back from seeing Michael Moore’s new movie, “Capitalism – A Love Story”.

It was moving, funny, and educational, all rolled into one. It made me feel both, proud and sad, to be an American. … but it’s recommended viewing if you still want to take OUR Country back, from the Powers that Be.

There are many lessons to be learned from the film — But the one that struck me, the one I’m motivated to write about now —

Is the Lesson of Plutonomy …

Plutonomy, perhaps like me, you’ve not heard much about this term, except in the occasional poorly defined rant. Well it’s a word we should all learn more about — since it’s one of the new “code words” the uber-rich use to maintain their “high stations” in life.


n. An economy that is driven by or that disproportionately benefits wealthy people, or one where the creation of wealth is the principal goal.

[Blend of pluto- (wealth) and economy.]…

In a report called “The Plutonomy Symposium Rising Tides Lifting Yachts,” Ajay Kapur, Citigroup’s global strategist, says the balance sheets of the rich are “in great shape, and will get much better,” which is why he recommends going out and buying stocks of companies that cater to that very select market.

Spending by the uber-rich overwhelms that of the average consumer and helps explain why the U.S. economy has continued to do well and the U.S. dollar hasn’t collapsed even in the face of the current federal budget deficit, a negative savings rate, global imbalances and high energy prices, he says. The United States is one of the plutonomy countries countries whose economies are powered by a relatively small number of rich people.

– Angela Barnes, “Want wealth? Invest in the uber-rich,” The Globe and Mail, October 2, 2006…

You see Michael Moore highlights a confidential report that Citigroup initially circulated only to it’s wealthiest customers. Those reports, since leaked, plainly discuss the power of the Plutonomy in America, and how it would only strengthen, as long as the “the rest us” (the non-plutonics) could be kept in the dark about the Plutonomy existence, its role, and its over-arching control in the American Economy.

Even though the Plutonomy (the top 1%) control over 50% of the net worth in America — they don’t control the Votes!

The thing they most fear is the principle of “one person — one vote”.

You see despite their extreme wealth and power, they only have 1% of the vote; “the rest us” control the other 99% of the votes. So if we ever caught on and, I don’t know, maybe raised their taxes back to where it use to be (40-90% range), well maybe they couldn’t have a Yacht in every city, or a Mansion in a half dozen states.  Maybe they couldn’t “lose count” of how many homes they owned.

Well I tried to locate the confidential Citigroup reports cited in the film, and think that these next two links are them. Remember these Reports were NOT meant for consumption by us “common folk”.

Citigroup Plutonomy Report Part 1

Oct 16, 2005

The World is dividing into two blocs – the Plutonomy and the rest.  

The U.S., UK, and Canada are the key Plutonomies – economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.

– Equity risk premium embedded in “global imbalances” are unwarranted.  

In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc.  

This imbalance in inequality expresses itself in the standard scary “global imbalances“. We worry less.

– There is no “average consumer” in a Plutonomy.  


Indeed, traditional thinking is likely to have issues with most of it.  We will posit that:  

1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest.  

Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S.  

What are the common drivers of Plutonomy?

Disruptive technology-driven productivity gains,

creative financial innovation,

capitalist-friendly cooperative governments,

an international dimension of immigrants and

overseas conquests invigorating wealth creation,

the rule of law, and

patenting inventions.  

Often these wealth waves involve great complexity, exploited best by the rich and educated of the time.          

2) We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization.


4) In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”.  

There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.  […] i.e., focus on the “average” consumer are flawed from the start.…

Here’s the key part, mentioned in the Moore film, where CitiGroup frets about us pesky “laborers” could some day push-back, that we might demand fair treatment and pay for all our productivity:

Citigroup Plutonomy Report Part 2

Mar 5 2006


Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as wasone person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization — either anti-mmigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.…

The arrogance displayed, as Citigroup sees their iron grip, slipping, yet scheming to hang on to that Plutonic Control — is truly appalling … and a bit frightening too. It’s as if we, the other 99%, are merely the cogs in their grand design. And as long as any worker push-back, can be held in check — well No Worries, then. They get to keep that Capitalistic Money Machine humming along fine, Cha-Ching!

This Citigroup message of catering to the needs of the Plutonomy, once it got out, hasn’t been lost on the Wall Street Journal crowd, although our National News Media, hasn’t really reported on it much, have they?

The Wealth Report


Robert Frank looks at the lives and culture of the wealthy.

By Robert Frank, Wall Street Journal – Jan 8, 2007

It’s well known that the rich have an outsized influence on the economy.

The nation’s top 1% of households own more than half the nation’s stocks, according to the Federal Reserve. They also control more than $16 trillion in wealth – more than the bottom 90%.

Yet a new body of research from Citigroup suggests that the rich have other, more-surprising impacts on the economy.


The Plutonomy is here, is going to get stronger, its membership swelling” he wrote in one research note. “Toys for the wealthy have pricing power, and staying power.”


Of course, Kapur says there are risks to the Plutonomy, including war, inflation, financial crises, the end of the technological revolution and populist political pressure. Yet he maintains that the “the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years.”

All of which means that, like it or not, inequality isn’t going away and may become even more pronounced in the coming years. The best way for companies and businesspeople to survive in Plutonomies, Kapur implies, is to disregard the “mass” consumer and focus on the increasingly rich market of the rich.

A tough message – but one worth considering.…

Nice, eh!?   … well not really.

What was it they fear most, again?

The principle of “one person — one vote”?

Say, NOW that’s NICE!  … that could one day be the People taking our Country back.

also posted on dkos


Skip to comment form

    • jamess on October 4, 2009 at 06:26

    shoes for industry …

  1. truths presented us.  I think Plato said that over a couple thousand years ago.  That’s evolution for ya.  

  2. with a member of the one percent recently. I wasn’t there in person, however with the wonders of technology every one here in Puerto Rico had the opportunity to witness the venom up close and personal.

    His name is Jaime González, multi-millionaire educator & motivational speaker (if you can believe it after reading below), appointed as executive director of the project Riviera del Caribe by our right wing governor – as in U.S. right wing, 2008 republican convention delegate and rabid McCain/Palin and anything Reagan supporter. During the last administration he served as our resident commissioner in D.C., so he’s very much an inside the beltway republican, even though here they call themselves “the new progressive party”. Tell me if the statements below sound progressive to you…

    González held a forum for the citizens of Ceiba, PR, where this project is to be developed on the land of the closed U.S. Naval Base Roosevelt Roads (well, as soon as the gov pays $65 million Defense Dept. to buy some of our land back – but that’s another story). The communities surrounding the old base are low, lower-middle and middle class, and just as everywhere else in the U.S., families are struggling. So these are the people that González was speaking to, or looking down through his nose to, you decide…

    FYI, the multi-billion $ Riviera del Caribe (Caribbean Riviera) is planned as a new luxury mega-resort (with the usual bells and whistles of the rich and famous), with it’s very own new international airport, new high-speed ferry terminal and a new marina. I won’t add further commentary to the quotes below, I think they stand perfectly on their own. What I do want is for you guys to tell me if I’m off the mark here.

    For me, I think a “plutocrat” got caught with his pants down, and the backlash here has been widespread and intense. González’s “such is life” comment, as well as “keep playing the lottery”, have become mantras and have unified the island. And his “hired gun”, immediately focused the attacks where they belong – to the governor who hired him.

    It’s been amazing. Protest are happening every day with thousands in the streets, leading up to a general strike to shut down everything on the 15th – 11 days and counting! Our focus is on health care reform (local SEIU activists have been raising holy hell!), stop the privitization of everything plans of the governor, and the reinstatement of all public workers (26,970 and counting) fired by the governor due to the deficit (his rationale, but he had no problem taking the stimulus money!) I hope you guys wish us luck in fighting back. The police presence is overwhelming, but we’re not backing down.

    I can’t wait for Michael’s movie to open here. With the tension so high in the streets, I have little doubt why it isn’t showing yet…can’t have anymore masks ripped off just now, can we?

    The following statements were made on July 15th, and it took all of us screaming through the streeets, every news radio station blistering the administration, and finally getting it on t.v. before the fucker was finally fired on August 27th. For anyone that understands Spanish, I can provide the video.

    “I’m going to be very sincere. I am, as they say…mmm…eh…eh…I’m an employee. I’ve been given instructions and I’m following those instructions. Any of you pointing out whether or not you like the direction or focus of the project…eh…the intentions of this project…look, I am only the messenger, believe me…I have my tasks, I’m as they say…I am a hired gun. I was hired to perform a task, not to impose my own personal criteria or any such thing”…

    “Now I’m going to…I’m going to make a statement, and it’s a very personal statement. In various sessions that I’ve participated in with the community of Ceiba … and the community leaders of Ceiba…eh…they’ve focused everything on Ceiba and I’m going to be sincere, the task that I’ve been given is not focused only on Ceiba…and if any of you don’t agree with the task I’ve been given, then I’ve got to tell you now, that you’ll have to go over my head. You’ll have to go to the Governor. He didn’t tell me, ‘let’s develop the Roosevelt Roads Base for the exclusive benefit of the residents of Ceiba’. Those are not the instructions that I’ve received”…

    “Let’s get rid of some of our inferiority complexes, as well. Some of the shops will sell various things that I can’t buy, and you can’t buy, oh well, such is life, as they say, such…is…life. Not everyone has been born so blessed. But here we are not excluding anyone. And for those that don’t have even 50 cents to buy a limber (Puerto Rican Icee) that were only 5 cents when I was a kid, at least you can walk – free of charge – on the sidewalks in front of the ocean and watch the cruise ships arrive, and watch the tourists disembark from the ships – tourists with money – and watch the tourists go into the shops, and watch them buy expensive things, and if this gives you an inferiority complex then I feel very sorry for you because such is life, some are not as blessed as others”…

    “and…the high-speed ferry station, to take visitors, hotel guests, to take visitors of the project…and again, straight to the point, it’s for those that can afford to pay for the ferry to go to Vieques, or the beaches of Vieques, or the restaurants in Vieques, or for those guests staying in Vieques to come here to eat, or see a Cirque du Soleil show that will be part of this project…”

    “and…the marina, that’s not going to be much bigger than what’s actually here now …it’s simply to give access to those people more blessed than you or I that have 50′ yachts and come here to dock for a couple of hours. But don’t worry yourselves over this, not everyone has a right to this. Keep playing the lottery …or whatever it is you play, and perhaps one of you can buy a boat, too”.

  3. You’d think these Masters of the Universe could at least afford a little better taste.

    Neo Classical meets Best Western.

    Nice fountain, too.  Does it squirt champagne?

  4. I am inclined to put Mr Moore in the very same category as Markos, the proprietor of the(hopefully) late great Satanic Orange place.


    Well because all of it smacks of America-centric-isms which completely ignores what every business student knows about western businesses having an orgasm about entering the billion man marketplace of China and the outright give up of every single technological advance made by the western world to a totalitarian police state empire.  Go figure.

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