Middle class is eroding -- just ask the business world

[unhappycamper]

http://www.adn.com/2014/02/03/3305238/middle-class-is-eroding-just-ask.html



In this Monday, Jan. 27, 2014 photo, Neal Breen, 21, works at the Ashburn Bagel & Sandwich Shop in Ashburn, Va.

Middle class is eroding -- just ask the business world
By NELSON D. SCHWARTZ
The New York Times
February 3, 2014 Updated 15 hours ago

In Manhattan, upscale clothing retailer Barneys will replace bankrupt discounter Loehmann's, whose store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth in mass-market models.

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

If there is any doubt, the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence. Within top consulting firms and among Wall Street analysts, the shift is being described with a frankness more often associated with left-wing academics than business experts.

"Those consumers who have capital like real estate and stocks and are in the top 20 percent are feeling pretty good," said John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers.

[jollyreaper2112]

1. How could this be?

If these people are the job creators, why are they not creating jobs?

[fasttense]

2. In our new corporate feudal society, we must all cater to the uber rich.

Just like they want it, just like in the days of monarchs and lords.

Maybe we can all clean their toilets for them.

[no_hypocrisy]

3. In a consumer-driven economy, it can't be run predominantly

on sales of stock, real estate, and luxury items.

You need a consumer base with disposable income to spend on merchandise and services.

Reaganomics has failed to consider the ultimate outcome of its theories and policies: you cut off the blood in the circulatory system and the heart stops beating.

[AnneD]

4. BINGO!

Business have to decide whether they want to sell 3,000 Rolls Royce's a year and keep 10% of the profit or sell $ 3 billion and keep 1% of the profit.

The point our captains of industry fail to understand is the simple supply and demand. That was the genius of Henry Ford. He paid the workers above the prevailing minimum wage at the time, gave them a 40 hr week, and let them buy cars on installments. That was how the market was developed-from a toy of the wealthy to an accepted means of transportation.

If I had the resources, I would develop a credit card for the un banked or a credit union for the poor. I have heard that Wal-mart issues cards and pays their part-time workers with these. I actually read the fine print and it borders on usury. I believe that someone can make a tidy sum and not gouge the poor. And I do believe that some smart person will develop the market.

[MisterP]

5. that's why Stockman admitted trickle-down was a scam from top to bottom 1981

he blabbed that it was just a gimmick to give the rich and powerful more money and power at our expense: it's the fine art of the fait accompli

of course, cognitive dissonance has forced our own party into the trap of "words speak louder than actions": we compulsively hand over benefit of the doubt, on the inverse logic that "X pays lip service to Y, so when X pushes the opposite of Y it's only because X did what they could and -Y is the best we could get"--a treadmill of rationalization that buys X enough time to hand over the reins to Z, who then starts it all over again (and since W HATES both X and Z, Z must be even better than X!)

[Crewleader]

6. Income Inequality