OC Register: Belt-tightening among wealthy shoppers could choke other households

[El Pinko]

http://www.ocregister.com/money/percent-year-sales-1971929-spending-shoppers


Belt-tightening among wealthy shoppers could choke other households
Lower-income workers are dependent on their business and tips.
By ANNE D'INNOCENZIO
The Associated Press

... economists say that recent signs of cutting back by the affluent could hurt the economy and deliver even more pain to lower-income workers, who are dependent on their business and fat tips.

....

Cutbacks by the wealthy have a ripple effect across all consumer spending, said Michael P. Niemira, chief economist at the International Council of Shopping Centers. That's because American households in the top 20 percent by income – those making at least $150,000 a year – account for about 40 percent of overall consumer spending, which makes up two-thirds of economic activity.

....

Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000; that means no more Jimmy Choo shoes and David Yurman jewelry. Her cutbacks also included canceling the services of a cleaning woman and a lawn care company. She also plans to trade in her BMW for a Ford when her lease expires in about a month.


....

Soaring home values had made upper-middle class shoppers feel wealthy in recent years, causing them to trade up to $500 Coach handbags and $1,000 espresso makers, but a housing slump has wiped away their paper wealth. The woes are creeping into even the high-end luxury sector, as affluent shoppers are rattled by the turbulence in the financial markets.


:puke: :nopity:


Another headline on the page says "Can Feds save O.C. housing?"

Since when is it the Fed's job to keep artificially speculation-inflated house prices inflated for even longer? I thought America was supposed to be a "free market". Without the shady loans that allowed people to buy homes they could not afford, the prices are on their way to reverting to trend - their true value, which is generally about 3X the median income of a given area, NOT SEVEN TIMES.

[msongs]

1. you really think Obama, Hillary, and Oprah are cutting back? nt

[El Pinko]

2. Oprah has more money than God...

...so I can kinda see her maybe spending $3000/month on clothes - she is on TV, and may give a lot of clothes away after wearing them a few times.

But it did kinda blow my mind that these nouveau riche trash spend more than most people do on rent or mortgage payments on CLOTHES.


I don't really understand the dig at Hillary and Obama. Are they profligate spenders?

Are they bigger spenders than the GOP candidates?

[BlueIris]

8. The clothing budgets of the rich have always blown my mind.

One of my aunts spends about $1,000 a month on clothes. Her husband pulls down half a mil a year, but it adds up. ...ech.

[AndyTiedye]

13. Clothing that Isn't Made in Some Sweatshop is Expensive

but maybe not THAT expensive.

[DS1]

3. I can see it in my town

two stores are just trying to clear inventory before they close, others have massive 50% off sales going on.

granted, tourist season is about to start once it warms up a bit, but I think it's getting really tight for all sorts of our local businesses

[Fed_Up_Grammy]

4. I'll continue to buy my big Coach bag every 3 years---I'll give up

the ridiculous amounts of coffee I drink outside the home.

[thevoiceofreason]

5. There is always difficulty when you break from the

Landed gentry form of economic model (everybody depends on the rich folks to throw them some crumbs) into a model where the people are empowered.

[annabanana]

6. I guess all those "big fat tips" are the actual "trickle down" that

was supposed to be the saving of the working class. . .

[AndyTiedye]

11. Tip Well if You Can

Folks are hurtin'.

[TahitiNut]

7. "plans to trade in her BMW for a Ford "? Good! Tighten more.

:eyes:

[AndyTiedye]

9. A Lot More are Trading for Priuses These Days

[SoCalDem]

10. It would appear that the "trickle-downers" have a "blockage"

Getting pissed on by someone with renal failure is just not the same as in the good ole days with St. Ronnie of Reagan

[Canuckistanian]

12. DAMN those wealthy shoppers

How else can all that wealth "trickle down" to ME?

Spend, you bastards!

[tech3149]

14. Could? Could? What a soft pedal headline and complete

bullshit. That is completely hiding the story with the lead. One of the reasons my ex is my ex is that she became a conspicuous consumer (the only thing better than being an executive is being king or dictator). I enjoyed the fruits of privledge and income for a while, but my viewpoint started to change when I saw her react to less than stellar service. I wasn't just embarrassed for those who had to deal with her outbursts, I was embarrassed that she didn't realize how much she had changed. Since we separated I've been able to get by on $10K a year, I don't even want to think about how much we wasted then.

We've been sold the idea that our value is determined by what we have/own and that is just so wrong. It makes us look at our lives as the result of what we've done when what's important how we do the things we enjoy and and how we spend time with those we love.

Sorry for the personal rant, but these problems dig deeper than "big picture" issues. They play out in your daily life without regard to income. I think an important thing to keep in mind is how the effect of spending in an income stratum affect the wider economy.