Plutonomy: Buying Luxury, Explaining Global Imbalances

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Buying Time: The Delayed Crisis of Democratic Capitalism by Wolfgang Streeck

"there is no alternative" (TINA), "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, air traffic controllers' union, Alan Greenspan, banking crisis, basic income, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collective bargaining, corporate governance, creative destruction, currency risk, David Graeber, deindustrialization, Deng Xiaoping, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial repression, fixed income, full employment, Garrett Hardin, Gini coefficient, Growth in a Time of Debt, income inequality, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, means of production, moral hazard, Myron Scholes, Occupy movement, open borders, open economy, Plutonomy: Buying Luxury, Explaining Global Imbalances, profit maximization, risk tolerance, shareholder value, too big to fail, Tragedy of the Commons, union organizing, winner-take-all economy, Wolfgang Streeck

Shefrin, Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing, Oxford: Oxford University Press, 2002). 12 The Citibank research department developed this as a positive concept, to dispel fears among the select customers of the bank’s private banking department that their future prosperity would depend, as in the Keynesian world, on the material welfare of the broad masses (Citigroup Research, Plutonomy: Buying Luxury, Explaining Global Imbalances, 16 October 2005; Citigroup Research, Revisiting Plutonomy: The Rich Getting Richer, 5 March 2006). 13 Against the advice of any number of people who claimed to know better, Germany had defended its industrial base and moved only slowly, in the 1980s and 1990s, in the direction of an American or British-style ‘service society’.

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Canedo, Eduardo, The Rise of the Deregulation Movement in Modern America, 1957–1980, New York: Columbia University Press, 2008. Castles, Francis G. et al., ‘Introduction’, in Francis G. Castles et al. (eds), The Oxford Handbook of the Welfare State, Oxford: Oxford University Press, 2010, pp. 1–15. Citigroup Research, Plutonomy: Buying Luxury, Explaining Global Imbalances, 16 October 2005. ———. Revisiting Plutonomy: The Rich Getting Richer, 5 March 2006. Citrin, Jack, ‘Do People Want Something for Nothing? Public Opinion on Taxes and Government Spending’, National Tax Journal, vol. 32/2, 1979, supplement, pp. 113–29. ———. ‘Proposition 13 and the Transformation of California Government’, The California Journal of Politics and Policy, vol. 1/1, 2009, pp. 1–9.

Occupy by Noam Chomsky

Alan Greenspan, corporate governance, corporate personhood, deindustrialization, high-speed rail, Howard Zinn, income inequality, invisible hand, Martin Wolf, Nate Silver, Occupy movement, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, Ralph Nader, Ronald Reagan, too big to fail, union organizing

For decades, Citigroup has been one of the most corrupt of the major investment banking corporations, repeatedly bailed out by the taxpayer, starting in the early Reagan years and now once again. I won’t run through the corruption—you probably already know about it—but it’s pretty astonishing. In 2005, Citigroup came out with a brochure for investors called “Plutonomy: Buying Luxury, Explaining Global Imbalances.” The brochure urged investors to put money into a “plutonomy index.” The memo says “the World is dividing into two blocs - the Plutonomy and the rest.” Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is. They said that their plutonomy index was way out-performing the stock market, so people should put money into it.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

A 2011 OECD report showed “Divided We Stand: Why Inequality Keeps Rising,” OECD report, December 2011. “I’ve never understood in my life” CF interview with Naguib Sawiris, November 18, 2011. “the World is dividing into two blocs” Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Global Markets Equity Strategy report, October 16, 2005. “The U.S. stock markets and the U.S. economy” James Freeman, “The Bullish Case for the U.S. Economy,” Wall Street Journal, June 4, 2011. “very distorted” Alan Greenspan, interview on NBC’s Meet the Press, August 1, 2010.

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Brian Arthur, “The Second Economy,” McKinsey Quarterly, October 2011. Facebook’s Mark Zuckerberg Zuckerberg attended Ardsley High School for two years before transferring to Phillips Exeter Academy. “Dopamine, a pleasure-inducing” Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Global Markets Equity Strategy report, October 16, 2005. “I recognize that sometimes survival requires a positive effort” CF interviews with George Soros, May 2009 and December 2008. “My theory of bubbles was a translation” CF interview with George Soros, May 2009.

The New Elite: Inside the Minds of the Truly Wealthy by Dr. Jim Taylor

Alan Greenspan, Alvin Toffler, British Empire, business cycle, call centre, Cornelius Vanderbilt, dark matter, Donald Trump, estate planning, full employment, glass ceiling, income inequality, Jeff Bezos, Larry Ellison, longitudinal study, Louis Pasteur, Maui Hawaii, McMansion, means of production, passive income, performance metric, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ronald Reagan, stealth mode startup, Steve Jobs, Thorstein Veblen, trickle-down economics, vertical integration, women in the workforce, zero-sum game

In both economies, effective marketing is about meeting people’s unmet needs and developing communications that resonate with their attitudes. As we’ve seen, the attitudes of the wealthy are more likely those of mainstream Americans than one might have anticipated. Notes 1. Ajay Kapur, Niall Macleod, and Narendra Singh, ‘‘Plutonomy: Buying Luxury, Explaining Global Imbalances,’’ research report, Citigroup Global Markets, http://www.billcara.com/archives/ Citi%20Oct%2016,%202005%20Plutonomy.pdf (accessed April 14, 2008). 2. Daniel Gross, ‘‘Don’t Hate Them Because They’re Rich: The Trickle-Down Effect of Ridiculous, Ostentatious Wealth,’’ New York magazine, April 11, 2005, http://nymag.com/nymetro/news/ culture/features/11721 (accessed April 14, 2008). 3.

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"World Economic Forum" Davos, Adam Curtis, air traffic controllers' union, Alan Greenspan, AOL-Time Warner, banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, job polarisation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Larry Ellison, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, low skilled workers, manufacturing employment, market bubble, Martin Wolf, Mary Meeker, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, proprietary trading, Right to Buy, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

, The Economist, 29 August, 2010. 245 Glaeser, op. cit. 246 Atkinson and Morelli, op. cit. p 57. 247 JP Fitoussi and F Saraceno, op. cit. 248 M Iacoviello, ‘Household Debt and Income Inequality, 1963-2003’, Journal of Money, Credit and Banking, August, 2008. 249 Kumhof and Rancière, op. cit. p 3. 250 T Cowen, ‘The Inequality That Matters’, The American Interest Online, Jan-Feb, 2011. 251 Moss, Harvard Magazine, op. cit. 252 Ajay Kapur et al, ‘The Global Investigator: Plutonomy: Buying Luxury, Explaining Global Imbalances’, Citigroup Equity Research, October 14, 2005. 253 RN Goodwin, ‘The Selling of Government’, Los Angeles Times, 30 January 1997. 254 J Stiglitz, The Roaring Nineties, Allen Lane, 2003. 255 K Phillips, ‘Too much wealth, too little democracy.’ Challenge, September, 2002. 256 Guardian, 19.11.03. 257 Time, 26 February, 2011. 258 H Williams, Britain’s Power Elites, Constable, 2006, p 164. 259 N Matthiason & Y Bessaoud, Growth in City Donations to the Conservative Party, Bureau for Investigative Journalism, February 2011. 260 CRESC, 2009, op. cit. p 23. 261 G Soros, ‘The Crisis and What to do About It’, New York Review of Books, 4 December, 2008. 7 LIVING ON BORROWED TIME One evening in late 2004, a couple who had been living in a small council house in Bradford for ten years got an unexpected knock on the door from a mortgage salesman.

Who Rules the World? by Noam Chomsky

Able Archer 83, Alan Greenspan, Albert Einstein, anti-communist, Ayatollah Khomeini, Berlin Wall, Bretton Woods, British Empire, capital controls, classic study, corporate governance, corporate personhood, cuban missile crisis, deindustrialization, Donald Trump, Doomsday Clock, Edward Snowden, en.wikipedia.org, facts on the ground, failed state, Fall of the Berlin Wall, Garrett Hardin, high-speed rail, Howard Zinn, illegal immigration, Intergovernmental Panel on Climate Change (IPCC), invisible hand, liberation theology, Malacca Straits, Martin Wolf, Mikhail Gorbachev, Monroe Doctrine, Nelson Mandela, nuclear winter, Occupy movement, oil shale / tar sands, one-state solution, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, public intellectual, Ralph Waldo Emerson, Robert Solow, Ronald Reagan, South China Sea, Stanislav Petrov, Strategic Defense Initiative, structural adjustment programs, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trade route, Tragedy of the Commons, union organizing, uranium enrichment, wage slave, WikiLeaks, working-age population

Robert Pear, “New Jockeying in Congress for Next Phase in Budget Fight,” New York Times, 3 August 2011. 27. Stephanie Clifford, “Even Marked Up, Luxury Goods Fly Off Shelves,” New York Times, 3 August 2011. 28. Louis Uchitelle, “Job Insecurity of Workers Is a Big Factor in Fed Policy,” New York Times, 27 February 1997. 29. Ajay Kapur, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” 16 October 2005, as found at http://delong.typepad.com/plutonomy-1.pdf. 30. Noam Chomsky, Making the Future: Occupations, Interventions, Empire and Resistance (San Francisco: City Lights, 2012), 289. 6. IS AMERICA OVER?   1. Elizabeth Becker, “Kissinger Tapes Describe Crises, War and Stark Photos of Abuse,” New York Times, 27 May 2004.   2.

Broke: How to Survive the Middle Class Crisis by David Boyle

anti-communist, AOL-Time Warner, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, call centre, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, delayed gratification, Desert Island Discs, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, financial deregulation, financial independence, financial innovation, financial intermediation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, gentrification, Goodhart's law, housing crisis, income inequality, Jane Jacobs, job satisfaction, John Bogle, junk bonds, Kickstarter, knowledge economy, knowledge worker, low interest rates, market fundamentalism, Martin Wolf, Mary Meeker, mega-rich, Money creation, mortgage debt, Neil Kinnock, Nelson Mandela, new economy, Nick Leeson, North Sea oil, Northern Rock, Ocado, Occupy movement, off grid, offshore financial centre, pension reform, pensions crisis, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, positional goods, precariat, quantitative easing, school choice, scientific management, Slavoj Žižek, social intelligence, subprime mortgage crisis, too big to fail, trickle-down economics, Vanguard fund, Walter Mischel, wealth creators, Winter of Discontent, work culture , working poor

[23] Francis Fukuyama, ‘The Future of History: Can liberal democracy survive the decline of the middle class?’, Foreign Affairs, Jan./Feb. 2012. [24] William K. Carroll, The Making of a Transnational Capitalist Class: Corporate power in the 21st century (London, Zed Books, 2010). [25] Citigroup, ‘Plutonomy: Buying luxury, explaining global imbalances’, 15 Oct. 2005, quoted in Edward Fulbrook (2012), ‘The political economy of bubbles’, Real World Economics Review, no. 59. [26] Ferdinand Mount, ‘The new few or a very British oligarchy’, Guardian, 24 Apr. 2012. [27] Adam Raphael, Ultimate Risk (London, Bantam Press, 1994), 192

How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

See, in this context, the call late last year by the director-general of the Confederation of British Industry, which represents manufacturing firms, for members to pay their workers better, as too many people are stuck in low-pay employment. See ‘Companies urged to spread benefits widely’, Financial Times, 30 December 2013. 38Citigroup Research, ‘Plutonomy: Buying Luxury, Explaining Global Imbalances’, 16 October 2005; Citigroup Research, ‘Revisiting Plutonomy: The Rich Getting Richer’, 5 March 2006. 39Nota bene that capitalism is about profit, not about productivity. While the two may sometimes go together, they are likely to part company when economic growth begins to require a disproportionate expansion of the public domain, as envisaged early on in ‘Wagner’s law’: Adolph Wagner, Grundlegung der politischen Oekonomie, 3rd edn, Leipzig: C.

Hopes and Prospects by Noam Chomsky

air traffic controllers' union, Alan Greenspan, Albert Einstein, banking crisis, Bear Stearns, Berlin Wall, Bretton Woods, British Empire, capital controls, colonial rule, corporate personhood, Credit Default Swap, cuban missile crisis, David Ricardo: comparative advantage, deskilling, en.wikipedia.org, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Firefox, Glass-Steagall Act, high-speed rail, Howard Zinn, Hyman Minsky, invisible hand, liberation theology, market fundamentalism, Martin Wolf, Mikhail Gorbachev, Monroe Doctrine, moral hazard, Nelson Mandela, new economy, nuremberg principles, one-state solution, open borders, Plutonomy: Buying Luxury, Explaining Global Imbalances, public intellectual, Ralph Waldo Emerson, RAND corporation, Robert Solow, Ronald Reagan, Savings and loan crisis, Seymour Hersh, structural adjustment programs, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, trade liberalization, uranium enrichment, Washington Consensus

Concentration, Kansas City Federal Reserve president Thomas Hoenig, August 6, 2009, cited by Zach Carter, “A Master of Disaster,” Nation, January 4, 2010, http://www.thenation.com/doc/20100104/carter. 25. Pete Engardio, “Can the Future Be Built in America?” Business Week, September 21, 2009. 26. Citigroup, “Equity Strategy, Plutonomy: Buying Luxury, Explaining Global Imbalances,” October 16, 2005; “Equity Strategy, Revisiting Plutonomy: The Rich Getting Richer,” March 5, 2006. “Why Service Stinks,” Business Week, October 23, 2000. 27. Wall Street Journal, June 15, 2009. 28. Thomas Catan and David Gauthier-Villars, Wall Street Journal, May 29, 2009. 29.

Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back by Oliver Bullough

Alan Greenspan, banking crisis, Bernie Madoff, bitcoin, blood diamond, Bretton Woods, Brexit referendum, BRICs, British Empire, capital controls, central bank independence, corporate governance, cryptocurrency, cuban missile crisis, dark matter, diversification, Donald Trump, energy security, failed state, financial engineering, Flash crash, Francis Fukuyama: the end of history, full employment, Global Witness, high net worth, if you see hoof prints, think horses—not zebras, income inequality, joint-stock company, land bank, liberal capitalism, liberal world order, mass immigration, medical malpractice, Navinder Sarao, offshore financial centre, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, rent-seeking, Richard Feynman, risk tolerance, Sloane Ranger, sovereign wealth fund, Suez crisis 1956, WikiLeaks

At the time, Kapur worked for Citigroup as director of Global Strategy Research, and his job was to find assets for his clients to invest in, which meant it was important for him to understand what was going on. He and his colleagues looked into the situation, and concluded that it was too early to be concerned. And then they thought some more, and read some more, and inspiration came: which they revealed to the world in an October 2005 report entitled ‘Plutonomy, Buying Luxury, Explaining Global Imbalances’. The footnotes to the report are packed full of works by academics who were then or who have since become heroes to the political left – particularly Thomas Piketty and Emmanuel Saez – but the bank’s analysts brought them into the service of the very wealthy. The report’s message was a simple one: the rich are getting richer, and that can make you rich.

Londongrad: From Russia With Cash; The Inside Story of the Oligarchs by Mark Hollingsworth, Stewart Lansley

"World Economic Forum" Davos, Berlin Wall, Big bang: deregulation of the City of London, Bob Geldof, Bullingdon Club, business intelligence, company town, Cornelius Vanderbilt, corporate governance, corporate raider, credit crunch, crony capitalism, Donald Trump, energy security, Etonian, F. W. de Klerk, Global Witness, income inequality, kremlinology, Larry Ellison, Londongrad, mass immigration, mega-rich, Mikhail Gorbachev, offshore financial centre, paper trading, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, power law, rent-seeking, Ronald Reagan, Skype, Sloane Ranger

Sekules, ‘The Best Town to Make an Upper Lip Stiff’, New York Times, 7 February 2007. 10Editorial, Spear’s Wealth Management Survey, Winter 2006/7. 11Rosie Cox, The Servant Problem, Tauris, 2006. 12Financial Times, 27 October 2007. 13See, for example, Doreen Massey, World City, Polity, 2007, chapter 2; Chris Hamnett, Unequal City: London in the Global Arena, Routledge, 2003; Greater London Authority, London Divided: Income Inequality and Poverty in the Capital, London, 2003. 14Evening Standard, 6 July 2007. 15Simon Parker and David Goodhart, ‘A City of Capital’, Prospect, April 2007. 16Ajay Kapur et al., ‘The Global Investigator. Plutonomy: Buying Luxury, Explaining Global Imbalances’, Citigroup Equity Research, 14 October 2005. 17Luke Harding, Guardian, 14 October 2008. 18See note 1. 19Guardian, 25 October 2008. 20Andrew E. Kramer, New York Times, 18 October 2008. INDEX The pagination of this electronic edition does not match the edition from which it was created.

Second World: Empires and Influence in the New Global Order by Parag Khanna

Abraham Maslow, Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, death from overwork, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, dual-use technology, Edward Glaeser, energy security, European colonialism, export processing zone, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, gentrification, Gini coefficient, global reserve currency, global supply chain, Great Leap Forward, guns versus butter model, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, karōshi / gwarosa / guolaosi, Khyber Pass, Kickstarter, knowledge economy, land reform, Londongrad, low cost airline, low skilled workers, mass immigration, means of production, megacity, meritocracy, military-industrial complex, Monroe Doctrine, Nelson Mandela, no-fly zone, oil shale / tar sands, oil shock, oil-for-food scandal, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, restrictive zoning, rising living standards, Robert Solow, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Suez crisis 1956, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

For background on the relationship between money and territory, see Cohen, The Geography of Money (Ithaca, N.Y.: Cornell University Press), 18. 19. Joseph Stiglitz, “The Roaring Nineties,” Atlantic Monthly, October 2002. 20. Erik Erikson, Childhood and Society. 21. Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Industry Note, October 16, 2005. 22. See Robert B. Reich, The Future of Success (New York: Alfred A. Knopf, 2001). The minimum wage in 2006 in real terms is 37 percent below what it was in 1968. 23. The United States has spent less than 2 percent of GDP on infrastructure since 1980. 24.

Who Stole the American Dream? by Hedrick Smith

Affordable Care Act / Obamacare, Airbus A320, airline deregulation, Alan Greenspan, anti-communist, asset allocation, banking crisis, Bear Stearns, Boeing 747, Bonfire of the Vanities, British Empire, business cycle, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, financial engineering, Ford Model T, full employment, Glass-Steagall Act, global supply chain, Gordon Gekko, guest worker program, guns versus butter model, high-speed rail, hiring and firing, housing crisis, Howard Zinn, income inequality, independent contractor, index fund, industrial cluster, informal economy, invisible hand, John Bogle, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, Larry Ellison, late fees, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, Michael Shellenberger, military-industrial complex, MITM: man-in-the-middle, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, proprietary trading, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, stock buybacks, tech worker, Ted Nordhaus, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

Stiglitz, “Inequality: Of the 1%, by the 1%, for the 1%,” Vanity Fair, May 2011. 2 “The fact is” Michael Abramowitz and Lori Montgomery, “Bush Addresses Income Inequality,” The Washington Post, February 1, 2007. 3 “By 2004, the richest 1 percent” Robert Frank, Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich (New York: Crown Publishing Group, 2007), 3. 4 “It is absolutely excessive” Matthew Symonds, “Absolutely Excessive,” Vanity Fair, October 2005. 5 WELCOME TO THE PLUTONOMY MACHINE Citigroup, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” October 16, 2005. 6 “The rich now dominate” Citigroup, “Revisiting Plutonomy: The Rich Getting Richer,” March 6, 2006, http://​www.​ifg.​org. 7 A wealthy American plutocracy Paul Krugman, “Graduates Versus Oligarchs,” The New York Times, February 27, 2006; Stiglitz, “Inequality.” 8 “The top 1% alone control” David Hirschman, “The New Wave of Affluence,” Advertising Age, May 23, 2011; David Hirschman, “On the Road to Riches,” May 22, 2011, Ad Age blogs, http://​adage.​com. 9 Luxury goods were selling Stephanie Clifford, “Even Marked Up, Luxury Goods Fly off Shelves,” The New York Times, August 4, 2011. 10 Most people estimated Benjamin I.

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, algorithmic management, Amazon Robotics, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, carried interest, collateralized debt obligation, collective bargaining, compensation consultant, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial engineering, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, fulfillment center, full employment, future of work, gender pay gap, gentrification, George Akerlof, Gini coefficient, glass ceiling, Glass-Steagall Act, Greenspan put, helicopter parent, Herbert Marcuse, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kiva Systems, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, Larry Ellison, longitudinal study, low interest rates, low skilled workers, machine readable, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, meritocracy, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, opioid epidemic / opioid crisis, Paul Samuelson, payday loans, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Rutger Bregman, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Stephen Fry, Steve Jobs, stock buybacks, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Theory of the Leisure Class by Thorstein Veblen, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, warehouse robotics, Winter of Discontent, women in the workforce, work culture , working poor, Yochai Benkler, young professional, zero-sum game

., Maura Judkis, “One of the Most Expensive Restaurants in Washington Is Going to Increase Its Prices,” Washington Post, January 23, 2017, accessed July 23, 2018, www.washingtonpost.com/news/going-out-guide/wp/2017/01/23/one-of-the-most-expensive-restaurants-in-washington-is-about-to-increase-its-prices/?utm_term=.3884ea4ce2ca. “ways of expropriating wealth”: Ajay Kapur, Niall Macleod, and Narendra Singh, “Equity Strategy: Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup, Industry Note, October 16, 2005, accessed July 23, 2018, https://delong.typepad.com/plutonomy-1.pdf. I borrow the term “income defense” from Winters, Oligarchy, 18–19. “only morons pay the estate tax”: See Julie Hirschfeld Davis and Kate Kelly, “Two Bankers Are Selling Trump’s Tax Plan.