Heady Times

Daniel Gross has a column on Slate that considers whether the spending of the wealthy could keep the economy afloat.

So, should we fear an impending collapse in consumer spending? Recent sales figures from retailers like Wal-Mart, J.C. Penney, Dollar General, and Sears have been less than encouraging. But the huge mass retailers may not be the best indicators of overall spending...

At Saks, same-store sales in August were up a stunning 18.2 percent; at Tiffany, same-store U.S. sales rose 17 percent in the second quarter. Indeed, luxury retailers are in an expansive mood. The Wall Street Journal reported earlier this week (subscription required) that "this year, some 30 high-end retailers have opened boutiques in Austin [Texas], including Tiffany & Co., Michael Kors, Ralph Lauren, David Yurman, Louis Vuitton and Burberry." These stores are located in a new mall anchored by Neiman Marcus, where same-store sales rose a healthy 4.6 percent in August. Among the strongest performers: "designer handbags, shoes, designer jewelry, women's fine apparel, and men's."

Of course, the wealthy spend less of their income than the poor do but the point of the article wasn't really to lay out the case for upward distribution of income. The point was simply to look at the paragraphs excepted above and think for a second about what they mean.