Just a little true anecdote on how the “rich” cutting back is hurting the “not rich.”
My wife went to a hair salon last Friday. The salon is located on the East Side of Providence, Rhode Island, near Brown University. This is the premier neighborhood in Providence, with a mix of very expensive houses along with more modest houses. The neighborhood is about as close to a gathering of Barack Obama’s wealthiest 5% (or 2%) as you will find in the City of Providence.
Of course, most of these people do not consider themselves rich. There are a lot of doctors, lawyers, accountants and other professionals who live in this neighborhood who work long hours and yes, have achieved a level of income which means they do not worry about paying the next mortgage bill.
But they are not rich in the sense that they do not have to continue working, or worrying. Because they make too much, they know they will pay full freight for their children to go to college, they pay high income and property taxes which support a multitude of social services they do not use, and just about the only thing the government gives them is police and fire protection. There are many dual income families, in part because two incomes are needed to maintain a lifestyle when one takes into account how much the government takes.
Whether they have $250,000 of income, or not, is irrelevant. They are the working, professional upper middle class whose spending habits feed so much of the economy. And my guess is that a lot of them, almost certainly a majority, voted for Barack Obama.
This was a Friday, midday. In the past, the salon would be packed with chatty women (sorry – couldn’t resist). But not this Friday. It was almost empty. The hairdresser is a women who does not own the shop but “rents” a chair, so that in effect she is self-employed. The hairdresser complained about how so many of her regular customers had stopped coming in.
Are people cutting back because they have lost money in the stock market, or jobs, or are they just cutting back in response to the fear stoked by this administration? Can’t tell from this example.
But one thing is for sure, there really is such a thing as trickle down economics. It’s called economics. Single out the “rich” for punitive taxation, talk down the markets, create a climate of fear, and you will create a self-fulfilling prophecy of economic doom. And you will hurt people who are not yet “rich,” but want to be.
UPDATE: If you are at a loss for words to describe how you are feeling, please consult the Blagospheric Neologian, not Wikipedia like people who had Star Wars bedroom curtains as a kid.