Blingdexes Boom, Unlike You

This is under the heading of "proof of what you already knew." Robert Frank's Wealth Report in Friday's Wall Street Journal cites several indexes of the luxury consumer sector to show that indexes that track high-end goods have gone up much faster during the Bush years than those that track consumption for the rest of us. Frank writes, "Most of the luxury index have posted an average increase of at least 13% between 2001 and 2006. The Dow Jones Industrial Average, by comparison, has increased an average of 4.7% annually during the same period." And of course GDP has increased less than that. In addition, "same-store sales for upscale stores like Saks and Barneys are increasing at more than twice the rate of the overall retail sector, analysts say."

Another example: Merrill Lynch's new MI LIfeStyle Index (which includes BMW, Porsche, Bulgari, Coach, Burberry, Tiffany, Sotheby's, etc.) "increased 23% in 2005 and 12.5% in 2006 - above the 14% and 7% posted for the Morgan Stanley's MSCI World Consumer Discretionary Index" which tracks global consumer stocks.

And of course the inevitable stats behind this are not long in coming: "The number of millionaire households in the U.S. has more than doubled since 1995," and "the total wealth held by the nation's richest 1% has increased more than 50% since 1998, to $16.7 trillion in 2004."

No wonder we had to cut national higher education funding by over 15% in real dollars in the 2000s, and had to privatize the formerly federal student loan agency Sallie Mae, whose CEO after 1997, Albert L. Lord, made $235 million between 1999 and 2004, and stands to make another $135 on this new deal. (See a good piece by Joseph Nocera, and and another by Julie Bosman on loan companies phony but mandatory "counselling" to students on campus.) Why send two kids to Harvard, or fifteen to Cal State Channel Islands, when you can buy a Bugati instead, make the kids take on debt, and then pay off your Bugati with the interest you make from their securitized debt? This is what makes this the greatest country in the world!