Afternoon Must-Read: Derek Thompson: "Two Nations... ignorant of Each Other's Habits, Thoughts, and Feelings..."
No. That is not what Derek writes. But it is what he should write:
Derek Thompson: How the Rich and Poor Spend Money Today—and 30 Years Ago: "The biggest difference between the lowest- and highest-earning Americans...
...is what they spend on housing. Less than 40 percent of the bottom quintile owns a home, compared with 90 percent of Americans at the top. As a result, the top quintile outspends the bottom on housing by $21,000 a year (remember: that gap alone is basically the entire budget of a lower-income family) and $13,000 more on transportation. At just about every income level, we spend about half our income on living and getting around. But after houses and transportation, what are the biggest spending gaps between the top and bottom quintiles today? The poor spend nearly twice as much (as a share of their budget) on food at home and utilities; the rich spend more on entertainment and education.
Here we see one reason for the very different perceptions of how things are going held by the rich and the non-rich. Not only have the incomes and wealth of those who occupy the "rich" slots in the income and wealth distribution been vastly outstripping the "non-rich", but of the things that the rich differentially spend a large share on one--education--has become much more expensive but as its cost has gone up its monetary and class-marker benefit has gone up as well, and the other--entertainment--has seen its cost plummet extraordinarily.
Cheaper electronic toys are worth a great deal to the rich. There has been no similar price revolution in housing, transportation, food at home, and utilities; the rise in the cost of education is perceived to have put opportunity further out of reach; and the fear of medical bankruptcy has grown.
