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“The twisted nature of American economic life is not new. Nearly a decade ago in 2005, a team of economists at Citigroup identified this new era of inequality and gave it a name, “plutonomy.” The rich are getting richer, these experts agreed, and the US economy has adjusted comfortably to the new reality. Plutonomy, they explained, is an economy “powered by and largely consumed by the wealthy few.” By Citigroup’s reckoning, only the United States, Britain and Canada qualify.

“We project that the plutonomies…will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization,” they concluded. The follow-up report a year later was titled “The Rich Are Getting Richer.”

Janet Yellen, if she dares, might ask the Fed’s deep stable of economists to look into the subject. These Citi forecasters did not see the financial crash coming nor the near-death experience of their own institution. Nevertheless, they got the picture right and their provocative projection is clearly back on track. The American plutonomy has recovered smartly. It is just the overall economy that’s still struggling.”
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