The US Economy Runs on Billionaire Pocket Change
The top 10% of earners account for almost half of all consumer spending in the United States. Wealth concentration has made economic stability shockingly reliant on elite consumption.
The richest Americans get their money as much from assets as wages and often spend it on luxury goods and services. (Michael M. Santiago / Getty Images)
While millions of Americans are struggling with a growing consumer debt crisis and surviving paycheck to paycheck, the wealthy are living their best lives — and increasingly so. This stark economic divide is no accident; it is the product of a rentier economy built on asset inflation and decades of failed trickle-down policies. It’s also a house of cards. But for those at the top, the living is easy. For now, at least.
As the Wall Street Journal reports, the top 10 percent of earners has grown to account for nearly half of US consumer spending — up about fourteen points over the last thirty years. These households enjoy incomes of $250,000 or more each year — money that comes from assets as much as wages or salaries, and which goes to luxury goods and services. Mark Zandi, chief economist at Moody’s Analytics, told the Journal that the wealthiest are spending more per capita than everyone else, buoyed by gains in the stock market and real estate.
All Hail the Rentier Economy
The shift represents a growing wealth gap, a growing concentration of power in fewer hands, and an economy that is increasingly detached from reality — but dangerous for all that. Beyond the growing wealth gap, the wealthy are making the economy more reliant on their spending, a situation that carries serious risks.
Rachel Louise Ensign writes in the Journal that “a stock market selloff or decline in home values that rattles the confidence of the top 10 percent and causes them to cut back would have a significant effect on the economy,” noting as well that consumer confidence is already looking shaky, in no small part thanks to Donald Trump and his broad tariff threats.
The stock market isn’t the real economy — a fact often lost on economic observers and politicians. Wall Street isn’t Main Street, which is why you can have a stock market that is setting records while millions of Americans worry about making ends meet. But stock market fluctuations still have real consequences, shaping expectations and driving behavior. If panicked investors trigger a sell-off and broader contraction, the fallout will hit everyday people the hardest. When the economy is built to serve those at the top — whose wealth depends on asset growth — they can afford to ride out downturns. Everyone else? Not so much.
Indeed, the risk of an impending crash is real, as some experts are already warning. With the country’s fortunes tied to tech barons and high spenders in the upper classes, a contraction in the stock market and a pullback on consumer spending by the asset-owning class would be catastrophic for the bottom 80 percent — who would be stuck holding the bag.
How to Make Money Without Working
Years of tax cuts for the wealthy and cheap money have fueled growing wealth inequality in the United States. In the years after the global financial crisis, the rich were able to use low interest rates to invest at scale and watch their returns soar, while the rest of the country took on over $1 trillion in consumer debt — only to find itself in a vice as interest rates began to rise. Higher rates turned out to be a win for the wealthy too, delivering higher returns on their investments. Either way, the rich profited: cheap money allowed them to buy up assets at bargain prices, while rising rates padded their portfolios. Nice work, if you can get it.
Decades of deindustrialization, financialization, and the legacy of Reaganomics — deregulation and tax cuts for the rich — have driven the United States toward a rentier economy, where wealth isn’t made by building things but by owning and exploiting assets. The more passively wealth accumulates, the more complicated the financial instruments behind it, the better. After all, who wants to work or, god forbid, have their debauched financial instruments questioned?
For American households in the top 10 percent, whose fortunes depend on an ever-growing stock and real estate market, this arrangement is a golden ticket — and a loaded gun pointed at everyone else. If the economy relies on the rich spending their legally earned but morally dubious gains, then everyone else is at their mercy. Or to return to the house of cards metaphor, the implicit threat is clear: if they stop spending, the whole thing collapses — just not on them. And so the system demands faith — in asset values, in ever-expanding returns, and in the hope that, someday, those at the bottom will get trickled down upon.
The Trump Bomb Is Set to Blow
During steadier times, an unequal rentier economy is simply a travesty — and a ticking time bomb. But with Trump in the White House, it’s become even more of a threat. His tariff threats risk blowing the economy to kingdom come. Prices will rise, jobs will vanish, and top earners will pull back their spending, exacerbating the crisis. Trump says this pain will be temporary and worth the cost, imagining a swift reindustrialization of the American economy — in steel, automobiles, and high-tech manufacturing. And maybe some of that will, indeed, happen. Apple has already announced a $500 billion investment in the country for advanced manufacturing and research.
But even if these investments materialize, that won’t change who bears the brunt of transition. As with every economic shock, the burden will fall overwhelmingly on the shoulders of the bottom 80 or 90 percent — through job losses, rising costs, and an even weaker safety net — while the wealthy find ways to profit from the turmoil.
In theory, American reindustrialization is a great idea: manufacture goods, secure supply chains, boost worker wages, thrive. But Trump’s indiscriminate trade war, driven by a crude mercantilism, is hitting an economy whose manufacturing capacity has atrophied over the course of decades and whose labor protections are weak. This won’t just be a crisis; it’ll be something worse. Add to that the near certainty that any manufacturing resurgence will be dominated by oligarchs dead set on suppressing wages and workers’ rights, and the outcome is clear: a labor market rigged against regular people and big trouble on Main Street. The Trump administration has already set about undermining labor rights by attacking the National Labor Relations Board and union rights. Expect more to come.
In an economic crisis, some richer Americans might have to forgo completing their set of matching Gucci bags in every color. But the cycle is predictable: the wealthy will recover; they’ll be made whole again. Meanwhile, workers will be left to struggle day by day, making meager gains — until the next downturn, when they’ll be sacrificed once again.