If You Don't Consume, You Don't Count

By Cernig

Hows this for a revealing statement?

So far, the subprime mess is more of a human tragedy than a stopper for the economy. It's being felt most by the lower middle class, which isn't the driving force in economic growth. The bottom 40% of the population by income accounts for just 21% of consumer expenditures. Julia L. Coronado, a senior U.S. economist at Barclays Capital (BCS ), says that in terms of spending power, and taking into account stock market gains, "Consumers haven't lost any wealth at all. In fact, consumers are better off than they were a year ago."

What a telling passage - it explains entirely how those who care about people think the economy is in the dump and those who only care about money don't. If you're too poor to spend lots or if you've stopped spending - stopped being a consumer - then you don't count any more for the latter group.

(H/T Kat)