The reports are available (for the time being: 20 June 2011 here and here

from Edward Fullbrook

In 2005 and 2006 Citigroup issued two now notorious but highly significant reports for the exclusive use of its richest clients. The first, from October 16, 2005, was “Plutonomy: Buying Luxury, Explaining Global Imbalance”. This 35 page report begins:

The World is dividing into two blocs – the Plutonomy and the rest. The U.S., UK, and Canada are the key Plutonomies – economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc. Equity risk premium embedded in “global imbalances” are unwarranted. In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc. This imbalance in inequality expresses itself in the standard scary “global imbalances”. We worry less. There is no “average consumer” in a Plutonomy. Consensus analyses focusing on the “average” consumer are flawed from the start.

And it continued:

We project that the plutonomies (the U.S., UK, and Canada) 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.

The full report is available here http://www.scribd.com/doc/23321255/Citigroup-Mar-5-2006-Plutonomy-Report-Leaked-Citigroup-Memo-Part1

Citigroup’s second Plutonomy report, titled “Revisiting Plutonomy: The Rich Getting Richer”, was issued on March 5, 2006 and began:

The latest Survey of Consumer Finance data was released Friday 24th of February. It shows that the rich in the US continue to be in great shape. We thought this was good time to bang the drum on plutonomy. Back in October, we coined the term ‘Plutonomy’ (The Global Investigator, Plutonomy: Buying Luxury, Explaining Global Imbalances, October 14 2005). Our thesis is that the rich are the dominant drivers of demand in many economies around the world (the US, UK, Canada and Australia). These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favourable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries. Also, new media dissemination technologies like internet downloading, cable and satellite TV, have disproportionately increased the audiences, and hence gains to “superstars” – think golf, soccer, and baseball players, music/TV and movie icons, fashion models, designers, celebrity chefs etc. These “content” providers, the tech whizzes who own the pipes and distribution, the lawyers and bankers who intermediate globalization and productivity, the CEOs who lead the charge in converting globalization and technology to increase the profit share of the economy at the expense of labor, all contribute to plutonomy. Indeed, David Gordon and Ian Dew-Becker of the NBER demonstrate that the top 10%, particularly the top 1% of the US – the plutonomists in our parlance – have benefited disproportionately from the recent productivity surge in the US.

Both reports were leaked and made available on the WEB. Michael Moore referred to them in Capitalism: a love story, and the now retired US newscaster Bill Moyers has called attention to them. But they seem to have been largely ignored by scholars. They should be required reading. But now Citibank is trying to suppress “Revisiting Plutonomy: The Rich Getting Richer”. They have succeeded in getting the second plutonomy report removed from Scrib. Where it used to be, it now reads “This content was removed at the request of Citigroup, Inc.” It is still available here http://www.mygreencard.com/downloads.php?file=CitigroupPlutonony_October2009.pdf Scholars should download both Plutonomy Reports while they are still available.