MacroScope

Giving up on the middle class

With more dismal U.S. economic data emerging this week, one marketing consultant wealth manager is advising her financial industry clients colleagues to ignore the masses altogether and focus solely on the ultra rich.

In an article on wealthmanagement.com, April Rudin, CEO of The Rudin Group (which, for the record, says it only focuses on clients of high and higher net worth), describes a “new reality” in which many wealth managers are marketing themselves to people who “will in the future not be able to afford their products and services.”

In the wake of the financial crisis, middle class families in the U.S. are burdened by too much debt, the rising cost of health care, fewer jobs and the ever-increasing price tag on retirement.

She adds bleakly:

The middle class is toast.

High inequality makes it tougher to reform economies: Swedish Finance Minister

Americans are all too acquainted with the shouting-match politics that tends to accompany any debate over economic policy: everyone is yelling and nobody is listening. The toxic political discord in Washington has become so familiar it is almost a cliché.

It turns out high levels of income inequality, which the United States is also famous for, could be to blame. According to Anders Borg, the Finance Minister of Sweden, a large wealth gap makes it harder to achieve political consensus because the debate is poisoned by mistrust. Speaking at the Peterson Institute this week, Borg said high inequality in Southern Europe was a factor preventing those countries from achieving agreement as they struggle with a deep financial crisis:

You need to deal with the social cohesion issue. You cannot have a society where the conflicts that are built in become so strong that you undermine the political ability to deal with problems. If I compared Sweden with Spain or Italy or Greece, one of the reasons we have been able to these reforms is that our income differences are substantially lower which also means that the political tension is on a completely different level.