The Hourglass Economy: Consumerism Goes Upscale

Some have called it the "disappearance of the American Middle Class." American consumers no longer strive for the house and the car and the television set. Now, even those who fall into the middle of the American economic spectrum want a Lexus and designer shoes and a state-of-the-art stereo system.

Some economists have described the shape of the American economic spectrum and its corresponding consumption pattern as an hourglass. The middle class has been squeezed out, leaving a bubble at the top and a bubble at the bottom.

Many companies have capitalized on (or perhaps helped create) the mainstreaming of luxury. BMW now makes somewhat affordable cars. Coach Leather stores now sit in many shopping malls.

One school of thought would argue these new trends are good: that the quality of life for all Americans — as measured by the goods they possess — is getting better for all sectors. Now nearly everyone has the television and the car that used to mark middle class life.

But others argue that the growing differences between the top and the bottom are having a detrimental effect on the nation as a whole. No longer is there a shared desire to get to the middle. The growing stratification of the nation — with no discernable middle — can create huge social upheaval.

This hour, the new hourglass shape to the U.S. economy.

Guests:

Walker Smith, President of the marketing consulting firm Yankelovich Partners
James Twitchell, Professor of English and advertising at the University of Florida, author of "Living it Up: Our Love Affair with Luxury"