Kim’s future beau has ruined it for men everywhere who are hoping to one day find a bride. Because let’s face it, very, very few engagement rings will ever compare to the $2 million, 20.5 carat monster sitting on Kim’s left hand.
But, jealous as we are of this lovable Kardashian and her good fortune, do we ever stop and think about what she and other celebrities really do for us? Yes, they engage us in frequent drama-filled television shows. And yes, from them we learn about fashion, fitness, star gossip, and of course, where to buy the perfect pair of Manolo Blahniks. For this we are eternally grateful.
Still, we rarely stop to think about what these celebrities do for us downtrodden consumers: They stimulate the economy. The question before us is simple: Can the wealthy spend enough to make the economy grow faster and bring down unemployment?
Reports from the Associated Press, say that fewer people applied for unemployment benefits last week. Now don’t get too excited. This doesn’t mean that finding a decent job will be any less difficult. It also doesn’t mean that there will be any fewer résumé-holders standing in front of you during a company’s open call hiring day.
But a front page article in the Financial Times on April 25, 2011 did speculate about the positive effects of spending in the current economic slump by the rich and the really rich.
It explained that the wealthy are extremely helpful in stimulating the economy on the short term spectrum, and that their purchasing is helping companies continue to make a profit. This, in turn, leads to more jobs. So, in a way, the affluent are the exact stimulus that we need.
I recently read an interesting report by the Harrison and American Express Publishing groups. Some of the statistics were mind-boggling. They found that top 10 percent of Americans are expecting to spend $26.6 billion more in the next year on luxury goods, excluding cars and travel. This year alone, their spending on luxury items is expected to rise 8 percent compared with 2010.
Talk about a lot of money. But is there a way that that our wealthy counterparts can stimulate the economy while doing some good for society also?
Bill Gates seems to think so. He made a speech in 2008 at the World Economic Forum in the beautiful city of Davos, Switzerland. Gates, a computer whiz and superb speechmaker, spoke about a new approach to capitalism in the 21st century. I sincerely believe that if more wealthy people start using an idea Gates calls “creative capitalism,” our economy, little by little, can pick itself out of the dirt and finally wash up.
Gates colorfully describes a fun conversation he had with Bono. Bono couldn’t stop talking about how they could get a percentage of each purchase from civic-minded companies to help change the world. Gates said, “He kept calling people, waking them up, and handing me the phone to show me the interest.”
Several seconds later Gates continued, “He was right.”
He further said that if you give people the chance to associate themselves with a cause they care about, all while buying a great product, they’ll do it. That same night in Davos, the RED Campaign was born.
RED products are today available from companies like Gap, Motorola, and Armani. Dell and Microsoft have now joined the cause also. And, in 2008, RED generated $50 million for the Global Fund to Fight AIDS, tuberculosis, and Malaria. Because of this great cause, nearly 2 million people in Africa are receiving life-saving drugs today.
How does this relate to us, and specifically to the rich? Gates thinks that there’s an understanding around the world that when change is driven by proper incentives, we have a sustainable plan for change, as profits and recognition are renewable resources.
So, if the rich continue their frivolous spending, but perhaps focus more of their energy on this creative capitalism mindset (say by purchasing a collection of RED shirts) they can do two main things: Stimulate our economy and do some good for the world.
Yes, it won’t fix everything. Credit card companies are saying that there is still $4 trillion in money market accounts. This paints the picture of a society still risk-averse and concerned about spending or losing money. But consumer spending, which accounts for 70 percent of U.S. economic activity, did rise 4% in the last quarter.
And hey, if high-end shoppers continue swiping their plastic cards across the states – just making sure to look out for companies that are socially responsible – well, it can be a beautiful thing.
Help us, Kim Kardashian, and other wealthy idols. We need you to shop.