OK, so the idea in this report is that somehow, truck drivers in Las Vegas found out that hedge fund managers in Greenwich CT were upgrading from Gulfstreams to 737s. This made them feel bad, so they went out and took out huge mortgages that they had no chance of repaying. When house prices went up, they refinanced and bought TVs giving them even less chance of paying off their mortgages. Now they’re broke and not spending a lot.
Speaking of inequality, I post again my colleague Garett Jones’s review of Thomas Piketty’s Capital In the Twenty-First Century . Garett’s review is perhaps the single best review of this book that I’ve read.