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In a plutonomy, the economy does not need the median consumer to be euphoric.

It just needs the median consumer to remain solvent.

That distinction matters.

A large share of discretionary demand can come from affluent households, asset owners, corporations, and high-income professionals. They drive premium housing, luxury travel, expensive restaurants, AI investment, equity market gains, private schools, cultural events, and high-end healthcare.

But the median consumer still has to keep the system from breaking.

The median household needs to keep working, paying rent, servicing auto loans, paying credit cards, buying essentials, and avoiding default.

That is why I think a Median Consumer Solvency Index is useful.

The index would track six things:

1. Personal saving rate
2. Real consumer spending
3. Credit delinquencies
4. Labor market strength
5. Debt service burden
6. Consumer confidence / expectations

Each category gets scored from 0 to 2:

• 2 = healthy
• 1 = strained
• 0 = deteriorating

The maximum score is 12.

My rough interpretation:

• 9–12: Green Zone — consumer is solvent and stable
• 5–8: Yellow Zone — consumer is strained but not broken
• 0–4: Red Zone — consumer stress is becoming systemic

Right now, the key issue is that the consumer may be in the Yellow Zone: strained, rate-sensitive, and increasingly dependent on a still-healthy labor market.

That can coexist with strong equity markets, AI CapEx, luxury demand, premium travel, and high-end housing.

But if the labor market cracks, today’s affordability pressure could quickly become a solvency problem.

That is the plutonomy risk: The top can keep spending. Capital can keep compounding. But the system still needs the median consumer not to break.

A decade ago, having an AMEX Platinum or Chase Sapphire Reserve actually felt premium. You got lounge access, upgrades, priority lines, concierge service, etc.

Now? Half the airport seems to have one.

The interesting thing is that the cards themselves didn’t really become “worse.” What changed is that the real premium layer moved higher.

We now have tiers:

• Mass affluent premium → AMEX Platinum / CSR / Capital One Venture X
• Actual premium → international business class lounges
• True elite → invitation-only cards, private terminals, first-class-only lounges

Same thing is happening everywhere in the economy:

• “Luxury” apartments
• VIP concert packages
• Hotel elite status
• Restaurant reservations
• Ski resorts
• Disney experiences

The old upper-middle-class experience got democratized through credit and subscriptions, so the wealthy simply moved to a new layer with more exclusivity and lower crowd density.

That’s why airport lounges feel overcrowded now: The product wasn’t designed for millions of people with premium cards.

The real scarce asset in 2026 isn’t marble countertops or free champagne.

It’s low-friction access and uncrowded experiences.

Jamie Dimon just said JPMorgan will likely hire more AI specialists and fewer traditional bankers as AI adoption accelerates.

That sounds like a banking story, but I think it is really a plutonomy story.

For decades, finance was one of the great upper-middle-class ladders. You joined a major bank, learned the business, moved through analyst/associate/VP roles, and slowly climbed into higher compensation.

AI threatens that ladder from the bottom and middle.

The winners are likely to be elite technical workers, senior rainmakers, capital owners, and client-facing people with relationships. The losers are the process-heavy professional roles that used to provide a path into the upper-middle class.

This is not necessarily mass layoffs tomorrow. Dimon even said the transition can be managed through attrition. But that may be the more important point: the change happens quietly through fewer replacements, smaller hiring classes, more automation, and fewer traditional career openings.

The plutonomy pattern is becoming clearer:

Productivity goes up.
Corporate margins improve.
Elite labor gets more valuable.
Capital captures more of the upside.
The middle professional ladder gets narrower.

AI may not eliminate banking. But it may eliminate a lot of the ordinary career path into banking.

For years, Big Tech felt like one of the safest ladders into the affluent class: high pay, stock grants, perks, remote flexibility, and a sense that talent would be protected.

That bargain seems to be breaking.

The plutonomy angle is simple: owning Big Tech and working for Big Tech are becoming two very different economic positions. Shareholders benefit when companies cut costs, automate more work, and defend margins. Employees, even highly paid ones, are discovering they are still labor — expensive labor, but labor.

Big Tech did not stop being a wealth machine.

It just became clearer who the machine is mainly for.

The U.S. car market used to serve the middle class.

Now the average new car is around $50,000, cheap models are disappearing, and automakers would rather sell $70k–$90k SUVs and trucks than basic transportation.

That’s the plutonomy pattern:

Companies no longer optimize for the median consumer. They optimize for affluent buyers with stronger balance sheets.

So GDP and corporate profits can look fine while regular households feel crushed.

The econobox didn’t die by accident.

It died because the market found richer customers.

NYC may have just entered a new political era.

Not because poor voters elected a socialist.

But because six-figure professionals increasingly feel locked out of the lifestyle they thought they were working toward.

The NYT called them “struggling yuppies.”

People making:

• $120k
• $150k
• even $250k

…who still feel like:

• housing is out of reach
• childcare is crushing
• wealth accumulation is impossible
• and there’s “no next step.”

That’s the key insight.

The issue isn’t poverty.

It’s blocked upward mobility inside a luxury economy.

When a city becomes a global luxury product, local professional salaries stop setting prices.

Global wealth does.

And eventually even educated professionals begin to politically revolt against the system.

That’s how NYC ended up electing Zohran Mamdani.

Las Vegas may be one of the clearest examples yet of how the plutonomy economy works.

The city used to be built around mass-market aspiration: cheap rooms, cheap food, cheap drinks, cheap gambling, and the feeling that a normal person could live like a high roller for a weekend.

That model depended on volume.

Now the high rollers are still coming. Private jets are still arriving. High-limit tables are full. The Sphere, Allegiant Stadium, luxury restaurants, premium shows, and VIP experiences are doing fine.

But the middle-class visitor is getting priced out.

The old Vegas bargain stack (cheap buffets, cheap parking, cheap entertainment, cheap rooms) has been replaced by resort fees, expensive drinks, paid parking, premium pricing, and a sense that the city is monetizing every friction point.

So Vegas is not necessarily “dead.”

It is becoming more plutonomic.

Fewer people may come, but the people at the top spend enough to keep headline revenues strong. The problem is that Vegas was physically and economically built as a volume business. You can’t run an entire city — hotels, restaurants, workers, taxis, shops, local services — only on whales and private-jet customers.

That’s the tension.

The premium tier still works, but the mass-market dream is breaking.

The AI backlash is not really anti-technology.

It is about distribution.

At the University of Arizona, graduates reportedly booed when Eric Schmidt said AI would “touch everything.” At the University of Central Florida, students also booed when AI was described as the next Industrial Revolution.

That reaction makes sense.

AI threatens the bottom rungs of the professional ladder: junior analysts, coders, writers, designers, paralegals, marketers, and recent grads.

Meanwhile, the upside flows to the owners of chips, cloud platforms, data centers, software, and capital.

That is the plutonomy angle: We automate your career ladder, and someone else captures the gains.

Young people are not rejecting progress.

They are rejecting extraction dressed up as progress.

The University of Chicago just announced free tuition for families making under $250,000 per year.

That sounds like a generosity story.

But I think it is also a plutonomy story.

Some colleges are failing because they are tuition-dependent, enrollment-sensitive, and lack deep endowments.

Meanwhile, UChicago can do this because it has an endowment of about $11 billion.

That is the split.

Elite universities are not just schools anymore. They are capital pools, credential machines, research platforms, real estate owners, medical systems, and elite-network gateways.

A struggling private college needs tuition to survive.

An elite university can use its balance sheet to subsidize tuition, attract stronger students, protect its brand, and reinforce its dominance.

The irony is that “free tuition” at the elite level may actually increase concentration.

More top students will chase the schools with the best aid, strongest networks, and most valuable credentials. The rich schools get richer in talent, prestige, donations, and pricing power.

The weak schools lose more oxygen.

This is the same pattern we see everywhere else:

• Luxury hotels
• Premium airline cabins
• Elite neighborhoods
• Private healthcare
• Top-tier universities.

Scarce premium goods and institutions increasingly reorganize around concentrated wealth.

UChicago offering free tuition is not the opposite of plutonomy.

It is plutonomy with a financial-aid office.

A lot of people talk about AI as if it will automatically lift everyone. Maybe.

But the more likely near-term outcome is that AI hardens the K-shaped economy.

Why?

Because AI rewards:

• Capital
• Scale Data
• Technical skills
• Managerial leverage
• Mega-cap platforms
• Workers who complement technology

It does not automatically reward workers whose jobs can be automated, commoditized, or reorganized away.

That creates a very plutonomy-like outcome.

AI can raise productivity, margins, and stock prices while still leaving many households financially stressed.

In other words, we could get:

• Higher corporate earnings
• Higher market valuations
• More tech wealth
• More productivity in capital-intensive sectors
• More premium consumption by asset owners

At the same time as:

• Routine labor weakens
• Entry-level white-collar jobs shrink
• Lower-income credit stress rises
• Housing affordability worsens
• The middle class loses ground

That is the uncomfortable possibility.

AI may be great for GDP, the S&P 500 and capital owners.

But unless the gains are broadly distributed, AI becomes another amplifier of plutonomy.

Not because technology is bad. But because the ownership structure determines who captures the gains.

The New York Times just ran a story about young adults in NYC facing a brutal mix of weak entry-level hiring, rising rents, student debt, and everyday costs that keep moving higher.

One 24-year-old applied to roughly 450 jobs, got more than 10 interviews, still has no full-time job, and now works part-time for $18/hour. The article also says NYC entry-level job postings fell more than 37% from 2022 to 2024.

To me, this is the plutonomy problem in human form.

NYC can still look rich, vibrant, and booming at the top while becoming almost impossible for young adults to enter. The city is increasingly priced by global capital, high earners, inherited wealth, wealthy parents, and affluent professionals — not by the 24-year-old trying to get a first real job.

The old New York bargain feels broken.

It used to be: “Move to the city, struggle for a while, build a career, and eventually rise.”

Now it feels more like: “Move to the city, compete against 1,000 applicants, pay plutonomy prices immediately, and hope you survive long enough for the upside to arrive.”

That is the mismatch: The opportunity ladder still exists culturally. But the cost of stepping onto it has been repriced.

In a plutonomy, the city does not need every young person to thrive. It only needs enough affluent consumers to keep bidding up scarce things: apartments, restaurants, neighborhoods, cultural access, private schools, and status experiences.

That is why NYC can feel prosperous in aggregate while so many young adults feel like they are drowning.

The city still works. Just not necessarily for the people trying to start from zero.

The top 1% own about 10x as much wealth as the bottom 50%

One of the biggest implications of the K-shaped economy is that the median household is no longer the price-setting consumer in many important markets.

That does not mean the median household disappeared.

It means the marginal buyer in scarce premium markets is increasingly someone else.

Think about:

• Luxury hotels
• Business class seats
• Michelin restaurants
• Premium apartments
• Good school districts
• High-end healthcare
• Private clubs
• Concerts and sports tickets
• Fine Hotels & Resorts inventory
• Broadway premium seating

These markets do not need mass affordability. They need enough affluent buyers to clear limited inventory.

That is the plutonomy dynamic.

If supply grows slowly but the number of high-income / high-asset households grows faster, prices can reset violently upward. Not gradually. Violently.

This is why people who are objectively doing well can still feel like the train is pulling away from the station.

They are not comparing themselves to the median anymore.

They are competing with the upper arm of the K.

And the upper arm has more income, more wealth, more home equity, more stock gains, more inheritance, and more willingness to pay for scarce premium access.

That is why “nice things” feel so much more expensive.

They are being priced for the affluent marginal buyer, not the average household.