Don't corporate profits depend on the 99% (the poors) spending? If the consumers fail, and stop spending, how long before the corporations feel mildly inconvenienced?
I'm unsure why people still believe we need the middle class to lead consumption for our economy to be "good"? At this point I feel like there is a lot of evidence out there directly contradicting that belief.
Do I think that's good for the nation? Not at all.
But I think fixing the fact that such an economy is terrible for the nation should be a separate discussion. Obviously we need to do something to support the 90%, and I support doing something in service of that goal. We should do it as soon as possible.
But I think people like Kashkari are thinking only about the economy itself. Which is kind of his job. It's the job of our elected officials to fix issues arising from the inability of the 90% to take advantage of the economy as well as they had historically.
Even NVidia has moved to this model: make your money from selling high-end GPUs for Data Centers and forget the low-profit margin (GeForce) GPUs for gamers/consumers.
The whole economy is moving to that model for many things.
In comparison. Android phones (in total) outsell iPhones because they are cheaper/more affordable. Sure Macs and iPhones may sell more than an individual non Apple brand, but collectively all together, the non-apple brands outsell Apple.
But it is certainly true that making high quality products doesn't necessarily mean low sales.
Same for politicians, 4/5 years matter, if the world collapses after, it's the next governments problem.
And in financial terms, those are really long periods, at least compared to HFT.
50% of consumer spending is by the top 10%, and that trend is getting more extreme as wealth concentrates further. Is there a breaking point? Sure. But capital is willing to see how far it can push this before it breaks.