From the same article: "Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone."

This is true. The rich are, broadly, 'investing' in the economy. But it does not necessarily follow that all 'broad' investment dollars are being spent on 'productive business.'

Conventionally, increased 'broad' investment should result in an increase in 'narrow' investment: purchases of intermediate goods. Things like industrial drill presses, hydroelectric turbines, and pig iron. We can dispatch that quickly: that simply hasn't happened. 'Narrow' investment is down over the past thirty years.

Perhaps those dollar-denominated investments are going overseas. But, no, not that, either. Capital outflows through FDI are smaller than the decline in 'narrow' investment or the increase in 'broad' investment. The money, in other words, isn't simply traveling overseas.

Perhaps he's just wrong, and the increase in inequality is financing extraordinary rates of consumption amongst the rich. Maybe the gold-plated-Hummer industry is taking off. But that's not the case, either: luxury consumption hasn't kept pace with the increase in inequality.

So, if this vast pool of capital isn't buying anything productive, what is it doing? Two things:

First, and most importantly, nothing at all. As the pool of millionth and ten-millionth dollars increases, there's a larger and larger amount of money with a low propensity to be spent on anything at all. Cashlike AAA assets are being hoarded to be spent by children, grandchildren, or great-grandchildren, or to be spent during retirements which will never arrive. In a sense, the cashlike assets of the fully-satiated rich are entirely different than the money of the poor: they represent past commitments to pay at some future date. Nominally, these cashlike assets are nonrevolving. In a practical sense, however, they are rolled over as they come due, deferring their obligations ever-further into the future.

Second: it's being spent on consumption. Not their consumption. Our consumption. Once wages began to flatten, consumer credit began to rise precipitously. Investors like Conard like to think that they're not involved in consumer credit. They're wrong. Cut out the middleman, and you'll find that Apple (for instance) is in the business of selling iPads to banks. Virtually all of the increase in final consumer spending since 1973 is attributable to the rise in consumer credit. Investors carry both the purchaser's credit card balance and Apple's profits on their books as 'assets,' artificially inflating the total amount of value.

Perhaps there's some value here. If there is, however, we need to look elsewhere than Conard to defend it: he doesn't even seem to understand what's going on.
Shared publiclyView activity