Godfrey, some comments:
1. Most cities don't have a Microsoft dominating their economy. Extrapolating from Seattle's experience would tend to lead one to overestimate the impact of such cases nationwide.
2. Don't be misled by the estimate of 10,000 millionaires. A million dollars is not enough to support "mass consumption." Consider the comments in the article from the couple who had two million:
Since he left Microsoft, he and his wife have been careful not to overspend. They left the company with a smaller nest egg than many early retirees -- they say it is about $2 million. They own one car, a hot-pink 1979 Volkswagen beetle. He rarely buys new clothes and gets around town on a 1956 Vespa.
"We are not crazy, mad rich," Shari Thatcher said. "We are beer-and-pretzels rich."
3. The idea of consumer spending doing a 180 without warning implies people spending at extravagant levels until they run out of money. I doubt that most people handle it that way. In fact the article says that people tend to do their spending binges early on. In addition, it implies that the flow of excess money in Seattle has already been cut back for some time now:
When Microsoft options went underwater in 2000, however, so did the local economy. Seattle and Washington state sank into recession in early 2001, three months ahead of the rest of the nation. Even now, 2 1/2 years later, the economy still shows few signs of recovery. The state unemployment rate in June was 7.7 percent, third highest in the country.
AI
