Have You Had a $10,000 Martini Lately?
by Paul HarrisThe Observer UK, July 30, 2007
Link to article
Did You Pay $736,000 for Your Watch? No? Then you’re not a member of “Richistan.”
“America’s super-rich have returned to the days of the Roaring Twenties. As the rest of the country struggles to get by, a huge bubble of multi-millionaires lives almost in a parallel world. The rich now live in their own world of private education, private health care and gated mansions. They have their own schools and their own banks. They even travel apart — creating a booming industry of private jets and yachts. Their world now has a name, thanks to a new book by Wall Street Journal reporter Robert Frank which has dubbed it “Richistan.” There every dream can come true. But for the American Dream itself — which promises everyone can join the elite — the emergence of Richistan is a mixed blessing. “We in America are heading towards ‘developing nation’ levels of inequality. We would become like Brazil. What does that say about us? What does that say about America?” Frank said. …”
Click on link to read entire article
Tags: Richistan
August 23rd, 2007 at 7:22 am
I’ve read Harris’s entire article. He makes a point. But he misses several other points, and the article doesn’t really set the full context for the problems of those of us who are “working more for less.”
Many of the new mega-rich have gotten there through extraordinary risk, such as hedge fund management and investment, or highly leveraged real estate investments during the housing market bubble. Hedge funds are now in mega-trouble. The housing cost bubble has burst and is drowning the foolhardy speculators and unscrupulous lenders who caused it in the first place. When all the owners of the $10million mansions in Beverly Hills can’t afford their property taxes, never mind their butlers, who is going to buy those buildings? Nobody. Not for private homes. They may become bed and breakfasts in the hands of sensible entrepreneurs. The governments that seize them for non-payment of taxes may turn them into affordable multi-family housing.
It’s impossible to predict how this economic Brazilification will play out. This is America, not Brazil. There are other forces at play in our economy on the negative side (outsourcing and salary stagnation) and on the positive side — the watchdogs of society, and even some of the mega-rich themselves who Harris reports realize that spreading the wealth is the only way to prevent a class war. That positive side is also where UP comes in.
The “American dream” and the “American way” have to do with working and risking your way to personal self-actualization and financial security. The existence of mega-rich folks doesn’t in itself compromise my ability to achieve my own dream proportionate to my own willingness to do a valuable job and take risks at a level I can tolerate. If I can sell the mega-rich some of my skills at a higher salary than a company will pay for other skills, that’s the American way. But if I look at the big picture, thanks to my American public school education, I can do the math and probability stats that when my mega-rich employer’s castle turns out to be build on sand, my job will be drowned with the rest of it.
So I’m not going to butler school or tutoring mega-rich kids in language arts. I still think that great American companies along with government are the care-takers of the American dream, and that’s where our efforts remain focused.
Let’s focus on demanding livable wages, fair salaries, and reasonable hours that appropriately reward the hard work we have done to get educated, continue to build skills the company needs as those needs change. Let’s focus on demanding universal healthcare that keeps us healthy enough to deliver a good value to our employers in return for the salaries we receive. Fair exchange of values — that’s the American way. Let’s focus on that.
August 23rd, 2007 at 10:36 am
I agree with Trude. Harris doesn’t really offer any insight here; his article amounts to a list of all of the things that the super-rich can do with their money.
Harris also ignores a very important fact: not all of the super-rich make a point of spending their money in a frivoless, Paris Hilton-like style. Some are what Barbara Ellen calls “Yawns”, meaning “Young and Wealthy but Normal.” That Richistan author Robert Frank essentially discards this lifestyle (see http://blogs.wsj.com/wealth/2007/07/13/are-the-rich-duller-than-you-and-me/) is not surprising, since it challenges the premise of his book, but a great many people who are rich do NOT spend the bulk of their time splurging on $42,000 handbags.
But some do, assuredly. And why not? It is, after all, THEIR money. What should we as middle class people want them to do with it–give it to us, so that we can become rich?
Don’t lose sight of the fact that the middle class is in the same position vis-a-vis the poor; how many people could we keep from going hungry if we all ate Kraft macaroni and cheese and donated the rest of our food budgets to sponsor soup kitchens? (Hint: A lot.)