Friday, October 31, 2008

"When Times are Tough, the Rich Should Flaunt"

This is from Robert Frank's "Wealth Report" blog at

Say what you will about the rich. They have provided excellent entertainment value in the past five years.

What with the Schwarzman party; the $3 billion Paulson payday; the Greenwich mansion with 26 toilets; the Larry Ellison yacht that was too big; or the $300,000 watch that doesn’t tell time– and that sold out.

It was ever thus: as James Stewart says famously in “The Philadelphia Story,” “one of the prettiest sights in this pretty world is the privileged class enjoying its privileges.”

Now, the wealthy are going underground. It isn’t just that they are losing some of their wealth–they can be forgiven for that. No, they are going quiet. They aren’t flinging the bling or living large; they are preaching “values” and “responsibility.” Big spenders are out: YAWNS are in.

The ever-entertaining Joe Queenan, writing in Forbes, calls them the “Wallflower Wealthy” and says they are bad for America.

As soon as a recession hits, everyone stows the Lamborghinis, puts the yachts in dry dock, cancels the 5,000-guest reaffirmation-of-vows party in the Temple of Luxor–the one where the Rolling Stones were supposed to helicopter in and play “Street Fighting Man”–and starts driving a Prius and stops smoking Cohibas. Once the stock market goes into a nosedive, even people completely impervious to the gyrations of the Dow are expected to act as if the Great Depression is right around the corner, as if the time has come to start scrimping and saving, perhaps even foregoing that twilight climb up Mount Everest and instead opting for an inexpensive staycation on Muscle Shoals.

Instead of being seen on the golf course or in the private jet, “everyone is expected to stay at home moping and eating celery stalks. If people who don’t have money are hurting, people who do have money are expected to act as if they are not. This defeats the whole purpose of having money.”

Some of this may be rather tongue in cheek, but what do you think? Should rich people scale back in hard times even when they don't need to? Is it so they're not setting a bad example? Is the idea that it's just not nice to rub it in when the rest of us are hurting? Does that even matter? I kind of lean more towards thinking the ultra-wealthy should keep on spending-- I mean, somebody's got to spend money and who else has any right now? (And of course we have to hope they're still donating to charities too.)


Nothing fancy to think of .. said...

Rich people are targets. Pure and simple. If you are rich, then people want what you have, and if lots of people flaunt it, then you are safe in numbers. If you are a lone wolf living "the life" then you become a target for jealousy and rage (as well as the government who wants all your money).

Anonymous said...

Wait - does this mean next fall's lineup on the CW will NOT be 100% about rich teenagers and their "problems"? Oh, the humanity!

Disclaimer: I totally watch Gossip Girl and Privileged. They're addicting and the actors are pretty. Don't judge me.

FB @ said...

Yes. Rich people ARE targets when the economy is down. Personally, if I were rich, I wouldn't be flaunting it. Then again, I wasn't born rich.

Am going to link this!!!!

Teezy said...

I'm not sure that the wealthy so much "flaunt" their wealth as just don't quite comprehend how wealthy they are. It seems to me (I have spent considerable time working for the wealthy) that they have no reference as to how NOT to live rich. The privileged YAWNs tend to be the ones that started from nothing and remember starvation. That's just my personal perspective.

Miss M said...

They may be affected by all the down economic news, even if they still have tons of money when everyone around you is talking the next great depression, some of it seeps in. I personally don't like over the top displays of wealth, but maybe that's cause I was raised middle class and it makes no sense to me.

Anonymous said...

I hope that what we are experiencing right now leads to a deeper understanding of what wealth is. Rather than some shallow notion that wealth is about individuals being able to afford pricey goods and experiences, I hope that we can realize that the extraordinary wealth that exists in our country - so much greater than so many other places in the world - can be channeled to help make the world a better place. I hope that rather than money being the means to have a yacht, or exclusive access to an uninhabited island for vacation, or throw an extravagant party, is tempered with the idea that one can use that wealth to help build a great society. There is no prescription for what a "great society" is in our increasingly global society, but making sure that the debate over what constitutes a great society is at least as robust as it was when our country was founded, is a noble goal.

We are in a very interesting moment, I hope that the debate about wealth is deeper than whether or not to flaunt it.

Gord said...

What is so puzzling to me is why so many assume that philanthropy should be left to the rich. I'd rather see 10 million middle class philanthropists than a few thousand millionaires taking care of things.

Sadly, neither is the reality. It's not personal economic circumstances that brings people to philanthropy; it personal philosophy. We all have a responsibility to share. When I see wealth squandered (flaunted is just plain immature) I think about what could have been.......who could have been saved from calamity instead. No sense in judging, just keep trying do my part to help, share and educate.

Anonymous said...

if wealthy people don't spend obscenely, then how is their wealth going to trickle down? it isn't, so spend baby spend is what i say. and don't forget to tip your wait staff well when you are having huge parties.

we aren't hugely wealthy, but we are pretty darn secure and we are spending more now because there are great deals to be had. that's only smart. not spending if you have the means would be rather dumb if you need or want something and can get it at a good discount.

i find it an interesting study on our consumer society that we want to aspire to look wealthy during good times, but in bad times we expect wealthy people to aspire to look poor.

Anonymous said...

There are a lot of people gloating about how the Fat Cats are becoming lean. Me? I'm in favour of Fat Cats. I'm trying to sell a house.

This week I did my bit for the economy. I bought a new camera. £194.

Janette said...

Just flying by
My thoughts on the money?
Spend it!
I am not even close to the wealthy stage. Never will be. I work in a poor public school. How will the parents of the children that I teach get money if everyone is saving? They are the dishwashers, maids and servers. Being in public service (street cleaning) would be a step up for most of them.
Go on a spending spree. Buy American (notice I did not say "buy just US")