Friday, June 05, 2009
Down & Out in Greenwich
You might not weep for the mergers-and-acquisition man maddened by the size of an even richer hedge fund manager's yacht, but his trauma is a symptom of a syndrome that has spread far beyond Greenwich, Connecticut. Above a certain level, wealth, and the status that flows from it, is more a matter of relatives than absolutes. The less dramatically affluent alphas that make up the core of Penn's professionals--lawyers, journalists, corporate types, academics, senior civil servants, and the like--suddenly found themselves over the last decade not just overshadowed by finance's new titans but actually priced out of many things they view as the perks of their position: private schools, second homes, and so on. I doubt they enjoyed the experience.
Well educated, articulate and, by any usual measure, successful, they had been reduced to betas--and thus, politically, to a glint in Obama's eye. The decades of prosperity had swollen their numbers, but shrunk their status and their security. Their privileges were mocked or dismantled and their "good" jobs were ever more vulnerable. Wives as well as husbands now had to work, and not just down at the church's charity store either, a change that is more resented than Stepford's children would generally like to admit. Even so, things they felt should have been theirs by rights were still out of reach or, perhaps worse, graspable only by heavily leveraged hands. In a boom-time (July 2006) piece for Vanity Fair, Nina Munk interviewed two women amongst "the worn carpet and faded chintz" of Greenwich's old guard Round Hill Club. They told her how everything had gone downhill, "no one can afford to live here--all our kids are moving to Darien or Rowayton because it's cheaper."
It's a mark of the pressure to keep up that, as Frank noted, in 2004, 20 percent of "Lower Richistanis," those 7.5 million households (the number would be lower now, but it then would have constituted roughly 6-7 percent of the U.S. total) struggling along on a net worth of $1 million to $10 million, spent more than they earned. These poor souls will have included the most prosperous of Penn's professionals, but in an age of "mass luxury" and almost unlimited credit, the compulsion to do whatever it took not to be trumped by the Joneses spread to their less affluent cohorts, with the devastating consequences that were finally visible to all by the middle of last year.
Here's my outlandish theory: that economic resentment at the bottom of the top 1% of America's income distribution is the new wild card in public life. Ordinary workers won't rise up against ultras because they take it as given that "the rich get richer." But the hopes and dreams of today's educated class are based on the idea that market capitalism is a meritocracy. The unreachable success of the superrich shreds those dreams.Not so out outlandish a theory after all. It's all-out war between the haves and have-mores -- and the average folks are left in the middle.
"I've seen it in my research," says pollster Doug Schoen, who counsels Michael Bloomberg and Hillary Clinton, among others. "If you look at the lower part of the upper class or the upper part of the upper middle class, there's a great deal of frustration. These are people who assumed that their hard work and conventional 'success' would leave them with no worries. It's the type of rumbling that could lead to political volatility."
