The superrich are superdifferent from you and me

Despite gloomy forecasts, the superrich continue to spend. Earlier this month I wrote about the change in Seattle's culture of consumption — but conspicuous spending is nothing new in New York. However, The New York Times apparently feels that the fact luxury consumption is continuing unabated despite the nation's economic woes is worth noting: $3,000 cognac, a Rolls-Royce shortage, and heavy demand for private chefs and butlers. Much of the money is being thrown around by Wall Streeters, which is something to ponder as you pay your taxes, ponder the subprime mess, and watch your IRA shrivel. According to the Times: Some businesses that cater to the superrich report that clients – many of them traders and private equity investors whose work is tied to Wall Street – are still splurging on multimillion-dollar Manhattan apartments, custom-built yachts, contemporary art and lavish parties. Buyers this year have already closed on 71 Manhattan apartments that each cost more than $10 million, compared with 17 apartments in that price range during all of 2007. Last week, a New York art dealer paid a record $1.6 million for an Edward Weston photograph at Sotheby's. And the GoldBar, a downtown lounge, reports that bankers continue to order $3,000 bottles of Rémy Martin Louis XIII Cognac. Demand is also high for the limited number of new Rolls-Royce convertibles. The Times reports that some people are paying as much as $200,000 over the $465,000 asking price to get their car. As I read this, I remembered a story I heard about the scion of an old-money Seattle family. He said his grandmother had no idea there was a Great Depression until his wealthy grandfather told her over a meal one day that times were tough for other people and that they should economize as a show of support. So, they'd have to let one of the servants go. I feel for that poor servant — turned out for the sake of symbolism. But at the same time I admire the gesture — and the antique notion — that we are all in this together. Conspicuous consumption used to be bad form. Now it's an unstoppable, unapologetic force. (Unless you're the billionaire founder of Ikea, who drives a 15-year-old Volvo and flies easyJet.) If nothing else, the old-money values often indicated sympathy for other people, but don't expect much of that from Wall Street's entitled few. The Times quotes Marc Sperling, the head of an equity trading company who is riding out hard times with a new $4 million condo: [Sperling's] view of the subprime mortgage crisis seemed to reflect a sort of inverse class resentment. "I don't want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money," he said. Harsh? Of course not. Wall Street had nothing to do with the mortgage crisis. It was all those greedy folks desperate for homes during a housing bubble that over-reached. Meanwhile, executives made wealthy by those "greedy" homeowner wannabes are hanging in there. The Times reports that just days before the collapse of his firm, the chairman of investment bank Bear Stearns bought a new $25 million dollar condo at The Plaza. No word on how much he pays for his cognac.