Rich People Spend Money Despite Recession!
A rather clueless NYT feature reports breathlessly that some people continue to live the good life even during recessions.
Who said anything about a recession? Sometime between the government bailout of Bear Stearns and the Bureau of Labor Statistics report that America lost 80,000 jobs in March, Lee Tachman spent roughly $50,000 last month on a four-day jaunt to Miami for himself and three close friends.
He is hardly alone in his eagerness to keep spending. 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.
Guess what? The overwhelming majority of people continue to live pretty much the same lifestyle despite recession. Recessions tend to hit a handful of economic sectors and/or regions very hard and leave everyone else pretty much unaffected. Indeed, even during the Great Depression, there were a lot of people buying nice stuff.
This, incidentally, is a good thing. The $50k that Tachman spent on his trip to Miami, pretty much by definition, went to other people. Most of whom, I’m guessing, can’t afford to spend $50k on weekend splurges.
Let’s say that he spent $2000 on a lavish meal for four at a fancy restaurant and left a $400 tip for the waitstaff. Are they a) resentful that this rich jerk has the audacity to spend money when they’re struggling to put gas in the car or b) pleased? In reality, perhaps both. But definitely b).
UPDATE: Commenter Michael suggests “bitter.” Heh.