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.
I am not sure if the paper has gone through a change in editorship, but there has been a serious increase in front-page fluff like this story and the dying blogger story from last week.
I have been a print subscriber to the paper for years and even when they have had these fluff pieces in the past they have been presented as modest asides.
The difference now is that these fluff stories have pretensions about speaking to non existent “social trends.”
Perhaps they are dumbing down to compete with Murdoch’s Wall Street Journal.
They also recently completed a redesign of the paper which essentially strips pages 2-4 of any stories. Instead, the first couple of pages give stupid capsule accounts of that issue’s contents–an unnecessary gesture since you can just browse the headlines for the same info.
I can’t imagine how hard the economy would fail if folks like the gentlemen in the article halted spending or put their lifestyles on hold out of… what? sympathy? for others that may be feeling the pinch of our current downturn.
Clueless indeed, NYT…
That’s a lot of words to avoid using “bitter”. Is “bitter” going to be politically taboo now?
Not saying you were deliberately avoiding the word, it just struck me that it would have been an ideal place to use it, if it hadn’t suddenly become controversial.
I wonder if this same writer is behind the stories with the theme “prison populations have increased even though crime has reduced”?
That’s assuming the guy is a good tipper. Having both worked on the serving end and been entertained by the wealthy at fancy dinners in my lifetime, it’s been my experience that the wealthier patrons are often the most demanding and the worst tippers of the lot. There are exceptions of course, but on the whole I think if you polled servers, you’d find that I’m right.
Surely the restaurant owner is happy but then he’s the one making the real money on the deal.