This 2007 book is a grand tour through the isolated provinces of wealth – by a Wall Street Journal reporter, right before the 2008 crash. Since then, “Richistan” has only gained more wealth. The book is mostly Robin Leach and his “Lifestyles of the Rich and Famous,” with a slice of analysis, like American cheese within a massive Wonderbread sandwich. But since most U.S. citizens have no clue how RICH the upper class is, the Wonderbread might be useful. As capitalism gets more and more unequal, it is becoming harder and harder to hide. ‘Conspicuous consumption,’ as Veblen noted, is back.
Did you know you could make $100K as a ‘butler’ in the household of one of these kings of capital? You see, life gets complicated the more investments, houses, mega-yachts, jets, cars, lawns, jewelry, software, children, vacations, paintings, real estate, concierge doctors and staff you have. Someone has to organize all this, and the millionaires and billionaires aren’t going to do it all. This is not Downton Abbey butlering, this is going to school to be a “Certified Household Manager.” There are still many job openings, so apply soon.
The most value in the book is Frank’s description of the different layers of the U.S. version of ‘Richistan,” which a Marxist would call the bourgeoisie or the upper class. About 11% of the country had assets of over a million dollars in 2004, which, if you assume each household has 3 people, that is about 33 million in these households. By millionaire, this means disposable income. As of now there are 330M people in the U.S., so roughly a bit more than 10% of the population were in millionaire households in 2004. Little has changed since then, except the numbers for the upper class have gotten larger. This ‘parallel country of the rich” has 4 layers according to Frank. It is mostly energetic ‘new money,’ not inherited and staid ‘old money’:
- Lower Richistan – made up of professionals like doctors, lawyers, bankers, corporate executives and money managers. Half of their wealth is from salary income, the rest from Wall Street equity and profits from businesses. 7.5M households in 2004, $1-10M.
- Middle Richistan – made up of some salaried, but more entrepreneurs, business owners and Wall Street or real estate equity. 2M households in 2004, $10-100M.
- Upper Richistan – made up of entrepreneurs who own or sold companies, CEOs, hedge fund owners, who have even more real estate and Wall Street equity. Population in the 1000s, $100M and up.
- Billonaireville – In 1985, there were 13. In 2006 there were 400. In 2018 there are now 585. Income from owning companies, subsidiaries, holding companies, investment funds and foundations. Jeff Bezos, Bill Gates, Warren Buffet, Larry Ellison, David Koch, Michael Bloomberg, Sheldon Adelson, Phil Knight, Mark Zuckerberg, Michael Dell, Forest Mars, John Menard Jr. and the Walton family - a familiar list of scumbags.
Frank’s understanding of the various strata of these classes is that they are not all conservatives – many are centrists or even ‘liberal.’ Both the Democratic and Republican parties benefit from their largesse. Lower Richistan voted for Dubbya Bush but no doubt they have now moved into the Democrat column. Frank uses a recent example of 4 rich Democrats who changed the agenda in Colorado. The upper class is internationally-oriented, especially the farther up the food chain you go. They are not all ‘nationalists’ except when it comes to calling in the military to defend their overseas properties or wealth. Many gained their wealth as ‘Instapreneurs’ who invented and sold their business in a ‘liquidity event.’ According to Frank’s 2005 figures, of those above $10M, only 3% were celebrities and only 10% were of ‘inherited wealth’ – which seems low.
Frank profiles various rich people – a merchant who made millions on toy ceramic villages; a workaholic owner of vacation properties for the upper class; a tech millionaire who lost it all in the 2000 Dot-Com crash. Donald Trump even gets mentioned, as he hosts gala ‘black-tie’ balls at Mar-A-Lago for the new rich. Of most interest is a billionaire in Texas who uses a better method of ‘social investing’ to build wells, solar installations, farming projects and schools in Ethiopia. According to Frank, his methods reveal the incompetence and waste of the large NGOs. But he’s an exception to the rule, as people like Bill Gates try to privatize education with their millions in donations, which only helps the privatizers.
Frank makes much of the economy that now surrounds Richistan. Upper-end businesses that cater to them – boat-builders, jet manufacturers, some builders, vacation planners, couture houses, high-end jewelry stores, hedge funds, automobile manufacturers like Rolls Royce – are doing very well. This is the real ‘trickle-down’ economics, but it only trickles to a small segment of the population. Like those well-paid ‘household managers’ mentioned previously. Marx even commented on this kind of spending 150 years ago when he had to consider whether it would provide enough investment and growth to save capital. He concluded 'no.'
As to the future of Richistan, Frank laughingly quotes Andrew Carnegie as to a prospective “reconciliation between rich and poor, a reign of harmony.” He thinks that the rich can help ‘reform the education and health-care systems.” This is Frank’s ‘hope.’ Given he wrote this in 2007 and the king of ‘hope’ was elected in 2008, and the inequality between the classes, education and health care are worse now in 2018, I’d say ‘hope’ is now a weasel word.
Other reviews on this topic, below: “The Servant Economy,” “Rich People Things,” “Understanding Class,” “Capital in the 21st Century,” “Look Who We’re Calling Comrade!” “Creative Destruction,” “Revolutions – Lapham’s Quarterly.” Use blog search box, upper left.
And I bought it at May Day’s excellent used/cutout book selection!
November 16, 2018