What Recession? Ultra-Rich Still Spending Like Crazy

Recession? What recession? Judging by the way some wealthy businessmen and women are spending, you'd never guess that the country was in a major economic downturn.

Reports the New York 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.

Some other examples of products appealing to the superrich are limited edition 12-bottle box sets of Perrier-Jouet champagne, otherwise known as the world's most expensive champagne (a personalized bottle pops records at 4,166 euros, or $6,485, each) and extremely rare tropical fish (a "super-red" arowana fish has sold for upwards of $55,000).

USA Today, however, takes an opposite position on the wealth spending trend. Zeroing in on luxury car sales, they report:

Adding to a turnabout in once-resilient upscale goods, most luxury car brands saw sales drops last month. Mercedes-Benz softened 3.7% compared with March last year, Autodata reports. BMW fell 8.7%, and Lexus plummeted 13.6%. Overall, luxury vehicle sales are off almost 13% this year.

Purveyors of the finer things in life are finding their well-heeled customers are caught in the same economic riptide tugging at the less well-off. "It's a recession that has a double whammy: Your real estate is down, and your investment portfolio is down," says Milton Pedraza, CEO of the Luxury Institute. "Even the ultrawealthy are saying, 'Let me pause here and see what's going on.' "

Comments

[Sumocat]

"USA Today, however, takes an opposite position on the wealth spending trend. Zeroing in on luxury car sales..." -- These positions are not opposites. Luxury car sales are indicative of the spending habits of the rich. Multi-million dollar apartments, fine art, and overpriced alcohol are the domain of the ultra-rich. As wealthy as the upper 10% of Americans are compared to the other 90% of us, the upper 1% make the rest of the upper 10% look like, well, the rest of us. The wealthy are cutting back on luxuries, while the ultra-wealthy are not.

[AliHajiSheik]

I don't begrudge the super wealthy their money, but you have to be a special kind of d-bag to pose for the NY Times with your car collection and your orange tie during a rececssion and housing crisis.

[swift_goat_pet_for_truth]

"special kind of d-bag"?

How do you think they got to be super wealthy?

[REZBOO]

Secretly we all wish that we were amongst the supers. But....alas, this is the basis for America and capitalism in particular. Surely we'd all be more alturistic-----NOT....!

[GreedyOldPsychopaths]

An apologist's exegesis on the opulence of the ultra affluent? Surely, you jest.

[elpollo]

No, secretly I don't. They will have much to answer for to our maker.

[Mike169]

As Jesus said "The Rich will always be with us."

[elpollo]

He also said something about camels and needles.

[vandegrasse]

1789, France. Guillotines!

[MajorKong]

< sound of pitchforks being sharpened and torches being lit >

[elpollo]

Pitchforks ain't gonna do shit against Blackwater mercenaries and their ultra sophisticated arms. If the Iraq War (and the soon to be foisted upon us Iran war) ever ends, then Blackwater will have plenty of business in the lower 48. They can gun us down just as easy as Iraqis - easier because we are fatter. Will they be paid by the guvmint or the corporations. You can no longer separate them with a razor.

[ProfessorDuh]

Yes. Check out the giant, skin-boiling "crowd control" ray gun the US military has developed, with your tax dollars, to use on you when you get too uppity about being raped by the plutocrats.

[Trueheart]

It's almost impossible not to think like this.

Just read article on increasing world hunger and the spread of food riots because people don't have enough rice, wheat, beans or corn to fill their bellies. Well, let them eat cake, non?

This level of imbalance can't maintain for much longer. History will out, and our social order (what is left of it) will topple. Since it doesn't look like we are on our way to a widespread, global epiphany amongst the super rich a la Gates and Buffet, this nightmare will progress.

[frappe]

Apparently, traders, deal makers, investors, and middlemen/ lobbyists are the only people making money in this "New World" economy. God knows that our manufacturing base and infrastructure is being sold from right under our feet. And more and more manufacturing businesses relocate abroad to take advantage of cheap labor with the promise of reaping higher profits as their products are "imported" back into the U.S. duty free thanks to our blind embrace of Free Trade agreements.

In short, we all going to hell in a handbasket faster than you can say, "Recession!". And when all the financial dust settles, the ultra rich, who have been the architects of this chaos, will be able to ride out the financial storm in luxury while the rest of America braces for hard times ahead.

[ErnestineBass]

Time to rent "Fight Club" on DVD, frappe.

It's a movie with a message.

[ProfessorDuh]

That, and "V for Vendetta."

[Warmglobe]

We prefer to use the term "less financially challenged"...:)

[Enid]

Hedge funds and the like are the new robber Barron's,

Their income from their toil is not taxed like your pay check.

Their income is considered capital gains and is taxed as such and don't forget
the perks.
Their work should be exposed but they only toil in the dark and the shadows of lawyers and accountants.

All with their peacock feather and gold for show, while screwing you out of your job your retirement and the medical insurance that you were counting on.

these are not our teachers our doctors our fireman our builder.

they are well educated bully's using laws and loopholes and under table deal. then dip themselves in gold to purify the deed. The spectacle just goes on & on.

[BPCentrisAmerican]

"Some call you the elite; I call you my base, the haves and the mores", George W Bush. Cut the income tax rate from 25 to 15% on people like Bill Gates (just an example) on dividend income, at the very least Bush"s wonderful economy is somewhat offset, add the income flexibility to invest in what was in the past were risky stocks like energy or buying shares in a failing brokerage house that is guaranteed by the humble tax payer who pays an average tax rate somewhere between 28 and 35% at bargain basement prices and there is money to be made in them their hills. Now, trade your worthless dolors in for Euros and park your dividend income offshore and let the good times roll. The Bush Administration has reconstructed the economy of the roaring 20s and tossed in the 2nd most costly war in American history for good measure, so they could pump up the public full of phony patriotism, flag waving and good old Christian values. I don"t mind an elitist running the country as long as that elitist isn"t a whore for corporate interest, in fact I don"t even care if next president, who ever that my be can though a bowling ball, or drinks Budweiser.

[swift_goat_pet_for_truth]

Yes. Tax work, not wealth.

Socialize costs, privatize profits.

The poor have too much money, and the rich don't have enough.

That's the GOP agenda that the people of the US have approved over and over.
And with John McCain, they will approve it again.

[kellygrrrrl]

We elites (I'm not ashamed to state the obvious; Progressives are the elite), we elites need to take back the capital that the neocons and their money handlers have stolen. Only then can we reverse the direction our country has been going, we can implement a future based on our understanding, insight, compassion and universal fairness. Why is it Progressives struggle for financial security while the evil neocons roll in the billions? Because we are altruistic and selfless.
The Republican party should be dismembered and banned from future election processes. Only then can the rightful leaders of this potentially great country take the helms and show us the glory that could be.

[adamsmith]

You should learn what the Progressive movement is before you subscribe to it. Starts around the time of Teddy Roosevelt, blossomed under Wilson, thrived under F.D.R..... Bush has spent like a progressive(he in fact is a progressive), tripling spending on education, and creating one of the biggest entitlement programs ever in Medicare D. Under Progressivism the individual is meaningless, a mindless entity useful to a government collective. Wonder why Johnny can't read? The educational system was built that way. One day enlightened "Progressives" like yourself may realize that nothing ever changes because both parties work together to keep a tyrannical political class alive. The founding fathers overthrew a tyrannical Monarchy only to be replaced by a tyrannical congress for the last hundred years....Class envy is stupid. Class in this country is determined by wealth. Work for it and you can change your class too. Whine and you will remain a slave to the "Progressive" collective. Your above comments only illustrate how brainwashed you truly are with your "us against them" thinking.....

[GreedyOldPsychopaths]

"Wherever there is great property, there is great inequality. The affluence of the rich supposes the indigence of the many." - Adam Smith

"All for ourselves and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind." - Adam Smith

"He is certainly not a good citizen who does not wish to promote, by every means in his power, the welfare of the whole society of his fellow-citizens." - Yes, you guessed it, Adam Smith

[elpollo]

Adamsmith - you have your invisible hand up your hind quarters. Bush is a Progressive? You disowning your prodigal (idiot) son? Maybe you should learn the difference between a progressive and a fascist. Oh, but we don't use the "F" word in polite company. Il Duce massively increased national spending as well. Lots of guns to buy and prisons to build. Since Bush is an irrelevant moron, I guess that means that President Cheney is a progressive as well.

[swift_goat_pet_for_truth]

I enjoy the way adamsmith selects his categories. For example, largest entitlement program, Medicare D. Well, yes, but the biggest part of the money for this entitlement ends up in the pockets of big pharma. The US is the ONLY nation in the ENTIRE WORLD that pays FULL RETAIL for big pharma's drugs. That is not "progressive". That is, by definition, fasicst.

[IanStuart]

Tough times for whom?

[Braves71]

The Times article, at least, is talking
about real 'elitist'. Not political spin nonsense.

[BlackbirdHighway]

Clearly, these people need more tax breaks. The rest of us can just work a little harder, cut back on our own spending, and pay a little more tax, so that these super-rich can maintain their lavish lifestyles. Remember to vote Republican in November, support the party of the rich, so the rich can party!

[swift_goat_pet_for_truth]

And their high-end alcoholic beverages will filter through their kidneys and trickle down to us.

THANKS, GOP!!!

[vippy]

They don't spend enough - retail is still in a hole and has been for the last 3 years. If anyone
knows retail's bottom line has taken a severe hit. We used to do around 15% and now we
make like 3 to 5 % which is marginal. This is why the masses, which is the middle class, is
the driving force behind any economy. But I could figure that out years ago, if you don't pay the
people how can you expect them to spend?

[swift_goat_pet_for_truth]

It's called "Trickle Down" Economics.

Don't you read the GOP political propaganda?

[ProfessorDuh]

Naturally the ultrarich are still spending. The class of ruling billionaires that the Republicans have worked so hard to create is no longer tied to the mere nation-state. Beyond the reach of citizenship and law, the ultrarich stand astride the world with the serf class (i.e. the vast majority of the human population) beneath their boot heels. Now that they are transnational and routinely hoodwink the public through their corporate media propaganda, they can buy and control all the governments they want, extracting the wealth from countries like the US through no-bid contracts and unending, highly profitable wars. And when the nation starts to collapse as the middle class and the working class stagger and fall, who cares? There's always the mountain resorts of Switzerland, or the vast estates of Paraguay, or the fleshpots of Dubai, where they can watch the chaos they've created from a safe, lofty distance. And there are plenty more serfs where the Americans came from.

[GreedyOldPsychopaths]

Yes Professor, the rise of a New World Order (governance by and for multinational corporations controlled by plutocrats) and the end of the age of national sovereignty (governance by and for the people).

[ProfessorDuh]

Plutocrats and kleptocrats, which are much the same thing. And for the ultra-rich, "national defense" is just a con artist's code for looting the public treasury. They only need the Pentagon to supply them with no-bid, no-performance contracts, now that they have private armies like Blackwater to protect them and kill any serfs who might get in their way.

[elpollo]

Prof. Duh, it's an interesting question as to whether the empire can hold when it turns its guns on the population at its heart. Can the mass media continue to dumb down America sufficiently when hard times hit? Can the corporations accrue enough wealth to control the world only through mercenaries without any sense of idealism or higher purpose? This remains to be seen. We are living in interesting times. What's the next inside job to keep Americans paranoid and frightened - nuking Cleveland? Sounds about right to me.

[GreedyOldPsychopaths]

Conspicuous consumption by Robber Barons in a Gilded Age redux. Who says history never repeats itself? However, there is one major exception to past events: production investment. At least in the late 1800s and early 1900s, investment in domestic production (industry) was the norm. Today, the Robber Barons exploit both domestic and foreign labor while emphasizing investment in foreign production. A recipe for certain economic failure.

[ProfessorDuh]

My point precisely. Sse above.

[VivaZapata]

in never never land, where we refuse to grow up, boys need toys.

[JohnFromCensornati]

Wouldn't that be because times are never tough for the ultra-rich?

[VivaZapata]

that would be it.