This page has been archived and commenting is disabled.

The Rich Actually Are Different

Tyler Durden's picture





 

With the long-weekend rapidly approaching, ConvergEx's Nick Colas takes a trip to the Hamptons, but through a time warp back to the Great Depression.  Examining the social registers (colloquially called the “Blue Book”) from 1927 and 1940, he finds that “The great and the good” of the day had real trouble holding their status during the social upheavals of the late 1920s and 1930s.  Only 32% of the families appearing in the Blue Book in 1927 were still there in 1940.  The ratio was even worse, at 29%, for the ultra-elite who belonged to the Meadow Club in Southampton.  It’s too early to tell what the last few volatile years will do to the upper crust of East Coast society, of course.  Or what may still be in store.  But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years.

 

Via ConvergEx's Nick Colas:

F.Scott Fitzgerald is known for the phrase “The rich are different from you and me.”  The full quote, from a 1925 short story, actually goes like this:

“Let me tell you about the very rich.  They are different from you and me.  They possess and enjoy early, and it does something to them, makes them soft when we are hard, and cynical when we are trustful, in a way that, unless you were born rich, it is very difficult to understand.  They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves.  Even when they enter deep into our world or sink below us, they still think that they are better than we are.  They are different.”

Ernest Hemingway had a famous retort to “The rich are different” in his story “The Snows of Kilimanjaro”: “Yes, they have more money.  But that was not humorous to Scott.  He thought they were a special and glamorous race and when he found they weren’t it wrecked him as much as any other thing that wrecked him.”  Yes, these two great American writers were friends.  Sort of.

I think about this exchange regularly, given the extremely high levels of personal wealth generation the world has seen over the last 30 years.  Hedge fund billionaires in the US.  Russian oligarchs in Moscow.  Super wealthy Indian businessmen snapping up nine figure houses in London.  And China…  Even Chairman Mao’s granddaughter, Kong Dongmei, is reportedly worth over $500 million.  And the list goes on…

Specifically, I wonder how long wealth actually stays with an individual and their descendants.  There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off.  There are obvious exceptions to this rule, of course, such as the in United Kingdom, where land ownership has kept the country’s titled elite deep in the money for hundreds of years.  But in economies where wealth is measured in financial assets rather than 100,000 acres of Scottish highlands or 50 blocks of London waterfront, how long does wealth concentrate before divorce, death, squabbling children and bad advice disperse it back into society?

Since we are hard on the Memorial Day weekend, let’s travel out to the Hamptons for a few answers to the Fitzgerald/Hemingway debate.  Don’t worry – you won’t get stuck in traffic or have to encounter the great unwashed on the train.  We’re doing this in style since we are hunting some big game here.  This is our approach:

  • I have on my desk two Hamptons “Blue Books” for the years 1927 and 1940.  These were the social registers of the day (and still in existence today), with inclusion on the list restricted to only the most well connected and affluent of the time.  They list the “Cottagers” for towns such as East Hampton, Southampton, Bridgehampton and nearby villagers.  The term is a bit of a conceit – some of these ‘Cottages’ still exist and run to 10,000 square feet and 5+ acres of land around them.
  • In addition, the Blue Books list the officers and members of some of the prominent clubs in the areas, including the Meadow Club (lawn tennis, with more grass courts than Wimbledon) and Maidstone (golf, famous for once not allowing then-President Bill Clinton to disrupt father-son day by playing a round).
  • The selection process for who made it into the Blue Book was – and continues to be – entirely arbitrary.  Between the wars – the first book was published in 1922 – the choices fell to a social secretary named Marta Linderskold who lived in Southampton and made her living arranging charity events and publishing the book.  The cost in 1927 was $2.50 (about $33 today) and local shops, orchestras, and other vendors to the affluent took out ads as well.
  • Keep in mind that spending the summer in the Hamptons in the 1920s and 1930s wasn’t the same program as today.  You had a “Cottage” because you didn’t need to work and could spend your entire summer there.  The Long Island Railroad took 2 ½ hours to get to Southampton from Penn Station and the Long Island Expressway through Suffolk County wouldn’t be completed until the 1960s.

So how many families listed in the 1927 Blue Book for the Hamptons managed to hang on through the 1929 stock market crash, the Great Depression, and the 1937 downturn and still spend the summer “Out East” in 1940?  The answer here:

  • In 1927, Miss Linderskold saw fit to include a total of 459 families in the Blue Book for the towns of Southampton and East Hampton, the two largest “Summer Colony” communities.  In 1940, there were about the same number: 461 families between the two towns, although much more skewed to Southampton than in the earlier listing.  A tour through the list is essentially a “Who’s who” of the East Coast establishment.  Founders of major brokerage firms, titans of industry, noted artists and architects.
  • Looking at the listed names individually, there is significant turnover between the two summers of 1927 and 1940.  In Southampton, only 100 of the original 250 families listed in 1927 still had their names in the book in 1940.  In East Hampton, the numbers are even worse: only 47 of the 209 families included in 1927 were still listed in 1940.
  • If you are looking for the uber-elite of this already rarified circle, the Meadow Club in Southampton listed its members in the Blue Book in both years.  Of the 133 members listed on the rolls in 1927, only 39 remained in 1940 – about 29%.  And the total membership had declined to 100.

The upshot of all this is pretty straightforward: even with all the wealth and privilege afforded the New York elite during the Roaring 20s, it was not enough to ensure their continued social position during the Great Depression.  I doubt they were all paupers by the time 1940 rolled around, of course.  But the financial wealth they accumulated wasn’t enough to withstand the stock market crash and still maintain their social standing.  All the “Big’ names remained in good standing, of course – the Mellons, Carnegies, du Ponts, et al.  But the next rung down, who thought they had it made in 1927…  Their fall from grace must have seemed a long way indeed.

To put some perspective on the Depression and high society, let’s close out with Miss Linderskold, the loyal social secretary who assembled the Blue Books we’ve been reviewing.  A 1937 edition of Vogue magazine hailed her as “A right hand to some of America’s most famous hosts and hostesses” and mentioned that her family came from Swedish nobility.  In 1939, however, she lost her home in Southampton to foreclosure.  She died in 1956 at the age of 70.

I wonder what she would have said about the Fitzgerald/Hemingway debate.  She might have said “Yes, the wealthy are different. Every year there are different wealthy people.”

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 05/24/2013 - 15:27 | Link to Comment Precious
Precious's picture

They have more of your money.

Fri, 05/24/2013 - 15:28 | Link to Comment Cursive
Cursive's picture

@Precious

Too much money only brings problems and worry.  Earn enough to be happy; the rich never get to enjoy that peace of mind.

Fri, 05/24/2013 - 15:33 | Link to Comment Precious
Precious's picture

Walk tall and carry a small stick. - Billy Jack

Fri, 05/24/2013 - 15:40 | Link to Comment Richard Chesler
Richard Chesler's picture

They have Obozos in their pockets. - Aquilinot Blind

 

Fri, 05/24/2013 - 15:53 | Link to Comment The Thunder Child
The Thunder Child's picture

I'll never forget Gina Rinehart AKA Mrs. Creosote's $2 a day speech, what a heartless cow and a prime example of the mentality of the rich.

http://www.zerohedge.com/news/guest-post-gina-rinehart-bubble

 

Fri, 05/24/2013 - 15:56 | Link to Comment James_Cole
James_Cole's picture

I'll never forget Gina Rinehart AKA Mrs. Creosote's $2 a day speech, what a heartless cow and a prime example of the mentality of the rich.

To be fair she earned every cent she inherited. 
Fri, 05/24/2013 - 16:10 | Link to Comment The Juggernaut
The Juggernaut's picture

" There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off."

 

Unless you're in the Rothschild family.

Fri, 05/24/2013 - 16:37 | Link to Comment jbvtme
jbvtme's picture

i once gave away $100,000 of my money over the course of ten years to fund a yoga program for inner city kids in nyc. i was never rich until i did that.

Fri, 05/24/2013 - 17:09 | Link to Comment jbvtme
jbvtme's picture

relax krugman.  i know you're rich

Fri, 05/24/2013 - 17:46 | Link to Comment I think I need ...
I think I need to buy a gun's picture

how much money is considered rich in the united states of america and 2013? And how much money is considered rich in india 2013 and how much in brazil?

Fri, 05/24/2013 - 21:05 | Link to Comment AldousHuxley
AldousHuxley's picture

1st gen - survival, entreprenurial save like it is depression everyday

2nd gen - progress, professionals, expand family business

3rd gen - hire someone else to do run the business/manage money, focus on non-monetary gains: power, fame, culture

4th gen - living on coat tails of ancestor's achievements

 

Let's say Bush Sr. died with $100M, wife donates $10M to charity, spends another $10M. $80M passed down to 3 heirs with $20 to uncle sam.

Bush Jr. inherited $20M. Few divorces (wives know who they are marrying into so they are not saver types) and yachts, ski lodges, etc. down to $10M...dies....donates $2M to charity $2M to uncle sam, rest to 3 children equally divided.

Bush III inherited $2M. Bought a $1M house, paid off $0.5M law school debt...left with $500k.

 

After 3 generations, $100M gets split into 3 children + 9 grand children = 12 and each passing there are financial mistakes, taxes, upkeep of lifestyles....

 

Plus, once every century you have social reforms, foreign invasions, civil wars, etc.

 

Life IS fair after 100 years or so...

Sat, 05/25/2013 - 00:42 | Link to Comment flapdoodle
flapdoodle's picture

Another problem is genetics:

1st generation entrepreneur is real smart, makes a fortune, then marries gorgeous blonde model trophy wife who is about as clever as a bag of hammers. The fortune grows but slows as the gorgeous blonde hits Saks occasionally, kept in check by the entrepreneur who is sociopathic cheapskate personified.

2nd generation son of entrepreneur is more handsome than his father and smarter than average, plays alot of tennis and marries gorgeous blonde model "just like mom" who is about as clever as a bag of hammers. The fortune is shrinking as the gorgeous blonde hits Saks pretty regularly since the 2nd generation son has always lived a life of luxury and thinks cheapskate is for the great unwashed.

3rd generation son is very handsome and of average intelligence and marries a gorgeous blonde model about as clever as a bag of hammers. Determined to reverse the decline of the family fortune, he decides to join the family firm and turn things around, with disasterous results, news he keeps well hidden from the gorgeous blonde wife who now does the Saks bit three times a week. When she finds out the fortune is gone in speculation, she files for divorce and keeps the Bentley.

4th generation blonde son looks like a model but is about as smart as a bag of hammers, but finds a sympathetic but ugly smart girl who knows how to make ends meet, so they don't have to sell all the heirlooms and occasionally drag them out along with the old Palm Beach newspaper clippings of the family at backyard barbeques to show their friends...

 

Fri, 05/24/2013 - 18:19 | Link to Comment Inspector Bird
Inspector Bird's picture

The fact you need to mention or discuss draws into question how rich you really are, both materially and spiritually. 

Fri, 05/24/2013 - 23:31 | Link to Comment jbvtme
jbvtme's picture

i was anticipating that announcing the good deed would have inspired others to do the same.   you should know that the yoga program is a prototype for all of the new york schools.  tell me, what have you done for the good of mankind?

Sat, 05/25/2013 - 08:54 | Link to Comment Kinskian
Kinskian's picture

How many have been pulled out of poverty and ignorance with yoga and meditation in India? I think they found a western styled economy providing jobs for the people to be more effective.

Fri, 05/24/2013 - 18:39 | Link to Comment Kinskian
Kinskian's picture

If there is any justice in the world, one of those inner city kids will grow up and mug you.

Fri, 05/24/2013 - 23:34 | Link to Comment jbvtme
jbvtme's picture

the 800 or so kids who learned to meditate on my watch will pardon your indiscretion.  you should try it yourself.  that is meditating and being kind to others.

Sat, 05/25/2013 - 00:48 | Link to Comment Kinskian
Kinskian's picture

And the children I've seen in cancer hospitals would pardon you as well, for your vanity and conceitedness.

 

Sat, 05/25/2013 - 04:35 | Link to Comment jbvtme
jbvtme's picture

i understand we will be evaluated after this go round. reincarnated to another physical realm where we will grow and evolve again spiritually. it is not vanity which compels me.   that's for hollywood and gatsby.  i'm in it for the enlightenment.  twenty years ago my family stopped exchanging xmas presents.  inspired by the spirit of christ, instead we now donate money to charities in one another's names.  today i am working on getting 30% of the cars off of the road in the name of killing the tar sands and fracking corporations.  stay positive, k.

Fri, 05/24/2013 - 17:18 | Link to Comment RafterManFMJ
RafterManFMJ's picture

There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off.

A better way of putting it, "From shirtsleeves to shirtsleeves in three generations."

Fri, 05/24/2013 - 17:57 | Link to Comment NoDebt
NoDebt's picture

Back then the Federal Reserve was just a baby, and our government was not the bloated monstrosity it is today. 

Now the institutions carry on with rotating chairmanship but no change in the locus of power.  Has this not been discussed on here many times before?  Does it matter greatly who happens to hold an office or head a major bank when the intertwined system of institutions itself determines the outcome much more so that the individual heading it at any moment in time?

It's all about the government and your relationship to it right now.  If your relationship is strong (whether collecting food stamps or collecting corporate welfare), the system works just fine for you.  If your relationship is not strong (small businesses, for instance)...... well, tough titties.

Fri, 05/24/2013 - 18:06 | Link to Comment Jekyll_n_Hyde_Island
Jekyll_n_Hyde_Island's picture

I would prefer that the ZH community doesn't turn into a mob of rich hating bitter pseudo-sophisticates.  Seriously.   It's like nobel savage shit in here sometimes.

 

  Most of the people in here are so bitter they've forgotten what a blessing that mere existence is -- and that oftentimes, as it has been pointed out in this forum before, the poorest people in the world are the most happy.

 

  Yes.  I'm someone who has spent time with the uber-wealthy.  They aren't all a bunch of solipsistic, narcissistic, evil bastards.  Many of them have taken their wealth and the subsequent opportunity that comes with it and chosen to learn and improve themselves through continued education and charity.

 

  You know who I have a problem with?  The poor, angry, resource leaching animals that drain our system with crime and self-serving behavior and no accountability as a human beings.  And liberals.

Fri, 05/24/2013 - 18:52 | Link to Comment James_Cole
James_Cole's picture

Yes.  I'm someone who has spent time with the uber-wealthy.  They aren't all a bunch of solipsistic, narcissistic, evil bastards.  Many of them have taken their wealth and the subsequent opportunity that comes with it and chosen to learn and improve themselves through continued education and charity.

The problem with the very wealthy isn't that they're wealthy, it's that they're still human beings. The problem specifically being that huge wealth gives them a lot of power - unafforded to the average ape - to pursue whatever whims they'd like.

Get a decent human being and combine them with power and things can go ok, get a shitty one and things can go very wrong. 

But overall, what was that they said about power corrupting?

Fri, 05/24/2013 - 19:06 | Link to Comment wisefool
wisefool's picture

Even if you go beyond particular personalities, and the whole good vs. evil debate, cronyism leads to guilds. Guilds had a signifigant hand in repressing technology during the dark ages.

Depsite the one invention of the transistor, historians are going to look at the last 100 years as a mini dark age. Nuclear power has been a net negative. But that explains why a tax accountant working at G.E. Corp makes more after tax compensation than the Nuke Es. T. Boone Pickens wanted to build a LNG infra for vehicles, but would not put his own money into it, unless he got AAPL type taxation. So we are stuck with the 110 year old internal combustion engine.

Sat, 05/25/2013 - 03:05 | Link to Comment prains
prains's picture

Jekyll

you're assuming that the wealth was earned within the parameters of a fair playing field for all otherwise known as a meritocracy, and we are all fully aware that this isn't the case. The George Bushes of the world are the norm not the exception and this is fairly obvious so why do you just skip over this fact in your defence of the wealthy?? You have given no thought to "how" the wealth was garnered in the first place.

Fri, 05/24/2013 - 18:17 | Link to Comment Inspector Bird
Inspector Bird's picture

Most of her speech was repulsive.  But I'm all about balance and fairness.  I agree with her basic premise that if you're jealous of the very wealthy, it would behoove you to get off your butt and do something with your life to try and be more like them.

Not that I want to be more like HER.  But we all have gifts, and we all have the opportunity and capability of becoming wealthy with some luck and some pluck (well not all - in some economies the government has rigged it to prevent certain people from improving themselves, and it looks like the US is working hard to mimic those economies).

Beyond that very basic premise, I'd say she's a nasty hoe who lacks the talent and intellect to understand the nature of wealth and what it can and should be used for.

Fri, 05/24/2013 - 21:08 | Link to Comment AldousHuxley
AldousHuxley's picture

that's bad advice....

 

you know how poor become rich? by stealing from them.

Fri, 05/24/2013 - 15:30 | Link to Comment i-dog
i-dog's picture

Money isn't everything...but it buys whatever is in second place.

Fri, 05/24/2013 - 15:34 | Link to Comment BLOTTO
BLOTTO's picture

Most of those ultra elite rich are soulless...

.

Therefore, we are way more 'rich' then they are and ever could be.

.

<smirks>

Fri, 05/24/2013 - 15:36 | Link to Comment Precious
Precious's picture

The main reason to get rich is so you can finally get rid of all your shit.

Fri, 05/24/2013 - 15:48 | Link to Comment BLOTTO
BLOTTO's picture

Irony,

Trying to 'get rich' - in order to acquire something that should already be offered to us for free - 'freedom.'

 

 

Fri, 05/24/2013 - 17:07 | Link to Comment Raymond K Hessel
Raymond K Hessel's picture

 

 

Freedom is permission from the Authority to do something without suffering the consequences.

Liberty is an attribute of humanity, like health, which can be given away through a lifetime of bad choices.

Fri, 05/24/2013 - 21:09 | Link to Comment AldousHuxley
AldousHuxley's picture

Money buys power over others.

In order for you to be "free", you need to control others to leave you alone.

 

 

Fri, 05/24/2013 - 18:21 | Link to Comment Inspector Bird
Inspector Bird's picture

To quote "The Jerk"
Marie: I don't care about losing all the money. It's losing all the stuff.

Fri, 05/24/2013 - 15:39 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Most of the rich elite are bastards with no souls?

Most of the poorest around the world are sheeple without a clue who rules what, how or why, and can't rise up or even care?

Fine world we live in

Fri, 05/24/2013 - 17:02 | Link to Comment sgt_doom
sgt_doom's picture

To segue on your excellent comments, MDB, this bullcrap blog posting wants us to accept some unknown person who compiled this Blue Book, much the same way the sheeple today blindly and robotically accept whatever a frigging Forbes vomits up!

Simon Johnson, presently an MIT prof in (ahem), economics, and senior fellow at the Peterson Institute (founded by David Rockefeller and his stooge, Peter G. Peterson), and former stooge at the IMF, claims that the Rockefellers gave all their money away?

Hmmm...so in 1960 the Rockefellers were worth an estimated $30 billion, and then moved all their money and ownership to those offshore finance centers and offshore trusts and offshore unregistered trusts, which connect to their hidden wealth and ownership at the North American foundations and trusts, and suddenly as their money doesn't appear in the public records, obviously, they aren't super-rich anymore?

In 1970, the Mellon family was estimated to be the third richest family on the planet and, (ditto for them as with the Rockefellers) today they are paupers?

The Mortimer family (a ka the Harriman family) the same!

When Rockefeller was "ordered" by the court to sell off his Standard Oil monopoly, his shysters simply created holding companies, moved the blocks of stock there, then moved the ownership of those holding companies to various foundations and trusts.  (Thomas Scott, the mentor of Andrew Carnegie, another death merchant like the Morgans, was the creator of the holding company and it has since been used by the super-rich quite ingeniously, etc.)

Rockefeller could do this (hiding ownership, etc.) because back then there was the NY stock exchange, and the curb market, or street market, where Standard Oil was traded on, which was relatively opaque when it came to the true assets and valuation of those companies. 

Sometimes one has to go waaaay back, and read books and legislation, circa the early 1900s (and especially read the legislation passed by congress in 1913 and 1914).

John Moody (the original founder of Moody's) loved the robber barons of his time, and wrote some very, very enlightening books, The Masters of Capital (1919) and The Truth About The Trusts (1904).

Likewise, read William C. Moore's Wall Street (1921).  These three, and many of the others back then are required reading to understand what is occurring today --- as the revisionism over the past thirty-some years has created a national amnesia of sorts!

And be sure to familiarize yourself with that classic by Louis Brandeis, Other People's Money.

Fri, 05/24/2013 - 17:16 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

The information is much appreciated.

Fri, 05/24/2013 - 17:33 | Link to Comment They trynna cat...
They trynna catch me ridin dirty's picture

Exactly. There are families who basically invented the modern banking system, yet we're supposed to believe that some Mexican cell phone guy is the richest person in the world.

If you own your own banks, you report what you want. Not to mention the name of the elites' game is "own nothing; control everything."

I'll tell you who the richest people in the world are: the ones who can print their own money.

Fri, 05/24/2013 - 21:15 | Link to Comment AldousHuxley
AldousHuxley's picture

no. Rich are not the ones with ferraris. Rich are the ones who get government issued airplane to take you to your vacation spots.

 

The really rich have no money of their own, but in organizations where people willingly contribute.

 

Hedge fund managers got nothing on the POPE

Fri, 05/24/2013 - 18:07 | Link to Comment New_Meat
New_Meat's picture

doom doin' good

Sat, 05/25/2013 - 00:55 | Link to Comment Diogenes
Diogenes's picture

Breaking up Standard Oil doubled Rockefeller's fortune. He continued to own as big a share in the new companies as in the old, and the value of the shares doubled. This drove some liberals crazy.

Sat, 05/25/2013 - 12:30 | Link to Comment tip e. canoe
tip e. canoe's picture

curb market, or street market, where Standard Oil was traded on, which was relatively opaque when it came to the true assets and valuation of those companies. 

sounds like dark pools

Fri, 05/24/2013 - 16:47 | Link to Comment Shigure
Shigure's picture

Lee, in "East of Eden":

"He thought of Sam Hamilton. He had knocked on so many doors.  He had the most schemes and plans, and no one would give him any money.  But of course - he had so much, he was so rich. You couldn't give him any more.  Riches seem to come to the poor in spirit, the poor in interest and joy.  To put it straight - the very rich are a poor bunch of bastards.  He wondered if that were true.  They acted that way sometimes."

John Steinbeck, East of Eden

Fri, 05/24/2013 - 22:18 | Link to Comment Prometheus418
Prometheus418's picture
+1 for the Steinbeck.   Careful who you associate with, though- or you may get yerself labled as part of the Joad clan.
Fri, 05/24/2013 - 15:57 | Link to Comment James_Cole
James_Cole's picture

Money isn't everything...but it buys whatever is in second place.

Money isn't everything but it sure keeps you in touch with your children. – Getty

Fri, 05/24/2013 - 16:49 | Link to Comment WmMcK
WmMcK's picture

Money won't solve all your problems, but it will solve your money problems which gives you more time to concentrate on the other ones.

Fri, 05/24/2013 - 18:02 | Link to Comment NoDebt
NoDebt's picture

Money will not buy hapiness, that's true.  But the lack of money can certainly make your miserable.

 

Fri, 05/24/2013 - 18:47 | Link to Comment e-recep
e-recep's picture

who says the poor has peace of mind?

Fri, 05/24/2013 - 19:01 | Link to Comment Momauguin Joe
Momauguin Joe's picture

"But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years."

Poor Man's Peace of Mind: Putting a bullet or three in that fucker's head.

Fri, 05/24/2013 - 21:50 | Link to Comment WillyGroper
WillyGroper's picture

I kinda agree with this guy.

http://www.youtube.com/watch?v=yge311sFhC8

Fri, 05/24/2013 - 16:19 | Link to Comment SteveNYC
SteveNYC's picture

During the leveling that took place in the 2007 - 2009 period one would think that yes, there would be significant turnover within the class referred to in the article. Alas, it was short lived. Ben was quick to ensure that the class holding the vast majority of paper and certain other assets were quickly reimbursed for their losses, and made whole by the populace at large via free paper and dollar devaluation.

So an ass-whipping was handed out, generally ass-whippings teach valuable lessons to the recipient thereof. The lesson was not able to be taught this time, the consequences were papered over. Unfortunately this does not bode well for society as a whole, and cause and effect dictates that at some point, this lesson simply must be taught and learned. 

Interesting decade this one is going to be.

Fri, 05/24/2013 - 18:43 | Link to Comment 1C3-N1N3
1C3-N1N3's picture

Oh there was a lesson this time, all right. It's just that this time it was for those outside the big club.

I learn the lesson every time I learn to do something on my own that I used to pay someone else to do.

In a sense, there is internal growth amidst external contraction.

Fri, 05/24/2013 - 19:33 | Link to Comment SteveNYC
SteveNYC's picture

Nice point, love your final sentence and concur fully. I just hope many more could see through your eyes on that.....

Fri, 05/24/2013 - 15:26 | Link to Comment l1b3rty
l1b3rty's picture

once the silverfish, goldbugs and bitcoiners are the rich ones, then the former rich will be headless.

http://goldsilverbitcoin.com

Fri, 05/24/2013 - 15:29 | Link to Comment Kassandra
Kassandra's picture

Yeah, they're different. When they order Makers Mark..that's what they get.

Fri, 05/24/2013 - 16:35 | Link to Comment long-shorty
long-shorty's picture

nobody even upper middle class orders Makers Mark anymore unless they are in some bar far away from Kentucky with a serious dearth of bourbon.

 

Fri, 05/24/2013 - 15:30 | Link to Comment reTARD
reTARD's picture

People who look at poverty also tend to ignore wealth/income class mobility.

Fri, 05/24/2013 - 15:31 | Link to Comment oddjob
oddjob's picture

More than likely the rich got richer and the Hamptons became bourgeois.

Fri, 05/24/2013 - 15:31 | Link to Comment jjsilver
jjsilver's picture

 

 

The Truth Comes Out: Former IRS Director Admits Taxes Are Voluntary

https://www.youtube.com/watch?v=I_aQbr6d_Js

Fri, 05/24/2013 - 15:36 | Link to Comment The Thunder Child
The Thunder Child's picture

Ammo

Send a copy of that on DVD to the IRS instead of your taxes.

Fri, 05/24/2013 - 15:41 | Link to Comment RobD
RobD's picture

Yep totally voluntary Harry Reid said so look it up. Yes you voluntarily pay your taxes with a gun pointed at your head(go to prison if you don't) but it is your choice, prison or pay.

Fri, 05/24/2013 - 15:47 | Link to Comment jjsilver
jjsilver's picture

What gave you that idea, TV

Fri, 05/24/2013 - 16:00 | Link to Comment NumberNone
NumberNone's picture

And in even more bizarre news, two FBI agents invovled in the Dzhokhar Tsarnaev arrest in Boston, die in a fall from a helicopter.

You really can't make this shit up...

http://hamptonroads.com/2013/05/fbi-agents-died-fall-helicopter-va-coast 

Fri, 05/24/2013 - 16:36 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

I get "Page not found", when clicking on the link.

Fri, 05/24/2013 - 16:43 | Link to Comment Milestones
Milestones's picture

I tried the site shown and "hamptonroads.com showed "page not found". Where did you get the site from and have you tried to use it. Kinda interesting in light of the FBI involement and all; particularily a "fall from a helicopter" My, my how convient from a lot of standpoints. 

Hey O'blah blah, you just might have some splain to do-again and somemore if this story is correct.         Milestones

Sorry for the highlighted text. 

Fri, 05/24/2013 - 18:06 | Link to Comment NumberNone
Fri, 05/24/2013 - 18:35 | Link to Comment Inspector Bird
Inspector Bird's picture

Doesn't say THEY were involved, just the team they belong to and the nature of how elite a team it is and what they get called in for.

I have yet to see anything which states these two were involved in any way.  It's an elite squad, but it's not so small these two guys were the ones called in.

Fri, 05/24/2013 - 17:10 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Admitted not once but TWICE and this is under oath! Great capture. Must mirror this one all around.

Fri, 05/24/2013 - 15:50 | Link to Comment Harbanger
Harbanger's picture

Now I see why they say that you should Always be nice to people on the way up; because you'll meet the same people on the way down.

What was that Mrs Scoffman? You'd like me to park your new Hyundai. Park it yourself bitch.

Fri, 05/24/2013 - 18:02 | Link to Comment Rainman
Rainman's picture

Oprah is now rich, Obama is now wealthy. It's about the brand, baby...the brand !

Fri, 05/24/2013 - 15:36 | Link to Comment thismarketisrigged
thismarketisrigged's picture

dont worry, all of us zerohedgers will be the rich ones when we are bathing in our gold in a few years, while the bankers count their worthless paper money

Fri, 05/24/2013 - 15:40 | Link to Comment wisefool
wisefool's picture

Neat article, but the answer to all the wondering the author does can be explained by a simple contrapositve in time.

"Let me write the tax laws for a nation, and I care not who prints the money."

Wealth is not measured by a simple number. It is a combination of physical power, lifestyle, assets,adoration ... basically: he who has the most free will is wealthiest. Lots of these old families are far better off now than when they had those neo-castles in the St. Lawrence Seaway. They now have true fiefdoms with many serfs. Corps and NGOs do not need caulking, replacement stained glass, foundation repairs, etc. They get all the legal benefits of being citizens, without that pesky arc of life. Heck, they don't die -- OR -- pay taxes.

Fri, 05/24/2013 - 16:27 | Link to Comment Catullus
Catullus's picture

That quotation is false. No one ever said it.

The quotation is "let me Issue and control a nation's money and I care not for it's laws."

Fri, 05/24/2013 - 16:37 | Link to Comment wisefool
wisefool's picture

In logiccontraposition is a law, which says that a conditional statement is logically equivalent to its contrapositive. The contrapositive of the statement has its antecedent and consequent inverted and flipped: the contrapositive of  is thus . For instance, the proposition "All bats are mammals" can be restated as the conditional "If something is a bat, then it is a mammal". Now, the law says that statement is identical to the contrapositive "If something is not a mammal, then it is not a bat."

http://en.wikipedia.org/wiki/Contraposition

 

:)

Fri, 05/24/2013 - 16:41 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

That can't be right either. Hint: read it like a grammar teacher.

Fri, 05/24/2013 - 19:18 | Link to Comment Umh
Umh's picture

It wasn't written in English,

Fri, 05/24/2013 - 21:17 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Fair enough. But before accepting this new version as "correct", how about providing us with the source? It's the scientific thing to do.

Fri, 05/24/2013 - 15:41 | Link to Comment koperniuk666
koperniuk666's picture

This is an exceptionally important post as anyone who understands Venn Diagrams will know. Thank you Tyler for promulgating it.

An often quoted saying is 'The rich get richer while the poor get poorer'  

This statement is disingenous because it conveniently omits the fact that the population of any group (e.g. the 'rich') may, and in all likelihood WILL change.

Actually (IMHO) change or even catharsis is essential for evolution, and, in the specific case of rich and poor above, beneficial for all members of both groups (i.e. for the poor too - something the poor would do well to reflect upon)

So don't overly criticise the Status quo (you may one day be a member!!) because it provides a measure of stability or even inertia that can protect us all.

But when it becomes sclerotic ( viz., now with a US kleptocracy and ruling ~EU political elite) it is time to seek change.

Great post - hope it enlightens some of the rednecks out there...

 

 

Fri, 05/24/2013 - 16:45 | Link to Comment WmMcK
WmMcK's picture

“The rich get richer and the poor get - children.”

? F. Scott Fitzgerald, The Great Gatsby

Sat, 05/25/2013 - 01:04 | Link to Comment Diogenes
Diogenes's picture

From "Ain't We Got Fun" (1921).  Van & Shenk Song mentioned in The Great Gatsby

 

http://www.youtube.com/watch?v=y041-eT6QrI

Fri, 05/24/2013 - 15:42 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

Completely unscientific. People move, new names are adopted through marriage, etc. The existence of a name in the hamptons registry says nothing about intergenerational wealth.

Fri, 05/24/2013 - 16:29 | Link to Comment Henry Hub
Henry Hub's picture

Using the Hamptons “Blue Books” to determine the staying power of the wealthy is a bit of a stretch. The really wealthy use trust funds to protect future generations from financial stupidity. Also having control of the tax laws help. It is very important for them to maintain the myth of upward mobility. (Don't criticize the super rich because you might be there someday). Of course they try to pretend that there is no class system in this country which is ludicrous.

Fri, 05/24/2013 - 17:23 | Link to Comment wisefool
wisefool's picture

Well put. Don't 99% of republicans call themselves "pre-rich"? And didn't they still vote for Romney after he revealed that he is one of the 47% of people who don't effectively pay any taxes at all?

Fri, 05/24/2013 - 18:19 | Link to Comment wisefool
wisefool's picture

ROMNEY: I would like 25 percent, but right now it's at 35, so people better pay what is legally required. But ultimately let's get it down to as low as we possibly can, if it's 20, if it's 25 but paying more than 25 percent, I think, is taking too much out of our pockets.
BAIER: So the highest you had was 35?
ROMNEY: Well, that's what the law is right now, but 25 is where I would like to see us go.

http://www.cfr.org/us-election-2012/republican-debate-transcript-south-carolina-january-2012/p27077

Romney pays 14%. And this is on his income. It is not on the wealth itself, including 100 Million generated by the "carried interest deduction" repatriated via IRS pardon, and tucked neatly into an IRA, which was designed for working  people who would not get a traditional pension.

I know I cite this example alot, but I had two drive by junkers. If working person thinks they will have this type of opportunity in their life, keep voting for republicans. Atleast democrats know how their leaders treat them. (Mr.  John 11% Kerry)

Fri, 05/24/2013 - 15:43 | Link to Comment Dr. Engali
Dr. Engali's picture

Fonz if you get cut off by a hedgie in a Bentley while visiting the hamptons this weekend make sure you give him an extra finger from us.

Fri, 05/24/2013 - 15:56 | Link to Comment Frank N. Beans
Frank N. Beans's picture

and tell him he can forget about getting any of your grey poupon

Fri, 05/24/2013 - 16:10 | Link to Comment catacl1sm
catacl1sm's picture

Fuck it, ram his ass and then butcher him with a cleaver when he gets out to yell at you.

Fri, 05/24/2013 - 15:46 | Link to Comment csmith
csmith's picture

Thanks to the bailouts, turnover in this cycle is way lower, and we're all suffering because of it.

Fri, 05/24/2013 - 15:46 | Link to Comment Agent P
Agent P's picture

Social registers for the rich, social networks for the peasants...I'll never be on either.

Fri, 05/24/2013 - 15:47 | Link to Comment jomama
jomama's picture

 

But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years.

 

The great thing about being on the road is it's one place where we are all actually equal.  And I don't take that shit lightly

 

Fri, 05/24/2013 - 15:53 | Link to Comment fonzannoon
fonzannoon's picture

The smart money in the Bentley's know what they are doing, they slow down and wave you by. It's the cokehead trader in the benz that I am lining up so when he gets out all angry I will do my best http://www.youtube.com/watch?v=TyK1owU3e6Y and lawyer up.

Fri, 05/24/2013 - 16:32 | Link to Comment Dr. Engali
Dr. Engali's picture

Lol too funny. You're a mess fonz. Where do you get this shit?

Fri, 05/24/2013 - 18:55 | Link to Comment 1C3-N1N3
1C3-N1N3's picture

Fonz is alright.

When he starts saying he's going to do this: http://www.tubechop.com/watch/1210241

That will be the time to worry.

(video length: 15 seconds)

Fri, 05/24/2013 - 15:48 | Link to Comment ChacoFunFact
ChacoFunFact's picture

abundance and lack are two sides of the same coin.  if you teach yourself to look for abundance you'll by default also have to teach yourself to look for lack.  and once you go looking for lack - imprint it on your mind - it will be part of your lexicon.  but in your empire building, remember, you haven't attained it yet so you aren't 100 percent sure what abundance "looks" like but you most certainly know what lack looks like.

no, the way to abundance is by letting go of that figuritive coin and trying something else.  still a work in progress....

 

peace

Fri, 05/24/2013 - 16:14 | Link to Comment fonzannoon
fonzannoon's picture

It was a joke.

Peace

Fri, 05/24/2013 - 15:48 | Link to Comment debtor of last ...
debtor of last resort's picture

I don't want your money. I want your head.

Sat, 05/25/2013 - 03:50 | Link to Comment Nue
Nue's picture

There can be only one!

*Cue Highlander Theme Song*

Fri, 05/24/2013 - 15:50 | Link to Comment Nue
Nue's picture

"Cottagers"   “Summer Colony”

This reminds that the two great conceits of the extremely wealthy is to exaggerate not only their humility but their “Rugged”  “Tough” Individualism as well. 

Fri, 05/24/2013 - 22:50 | Link to Comment WAMO556
WAMO556's picture

Far from it!

Most of these f@CK$ wouldn't know what do to with themselves if their servants didn't show up to work. Could you imagine one of the Kardashians actually don't their own nails? Manual labor they would scream.

I saw Kim on a magazine front showing off her "baby bump" in a bikini. I also saw the daddy of her baby likes to take it in the Hershey highway.

The NEW NOBILITY thinks that betrayal is Nobel. Imagine that!!??

Fri, 05/24/2013 - 15:50 | Link to Comment slaughterer
slaughterer's picture

PM meltdown 2.0 when the Japanese get the tap on the shoulder on Sunday.  

Fri, 05/24/2013 - 16:04 | Link to Comment pashley1411
pashley1411's picture

The reason you are on ZH is to know what happened when the economy clubs you upside the head.   Doesn't mean you can avoid it.

But the sad ones are the professional middle class, the sheeple.    Can either save and squirrel-away their earnings in underwater mortgages and "pffft" 401k's, or vacation every 6 months; when the government pounces on savers, the results are the same.

That aside, the few clients I have with Rolls or the like in their garages, have recent mortgage repo's as well.

Fri, 05/24/2013 - 15:55 | Link to Comment q99x2
q99x2's picture

I'm not waiting 23 years to become one of them.

BitCoin Last price:$133.00000

Fri, 05/24/2013 - 15:53 | Link to Comment Omen IV
Omen IV's picture

sounds like Ms Linderskold was the right hand of the elite except when she needed their help she got the back of their left hand

at the end of the day there is no one but your own brain and your back

Fri, 05/24/2013 - 15:56 | Link to Comment Yen Cross
Yen Cross's picture

      The hedgies in the Hamptons had better have their portable trading platforms handy this weekend. Kuroda is speaking on Sunday, and we saw what happened the last time he tried to communicate with the markets.

      Low liquidity/volume Sunday afternoon through Monday evening(u.s. holiday), is prime time for huge swings in the Asian markets. Bombs away in the JGB market.

Fri, 05/24/2013 - 15:57 | Link to Comment whoopsing
whoopsing's picture

I'll avoid the Hamptons like the plauge this weekend.

Fri, 05/24/2013 - 15:59 | Link to Comment A. Magnus
A. Magnus's picture

Recent studies likened the behavior of CEOs and politicians to sociopaths; since these fucktards typically got wealthy by committing lots of fraud and eating lots of banker cock, it only follows that yes, they ARE indeed different than us productive members of society...

Fri, 05/24/2013 - 16:05 | Link to Comment thisandthat
thisandthat's picture

Obvious conclusion, the rich are indeed different (since they think so...), just that some are apparently more different than others...

Fri, 05/24/2013 - 16:11 | Link to Comment They trynna cat...
They trynna catch me ridin dirty's picture

The shift in wealth and power in America from the beginning of the 20th century to today was a shift from genteel WASP families to, let's just say, not-so-genteel Asiatic ones.

In the early 20th century it was still common to encounter high profile European-blooded Americans who were proud of their heritage, both European and American. It was also common to hear such Americans advocate foreign and immigration policies that were in the interest of the American nation. Obviously that is no longer the case.

One need only observe what a low class, foul-mouthed, pretentious, gaudy shit show the Hamptons has become to understand the character of our new 'elites.' The Lizzie Grubman SUV scandal some years back captures it perfectly.

Fri, 05/24/2013 - 16:41 | Link to Comment falak pema
falak pema's picture

so the decadence of the US establishment has ethnic roots and its not due to Henry Ford's iconic saying : you can hump all you want in my Model T of any colour or creed, provided its black! 

Now thats Waspy talk of awesome Amercian dream and its capitalism personified in a production line of the Gatsby age. 

Imagine how that caught the imagination of all those flappy, Waspy gals who thought that black was beautiful!!!

And it was...just look at Mohd Ali! 

Fri, 05/24/2013 - 22:32 | Link to Comment WAMO556
WAMO556's picture

WTF did you just say?

Sat, 05/25/2013 - 13:07 | Link to Comment falak pema
falak pema's picture

lost in translation; I don't speak hate; just irony.

"genteel" and "not genteel"...why not "gentiles" and "non gentiles" while we're at it.

Fri, 05/24/2013 - 16:09 | Link to Comment FishHockers
FishHockers's picture

Why didn't you name names?  This is ZeroHedge Bullshit, Without names you are a bullshitter.

Fri, 05/24/2013 - 16:15 | Link to Comment A. Magnus
A. Magnus's picture

What kind of names are you looking for, besides the ones in your mother's little black book?

Fri, 05/24/2013 - 16:15 | Link to Comment OldTrooper
OldTrooper's picture

This isn't much of a surprise.  Read Barbara Tuchman's - A Distant Mirror.  Upward, and downward, mobility seems to be a timeless and nearly universal human trait.

Fri, 05/24/2013 - 16:19 | Link to Comment chubbar
chubbar's picture

Jeez, I wonder what this is all about?

"From the Hartford Courant, “Bill Drafted In Secret Would Block Release Of Some Newtown Massacre Records”“The staffs of the state’s top prosecutor and the governor’s office have been working in secret with General Assembly leaders on legislation to withhold records related to the police investigation into the Dec. 14 Newtown elementary school massacre — including victims’ photos, tapes of 911 calls, and possibly more. The behind-the-scenes legislative effort came to light Tuesday when The Courant obtained a copy of an email by a top assistant to Chief State’s Attorney Kevin Kane, Timothy J. Sugrue. Sugrue, an assistant state’s attorney, discussed options considered so far, including blocking release of statements ‘made by a minor.’”

This entire investigation has been shrouded in secrecy, as evidenced by repeated protests by local editorials (here and here). All this secrecy has been kept simply by the raw will of the police and whoever is overseeing them. What will happen if this becomes enshrined in law? Will it only be the bodies that are kept from view, or will we never get to see any more pictures of the bullet-ridden cars in the parking lot? Or will we be forbidden from seeing photographs of Adam Lanza’s Honda Civic with all four doors open and black sweatshirts strewn on the pavement around it? What about spent shells and the bullet holes in the interior walls? The official story makes Adam Lanza a lone gunman who managed to shoot 155 bullets in under five minutes and hit multiple targets multiple times."

http://lastresistance.com/2162/the-secret-sandy-hook-secrecy-bill/

 

Fri, 05/24/2013 - 16:56 | Link to Comment Milestones
Milestones's picture

Gee Whiz, this sounds like a Bonnie and Clyde assult rather the one, possibly deranged gunner. The world is getting weirder by the momement.

Milestones

Fri, 05/24/2013 - 18:48 | Link to Comment jumbo maverick
jumbo maverick's picture

Police can keep most all info. from the public and press while the incident is still under investigation and that is legal. But why on earth would they want to pass any laws that will prohibit the information about this incident from getting out once the investigation is over?

There is no suspect at large waiting in the shadows to knock of any witnesses once their statements have been given.

It's not like people want to know these little kids home addresses or social security numbers but it may be important if a bunch of these kids reported they saw more than one gunman shooting at the school, victims, etc.

Why on earth would they not want the 911 tapes released?

This proposed legislation, if true, is very puzzling.

Fri, 05/24/2013 - 16:21 | Link to Comment ToNYC
ToNYC's picture

The Banalites of Evil Dominance, left turn at Shinnecock: "The money is always there, but the pockets change", Gertrude Stein noticed.

Fri, 05/24/2013 - 16:26 | Link to Comment ChacoFunFact
Fri, 05/24/2013 - 16:28 | Link to Comment muleskinner
muleskinner's picture

If you aren't drinking decent brews, you'll never become rich.  You'll be poor all the rest of your days, which is no shame, but don't ever expect to become rich if you don't drink beer that is worth drinking.

 

If you drink O'Dell's Mercenary double IPA, you will become rich.

 

God won't make you rich, but he won't let you starve.  There is no beer in heaven, so you won't be needing any money either.

 

All 13 minerals to sustain life are in beer.  Drinking beer not only will make you rich, it will make you smart too.  Your IQ will be 200 plus.  Go buy a six pack of Stone Ruination and you'll never regret the purchase.    

 

Wealth is applied knowledge, not possessing billions of dollars.

 

If you want to be rich beyond all imagination, drink beer.

 

You can start today.

Fri, 05/24/2013 - 17:48 | Link to Comment Sweet Chicken
Sweet Chicken's picture

Leffe blonde FTW

Fri, 05/24/2013 - 18:05 | Link to Comment Inspector Bird
Inspector Bird's picture

Agree 100%.  I do my own homebrew, as well.  If you don't know how to brew, it's very hard to appreciate the complexity of a good beer.

Sat, 05/25/2013 - 01:10 | Link to Comment Diogenes
Diogenes's picture

You can't live on beer. You need a few potato chips too.

Fri, 05/24/2013 - 16:30 | Link to Comment semperfi
semperfi's picture

For the rich that got rich by corruption/crime/fraud - I hope they drive off route 27 into a light pole.

Fri, 05/24/2013 - 16:36 | Link to Comment darteaus
darteaus's picture

Correct!  the 1% are the 1%, but the members of the 1% change ALL THE TIME.

Fri, 05/24/2013 - 16:38 | Link to Comment Decimus Lunius ...
Decimus Lunius Luvenalis's picture

In some ways they're different, I suppose.  It seems to me, their necks give into the guillotine just like the rest of us.  We all eat, drink, shit, and fuck.  All the other differences, and the importance placed on them, we simply made up.  The aura of the rich is only as real as Uncle Ben's electron money.

Fri, 05/24/2013 - 16:52 | Link to Comment babylon15
babylon15's picture

This may have been true in 1927 but it's not true today.  The rich overwhelmingly hold onto their riches.  The Great Depression reset the financial system and rich people lost much more relative to poor people.  Today, no such crash has occured.  Central banks are actively working to make sure it doesn't.  I think a Pew study showed that the top 1% have gotten 28% richer since 2007 while the bottom 99% have gotten 8% poorer.  That's what QE does.  Eventually, I think it has to end.  So I think the possibility for a 90% drop in asset prices is still there.  Maybe, hopefully, soon.

Fri, 05/24/2013 - 17:20 | Link to Comment AGuy
AGuy's picture

"This may have been true in 1927 but it's not true today. The rich overwhelmingly hold onto their riches."

I'd disagree:

Macklowe defauts on NYC Buildings:

http://online.wsj.com/article/SB120277733549560767.html

Lots of new money: Zuckerberg, David Karp (Tumblr), lots of google execs, etc. A lot of these dot com guys usually lose most of there money in a decade after they cash out. They go any buy overprice assets like sport teams, make terrible investments and lose most of there money.

"So I think the possibility for a 90% drop in asset prices is still there."

Or something else drops 90%, like the value of the US dollar, which already has lost about 97% of its value since 1913. I don't it will take another 100 years for the dollar  to lose another 97% in value.

 

 

 

Fri, 05/24/2013 - 18:02 | Link to Comment Inspector Bird
Inspector Bird's picture

This is only partially true.  In cases where the wealthy hang on to their money, it's usually DUE TO POLITICAL INFLUENCE.  In a true market economy, many more should've lost their wealth in 2007/2008.  Thanks to a crony capital system which is funded by the Fed and government money managed by issuing bonds (which the wealthy earn interest on) and then given back to that same wealthy earning on the interest, fully funded by you and me in the middle to upper middle classes, the wealthy can hang on to their assets. 

The middle classes are getting squeezed.  $250k a year is rich?  Try living with 2 kids and a modest 3 bedroom house in most suburbs of New York on that much.  I make far less than $250k and have this and I'm living paycheck to paycheck.  At $250k, at least I'd be able to pay for college tuition for my son. 

Right now I'm forced to borrow from....the government and the bankster wealthy!  It's a rigged game, because the government wants it rigged.

Fri, 05/24/2013 - 17:34 | Link to Comment Inspector Bird
Inspector Bird's picture

Hemingway misunderstood Fitzgerald, though both were right to an extent.  I'd say I put more faith in Fitzgerald's view.  His quote points out that the rich are not different because they are special or better (as Hemingway assumed), but because they THOUGHT they were and lacked the common sense to know better.

Fitzgerald was enamored of their lifestyle, for sure, and was wrecked by not having a grounding to fully accept the facts, which he had laid out so clearly, were very real.  He became soft himself.

Fri, 05/24/2013 - 17:40 | Link to Comment IamtheREALmario
IamtheREALmario's picture

To quote Yoda: "Wars don't make one great".

However: Fear can make one rich. Someone who has no fear has no reason to be rich. They can concentrate instead on being great and good.

Fri, 05/24/2013 - 17:54 | Link to Comment muleskinner
muleskinner's picture

The French nobelman Marquis de More once challenged Theordore Roosevelt to a duel.  Theordore Roosevelt and the Marquis couldn't see eye-to-eye.  Both were ranchers in the Badlands, Theodore didn't put up with the French nobleman's nonsense.  Roosevelt responded that his choice of weapon was a long rifle knowing full well that the Marquis de More was a bad marksman and Roosevelt, if the challenge was accepted by choosing a long rifle, was not going to lose.  The Marquis de More declined the choice of weapon and the duel never took place.  Theodore Roosevelt abhorred violent confrontation and the Marquis de More was proven a coward by not accepting the challenge.

 

Teddy Rossevelt was in his younger years and was capable of shooting the Marquis dead on the spot.  The Marquis decided that living is better than being dead.

 

Better to be rich and alive than just plain dead.  It didn't matter to Teddy Roosevelt if the Marquis was rich or poor, his nonsense came to an abrupt halt.

 

Doesn't matter if you're rich or poor, your life is more important than money.

  

Fri, 05/24/2013 - 18:04 | Link to Comment Inspector Bird
Inspector Bird's picture

"Little Big Man" - still one of my alltime favorites, muleskinner.  I wonder how many people would've noticed your name?

Sat, 05/25/2013 - 13:14 | Link to Comment falak pema
falak pema's picture

Now if the marquis of more had called in the marquis of sade as second man we would have had a duel of true badasses.

Sad.

There even was a marquis of less; he was a second cousin of More with his head cut off. 

Fri, 05/24/2013 - 19:23 | Link to Comment TahoeBilly2012
TahoeBilly2012's picture

East Coast society can sniff my butt!

 

http://www.youtube.com/watch?v=8QPoBHX82uw

Fri, 05/24/2013 - 20:30 | Link to Comment BigSpruce
BigSpruce's picture

Money only magnifies what you are already are inside. 

Fri, 05/24/2013 - 21:53 | Link to Comment minosgal
minosgal's picture

The 1960s found the last of the once-powerful Walker family in reduced circumstances. The great house still remained, at the foot of the street named after them, although most of the estate had long since been carved off -- the bottom land that ran along both sides of the Mohawk river was taken in turns by the NYS Thruway, public housing, a subdivision and a shopping center -- eminent domain, mostly.

It was a beautiful brick Victorian house on about a half an acre, with a three-stall garage that was added around the 1920s. An elderly woman lived there with her middle aged son.

I used to ask my Dad why the son always wore a suit and tie to mow the lawn.

Fri, 05/24/2013 - 23:11 | Link to Comment kareninca
kareninca's picture

I have a friend here in Silicon Valley who has a horse stabled in a very costly stable.  I'd guess that her husband makes about 450k per year, but she is not one of the rich people in that context.  She tells me that the turnover at the stables has been extreme for the past several years, and it is because the wealthy people there end up unwealthy.  And then, new wealthy people come in.  As a specific case, a friend of hers who had three horses there, one elsewhere in the U.S., and one in Europe that she would visit every couple of months.  That lady and her husband lost everything; the horses, the fancy cars; they just sold their estate in the hills.  Fortunately she is apparently good natured about it; nary a complaint.

I think that is not unusual.  There is a pretty direct correlation (per the social scientists; no I don't have the link at the moment) between I.Q. and income (with many exceptions, naturally).  However there is NO correlation between I.Q. and net worth.  Which makes sense.  My brother and his wife are really smart; highly educated, and well paid, but mainly due to his moronic spending they are deeply in debt.  My cousin and her husband both have learning disabilities, are often unemployed due to the terrible MI economy, despite being diligent, yet they own their very modest house outright and have savings:  they KNOW they have to be frugal.  And boy, there are plenty of examples around, of the "dumb rich."

It is very easy to wildly spend away even a great fortune.  I have a former friend whom I saw in the early stages of doing so.  She is uni-polar manic  -  no downs!!!  The same wild energy that caused her grandfather to make the fortune, was causing her to spend it!  The European nobility had it down to an art  -  losing fortunes, that is.  No matter how hard the prudent generation tries, they CANNOT control the next generation's profligacy.  The very, very few families that have so far succeeded (I don't deny they exist), are the exception that proves the rule.

Sat, 05/25/2013 - 09:47 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Horses, now there's an interesting topic.

The English (and Irish, of course) have a long history of being mad over horses, and I can quite factually tell you how much owning 20+ will cost you per year (answer: buy a Bugatti or take up coke, it's cheaper). However, it is one of those old school industries (£10 bil / annum approx in the UK across sectors) that are incredibly labor, land, equipment and technical skills intensive (vets & farriers if they work hard can mint it), not to mention feeds, farming (hay/straw) and so on. Owning a horse is directly supporting 7-10 other jobs. And, of course, because it's perceived as a rich man's game, it's taxed into oblivion, at every level. (Fun fact: if you have an equestrian business in the UK, you're taxed @ business rates m2 the same as retail on all those empty yards, menages and schools which given you can get only 1 or 2 of the buggers in there at a time: insanity doesn't cover it). The reality is much different, of course, with 65% of horse owners owning a single horse, and about 90% are female: I'll let you work out how many of those spend ~80%+ discretionary spending on their animals and who otherwise pays for it.

I'll let you wonder over how viable it is in a modern setting: however, it's on record that the head of one of the UK's top equine sport societies openly admits that only the service providers in the equine world ever make any money. It's a vast, socially hierarchical, tax system where trickle down really does work (to a limited extent: being a groom / jockey ain't much financial fun, and there's horrible issues with stratification). Compare this to the newer forms of trickle down, and you'll see a vast disconnect.

Translation: newer means of production stole the PR from the actual way older models worked, without any of the actual trickle down (Hello Mr Walmarts of this world). Old money spent downwards because you can't avoid it with organic industries (not through any sense of altruism); newer means of production aren't organic, and so trickle down as a concept is total bullshit. This is an easy distinction to grasp, and yet not many do (especially in America).

As for families, you're completely incorrect. The art of horse breeding is millennia old, do you really think the 0.1% don't do the same with their sprogs? Interesting. Even if it is via social means such as private schooling and so forth, it's very obviously done. And trust me, there's a big enough section of the US who are proud of tracing 400 years back (the Hamptons is new money, darling).

 

tl;dr

 

Horses are a traditional measure of the game, and I don't think you quite get what they're actually about (let's just say the social angle is a vital part of it). Why do you think Sheiks are mad for them?

Sat, 05/25/2013 - 18:25 | Link to Comment kareninca
kareninca's picture

Well, if the ultra rich are trying to breed the master race in ultra costly private schools, they are doing a rather poor job.  The kids that I've met who have gone to those schools are physically attractive, but they are not very smart  -  although of course they *think* they are very smart.  The dumb rich that I alluded to.  Nearly any Chinese or Korean kid I've known, could eat their lunch intellectually.  And I predict that they will.

What is also happening, of course, is that the ultra costly private prep schools in the U.S. are becoming heavily East Asian.  It's driving the admissions people nuts.  They want to keep their "old" families, but these Asian kids are rich and smart, instead of rich and dumb like the old white families.  The great dream of rich white folks is that their dumbass slacker son will marry a smart, ambitious Asian girl whol will tell him what to do, and rejuvenate the family's IQ (her economic background is irrelevant), and I am seeing that happen.

Twenty years from now, when some "old time" rich U.S. family is half East Asian, will you say it's the same family?  Who knows.  Whatever.

Rich people are human, truth to tell.  Think of Gordon Getty, with his rich family.  Then it turned out that he had created a "family" on the side, and the two girls from it, when they reached adulthood, demanded to be recognized.  And were, legally.  You can't breed economic rationality into people.

Of course the Hamptons is new money.

Who was saying "trickle down" works?  No-one on ZH, I think.

And, of course the "social" angle is a big part of the horse world.  There are lots of status activities that rich people like; that's one.  For some people it's a way of keeping score, sure.  Funny, though, there are people of all social classes who like doing those things:  riding horses, boating, fly fishing.

Mon, 05/27/2013 - 14:41 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Eton and so on and then Oxford etc train the political / media class (and are currently in the dog-house at the moment).

 

I was perhaps hinting at something else.

Sat, 05/25/2013 - 11:32 | Link to Comment cdskiller
cdskiller's picture

Duh. What is different is that by 1938, the top marginal tax rate had been raised to 80%. THAT'S why the rich couldn't hoard their wealth. Back then, the rich also didn't have a multitude of entrenched alternative investment strategies available to them. They couldn't pay billionaire hedge fund managers to hedge their bets in opaque markets, to short the idiot small time investors, to speculate in commodity futures, etc, etc.

Things are very different now. The rich control Washington.

Sat, 05/25/2013 - 18:29 | Link to Comment kareninca
kareninca's picture

It is true that the rich have complex investment strategies that they can use to shelter their wealth.  What people tend to forget, though, is how utterly the rich are at them mercy of their financial advisors.  Unless you are rich AND extremely smart AND willing to devote your mental life to financial products, you can easily be Corzined or Madoffed.

Of course the rest of us are truly screwed.  But the rich are not exactly safe; they are a target.

Sat, 05/25/2013 - 18:44 | Link to Comment Peterus
Peterus's picture

Income tax at 80%? I guess you better not have income in that situation. So rich people didn't have that much income at that time.

Anyway, I've seen some articles like this one about turn-over of rich people, it was based on some top wealth lists. It was similiar, but the tame frame was different. This really begs for a comprehensive look. Check as much sources (not just Time's list, or this blue book) as possible and line it up for entire XX century. We could see at what times this turn-over was higher, when lower.

It could also branch into analyzing some of the families that stayed super rich the longest. How connected they were to politics and did their revenue sources change a lot or stayed at one industry, etc.

Do NOT follow this link or you will be banned from the site!