What Rich Used To Be

Tim Knight from Slope of Hope's picture

From the Slope of Hope: I've had a lifelong fascination with wealth and, more recently, wealth disparity (for proof, look no further than the SocialTrade stack on this very topic). I grew up in Baton Rouge, Louisiana in a happy, financially-secure, but very much middle-class family. We lived in this house:

0617-sinclair

Everyone I knew had the same situation. We all had pretty much the same kind of house, the same quantity of toys, the same simple vacations.........everything was so equal, you'd think we were living in some kind of socialist paradise.

We weren't, of course, and there was, naturally, one "rich kid" in the neighborhood. Everything about his life was just a little bit nicer, starting with the house he lived in:

0617-steven

Doesn't look too much different, does it? Well, that's kind of the point of this post.

As a youngster, I was acutely aware of many differences between the life I had and the one my friend Steven (AKA the rich kid) had. Although many decades have passed since then, I don't have to even try hard to remember some of those contrasts:

The White Carpet
One of my most vivid memories was walking into Steven's house and seeing stark-white wall-to-wall carpeting. In my house, we had four kids, and white carpet would have been just nuts to have. But in Steven's, there it was, white and looking good as new. It helped, I suppose, that there was plastic runners, so you had to walk on them, as if it was a plastic sidewalk in the middle of the house. Even as a child, I thought it was kind of silly to carpet a house and then lay down a strip of plastic to protect it, but who was I to say?

The Treehouse
In Steven's back yard, there was the most gorgeous treehouse. His dad ran a Ford dealership, so I guess he could pretty easily afford a carpenter to come out and construct it for him. Now, when I say "gorgeous", all I mean was that it looked good to my ten-year-old eyes. It was just a simple cube - - but it was made of high-quality wood, was obviously professionally-constructed, and conjured up much envy within me. I asked my dad every summer if I could have a treehouse, and the response was always the same: "I'll think about it." It never came.

The Thunderbird
As I mentioned, Steven's dad had a dealership (well, at least he was the general manager there), and their family had a nice, new "luxury" car. It was certainly fancier than our station wagon, and I was amazed that it had this thing called "Cruise Control", which to my young mind meant the car would actually drive itself. Steven and I were in the back seat, and he told me that the little windows were called "opera windows", which likewise sounded like something far more elegant and expensive than I'd ever own personally.

Dad Salaries
I distinctly remember one conversation my friend and I had in which our father's salaries came up. Now, I actually had no earthly clue what my father made, but for some reason I was feeling competitive and insecure that day, so I told Steven my father made $35,000 a year, which sounded tremendous to me. He countered that if MY dad made $35,000 a year, then HIS dad must make $50,000 a year. I shut up at that point, because I figured it must be true, given their apparently luxurious lifestyle.

The Boom Boom Cannon
This one seemed to sting the most of all: one Christmas, my "big gift" was a plastic UFO that could fly by way of a motorized propeller. Unfortunately, we couldn't get the damn thing to fly, in spite of my father's best efforts. So it was pretty disappointing. I visited Steven to see what he got for Christmas, and he was the proud owner of a tiny working cannon called the Boom Boom (yeah, safety concerns weren't as prevalent those days..........this was actually a working cannon, with gunpowder, albeit very small). It was made of nice, heavy metal, and I'd never seen one before. It seemed like just about the best toy imaginable.

Looking back, it was as if my dad was 6 feet tall, just like everyone's else's dad, and here was my friend who had a dad that was 6 feet and 1 inch tall. Steven's toys were just a LITTLE bit nicer. His house was a LITTLE bit cleaner. His vacations were a LITTLE bit fancier. But, in truth, the difference between his life and everyone else's was really, really small. Back then, though, I always felt poor when I was with Steven.

These days, the difference isn't between a 6 foot guy and someone 6'1". It's more like suddenly there are some people who are 900 feet tall - - 1500 feet tall - - 5000 feet tall. Their wealth is just as absurdly large as such heights would be, while at the same time the mass of humanity seems to be getting shorter by the week.

For decades - - mainly the 40s, 50s, and 60s - - wealth distribution in America was incredibly even. Someone very middle-of-the-road could still aspire to be "the rich guy" in town. If my father, for instance, got it in his head that he wanted to win the rat race in our neighborhood, it wouldn't have been that difficult. It was totally feasible. That extra inch wasn't unattainable.

Starting in the 70s, thought, and picking up speed in the 1980s, things started to change. Over the past third of a century, policy has clearly handed the wealth of the country over to the rich kids.

Notice the change that took place in 1982. Interestingly, that was exactly the same year that the original Forbes 400 list came out. Their timing couldn't have been better, because the very existence of such a "rich list" was the equivalent of ringing in an era of plutocracy. But read what the list was like in the inaugural issue.........

In the first Forbes 400 list, there were only 13 billionaires, and a net worth of 75 Million USD secured a spot on the list. The 1982 list represented 2.8% of the Gross Domestic Product of the United States. The 1982 Forbes 400 had 22.8% of the list composed of oil fortunes, with 15.3% from manufacturing, 9% from finance and only 3% from technology driven fortunes.

Being a billionaire was a big, big deal. Only 13 entries! These days, just to on the list at ALL, you need a net worth of at least $1.7 billion, 23 times higher than the original list. Amazingly, there are nearly 200 people who are billionaires that don't even make it on the list at all, because they don't have enough! So the 1982 list seems absolutely quaint in the modern era.

Life tends to move in cycles, and I doubt the scenario in which this massive disparity exists is a permanent feature of life. However, it will take many decades - - and probably more than a little social pain - - to share the wealth again.

All I can say to my younger self regarding my rich friend..........it really wasn't so bad, and Boom Boom Cannon notwithstanding, financial life was a lot more evenly-balanced back then than it is now. And I still don't have a treehouse.

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tailgunner's picture

After thinking about this thread, I realized my family were the rich people in the neighborhood.

My day got a new company car in 1953, a ford two door Mainline, with no options.  It was green.

I slept in an unfinished basement with no heat for 8 years.  It had a closet and a 2 drawer dresser.  My brother shared the dresser, bed, and closet.  In the closet I had my Sunday clothes, a shirt with a collar and that was it.  In the dresser a pair of jeans, a few sets of t-shirts and shorts.  Socks also.  One pair of shoes.  it was cold down there.  I went to a school and most were dressed like me.  One guy in class at school was dressed up, but he was a snob so we did not care.  Our street was finally paved in about 1959.

This was in a middle class neighborhood, and we always had enough to eat.  A few toys, and If we wanted more we found work in lawn care, snow shoveling, and with no girls in the neighborhood I ended up baby sitting for $.25 cents an hour.

My mother wanted me to learn social skills, so the city club was open for the members kids.  I was 16 the first time I went to help prepare decorations for  a dance.  I could not understand where these kids got their money for fast cars, and very nice clothes.  So I asked.  The parents gave them what they wanted.  This was the people from the south hill area.  That was where the money was.  One guy had a new tri power GTO.  After that I went home to what I knew.  I walked the 3.5 miles in the dark.  as usual. 

 

 

 

 

 

 

 

 

mary mary's picture

That was before the invention of Gated Subdivisions.

Now the Rich can get Satanically Rich and tell themselves they have absolutely no duty to such things as "fellow citizens" where they live.

I Write Code's picture

Well, you're wrong of course, and right.

The fact of the matter was almost certainly that on every block in your neighborhood the real disparity between the poorest and richest was at least three to one, however for the most part that was hidden because that was the style of the time and really, it didn't matter that much.

And if you spread the geography to say all the families with kids in the same high school class the disparity would almost certainly be ten to one, even in a mostly homogenous middle-class neighborhood, pretty much like the one I too grew up in.

bullet's picture

hi Tim... grew up in Baton Rouge also... looks exactly like my parents house... LSU 1974... 

ElTerco's picture

Good Read. We used to all be in this together, and life really was more fulfilling. You made me remember that.

Ron Blum's picture

The most interesting thing in this article is the chart. The previous top was at the time of the 1929 crash and the decline lasts throughout the ensuing depression and WW2.

Things will follow EXACTLY that pattern this time around.

Crush the cube's picture

Rebuild?  Rebuild what?  Nobody even knows what works anymore, set it all on fire and only that which does work will survive.  Humpty Dumpty, he ain't never going back together, kill him and move on.

northern vigor's picture

I had a bachelor farmer neighbor. Dressed like a homeless man, drove a beat up truck...the man used to finance all the other wealthy looking farmers. Sometimes they'd miss a few payments and he'd show up at their family reunions or weddings and demand his money. The old codger knew the best way to get his money was to embarrass the wives. 

 

Often the guys that look the wealthiest are the guys that don't have any money in the bank.

mtanimal's picture

You just summed up every affirmative action employee in the suburbs.  $500k house, an Escalade, toys galore, and a 30 hour/week job doing nothing that he will never lose due to his race.  Borrow, borrow, borrow ... buy, buy, buy, ... the rest of us will cover it.

Horseless Headsman's picture

Oh, I don't know. Things might be much more evenly distributed in only 30 days, given the proper events. True, the baseline would be much lower....

Arnold's picture

When was Marfa again?
I might be on walkabout.

Cthonic's picture

Steven's dad was likely one of the "regional elite" of the pre '71 era. Sources of local capital, owner operators with their wealth tied up in concrete assets.  Supported little league (without turning the kids into unwitting/unwilling sandwich boards).  Sat on the board of the community hospital.  Knew who the trouble makers were and made them unwelcome.  Then along came financialization, and they all started sending their cashflow off to New York money center banks, by way of their brokerage accounts.  Along came ERISA, IRA's, and 401(k)'s, and their better paid employees diversified into NY financial assets.  All of them indirectly funding their own competitors.  Who paid off city council members to gain the permits they needed to set up shop, eventually putting the regional elite out of their collective misery.  And their employees packing to larger metros in search of the next paycheck.

My home town now has a Sams Club, two Walmarts, and a Walmart Neighborhood Market.  And a Target.  I'm sure Aldi will be invading next.  Not a dime of the money spent at these establishments stays local.  Their employees make enough to buy at the company store to support their survival perhaps.

During the last week of school, my daughter drew a map of her city.  Chain restaurants, no productive (non-FIRE) enterprises, too many Targets.  #sad

Milton Keynes's picture

I remember in the 70's, there were "Rich" kids, Mr Potter who was a partner in a law firm,

his house was much bigger, maybe 6 or 7 bedrooms, because he had 4 kids and his sister( Aunty) lived with the family

plus they had a guest bedroom for the occasional sleepover.  nice bannister stairs, and a decent basement  with a rec room,

but it was also in the same schools we went to. Our house was 3 Bedrooms.  Sure he lived better and had an RV and some nice toys,

but, it was maybe 2X better and my parents were saving to send us to college.  

There was our neighbor the Orthodontist, he had a really big yard and a 4 BR house..

 

Now the Billionaires have 20 room mansions... 

Gordon_Gekko's picture

"Starting in the 70s, thought, and picking up speed in the 1980s, things started to change"

About the same time Nixon ended Dollar's Gold peg. Just a coincidence? I think not. Evereything has gotten worse since the fiat money regime started in earnest and Gold was banished from the monetary system. You can trace the degradation of pretty much everything in our society to the degradation of our currency. And that is NOT a coindence.

peippe's picture

now I'm jealous of Gekko's font, 

so much finer than this cheesy squat script i type in. : (

dammit.

AGuy's picture

"About the same time Nixon ended Dollar's Gold peg. Just a coincidence?"

Nixon's presidency wasn't the turning point. LBJ Gun & butter was when the train left the rails. LBJ admin removed Silver from US coins and starting printing dollars to support LBJ's Vietam & his "Great Society". Even the Kennedys' referred LBJ as "That Son of a Bitch". Train also got on the wrong track trying to fight the cold war and pouring Billions into MIC in beginning in the 1950's, with nothing to show for it. LBJ's policies also kicked off the hippy movement, as young american didn't want to go fight in asian jungles, and the wealthfare state provide an alternate to working.

You can blame Nixon for alot of crap, but not the Dollar's demise and degeneration of American society. LBJ was the real SOB.

Also it didn't help that by the time of the late 1960's early 1970s, Europe and Japan rebuilt their factories and didn't need to rely on the US for manufactured goods.

nailgunner44's picture

Why do I feel like I've read this before?

armageddon addahere's picture

It rang a bell with me too. What he describes is 'small town rich'. I recall a story from the 30s describing someone very similar to this rich car dealer family.  The protagonist in the story had the chance to marry the daughter of one of the town's rich families. He described the house, the Buick, the wife, the Rotary club, the country club, the small town version of  business success.

This was a common story right from Colonial times down almost to the present day.

Things have changed now that small town businesses have largely been destroyed by national and multinational corporations.

Now that I think of it, this process was foreshadowed by The Magnificent Ambersons. It's a good movie in its own right but the same story seems to be playing out now, 100 years later.

2banana's picture

There is only one way to fix this.

Bigger and bigger government with more and more regulations and higher and higher taxes to make things fair.

And to import millions of moucher muslim rapists.

Oh wait - that is two things.

Stud Duck's picture

As an individual raised rural, I watched the wealthier ranchers flaunt their money with new cars and equipment and the common rancher like my Dad comment, well he did not make it, his grandfather homesteaded and his father kept it together. Then I wathced all that his grandfather and father get squandered by the kids in businesses in the bug city. The ranch is sold to California investorsprobably backed by Chinese banks, they are plowing up the sod grasses and drilling irrigation wells into aquafers  that area about dried up.

Soon it will be blowing dirt storms again, a young man from the area will buy it on the court house steps and maybe make it, if the weather is good to him.

Jesus main point in his preachings that got him in big trouble with the guys in Rome was his ranting about a new thing called money!

AGuy's picture

"Soon it will be blowing dirt storms again, a young man from the area will buy it on the court house steps and maybe make it, if the weather is good to him."

Which Young man would that be? Do to mean a Millenial that is glued to a smartphone, likely buried in Debt with a social studies degree, and has zero knowledge about agriculture?

Why would anyone in Ag. buy property with no water, depleted aquifer, land likely saturated in salt minerals (from ground water, with all the top soil blown away? I think I'd rather by a bridge! /sarc

northern vigor's picture

Out of a hundred kids there will be one that is just head and shoulders over the other 99. He could fall into a shit pile and come out smelling like a rose. He'll buy it on the court steps.

 

AGuy's picture

"Out of a hundred kids there will be one that is just head and shoulders over the other 99. He could fall into a shit pile and come out smelling like a rose. He'll buy it on the court steps."

Nobody is that has any common sense about Ag. is going to buy property with no water, saturated in mineral salts from excessive aquifer irrigation, with the top soil blown away. Most people call that a desert.

Perhaps some dumb millenial will buy it, but it will be a lost cause.

Shift For Brains's picture

There are more than that. We read about the snowflakes, the SJWs, the economic retards. There are still a lot of kids--maybe more since they see the carnage all around--who are going to surprise a lot of boomers and even themselves, maybe.

It's funny with all the news on how bad the younger ones are, I keep running into really good ones. I always try to tell them that America will be in good hands if they are an example of who is coming onto the watch. Unsurprisingly, they almost always look proud to be told that.

Arnold's picture

Did you not think there were consequences to your actions?

Arnold's picture

Much as on the other threads you have inundated you are still a stupid son of a bitch.

Kayman's picture

Fiat money, credit creation and fractional reserve banking. The devil was holding those 3 cards down on the table.

VK's picture

The looting goes on. It will only stop when the FED is destroyed and the cartels brought down - sickcare, warmongering and unintelligence complex.

Arnold's picture

Pretty good, Tim.
You should be a writer.

Arnold's picture

To have several millions in assets as we do, and be a one percent-er in the world is staggering.

Sonny Barger hasn't ever stopped rolling in his grave.

I suggest we dig him up and rebury him every year, like Bill Cody, just to replace the worn out coffin.

Oh....he ain't dead yet?

Jedclampetisdead's picture

Agree, my mom was a secretary making about 10k/yr, dad used car salesman made 20k/yr. Bought our house for 30k.   Average house in miami florida for everybody in the 70s

land_of_the_few's picture

Totally, wouldn''t be surprised if the houses are 10x that now, and the salaries for normal people sure as heck aren't. 3x to 4x maybe.

Kayman's picture

Houses up 10 times.

Take home pay (if you have a job) up 2 to 3 times.

Ain't financialization grand ?  All the newly conjured money has gone to the parasites.

OCnStiggs's picture

DC is correct about Mexico...

A businesswoman in our town runs a really nice Mexican furniture and furnishings shop. They make runs into Mexico to pick up their merchandise once a month hauling a big trailer behind a huge van. Now, they have to go incognito, dressing in ratty clothes, they have removed any logos from the van, and, they travel a lot starting at 2 A.M. and spend much of their days in "safe houses" provided by their merchant manufacturers. She told us about the local pharmacy owner whose son was kidnapped until a huge ransom was paid. He was only home a week and another family member was kidnapped and killed. The pharmacy owner simply walked away from his business, leaving the store open. Now, there is no "farmacia" in this little town.

The locals have few firearms to protect themselves. The cartels run everything, including the government, the local cops and most of the Federales. What Mexico needs is a huge civil war to wipe out the cartels and take back their government. Not likely any time soon.

Most people think of Mexico as a quaint little country next door. Think of Iraq or Somalia and you are closer to the truth.

Pollygotacracker's picture

Mexico is horribly corrupt. I've traveled there and seen men out in the scorching sun building roads literally with their bare hands. You rarely see the mega wealthy people. But, once at a very nice restaurant I sat at a table next to a group of ladies. They had clothes, shoes, and handbags purchased in Europe. I know expensive when I see it. I hate to see the U.S. going down this road. 

Horseless Headsman's picture

It's probably too late for an end to the drug war to make a difference. The cartels are too big and entrenched now. Ain't war grand?

AGuy's picture

"It's probably too late for an end to the drug war to make a difference. The cartels are too big and entrenched now. Ain't war grand?"

It would collapse in a few months if the US abandoned its war on Drugs and legalized them. Ultimately I think this is coming. the US is too broke to spend the Billions on its existing policy. Sooner or later the US gov't will switch from drug enforcement (expenditure) to drug taxation (revenue).

kumquatsunite's picture

There is a fundamental premise of Civilization; we do not abandon our youth (who are the ones sold drugs) to the vile and the destructive. Read up on the opium wars of China. You'll find that any society/culture/civilization that cedes to drugs will be destroyed. This, we as a Christian nation do not do. Or maybe you do want your brain surgeon to have a wee bit of heroin right before your surgery?

AGuy's picture

"There is a fundamental premise of Civilization; we do not abandon our youth (who are the ones sold drugs) to the vile and the destructive. Read up on the opium wars of China. "

Substance control does not work. Prohibition didn't work, but it fuel the means to introduce gang violence. If the on Drugs was working, the cost of drugs would have soared. Instead prices collapsed.

"maybe you do want your brain surgeon to have a wee bit of heroin right before your surgery?"

LOL! You have me pegged wrong. I barely take any OTC. never touched a narcotic, and I barely consume alcohol. It does not matter what you are I think or want. Reality shows that the war on Drugs is a complete failure. On the other hand legalizing alcohol (end of prohibition) did not destroy civilization, but it did remove gang violence and power that was empower via illegal alcohol sales.

There will always be people that choose the path of self-destruction and laws cannot change that. The only logical action is prevent criminals from monetizing off drug trafficing, taxing it, and using taxes to educate the youth.

A person that becomes a brain surgeon is not going to ever touch narcotics to begin with so you're argument is non-existent. It is not laws that prevent people from taking or not taking narcotics, but the traits of the person. Today any surgeon can easily acquire narcotics. They simply chose not to.

waspwench's picture

America will not legalize drugs. The American government (aka the CIA) funds itself with drug money. That's where the Clintons got their start.

AGuy's picture

"America will not legalize drugs. The American government (aka the CIA) funds itself with drug money. That's where the Clintons got their start."

Its already begun. I think there are about 10 to 12 states that already ended enforcement for pot, and many states provide free, clean needles to heroin users. The issue is that drug enforcement is becoming too expensive and they have no choice but to abandon enforcement. Perhaps the Federal gov't will never fully legalize it, but that is not going to stop starts from decriminalizing it.

Aireannpure's picture

This is tearing America apart and will not end soon enough. Rebuilding will take longer than the un-building. Darwin's "REAL" book title is totally racist and every politically incorrect thing today. Yet the sheeple cling to ignorance. Darwin will win out. Faith and moral's build and contain a culture. Law and order allow this much needed rebuilding. Be grateful, generous with moral acts, pray/meditate, spend time with children (not pets) and respect police and your wife.

Usura's picture

Rebuilding will require a very deep culling of the herd

DuneCreature's picture

What the rich used to be was safe to venture out during the day without mobs of pissed off disenfranchised looking to rob, cheat and or beat them.

It used to be safe to leave the gated community (better know as the Green Zones) any time they wanted. ... That will be daylight only and in groups very soon.

Rich now means having armed guards that you pay enough to be fairly certain they won't turn on you.

Wealthy will soon mean that being a possible target of midnight 'The Death Squads' and kidnap and ransom seeking boys is very real.

Think I'm exaggerating? ........ Been south of the border lately?

I have friends in Mexico and that is how they live. ... The richer they appear the bigger their security needs. ...... A fact of life now.

Oh, and we are importing all of trouble we can from down south and the ME as fast as we can fly it in.

Live Hard, Rich Has Its Drawbacks When You Are The Only Rich Family In A Sea Of Poverty, Die Free

~ DC v6.5

runnymede's picture

 I lived in Mexico back in the day. I even lived in Ciudad Juarez. Never was once acosted or threatened. Even being a guero. Last time I visited, it was totally different. I would not venture out without security under any circumstances. I will not be going back. Even in my flyover country hometown, there are large swaths where I would only go if in a car, and then even not at night. Gangs, homeless and drugs everywhere. As a youngin, we literally never locked our doors and I do not recall one murder or robbery in all those years. I was a free range kid. One adventure after another--mostly outdoors and unsupervised. 

We clever humans have built a most impressive technological structure of society. But it is only a facade; turn over any plank and you will find the rot of decadance. Like the whited sepulchre. 

 

Half Bit's picture

I share your opinion about Juarez. Worked there as the Gringo Man 15 years ago and I never had any problems. Nowadays I dare not venture across the border from El Paso.

Common_Law's picture

You mean planks of the communist manifesto, there's lots of rot under there.

Dame Ednas Possum's picture

There seems to be a direct correlation between 'rich' and 'shithead'. 

I'd say there is definite causation too. 

 

And btw... apparent wealth more often than not equates to extreme debt. There's plenty of flashy gits out there who are up to their eyeballs in debt. 

I know plenty of well-off people who look like they don't have a pot to piss in. I think it is part of the game in ensuring one is able to keep hold of one's wealth! 

 

ElTerco's picture

Wealth means debt *and* not paying someone for the full value of their work. Someone has to get screwed/robbed in order for someone else to be 900 times more wealthy than the median. Either that or the one person can do the work of 900 times more people placed in a similar position with similar resources. I feel pretty confident to say that's an impossibility. Therefore, the wealthy are with near certainty stealing from someone else to make themselves rich. QED.

NidStyles's picture

Sometimes ideas are worth something. In those instances, indeed one man can do that much more work.