What Do The Rich People Do?

Kevin D. Williamson:

Some years ago, when I was a young newspaper editor, I met a man who owned one of those great big old stone houses on ten manicured acres that you can see along the Main Line of the old Pennsylvania Railroad west of Philadelphia. I did not want such a house, but I did want to be the sort of man who could acquire such a house if he wanted one, so I asked him: “What do you do?”

He told me he was president of this or that bank-and-trust company, which I already knew. He might as well have said: “I get up in the morning and go to my desk at eight, work until noon, take an hour for lunch, and then work from one to five.” Yes, I told him, I know what your job title is, but what do you do? What kind of work does one have to do all day, requiring what kind of skills and aptitudes, to earn an income that buys a house like that? So far as I could tell, he had a lot of meetings. And that’s a strange thing I’ve learned over the years: A great many very rich people don’t really know what they do for a living, at least not well enough to explain it. And if you can’t explain it, you don’t understand it.

With oil prices having been depressed for so long, Houston has had a rough go of it: For much of 2015, its job-creation numbers were way down at the bottom of the list, alongside Philadelphia and Chicago. But you’d never know it from driving around Houston, the skyline of which makes you wish you were in the construction-crane business.

There’s a new retail complex opening on palm-tree-lined Westheimer Road, composed almost exclusively of very-high-end boutiques: Hermès, Dior, Cartier, Tom Ford. I’ve learned a little about these kinds of businesses over the years. For a typical high-end department store, the 80/20 rule generally applies, i.e. 80 percent of the revenue comes from 20 percent of the customers. The higher up the status continuum you go, the more lopsided the distribution gets. Sure, lots of 65th-percentilers splurge for an Hermès scarf or a pair of Tom Ford sunglasses once in a while, but that isn’t what keeps these places in business. They have customers who come in and buy four handbags that together cost as much as a modest house or a really nice car, and then come back next week.

What do they do?

Often, the answer is: They work in finance. The Left, and some of the Right, talks about “financialization of the economy,” or the “FIRE” — finance, insurance, real estate — economy, as though it were somehow necessarily unsavory. (It often is unnecessarily unsavory.) You can kind of see why that might be. I know peanut farmers, and a guy who makes peanut butter, and another guy who sells expensive peanut butter in his chain of grocery stores, but none of them probably makes as good a return on the smushed-peanut trade as does the guy who finances their smooth operations and insures their chunky assets. Money is the one good that’s always in demand (give or take a few hundred trillion Zimbabwe dollars), and so one sort of expects the money business to be pretty lucrative.

What really seems to drive people bats about finance — and what’s behind a great deal of our resentment-driven “inequality” politics — is that same question: “What do they do?” It’s the mysteriousness that vexes people, the sense that there exists in these United States a class apart whose ways and means are alien and incomprehensible.

And there is something to that. The real story of inequality in the early 21st century isn’t one of the lower classes’ sinking into penury and misery. In purely material terms, they’ve never had it so good. By any quantitative measure — calories eaten, square footage occupied, energy consumed, disposable income after basic food and shelter, real purchasing power — lower-earning households are far, far better off than they were during the so-called golden age of the 1950s or 1960s, that magical postwar period for which we still feel a paralyzing nostalgia. What’s remarkable isn’t that the poor are falling behind, but that the top tenth or so are pulling away in ways that weren’t common, or even possible, before very recently in our history.

We’re not talking about Wall Street tycoons and Silicon Valley billionaires here, but people who make six-figure incomes in which the first figure is not a 1 or a 2. If you make an income like that, you can, if you are so inclined, insulate yourself from a great deal of ordinary American life. If you are a Californian, you can join a private-jet club for less than $2,000 a month that will shuttle you from a private terminal in Burbank to a meeting in the Bay Area to a golf club in Palm Springs. You’ll never see a TSA line or take a parking shuttle, and the price is about the same as a lease payment on a high-end European sedan.

This is part of a long-term trend in which indulgences once reserved to the very wealthiest make their way down through the market to the merely high-income, and then on to people of more modest means. As late as the 1960s, airline travel was rare enough and expensive enough that the term “jet set” meant something, whereas today it is hopelessly retro-sounding. The fact that people who are merely rich rather than super-rich can now travel relatively easily by private jet may not sound like progress to people whose household finances would be upset by an unexpected $200 car-repair bill, but that progress is in fact one of the most common avenues of economic advancement. If in 20 years there are no more traffic jams in Los Angeles and Washington because autonomous electric cars shuttle most people to and from most destinations and there’s an Uber-like service making private-jet travel accessible to people of middling incomes, it will be because the development of those products was subsidized by wealthy early adopters. The fact that private-school mothers in E-Class station wagons shop at Whole Foods is the reason you can buy better fish and vegetables at Walmart now than you could ten years ago. That’s just how it works.

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