For the select few, the ‘time is right for indulgence’

You may be under the impression that these are challenging economic times. Wages are stagnant; we’re in the midst of a credit crunch and a housing crisis; the economy has crawled to a stop; and the cost of everything from food to gas to college tuition to healthcare has ballooned.

But perhaps that’s a myopic way to view the economic landscape. The Boston Globe reported that these downtimes have actually created a “bonanza of deals on luxurious pleasures” for the very, very wealthy. (thanks to reader E.S. for the tip)

At the Rolls-Royce dealership in Wayland, the Rolls-Royce Phantom Drophead is sold out into next year, and orders are still rolling in. Ferrari Maserati of New England in Foxborough notched more sales in April than in any of the previous 14 months. Boston Yacht Sales of Weymouth last week closed on three boats valued at a total of $1.6 million, helping to push business up by 9 percent over last year. Business has been so brisk at Shoreline Aviation in Marshfield that the wait time to purchase a sleek Cessna Citation jet is two years. Million-dollar condo sales, far from stalling like some other sectors of the real estate market, have continued at a pace about like last year’s.

In all of those things, dealers say they see no signs of a slowdown in coming months.

“If I had five Rolls-Royce Phantoms, they’d be gone the next day,” Paul Downey, sales manager of Herb Chambers Rolls-Royce Motorcars of New England and Bentley Boston, said of the convertible that retails for $440,000.

For the class of rich who make more than $1 million a year and have several times that in the bank, the time is right for indulgence. Falling interest rates have made luxury goods cheaper to buy, and the items, which tend to be considered investments because they retain their value, are proving attractive alternatives to the volatile stock market. There is also the foreclosure factor: A growing number of high-end boats, cars, and homes have been foreclosed upon by banks and can be had for cut-rate prices.

Thank goodness someone is benefitting from this recession, right?

The Globe talked to one executive — who, for some reason, didn’t want to be quoted by name — saying he’s noticed the downturn has cut into his company’s profits, which has led him to watch his spending habits. He nevertheless just bought a Ferrari. “With a Ferrari, that’s the car I like, and that’s the car I drive . . . so the economy is not going to affect that,” he said.

Wait, it gets slightly more insulting.

The Globe article concluded:

Still, from the vantage point of some of the region’s wealthy residents, doomsayers have overexaggerated the economy’s weaknesses. Jonathan Bush, president and chief executive officer of Athenahealth Inc., a Watertown-based medical billing and electronic medical records firm, took his company public last year and said the outlook is sunny.

To that end, he said he has donated money to nonprofits that he said he has wanted to support for many years, and he recently purchased a house in Cambridge’s Hubbard Park. The price was $3.1 million, according to the Middlesex Registry of Deeds records.

Bush, a cousin of President Bush, said he’s not a car guy, and has no immediate plans to purchase other big-ticket luxury items. But, he said, “Maybe the materialism is waiting to punch through.”

Yep, the feature piece about the superrich sailing through the recession includes an optimistic perspective from the president’s cousin — a multimillionaire who thinks materialism may soon “punch through.”

The mind reels.

Well the super rich have benefitted from the GOP policies, its the rest of us who have gotten the short end of the stick

  • Two Points:

    1. The rich are getting richer. I’m no economist, but there is only a finite amount of money in this world. The rich are getting more, the poor are getting less. They can afford this stuff, I guess.

    2. In the real estate market, which I follow with some interest, part of the reason why some people are looking to get rid of properties now is that it is expected that capital gains taxes will be increasing with more democrats in office. About time, I’d say.

  • The earth is in desperate need of new definitions of wealth. Just as the economy is in desperate need of a more ecologically sane measure of its status and health.

    This post indicates that it does not take great intelligence to generate or spend great fortunes on this planet. If shit were gold, the rich would be born with the biggest assholes.

  • But but but you make it sound like this would be, gasp, class warfare! Just as it has been since the folks in Cave 1400 lorded over the fact that they got one more mastodon than the other caves and a few of the other caves felt the green eyed monster tug at their souls.

    If I were the upper classes, the folks I’d really worry about aren’t the ones who want to change the status quo, but rather their minions, the wannabes.

    I suspect that more than a few nobles in the days of Revolutionary France or Russia thought it was great time time to buy too.

  • I know I always have a hard time deciding whether to buy the Ferrari or put money into my savings account for the day when I can collect what’s left of Social Security.

    Seriously, the thing to remind the undecided voter is this: McCain’s wife is worth somewhere around $50 million (some say $100M, she refuses to release her tax records). McCain is pushing for tax cuts which would hugely benefit people like him to the tune of billions of dollars. Meanwhile the Republicans, McCain included, keep voting against a few million here and there for veterans, mortgage relief, and investments in things that ordinary Americans need.

    Millionaire McCain needs your vote so he and his friends can make more money. Obama has vowed to rescind the tax cuts for the people like McCain, so obviously McCain will say just about anything to keep that from happening.

  • I don’t find any of this insulting. I’m almost indifferent to it, even if it makes me a little jealous. I don’t think there’s anything wrong with these people spending their money, even if it could have gone to a more socially commendable cause. Even if the worst of times, some people will have money to burn. My aunt and uncle, who remodeled their last house during the last downturn, among other things, are now looking to build a new house or buy something in one of the more expensive areas where we live–and where they live right now isn’t exactly a slum.

    I’m not exactly a high earner. I’m working in a restaurant after graduating college a year ago, and while I am doing decently, I could be doing better. I still spend too much eating out, but I’ve tried to be more observant of how I spend my money. (Hopefully, if I go to law school, a frugal personality will allow me to avoid living like I’m about to declare bankruptcy. And while I don’t have a family to support, I’m working on paying down my debts and starting to save both in regular savings and for retirement. In other words, I am working on getting my finances straightened out. It’s something we should all try to do, but particularly during a tough time like this. It’ll help us more in the long run.

  • “To know that you have enough is to be rich.” – Tao Te Ching

    In that sense (and only in that sense), I’m richer than any of these assholes.

    Let the class warfare begin.

  • To quote from Warren Buffet, when asked about politicians implying ‘class warfare’:

    “We have been in class warfare for more than 50 years and my class has won.”

  • Bignose (2), I’m no economist either, but I would take issue with the thought that there is “only a finite amount of money in this world.” Economies are actually a function of energy or production, not merely currency.

    Imagine an island with three people. They each have 100 dollars and a specific skill. If they divide the island and each do everything for themselves, they will all still have $100, but will live very flawed lives because of their weaknesses. However, if they use the money to pay each other to complement their own strengths, they all live a better life. In terms of money you can equate this with (say) $1000 income versus no income if they live isolated lives. The more they do, the richer they all become in terms of standard of living. If necessary, more money can be printed, or debt instruments can be made part of the equasion.

    But if one collects all the money, the others become virtual slaves. Unfortunately, Bush & Co. are creating rules that support this scenario. And it is this set of rules that separates healthy economies from third world ones. Think about tort laws, safety oversight rules, bank/investment/lending regulations and labor laws. Where we are going is not the result of a fluke.

  • The last time the U.S. had a sustained period of Republican presidents and congresses (1921-1930) also saw a greatly increased disparity in income and the celebration of conspicuous wealth. That period ended with the Great Depression.

    Now we’ve had another period of Republican dominance (with Bush vetoes and senate filibusters checkmating the Democratic majority). Productivity increases continued in this decade while median incomes stagnated or decreased — so corporate profits have soared. Collectively and individually, debt is at historic levels — interest on that debt floats to the top.

    Of course the Vacuum-Up economic policy of Bush/Cheney/McCentury/Republican, Inc. makes the president’s cousin a big winner in this game. The stakes are clear, this election is about changing direction so this period of Republican dominance does not end in another depression.

  • I’m with Brian here. If you’ve got money, it’s actually okay to spend it. In fact, it’s better for the rest of us if you do.

    Of course the main argument here is the standard one about the rich getting richer and all that. I agree that’s bad. We do need a somewhat more progressive tax scheme until, basically, the income gap stops growing *in general*. But it’s okay for some people to be rich and some to be poor – that’s going to happen because some people work harder and smarter or are simply luckier. Life isn’t fair and all that.

    And Danp is also correct – people generate wealth by actually doing productive things. We can all make the whole world wealthier. But people need the opportunities to do so. Straight-up unregulated capitalism doesn’t fully accomplish that task.

  • mmm…

    Does America manufacture these luxury goods?
    If so, with a falling dollar, maybe this isn’t ALL bad. We can make the boats, cars and yachts of European, Japanese, and Chinese moguls.

    Gotta do SOMETHING to pay the bills since everything from computers on down is made in China.

    Lord knows, with Airbus so far behind Boeing, high end goods might help us dig out from our hole as long as China doesn’t take THIS lunch money from us too. (It’s our own fault. If I were China, I’d rob us blind too. Capitalism, baby!)

  • lou (#3): “The earth is in desperate need of new definitions of wealth”

    The pre-European contact “savages” here in the Great Pacific Northwest were blest with continuous supplies of fish, game animals, water. They were on the verge of domesticating plants and animals. Capt. Vancouver regarded them as the most sophisticated traders he had encountered in his global voyages.

    Given differentials in the natural endowments, sooner or later all the wealth would have accumulated among a very few families, except for an institution peculiar to the Northwest: the Potlatch. The word is from Chinook jargon; it meant “to give away” or “gift”. We measure prestige by possessions or wealth. They did, too, up to a point. Beyond that your prestige came from how much you were able to give away.

    I’ve just returned from two weeks in Rome where I thoroughly enjoyed the gifts (buildings, art works) of (mostly Church) patrons. In this country a few of our robber barons were generous (Carnegie comes to mind).

    How shallow and unrewarding our TeeVee culture has become.

  • So what’s new? The operative word for the super rich has for the most part always been: MINE!…usually followed by MORE MINE! Thank their lucky stars they have the common folk to fight and sometimes die on the battlefields for their way of life.

  • Just one more example of the “I’ve got mine so *censored* you!” attitude. I’ve got three words for that: class war NOW.

  • Class warfare is only warfare if people are willing to go into the streets, which Americans have forgotten how to do. Obedient, conforming, compliant, timorous and fearful as we have become suggests that meaningful dissent is not likely. In any case dissent is pretty much illegal under the Bush thugocracy where you can’t even wear a T-shirt with a mildly dissenting message without being handcuffed and questioned or thrown off a plane. The French haven’t forgotten how to shut down their government when it offends them. If only we would learn how.

  • I have talked to a few bike store owners I have known for a while. I was curious as to how their business was. They were selling a lot of bikes for two reasons. Middle class people were starting to buy bikes and accessories for commuting. More wealthy people were spending big bucks on new toys- $5000+ dollar bikes. These shops just had record years. I was a little shocked, but after thinking about their client base, not so much.

  • Hemingway and Fitzgerald were once getting drunk in a bar in Paris, when Hemingway made one of his stupendous observations of life, to wit: “You know, the rich aren’t like us.”

    To which Fitzgerald replied, “Yes, they have money.”

  • I’m in south florida and was talking to the service manager of a major south florida dealership that sells high end cars. Their most active price point is $160,000 range.

  • One thing that is really getting on my nerves is these investment groups, which are made up of rich investors, going to foreclosure auctions and buying everything. There is no way to know if these guys are local, national, or global, but they are buying up anything that is discounted. I would imagine this isn’t Houston specific and in my lifetime this could easily be the most blatant redistribution of wealth I will ever see. The rich foreclosing on homes, then buying them back at reduced prices with reduced interest rates and in some areas with tax breaks.

    It really makes one wonder if this wasn’t planned to some degree. If not, talk about a real winfall for the massively rich.

  • If these clowns buying Ferraris and Rolls Royce’s piss you off, you should really, REALLY check out what these assholes are doing to food prices. Hint: It involves raking in profit while people starve to death.

    Read all about it … if you can stomach it.

  • I’ve never understood this anger at rich people who spend money on expensive consumer goods. What, you want them to stash the money away overseas so it leaves the economy?

    To the extent that some rich people are getting richer because of unreasonable tax laws or unethical behavior, sure, that’s a problem that should be fixed. But the wealthy people I know worked damned hard (and got lucky to some degree). Who the hell am I to tell them what to do with their money? And why *wouldn’t* I want them to spend it at local exotic car dealerships, which employ local people?

    I’m a big believer in equal opportunity and a strong social safety net (which we in the US do a poor job of). It’s this drive for equal outcome that creeps me out. Let’s improve the system, but also acknowledge that in a large population, statistics insist that there will be outliers at the top and bottom of the wealth scale. And as long as that’s the case, there will be rich people who buy expensive toys. So what?

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