The Disgusting Greed Continues

    The New York Times can't get enough out of the riches pouring into Wall Street and the consumption that follows. Today, more on what those newly rich or even more rich will do with their bonuses:

That is serious money. And the serious luxury goods markets are feeling the impact.

Miller Motorcars, in Greenwich, Conn., is fielding more requests for the $250,000 Ferrari 599 GTB Fiorano than it can possibly fill. One real estate broker laments a dearth of listings for two clients trying to spend $20 million on Manhattan properties. Financiers already comfortably settled in multimillion-dollar apartments and town houses are buying $5 million apartments for their children. Vacation homes, usually bought and sold in the spring, are now hot this winter, including ones in private resorts like the Yellowstone Club in Montana near Yellowstone National Park.

    And...

Then came bonus day. Last week, Michele Kleier, president of Gumley Haft Kleier, received a call from a hedge fund manager in his late 30s. He had spent $6 million on an apartment two years ago and, with his bonus, wanted to upgrade. His new price range? “Not more than $20 million.”

Ed Petrie, a broker at Sotheby’s in East Hampton, N.Y., is now fielding two bids for $8 million to $10 million properties in exclusive Georgica Pond — properties that have been on the market since the spring. “The fall was relatively slow and then suddenly, with news on bonuses, there has been quite a bit of activity,” he said.

    And...

Private planes, or shares of them, are also on the rise, with demand for charter planes at one company up 40 percent to 50 percent among financial services executives. “There is a noticeable difference this year compared to the past, especially in the financial sector,” said Jeffrey Menaged, founder and head of Chief Executive Air, the company that hired Ms. Clark for the day. A typical price for a charter flight is $30,000.

Sales of “jet cards,” a sort of debit card for private flying, increase during bonus season, Mr. Menaged said, as executives lock in last year’s gains with guaranteed comfort for the new year.

Exotic destinations are also being pitched to the Wall Street ultrarich. Unlimited Speed started Victory Lane in November, a 3,000-acre development in Georgia for motor racing aficionados. Along with a 4.5 mile racetrack, the development also has a 1,600-acre nature preserve, equestrian facilities, a golf course and spa. It already has 27 reservations, a quarter of them coming from Wall Street, said Andrew Goggin, president of Unlimited Speed.

    No mention in the article about what the 48 million Americans without health care are going to do with their bonuses...

Comments

[Stephen Diamond]

Of course, Jonathan, there is no doubt more than enough greed to go around on Wall Street these days, and in the CEO suites, too. But a recent Commentary in the Financial Times suggests an alternative argument, rooted in the reality of the new post Cold War global economy. The heart of the argument is the scale at which capital, in particular American led capital, operates today. Technology and modern finance gives American capital the ability to operate at an unprecedented scale, knitting together cheap, repressed labor power with global markets.

Those at the top of the global pyramids of financial and operational capital (often one and the same, as in the case of private equity funds) are able to generate massive returns for their shareholders and themselves. For the labor movement I think a key issue is that this kind of inequality suggests a final tearing apart of the tenuous link between the common interest that some thought had been at the heart of the so-called Keynesian or Fordist social contract of the Cold War era. No one can credibly suggest there is anything left in that tired idea when those at the top command multi-million dollar annual salaries.

Under such circumstances what is the point of even wasting one's breath debating "Rubinomics" inside the Democratic party?

[Jake]

Half of those bonuses go to the government in the form of taxes. The other half helps provides jobs for 145 million and health insurance for 250 million Americans.

[tom]

How many jobs does buying a $20 million apartment make? How many jobs does buying a $250,000 car make? Do you think 10 people buying $25,000 cars would create more or less jobs? Or do you ever think?

[Tasini]

Actually, with more companies not offering health care at all or a barebones plan and with 48 million Americans living without health care, I doubt, Jake, that much, if any of the bonuses, not to mention the non-bonus money, go to pay for health care. And, actually, since the top tax rate is now 35 percent, no where near half of the bonus money will go to taxes--leaving aside the point that much of the money will be sheltered in some scheme or another.

[D Flinchum]

I read recently - can't remember where, maybe WSJ - that a whole industry of "enablers" committed to helping the super-rich "find" that absolutely perfect condo in Aspen, nanny or private school for the kids, etc is popping up; but it employs a relatively few people. Who can afford it but a small handful?

More distubing is what I am hearing from the health care area. It seems that some doctors or groups of doctors are offering - for a fee - to sort of give certain patients a little extra attention, monitor their care, make sure that all of their doctors are on the same page as to drugs etc. This development is one that I have always feared should single-payer health care actually occur: The rich would have that "little extra" - at a price, naturally, that the rest of us couldn't afford - and there would be 2 (or more) tiers of health care. Certainly some health care would be better than none for the now uninsured but this development could actually lower health care for a lot of folks.

Anybody know anything about it?

[Will B Rich]

It's all about freedom. The people who have all that money earned it. They didn't steal it and the money was voluntarily handed to them in exchange for their work.

If you can make yourself valuable, people will hand you money, too. The more valuable you are, the more people will be willing to pay you. Simple.

Governments, on the other hand, just take your money by force in the form of taxes. You either pay or face the law.

[Ligle]

Actually you missed other great post.
2006 Wall Street Bonus Survey at

www.wsren.org/career