By Scott Graber
It’s Friday — I’m in my small, bookcase-lined study — wondering about the pathogen in our midst. This morning, the Wall Street Journal is mostly given over to the virus.
But if one reads further, one discovers a small item saying there will be at least 650,000 people (around the world) with $30 million or more by 2024. The article goes on to say these mega-wealthy folks are desperate to find places to park their millions. Favorite parking places include “private equity investments, gold, cash and real estate.”
The piece — clearly conceived before the pandemic and the implosion of the stock market — tells us that wealthy folks are moving out of stocks, for something solid like a piece of a private (untraded) business; or bullion, or the most tangible, touchable of all assets — real estate. This real estate is often located in a city — New York, London, Singapore — and usually translates into high-rise, pencil-thin building with views (on a clear day) of Rahway, N.J.
Although all eyes are now focused on where our Coronavirus is thriving — New York, California and Washington — there is a Presidential election in our future. Given the millions of newly unemployed workers now sheltering in their studio apartments, the concept of “income inequality” will be more than an interesting abstraction this time around.
A little research on income inequality leads one to believe that this growing chasm is more complicated than a few Swiss-banking, Gulfstream-owning, tax-dodging hedge fund managers. According to my research an equally culpable culprit is “globalization.”
“Globalization” — as a concept — is the world-wide integration of trade, information and jobs. On the surface this seems like a good thing. It certainly is a good thing for the makers of laptops, cell phones and ear buds. But the movement of jobs to China, India and Brazil is not a good thing for America’s middle class.
Branco Milanovic, an economist, has looked at the middle classes of emerging economies, like China, and found that 5 million Chinese households earned between $11,500 and $43,000 in 2005. By 2015, 225 million Chinese households had moved into this category. This same expansion of middle class happened in India, Indonesia, Brazil and Egypt. But that expansion has not happened in America.
While this hollowing-out was under way, compensation at certain corporations turned into a competition where the winning CEO was richly rewarded, and runners-up got less. Much less. Those winning CEOs needed somewhere, someplace to park their compensation and so these folks got their very own shopping section in the Wall Street Journal called, “Mansions.”
This morning, “Mansions” tells us that tobacco billionaire Brad Kelly has listed his 500,000-acre ranch for $500 million dollars; that Barry Schwartz has listed his “equestrian estate” in Westchester County for $100 million; that George Ruan has sold his Neoclassical Bel-Air (California) house for $60 million.
After giving our triumphant CEO a listing of the latest, top-of-the-charts properties, we find a piece on the dismal sales in the Hamptons called, “The Hamptons Are Going Cold.” Here we read that this posh, privileged island 90 miles east of New York City is suffering from oversupply. Apparently the Hamptons are also losing their allure from “McMansions, a status-obsessed culture and grueling traffic, …”
The marginalized, under-employed, former residents of America’s middle class are not illiterate. The newly let go bartenders can also read “Mansions” and are (probably) stunned by the fact that there are people who can buy a 500,000-acre ranch for $500 million. And while these kids may enjoy a costume drama like “Downton Abbey,” they don’t like the notion that now they are the liveried servants who clean the toilets and polish the silver.
It is clear that the Trump Administration is desperate to get cash into the countryside to keep these folks afloat. But that cash ($1,200) may pay the rent for a month, or perhaps two months, but it won’t get them a new job if the bistro is in Chapter 11. If these young folks don’t see a future, if they are still looking into the yawning maw of student debt, they will actually vote this time around.
Some of my friends on the right see Bernie’s army (13 percent of the electorate) voting for Donald Trump on their theory that they want a revolution and Trump is a revolutionary. I don’t think that’s he’s their candidate. But come October this cohort is going to register their anger in the form of a vote. Stay tuned.
Scott Graber is a lawyer, novelist, veteran columnist and longtime resident of Port Royal. Email Scott at cscottgraber@gmail.com.
