You don’t have to look far to pick up on this frazzled new mode of status anxiety. It’s in movies like Nicole Holofcener’s Friends With Money, in which Jennifer Aniston’s character slides pathetically into the service sector while her rich friends piss away thousands on charity balls, home renovations, and toys for their kids. “It just seemed to be coming up a lot,” Holofcener says, “and I thought, I want to write about money and how fucked up we are about money. It’s insidious. It’s a little poison that spills into all different elements of relationships, and it complicates them.” It’s in John Perkins’ Confessions of an Economic Hit Man, Dan Reingold’s Confessions of a Wall Street Analyst, and Paul Stiles’ Is the American Dream Killing You?—books that suggest that working stiffs are getting reamed by forces beyond their control. Stiles warns of “a dangerous separation in America between an upper, predatory class and their prey, the middle class” and how “the entire top tier of society becomes a cabal exploiting the rest.” The message is clear: The cozy class system you grew up with has been replaced by something else.
It used to be that dentists and lawyers and regular-Joe corporate schlubs qualified as “rich people,” but in the age of the grossly overcompensated CEO and the hedge-fund wizard, all bets are off. A hedge-fund wizard does not get rich by socking away 13 percent of his salary in the Vanguard Nice & Safe Index Fund and waiting for the three-bedroom in Montclair to appreciate. He takes massive risks on stuff that looks abstract and inaccessible to the rest of us—movements of money as mysterious as the movements of clouds.
And according to the data, the luxocrats are breaking away from the schlubs faster and more emphatically than ever. Forbes reports that there are now 793 billionaires on the planet. Twenty years ago there were 140. (In the past year alone, 102 people crossed the billion mark.) Meanwhile, back in Schlubville, the last census found that the median net worth of an American household was $55,000—and sank down under $15,000 if you snipped out the (quite possibly inflated) value of the house itself. Between 1967 and 2003, the median income of an American household practically flatlined, not even poking out of the $30,000-to-$45,000 range in the course of 36 years. “The long-run trend has been this continuing concentration of income and wealth at the top,” says Cornell professor Robert H. Frank, the author of Luxury Fever and coauthor of The Winner-Take-All Society. “For a while, people in the middle were gaining ground—in the late nineties, a little bit. But that’s all sort of gone back to the stagnant picture again. The only gains that people in the middle get are from working longer hours.” D’oh.
Still, if you’re looking at those census numbers and you make six figures, you should be feeling pretty good, right? So why don’t you? Well, as Frank puts it, “Everybody wants an apartment with a view of Central Park. Those apartments don’t go to the people who earn $500,000 a year anymore.” It’s a chain reaction: With every purchase that the lord makes, something slips farther out of reach for the vassal. Want to send your kid genius to private school? Consider it a sign of the times that Westridge, a prestigious school for girls in Pasadena, California, is now offering financial aid to families that bring in up to $150,000 a year. College tuition has shot up, too—by something in the neighborhood of 300 percent. Luxury inflation happens across the board, and it leads to bizarre phenomena: A recent report put together by Capgemini and Merrill Lynch discussed “The Mid-Tier Millionaire Paradox.” (It turns out that people who are worth between $5 million and $30 million are seen as “tweeners” in the world of high-net-worth individuals, because they don’t get enough help in figuring out how to invest and protect their money. No, the folks who get all the attention are the ultra-high-net-worth individuals, those who are subsequently obsessed with the Forbes Cost of Living Extremely Well Index and are constantly fretting about getting gouged by their yacht dealer.)