Ferraris, charter jets, multi-million dollar apartments and vacation homes…just some of the goodies picked up with the luxury spending this Christmas on Wall Street, reports Jenny Anderson at the New York Times.
Just check out how the other half lives, their spending driven by the huge bonuses raining down.
As Oscar Wilde once said, nothing succeeds like excess, and Wall Street's top bankers and traders would agree. Anderson writes:
"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.
'Last year, everybody bought Ducatis,' said one investment banker, referring to the Italian motorcycle. 'This year it's vacations. I'm on my way to St. Barts,' he said, en route to the airport."
The widening gap between Wall Street and the average Joe is a worry and could result in a political and social backlash, and that could be ugly. That's the warning from Stephen Schwarzman, chief executive of the private equity group Blackstone .
Earlier this year, Federal Reserve chairman Ben Bernanke told the House Financial Service Committee that inequality was a problem:
"I agree that rising inequality is a concern. The strength of the economy itself requires a belief of the broad American public that they are beneficiaries of a rising economy."
His views are echoed by economist Paul Krugman who, in this piece, warns that the rise of a narrow oligarchy, where income and wealth increasingly concentrated in the hands of a small, privileged elite, is dangerous because it leads to corruption.
"Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt. There's an arrow of causation that runs from diverging income trends to Jack Abramoff and the K Street project. And I'm with Alan Greenspan, who – surprisingly, given his libertarian roots – has repeatedly warned that growing inequality poses a threat to "democratic society."
Commentator Bill Moyers uses Christmas as the opportunity to look at this issue as a parable for our times and quotes one of the founding fathers of the United States, alexander hamilton to highlight the impending political backlash:
"As riches increase and accumulate in few hands; as luxury prevails in society; virtue will be in a greater degree considered as only a graceful appendage of wealth, and the tendency of things will be to depart from the republican standard."
So look carefully at the lavish spending habits on Wall Street. It could be the canary in the coal mine.