It’s no secret that the rich have been getting richer. There are about 3 million millionaires in the US, about one percent of the population. Wall Street Journal columnist Robert Frank‘s conceit here, tho he doesn’t push it too far, is to examine the lives of the rich as if they lived in another country. They do form a separate society, with their own gated communities, clubs, stores, summer camps, and self-help groups. Richistan, moreover, has class divisions of its own. Upper class Richistan, people with more than $100 million, don’t associate with lower class Richistanis, those with only $10 million or so, who often can’t even get into super-premium investment opportunities. Don’t even ask old money to mix with new.

Nor are their lives necessarily easier than ours. Managing wealth on this scale becomes a job in itself, and life with multiple homes can become impossibly complicated, to the point where professional help is often required. (Take a hint kids–butlers can start their careers pulling down six figures). Worse, the inflation rate in lower Richistan is twice that for the rest of us, four times higher among the richest. Maintenance on a yacht runs about ten percent of the purchase price every year, and new models keep getting bigger (as do houses), so that your giant boat from a few years ago may soon be dwarfed by those of your neighbors, defeating the whole purpose of owning one in the first place. And what of the effect of this money on your kids? Worst case scenario?

Thorstein Veblen explained much of this over a century ago, but Franks offers a fascinating look at a world most of us can barely imagine. --John

From ICPL Staff Picks Blog