Wealth

Sometimes in a therapeutic situation, an analyst or psychiatrist will point out to the patient that an obsession actually performs a protective function to the extent that it eclipses a deeper fear or more profound desire or problem--such as fixating on sex instead of  death. Racism is very real in America. If fathers are absent from many black families, it’s often because so many black men are in prison. But racism is also a camouflage. The reason why so many blacks are disenfranchised speaks to the larger question of economic inequality which is an equal opportunity employer. It’s convenient to have blacks out of the mix because it keeps one segment of the population from getting a bigger piece of the pie. However, it’s equally convenient to have poor whites marginalized. And economic and educational inequities go hand in hand. Thomas Piketty’s Capital in the Twenty-First Century describes an ever widening gap between the rich and poor. That gap is mirrored in the condition of a society where a small proportion of the population receives increasingly elite education while the other half are the recipients of the kind of training which is exponentially inferior. You hear the occasional inspirational Horatio Alger story about a child who grew up in a trailer park, with parents who were addicted to methamphetamines, and ended up at Harvard. However, most economically disadvantaged Americans are so far behind their more affluent peers that there's simply no way they catch up. Under this schema the elites continue to be the masters of the universe and maintain their hegemony by keeping the less advantaged both racially and economically segregated. In this regard the picture of a meritocracy which de Tocqueville painted in Democracy in America is no longer true. Of course there are token gestures from the top. Crumbs are thrown down in terms of relatively minor amounts of scholarship funds, affirmative action programs and internships with major corporations. But these drops in the bucket have more to do with appearance than reality.

Raining on the Rainmaker’s Parade

The Times ran a story about John J. Altorelli, who they describe as one of Dewey & LeBoeuf’s “most important rainmakers, the term used to denote partners who land clients  At his peak he was credited with generating more than $33 million in annual revenue for the firm,” (“The Rise and Fall of a Rainmaker,” NYT, 12/12/14). Altorelli is portrayed as leading a pretty high falutin' existence traveling in the company of glitterati, during the heyday of the now defunct firm. A picture accompanying the article shows Altorelli with Anna Chapman, who the Times describes as “being arrested by the F.B.I. on charges that she was a member of a Russian spy ring embedded in the United States.” The last movie which with a plot like this was The House on 92nd Street (1945) about the F.B.I. cracking a Nazi espionage ring that had established itself in Carnegie Hill. They don’t even make movies like that anymore. Perhaps the moral of the story is that to succeed, even for a little while, you have to cook up the kind of plot that’s so outlandish it would be rejected by most Hollywood studios. John le Carre has ventured into the world of corporate law, but it is unlikely that Altorelli would have been the model for any of his characters. Anyway Altorelli, who the Times piece described as coming from a family of l0 children growing up in Derby, Connecticut, must, one would think, be living a far more modest existence than in his glory days at Dewey & LeBoeuf. The piece went on to describe the fact that the bankruptcy trustee involved in the case "is suing him for $12.9 million." In Democracy in America de Tocqueville pointed out the fundamentally populist (and anti-aristocratic) nature of American life in showing how one generation could be rich while the next one poor. John J. Altorelli’s story shows a new America in which wealth can be amassed and lost in the same generation.

Aristocats

America has no aristocracy in the hereditary sense of the word. This is something which de Tocqueville acknowledged way back in the l8th Century when he wrote Democracy in America. Another Frenchman Bernard-Henri Levy updated de Tocqueville several years back recording his travels around the country in The Atlantic to mark the bicentennial of de Tocqueville’s journey. In America being upper class is simply a matter of having money and, as de Tocqueville noted, in America today’s rich can easily be tomorrow’s paupers. The passage from riches to rags is a sad story that never ceases to provide fodder for the tabloids. Realizing that their status lies on shaky ground, the American upper class is characterized less by noblesse oblige than apologia pro vita sua. Perhaps due to the insecurity associated with their status and how merit orientated American society tends to be, America’s rich rarely pull rank and are constantly trying to affirm their kinship with their fellow man. The American upper class are friends with the doormen of the high rises in which they live while a Paraguayan who still holds Stroessner in high esteem, or a member of the Spanish elite with fascist leanings, who still looks back fondly on Franco, will likely treat the servants like servants. Nowhere is this more evidenced than in Manhattan where you have wealthy people of all nationalities, real aristocrats otherwise known as Eurotrash, the distaff of whom won’t be seen in public without their Carolina Herrera outfits, living with self-made rags to riches types in luxurious Park Avenue co-ops. Warren Buffet epitomizes the best qualities of the American upper class. He still lives unpretentiously in the Omaha house he purchased over fifty years ago. And he sports an ethic based on the pragmatic notions of The Intelligent Investor. Benjamin Graham's famed tome, with its emphasis on value, provides the no nonsense framework for his investment philosophy.

My Way or the Highway

“My way or the highway!” There was once an entrepreneurial young man, the scion of one of those wealthy, formerly hardscrabble Manhattan families, who loved to use that line. His other favorite was the famous Mel Brooks quip from History of the World: Part I, “It’s good to be the king!” Like the denizens Alexis de Tocqueville describes in Democracy in America, this man had ascended to royalty in the span of one generation, bestowing upon himself the title of Bourbon, after the drink. He was a collector, both of art and women, but had some trouble distinguishing his whores from his wives. He was used to revamping his trove. By the time he was in his late 30s, he’d had three wives, and fathered two boys each with the last two. But he wasn’t just a rich guy who squandered his wealth. He had many hobbies, and whatever he tried his hand at, whether painting or skiing or stamp collecting, he did with great mastery and élan.

    

He liked to travel everywhere in private planes, and even took helicopters to the heliport on the East River in Manhattan. He wasn’t afraid to live the good life.  He liked to vacation on out-of-the-way islands in the Caribbean, which were more easily reached by private aircraft. He had life down to an art. His car and driver waited for him in the morning, and he rode to work with his St. Bernard in the back seat.

Then one day he took an innocuous trip to New Hampshire in a chartered Learjet.  He was going to attend the annual meeting of the board of trustees of his old prep school.  He flew up with another alumnus, with whom he liked to shoot skeet. His friend had even brought along a pair of rifles. The plane was forced to make a crash landing. Bourbon perished, but his friend walked off the plane unharmed, with his guns in tow, reporting that the rich scion’s last words as the plane went down were, “Oh shit!”