Trouble in Richistan

November 11th, 2011  |  Source:

The dream – or myth – of mobility was the glue that helped keep America together

Four years ago Robert Frank, a journalist, wrote a fascinating account of America’s elite entitled Richistan. It was a potent snapshot of a gilded age, describing in voyeuristic detail the armies of staff, multiple jets, and colour-co-ordinated 30,000 sq ft mansions that the US’s billionaires enjoyed before 2007. “I don’t carry a flag in the class wars,” explained Frank, The Wall Street Journal’s self-described “wealth reporter”. “I’m not out to celebrate or castigate the rich ... [but] to report on the world of wealth just as I covered foreign countries as an overseas correspondent, describing [it] to readers far away.”

Last week, Frank produced a second “dispatch”, The High-Beta Rich. This is doubly intriguing. For if Frank is correct, parts of “Richistan” are in turmoil: as markets have gyrated since 2007, fortunes have been lost, assets seized and lifestyles crunched. Thus, we hear about the Siegel family who were building a Florida mansion called Versailles, so vast they needed Segways to cross it, until in 2008 their property business was heavily hit by the credit crisis. Now their pools, bowling alleys and cinemas lie half built. Then there is the Blixseth family, who were one of America’s richest families (322 on the Forbes rich list) in 2006, but are now so bust that creditors have even seized the coral from the fishtanks.

More fascinating still, a new class of “repo” – or “repossession” – men are stalking the land, seizing jets, boats, paintings and other baubles from the wealthy who have defaulted. “There is an art to taking the prized possessions of the rich,” Frank explains, recounting how these repo men sneak into private airfields, after being tipped off by mechanics, storm jets and fly away, as their (former) owners relax in the airport lounge. “Between 1995 and 2010 the number of private jets in the air more than doubled, from 7,176 to 17,199,” he adds. “With prices of private jets now falling by more than half, many jet owners who used borrowed money are now upside down … leading to rising loan defaults.”

Abstract only. For the full article by Gillian Tett go to:

About Value News Network

Value is the only commonality in an increasingly complex, challenging and interdependent world.
Laurance Allen: Editor + Publisher