When Only $1 Billion Will Do, the Rich Live in a Bubble: Books

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An Egyptian telecom magnate, discussing how much of a fortune is enough, figures on $1 billion: “That’s my number for the minimum,” he says.You can meet him in “Plutocrats,” Chrystia Freeland’s exploration of the super-rich."Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else," by Chrystia Freeland. Source: Penguin Press HC via BloombergChrystia Freeland is the author of "Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else." Photographer: Brian Ferraro/Penguin Press HC via BloombergMoving from Davos to Martha’s Vineyard as she stalks her subjects in their luxurious lairs, Freeland observes the subtly malign effects great wealth can have.“Being self-made is central to the self-image of today’s global plutocrats,” she writes of these financiers and Internet tycoons. “It is how they justify their luxuries, status and influence.”Freeland finds a general disregard for the sufferings of the middle class and an obsession with not paying more taxes (even though marginal tax rates are historically low).In the U.S., where finance has played a disproportionate role in producing mega-wealth, Freeland’s subjects tend to blame government or the middle-class for the country’s economic woes, not the recklessness of bankers.“It is this not-our-fault mentality that accounts for the plutocrats’ profound sense of victimization in the Obama era,” Freeland writes.

Instant Outrage

To people whose every whim is instantly satisfied, the slightest inconvenience can provoke outrage.In one case, she reports cadging a ride with a financier. As they struggled to find his car and driver at Heathrow Airport early one morning, he “fumed about the wait, berating himself for breaking with his usual practice” of having his assistant, who was in California, be on call at all hours of the day and night to ensure his comfort.The super-rich don’t just live in a bubble, evidently; they’re encased in a distortion field.Freeland is acutely conscious of the way inequality and plutocracy have risen in tandem, even as growth in the developing world has helped shrink inequality between nations. Of course, the rise of a vast new Asian middle class is small comfort to the ailing U.S. middle class, whose income looks increasingly paltry next to the vast sums being made by the new fraternity of wealth.

Hourglass Index

Citigroup Inc. (C) has coined the term “plutonomy” to describe what Freeland calls this “new virtual nation of mammon,” and even created an “Hourglass Index” which tracks stocks catering to the high and low ends of an economy squeezing the middle class.http://www.bloomberg.com/news/2012-10-26/when-only-1-billion-will-do-the-rich-live-in-a-bubble-books.html