“They were careless people, Tom and Daisy – they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made…”
F. Scott Fitzgerald had deeply ambivalent feelings about the rich – he hung out with them on the Riviera before and after Paris, and was always writing about them. But that was a product of the times. It was the roaring twenties, and a time much like these times – with a vast income gap between the rich and everyone else. And that caused no end of trouble. The line is from The Great Gatsby – published in 1925 and set in the summer of 1922 – and it’s the tale of the mysterious Gatsby, of even more mysterious vast wealth, trying to win the heart of the one woman from his past that he really longed for, his true love, the vapid and breathtakingly beautiful Daisy, now married to the rich dolt, Tom. It’s a hopeless quest, but pure and idealistic, but also one where Gatsby knows the only way he can win Daisy’s love is by being absurdly rich – that’s the only thing that will melt her tiny heart. But that’s his dream, and he pursues it with an admirable pure idealism.
And that makes Gatsby the oddest of heroes in American fiction, a pure idealist on a noble quest, but in an ethically empty universe. Of course Gatsby ends up dead, shot by one of the working poor, after someone had run down and killed the guy’s wife and had just driven off. The guy thought it was Gatsby. But it was Tom. That’s what the quote was about. Idealism and nobility are fine things. But they don’t matter much. There’s being rich. There isn’t anything else. It’s the Great American Novel. No really, people do call it that.
Of course Fitzgerald ended up at the center of America’s ambivalence about wealth. He spent his last few years in an apartment a few doors down the street here on North Laurel Avenue in Hollywood, working on The Last Tycoon, a novel he never finished. He had his last and fatal heart attack at the cigarette counter at Schwab’s Drug Store on the corner here, now long gone and replaced by a small shopping center with a multiplex, a trendy gym full of the pretty people, and a Trader Joe’s. It happens. But to the end Fitzgerald was trying to decide whether he admired the rich or was outraged by them. It’s no wonder Hemingway was so frustrated with him. Get over it. But Fitzgerald couldn’t get over it. And no one living in Hollywood can get over it. Now and then Paris Hilton drives by in her Mercedes SLR, and that’s a cool car. And she is who she is.
Fitzgerald was, of course, exploring the American dilemma. This is a place where you can get rich. Nothing will stop you. It’s wonderful. It’s the land of opportunity. And getting rich can or will turn you into a jerk, one of those empty people who carelessly hurt all those around them. People will admire you – against steep odds you made it big. And they will deeply resent you and your carelessness – although they probably won’t shoot you. Fitzgerald was being dramatic – symbolism and all that. But he wasn’t far off the mark. And Gatsby was the exception – the one good rich man, a thoughtful and courteous rich man who actually wasn’t careless. It didn’t do Gatsby much good, did it? America is like that.
And we’re still working this out:
With Republican leaders anxious to set an austere tone for their ascendance into the House majority this week, the lavish fundraiser scheduled for Tuesday night at a trendy Washington hotel to benefit a dozen GOP freshmen is not exactly the populist image leaders are anxious to project.
House Speaker-elect John Boehner, whose name was featured on the invitation, is nonetheless skipping the event at the W Hotel, where lobbyists, political action committee managers and others paying the $2,500 ticket price will be treated to a performance by country music star LeAnn Rimes (a $50,000 package includes a block of eight tickets and a “VIP suite” at the W). The office of incoming Majority Leader Eric Cantor, another featured invitee, was noncommittal Monday night when asked whether he’d attend.
Yes, this is a problem:
“If incoming GOP freshmen were hoping to bring fiscal responsibility and ‘family values’ to Washington, they may have gotten off to an interesting start,” conservative blogger Matt Lewis noted, citing the event’s steep ticket prices, as well as Rimes’ confessed extramarital affair and her recent appearance in a “Sexy Santa” outfit at a gay men’s chorus Christmas performance.
Somehow the Tea Party crowd just turned into Fitzgerald’s careless people. The man behind the event is incoming congressman Jeff Denham of California – he’s the rainmaker for the eighty-seven-member Republican freshman class. This is about tapping into the big bucks of the fat cats who want the Republicans to do right by them. There’s being rich. There isn’t anything else. And no one is really surprised. America is like that.
Of course there are studies about this. From Harvard’s Roy Y. J. Chua and London Business School assistant professor Xi Zou there is their February 2010 paper The Devil Wears Prada? – Effects of Exposure to Luxury Goods on Cognition and Decision Making and this question-and-answer session with Chua. The gist of it is people who live luxuriously may be psychologically different than everyone else, or more specifically, people who drive around in town cars and blast across the country in private jets make selfish decisions that enable them to do just that. They make decisions that best benefit themselves and don’t consider others. Chua says this could be the reason so many highly paid executives, like those on Wall Street, act irresponsibly. After all, they did do that study – “People who were made to think about luxury prior to a decision-making task have a higher tendency to endorse self-interested decisions that might potentially harm others.”
Thus you get Fitzgerald’s Daisy and Tom. But the drive for luxury, Chua found, really doesn’t make people intentionally harm others – it’s not nastiness – it just makes them less concerned about others, and any harm caused is really just a side effect. It’s carelessness.
Can this be fixed? “Perhaps besides limiting the size of bonuses, limiting corporate excesses and luxuries might be a step toward getting executives to behave more responsibly,” Chua says.
Good luck with that. People who live luxuriously may be psychologically different than everyone else. In 1925 Fitzgerald wrote his short story “Rich Boy” that begins with this passage:
Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.
Hemingway may have thought Fitzgerald was an obsessive jerk. They are different from you and me? Yeah, they have more money. But Fitzgerald had it right. The science of it is just catching up with him.
And there’s the Atlantic’s new cover story, written by Chrystia Freeland, which profiles the global elite:
The rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition – and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.
Those are somewhat like the folks Fitzgerald used to hang around with on the Riviera. In 1924 he and Zelda moved to the French Riviera, where they fell in with a group of idle rich American expatriates, which is what his last completed novel Tender Is The Night (1934) is all about. And shortly after their arrival he completed The Great Gatsby – there. It all fits.
But Freeland is more specific, and gets into public policy issues around the new global elite, the careless people:
What is more striking is the degree to which even former Obama supporters in the financial industry have turned against the president and his party. A Wall Street investor who is a passionate Democrat recounted to me his bitter exchange with a Democratic leader in Congress who is involved in the tax-reform effort. “Screw you,” he told the lawmaker. “Even if you change the legislation, the government won’t get a single penny more from me in taxes. I’ll put my money into my foundation and spend it on good causes. My money isn’t going to be wasted in your deficit sinkhole.”
Matthew Yglesias comments:
What’s telling here is the dissonance. On the one hand, the princes of Wall Street are upset at the idea of needing to pay higher taxes (“screw you!”) while on the other hand they insist it won’t make a difference (“the government won’t get a single penny more from me in taxes.”) That doesn’t really make a ton of sense.
What it comes down to is that people do, in fact, have the ability to shelter their money from taxation by donating it to charity. The prince in question wants to persuade the Democrat that there’s no point in raising his taxes (“the government won’t get a single penny”) because the cash will all flow to charity instead. But the prince’s preference is to keep the low taxes and use his money to finance lavish consumption rather than charitable endeavors. Hence, screw you.
In the prince’s mental model of congress, members are just greedy bastards seeking to collect as much revenue as possible. But the wise member recognizes that he should by no means be indifferent between the option of the prince buying himself a private jet and the prince financing the expansion of a charter school network or the renovation of an art museum. The consumption of the super-wealthy has an extremely low marginal value, and almost anything else is a socially superior use of resources.
Hence the case for progressive taxation – especially if it can be made progressive taxation of consumption. If what the super-rich come away with are a lot of buildings with their names on it, that’s fine by me. The problem is when it all goes toward positional competition and conspicuous consumption.
But you know the deal. Let me tell you about the very rich. They are different from you and me. Positional competition and conspicuous consumption are what matters. Why can’t you see that? Why do you want to take my money?
Yeah, yeah – see this from Matthew Steinglass:
Back in mid-2009, Barack Obama told the assembled plutocrats of Wall Street that they ought to be more grateful to him; he was “the only thing standing between you and the pitchforks.” The plutocrats smiled, and departed by helicopter. To the extent any pitchforks have been seen, they were applied to the Democrats’ behinds last November. Perhaps, rather than attempting to stand between Wall Street and any hypothetical pitchforks, Mr Obama should have gotten out of the way.
And see Ryan Avent:
It is striking how little inchoate public rage has actually boiled to the surface in the rich world… In America, the language of the angriest is very similar to that of the plutocrats themselves. Indeed, the complaint that today’s elite lack the noblesse oblige of the aristocrats of old, and are therefore risking public anger, seems to badly misread American public opinion. The middle class doesn’t want hand-outs from condescending rich people. They want moralistic language and complaints about deficits.
Kevin Drum comments:
Amazing, isn’t it? After nearly destroying the world, the plutocrats just dipped into their petty cash accounts, funded a tea party movement dedicated to promoting their interests, and won the next election. Problem solved! Now, where should we have dinner tonight? Paris or Rome?
And Drum also has a few words about the Republican Party:
Just a quick note for the DC press corps: Republicans don’t care about the deficit. They care about cutting taxes on the rich and shifting spending from the poor to more deserving corporate recipients. Understanding this will collectively save you thousands of hours of time writing chin-scratching op-eds and analysis pieces that try to explain why Republicans are doing what they’re doing.
If you have any questions about this, please feel free to contact me.
And note that Freeland did show that the super rich don’t really seem to care much anymore about all the rest of us:
The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled. …
Speaking at the [Aspen Ideas Festival], Thomas Wilson, CEO of Allstate, also lamented this global reality: “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business … American businesses will adapt.” Wilson’s distinction helps explain why many of America’s other business elites appear so removed from the continuing travails of the U.S. workforce and economy: the global “nation” in which they increasingly live and work is doing fine – indeed, it’s thriving.
So, combine that with the “Wall Street prince” who says screw you all, he’s not paying any more taxes, and you have quite a mess, and Kevin Drum offers this:
I don’t know if this attitude is truly new – maybe not as much as Freeland suggests. Still, it certainly feels as if America is dominated more and more by an elite class that cares less and less about the public good because they don’t really feel like they have a stake in the public good anymore: they’ve never served in the Army or the Peace Corps, their kids never come within yelling distance of public schools, they donate their money exclusively to their own churches and their own global foundations, and they whine constantly about taxes even though their incomes have skyrocketed and tax rates have fallen dramatically over the past several decades. To them, taxes aren’t part of a social contract, they’re just pure welfare: they don’t care about education or infrastructure or unemployment or healthcare because they don’t have to. Within their own bubble, they don’t need to rely on the public versions of any of that stuff.
And he cites Felix Salmon:
When it comes to US plutocrats, most of them are very similar to the Russian oligarchs who seized their country’s natural resources – they’re bankers and hedge-fund managers who seized their country’s financial resources. They produced no goods, and they created no jobs – quite the opposite. And so it makes sense for Americans who have lost their jobs and their hope to reclaim those financial resources, through mechanisms like a wealth tax or a financial transactions tax. The Silicon Valley elite would happily pay such things. And if the angry bankers went off to destabilize some other financial system, they wouldn’t actually be missed.
He’s not optimistic about the prospect of the American public ever rebelling against our ruling elites, and he’s probably right. Ever since the demise of organized labor, the working and middle classes simply haven’t had the kind of energetic, institutional presence that allows them a serious voice in our political culture. The elites are winning because, at the moment, there’s really nobody left to fight them.
Yep, all that’s the left is some random actor shooting Gatsby, and Gatsby is the wrong guy anyway.
And back to Ryan Avent here:
The interesting policy questions continue to be, first, what are the sources of the wealth and, second, what distortions result from it. On the first, it seems to me that we should obviously think differently about money earned from superstar effects and money derived from access and rent-seeking. Rich wealthy from the invention of Google or bets against an unsustainable housing bubble are in a different category from those who happened to know the people doling out government contracts or mineral rights.
But the second issue is actually the more important, and it’s the one for which we currently lack a firm grasp. What does this concentration of wealth mean?
Fitzgerald was working on that – novel after novel and all the short stories – and he never figured it out. He just knew there was something sad and tragic and good and bad in it all. And Gatsby’s body floats face-down in the pool while Tom and Daisy, the careless people, drive off into the sunset. That’s the way it is.