Playing Dress-Up While Rome Burns
In 1897, the Bradley-Martins gave a costume ball in order to "stimulate the economy" of New York City, which was recovering from the so-called "Long Depression" and still struggling under high unemployment and unusually harsh winter weather. It was a splendid affair with a guest list that included 800 socialites and other stars of American high society. The New York World reported at the time that of the men present "not half a dozen were not millionaires." The Waldorf-Astoria Hotel was transformed into a replica of Versailles and Mrs. Bradley Martin wore a cluster of diamond grapes that had once belonged to Louis XIV and a jewel-encrusted gown worth more than $60,000 as she greeted her guests.
The final bill for the party was estimated at $370,000, not including the $400,000 or so spent on costumes by the guests (figures not adjusted for inflation), but oddly enough, the people of New York did not appreciate the attempt to improve their economy.
A few days before the ball, anarchists tried to blow up the Bradley Martins' house, and the hotel's windows were boarded up in an attempt to prevent an attack as well. The ball was roundly denounced by editorialists and clergy from one end of the city to the other, and the Bradley Martins fled to their second home in London.
Today, the ball is remembered as one of the final excesses of the Gilded Age.
Percentage of Total Wealth Controlled by the Wealthiest 10% 1917-2002
A New Gilded Age?
Although monopoly-busting and progressive taxation have reduced the clout of the super rich (in 1911, John D. Rockefeller's net worth alone amounted to more than 2% of the US's national output, a figure Bill Gates can only dream about), income inequality, after decreasing dramatically between the 30's and 60's, has been climbing steadily since the 1970's.
Between 1972 and 2001, the income of the richest 0.01% of Americans climbed by 497%. The richest 1% saw an average increase of 129% between 1979 and 2003. For the middle 1/5 of households, the figure was 15%, and for the bottom fifth, the increase was just 4%. (All figures adjusted for inflation.) The richest 1% of Americans now receive about 15% of total American income, close to the 18% they earned in 1913, when income taxes were first seriously implemented in America.
During roughly the same period (1970-2007), the average tax rate on the richest 1/100 of Americans has been cut in half, while taxes on the middle class have risen to the point that dividends and capital gains, the unearned income of the rich, are now taxed at lower rates than the earned income of many middle-class families.
More disturbingly, while the wealth amassed by the 19th century's "robber barons" was the direct result of a massive improvement in America's infrastructure (with a little help from large-scale securities fraud, it's true), the Super-Rich of today are far more likely to have earned their wealth by moving imaginary money around between hedge funds, or worse, outsourcing many of the very jobs created by the robber barons and their descendents to the cheap labor and lax environmental regulations of Mexico and Southeast Asia, where income inequality and differences in the standard of living between the rich and poor reach undeniably Gilded Age levels.
In the face of such irresponsible, unadulterated greed, the American Dream has taken a beating, yet the progressive populism that emerged from the excesses of the original Gilded Age and led to such gains as the abolishment of child labor has shown few signs of rearing its head.
In an era when the rich are not only flaunting their wealth more than they have in decades, but also, in many cases, earning it in ways actively harmful to the interests of the American public at large, where is the outrage?
The primary difference between the Gilded Age of the 19th century and the current period is in the comparative level of consumer equality. As conservatives are fond of pointing out in defense of the current levels of income inequality, not even Louis XIV had electricity. Now the majority of Americans, even very poor Americans, not only have electricity, running water, heating, and air conditioning, they also have cars, refrigerators, TVs, even cheaper knock-offs of designer duds.
Is shopping the real opiate of the people?
Nobody would argue that the rise in the basic standard of living for all Americans is not an extremely positive occurance. However, consumer equality figures mask some ugly truths. In 2007, 47 million Americans, including 9 million children, were uninsured, and an estimated 40 million adults did not receive at least one kind of needed health care because they could not afford it. Nearly 2 million poor householdswere unable to pay their full rent/mortgage bill at least once in 2007, 6 million pay more than half their income on housing and utilities. 12.6 million households (about 35.5 million people) lacked access to adequate food at some point because they could not afford groceries. In about 4.6 million of these households, some family members routinely skipped meals because they couldn't afford to pay for them.
Even among the middle classes, the situation is deteriorating:
The Coming Collapse of the Middle Class
The New Bradley Martins
The breathless columns of print once expended on socialites like the Bradley Martins and Consuelo Vanderbilt are now directed mainly towards celebrities. Ordinary Americans can read about little Suri Cruise's $100,000 second birthday party, or Shiloh Jolie-Pitt's $17,000 diamond encrusted pacifier, and dream.
Wealth, however, remains intimitely connected to power. About 1/3 of our Senators and Representatives in Congress earn $1 million or more per year, compared to less than 1% of the general population. And politicians, like the socialites of bygone eras and the celebrities of today, are not well known for their personal frugality.
John Edwards' much-mocked $400 haircut suddenly became quaint when the news broke that the Republican National Convention had spent $150,000 on a makeover for Sarah Palin and her family, even including $300 for little Trig at a high-end baby store.
Although the morality of using good faith taxpayer donations to the GOP in order to pay for shopping sprees at Neiman Marcus and Saks Fifth Avenue is questionable, Sarah Palin's wardrobe is hardly something new. Cindy McCain famously wore an outfit estimated at $300,000 in total value ($280,000 for her earrings alone) to the Republican National Convention, and even some of Barack Obama's suits have been estimated at $1500, though there is no evidence that either Mrs. McCain or Mr. Obama paid for their outfits out of anything but their own personal wealth.
However, Sarah Palin's $150,000 present from the RNP is the latest in a long line of clues that the ruling classes of America are as out of touch with reality today as they were in 1897.
The collapse of the original Gilded Age was followed by decades of progressive reform that raised the standard of living for all Americans, not just the wealthy ones. Will modern Americans demand change, or will we sit back and let the rich continue to legislate their way towards a permanent kleptocracy?