Rich Enjoy A Gilded “Gilded Age” with Bush
By Roldo Bartimole
Many years ago, while at The Wall Street Journal I participated in a round-up story the paper was doing on how wealthy people spent their money. Each WSJ bureau (Cleveland had one at that time) would come up with what it could, send it to New York where one would hope to get a line or two in the article consolidated with other contributions.
I remember one call was to Art Modell, then owner of the Cleveland Browns and active in other Cleveland businesses. I don’t even remember whether I spoke to him personally or to one of his spokespersons.
However, the answer I got, as I remember, was that Modell was selling his yacht, one of his major expenses as a “rich guy.” The reason: Too many hangers-ons had to be wined and dined on the boat, making it too expensive.
What made me think about this again was a story in The Wall Street Journal before Xmas. “New Luxury Goods Set Super-Wealthy Apart Of Pack.”
I would say so.
The article should be sent to anyone with less than a $100,000 income who voted for George Bush because those cited in the piece certainly benefited from Bush’s class war tax reductions against ordinary folk, carried out at the same time he’s trying to slice back, if not destroy, Social Security.
It might wake up some people to find that their and their children’s welfare is being eroded at an amazing clip by the conservative movement.
Yachts, pricey cars, and other luxury goods appeared to be selling at a fast clip, according to the Journal story.
How about, as the article details, Mercedes cars, not at the old $100,000 price of the late 1990s, but the new Mercedes Maybach at $350,000 or last year’s SLR at more than $450,000.
Bugatti, now owned by Volkswagen AG, makes the Mercedes look low class with a sports car that will be priced at more than $1 million.
Nothing can be too pricey for today’s wealthy consumer, it appears.
What might catch one’s fancy are the new over-the-top watches that sell for some $200,000 and the “limited edition” ones that sell for millions of dollars each, according to the WSJ. That’s a wristwatch!
“Vacation homes” sell at $70 million. In another article, the Journal talked about the “hot market” for third homes. Second home ownerships have “jumped significantly in the past decade,” says the article but adding another has also increased. One real estate dealer operating north of Miami said that she had sold 40 third-home properties last year, double the previous year. The homes range from $265,000 to $2.4 million each, she said.
But let’s not leave out the yachts. “In the U. S., the yacht wars started with (Ohio’s) Leslie Wexner, chairman and chief executive of Limited Brands, Inc., built the 315-foot Limitless in 1997. The ship has 3,000 feet of teak wood along with a gym,” says the WSJ piece.
Of course, that was 1997. Now Microsoft co-founder Paul Allen upped Wexner with a 354-foot yacht with a 72-foot sailboat aboard. He has since ordered something a bit larger – a 414-foot “Octopus” – with a few attachments. It has a personal submarine, swimming pool, a helicopter pad that also is a basketball court.
Those familiar with the boat, according to the WSJ, say that it will cost more than $250 million and cost more than $10 million a year to operate.
In this rare atmosphere of the rich, expenses are no problem.
The New York Times recently ran a piece on properties in Idaho where the ski crowd goes to enjoy the sport at Sun Valley. There, says the Times, “buying a condo… has become known as purchasing a ski locker.”
In other words, people are buying $250,000 and up condominiums there, not for using other than to acquire the real object, a parking place closer to the ski lifts. Jann Wenner, founder of Rolling Stone, explained in the article that his ownership for the parking privilege is a “major convenience.”
Of course, these people have multi-million dollar mansions elsewhere in the area from which it was stated the ski operators would pick them up and take them to the ski lifts. A $250,000 parking space, however, is more convenient.
The tax policies of Ronald Reagan and George W. Bush help tell the story of why so many wealthy people have such reservoirs of expendable capital to spend frivolously. Both, as President, pushed tax reductions for the wealthiest Americans.
What’s most unseemly about the spending and about the tax reductions that Bush continues to seek for the wealthy is the war Bush pursues.
During World War II, President Roosevelt pushed the federal income tax rate to 91 percent for the highest bracket. That rate lasted until 1964 when it declined to 70 percent. It is now HALF that – not mentioning other tax reductions on the wealthy as estate taxes - with the latest Bush tax cuts, all of which he wants to make permanent.
One would have thought that in a time of war, sacrifice would be the test of patriotism and care about the nation. Not with our growing wealth class. They believe others should die in fighting for the war and parents of ordinary people should pay for it.
Bush also wants to clip ordinary people with his Social Security “reforms,” merely a ruse to cut benefits and shift assets to Wall Street.
It’s class war in reverse of what we are usually taught.
Why The City Shouldn't Be in The Subsidy Business
It was with no surprise when I read Jay Miller’s story in Crain’s about Cleveland’s suit against Aqui Systems, the first tech company it financed. The city wants $52,000 back.
When the original legislation passed the economic development department, Council chair Merle Gordon asked me what I thought of the deal and looked unhappy when she got the answer:
“You could send someone to Las Vegas to throw the dice,” I said.
The loan was to be $250,000 in total to Brian Sroub who appeared to be desperate. His promise to move his company from Cupertino, California to Cleveland puzzled Zach Reed, who was the only one to vote against the loan. Aqui, by the way, had one employee - Sroub. He told the committee employment would rise to 35 in a year.
Sroub failed to tell Council that a firm, Chipshot.com, he listed in his resume presented to the committee, had belly-upped.
Sroub tossed out the name James Biggar as a possible investor but city officials at the time had no information to back that up nor knew of other investors or others loaning him money.
It’s as good an example of why the city is ill equipped to be in the business of giving government money to anyone.
Jackson Puts Himself in Target Range
Frank Jackson, the lone ranger of Cleveland politics, curiously made an early announcement that he would run for Mayor this year.
Jackson delivered his statement alone minus the usual entourage of supporters. That’s not surprising. It always intrigued me that Jackson, when he was not chairing a meeting himself, would sit apart from his colleagues, silent and observant. He has the quiet qualities, as I’ve written before, of a High Noon Gary Cooper hero.
His solo nature will have to undergo a drastic change as he runs for the top city office. People will want to know more about him personally and politically. That he made it so early in the year (the primary isn’t until October for a November 8 election) I can only assume suggests an unusual campaign for the city’s highest office.
I don’t think that the fact that other Council Presidents haven’t succeeded as mayoral candidates suggests anything about Frank Jackson’s chances. After all, Clevelanders elected as mayor the late Ralph Perk and Dennis Kucinich, both former Councilmen, though not directly from Council.
Jackson has made himself a target earlier than necessary. It may not make a difference with the sleepy news media here. However, his record now is open to more scrutiny if the cruise control ends at the Plain Dealer and the rest of the news media. He has had an easy time controlling a docile Council but he has operated in a manner that might not stand up well to close examination.
Jackson took over after the reign of Mayor Michael White. White and Council were bitter enemies. Council mistrusted White with reason.
Therefore, especially during White’s later time in office, Council hired extra staff and consultants to check White’s every claim on airport expansion, the construction of Browns stadium and other issues. Council considered it necessary to monitor a recalcitrant mayor.
Mayor Jane Campbell, while Jackson may have problems about her consulting him, hasn’t operated on a go-alone basis. She didn’t require the scrutiny that White did. In fact, Campbell has been criticized for not reaching out enough to other Council members and relying solely on Jackson’s counsel.
Jackson, however, has continued the heavy spending for consultants and kept the expanded staff. He’s open to examination and questions about his efforts in this respect. When he hired his clerk of council, a former White executive, he kept the previous one on the payroll. He circumvented the city’s residency law to hire at a hefty salary, a former Plain Dealer editor as his press aide.
Jackson also was casual with spending. At the six-month mark in 2003, Jackson had spent $17,000 on food, water and coffee for its well-paid members, as I reported then.
He also pushed the inexperienced Campbell to maintain employment in the first budget crunch that led, I believe, to the more dire layoffs of the succeeding year.
By announcing his candidacy before the city’s budget hearings, Jackson’s actions in this respect could be considered politically motivated if he attacks Mayor Jane Campbell, a potential candidate for re-election as mayor.
from Cool Cleveland contributor Roldo Bartimole Roldo@Adelphia.net
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