In a Q&A in the New York Times Magazine Sunday, comedian Joan Rivers talked about the importance of keeping up appearances in today’s image-obsessed world (in her case with so much plastic surgery that when she dies “they will donate my body to Tupperware.”)
But when it comes to wealth, keeping up appearances has become hopeless. She says losing money a la Madoff has even become something of a status symbol.
JOAN RIVERS: I love my life, except for losing all that money with Ruth and Bernie. I’m pleading with you, please say, “She lost a bundle with Bernie Madoff.”
DEBORAH SOLOMON: Did you?
JOAN RIVERS: No, but everybody is walking around now saying that, and that shows that you used to be very rich.
Joan is being Joan, of course. But in a post-bubble, government-bailout, tax-the-rich, post-Ponzi scheme economy, losing money may become socially acceptable. Maybe even respected.
Being a FRIP–a Formerly Rich Person–may become more socially and politically acceptable today than being a newly minted millionaire or billionaire. No one wants to be the guy driving the new Hummer or the woman showing off the new 72-carat necklace or the family building the biggest mansion on the block right. But losing $20 million or $1 billion, now that is an achievement. Plus, being a financial victim like everyone else gives the anxious wealthy instant everyman credibility.
If 2008 was about getting rich, 2009 will be about having been rich.
And the number of Frips is likely to keep increasing. There will surely be other Madoff-like hedge-funds and investment firms that implode, not nearly on the same scale, but certainly large enough to wreck some personal fortunes. Financial markets will continue to wobble, housing prices will continue to be soft and everything will be worth less than it was last year.
In short, the greatest engine of wealth creation over the past decade–leverage and liquidity–has stalled.
So perhaps the new competition among the wealthy at the country clubs won’t be about how much they just reaped from their leveraged buy-out or from their macro hedge fund. It will be how much they could afford to lose. Forget keeping up with the Joneses: 2009 will be about keeping up with the Adelsons.
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