What does it mean to be rich? What does it mean to be poor? These are relative terms, as any sociologist will tell you. A person considered poor today might own a car, a house, and in general have a standard of living that was considered middle class thirty years ago. And the rich of today are not your daddy's rich. There was a time when you were considered well off if you owned a new model Buick, had a hi-fi stereo and fondue set.
The Council of Socio-Economic Trend Analysis attempts to answer these questions with the annual release of its Affluence Index. The Council is a government sponsored organization which attempts to ascertain trends affecting--oh, blah blah, really it's just a gaggle of ex-bureaucrat policy wonks who attempt to justify their meager non-profit salaries by issuing silly pronouncements like the Annual Affluence Index. Whatever, the Affluence Index is closely followed within certain circles, particularly the Wall Street crowd, which is, of course, neurotically status conscious. And this year's index is already causing tremors across the high finance landscape.
Evan Farkas, chairman of the Council, had this to say, "The index continues its upward ascent from its initiation in 1995. Starting at 100, the index is now at 3065! Needless to say, a lot of people who once thought of themselves as well-to-do better be prepared to eat some humble pie."
And what constitutes affluence in 2004, according to the index? The component with the largest increase is housing. According to Mr. Farkas, an affluent person today would own a house of no less than 10,000 square feet, have a water view of some sort, a "media theater" with a private screening room, and an indoor recreation facility, e.g. bowling alley, basketball court. A new dimension to the housing component is the second home factor. No one today can seriously call himself affluent without owning at least one second home in a specially designated "high rent" zip code (think Martha's Vineyard or Vail, for example).
Other aspects of the lastest index have sent chills down many an investment banker's spine. For example, the hoity-toity have only one spouse bringing in the bread; nothing today is more bourgeois than an husband and wife both working. And don't think that cute Swedish au pair entitles you to think that you are something special. The affluent have "staff," a cook, a gardener, and a nanny who is indentured long enough to ensure that she will be attending her ward's wedding twenty years from now, just so the parents can show how "egalitarian" they are.
Nina Dildowitz, a psychologist who limits her practice only to those with fat wallets and skinny psyches, is already witnessing reprecussions from this report. One of her clients, a high yield bond trader who earned $2 million last year, called her in a panic after reading the report. "He was hyperventilating, whimpering," Ms. Dildowitz said, "mumbling that he was a failure, a loser because he knew that he had been 'priced out' of The Affluent. He was shocked, for example, to find that having his kids' college educations paid up fifteen years in advance was no big deal. Afterall, the truely affluent have donated enough to the university of their choice to have at least a classroom named after them...The only thing I could do was double up his Lexapro prescription."
Ms. Dildowitz expressed concern that investment banking drones who have sacrificed their hobbies, their families, their health, their equanimity, in short their souls, are now asking themselves, For what? To be lumped into a socio-ecomonic class labeled The Comfortable?
Mr. Farkas expects even more bad news for wannabe's and social climbers next year. "For 06, we're adding a new component to the index, Privately Owned Jet Aircraft." He concludes by saying, "Let's face it, unless you are a senior partner at a hugely successful hedge fund, you ain't rich."