The Relentless Pursuit of Wealth
Most of our lives revolve around making money and most of us judge ourselves according to what we can show for our money. In America money is, if not quite omnipotent, at least omnipresent.
Editor's Note: This article was originally published on July 30, 2007 and is being reprinted for the benefit of the Minyanville community.
This past Tuesday, the U.S. federal minimum wage increased 70 cents to $5.85 an hour, ending the longest span without a federal minimum wage increase (ten years) since it was enacted in 1938.
The minimum wage will increase 70 cents each summer until 2009, when all minimum-wage jobs will pay no less than $7.25 an hour.
Adjusted for inflation, the purchasing power of the federal minimum wage between 1990 and 2005 actually declined by 9.3%, according to Professor G. William Domhoff of the Sociology Department at U.C. Santa Cruz.
Domhoff also points out that the ratio of CEO pay to factory worker pay rose from 42:1 in 1960 to 411:1 in 2005.
Yes, CEOs are making more money, comparatively speaking, than ever before. But, with the Reuters/University of Michigan Surveys of Consumers reporting stock ownership by more than six in ten U.S. households, one thing is certain: the pursuit of money is nothing short of a national pastime.
In Psychology Today, cultural critic Michael Ventura writes:
In these United States money is our common denominator. It is the absolute standard of access and status-the "bottom line," as we say these days. Not only commerce but education, justice, art, the environment, health care, and often liberty itself must meet the standards and bow to the demands of money. There is precious little among us that isn't rationed, administered, and ultimately valued in terms of money. The Constitution aside, most Americans consider themselves free insofar as they have access to money.
The "American dream" has come to mean an ideal not of liberty but of prosperity. Our unconscious or half-conscious definition of liberty has become "prosperity." Contemporary politics is based on this equation. Most of our lives revolve around making money (as opposed to the human, communal value of our work, which was the standard for many eras), and most of us judge ourselves according to what we can show for our money. In America money is, if not quite omnipotent, at least omnipresent.
His statements are borne out by fact:
October, 2007's two-day, $2,800-a-ticket World Business Forum at Radio City Music Hall (VIP passes are $3,500) will feature presentations by, among others, former General Electric (GE) chairman and CEO Jack Welch, former Federal Reserve Chairman Alan Greenspan, and Fred Smith, current chairman, president, and CEO of FedEx (FDX).
Business book sales are up 3.2%.
Viewership for CNBC's "Squawk on the Street" is up 73% over 2Q '06.
"Squawk Box" viewership is up +46%.
It's not as if the desire for money is breaking news. German philosopher Arthur Schopenhauer, who died in 1860, said, "Wealth is like seawater; the more we drink, the thirstier we become."
That sentiment was summed up in five words by Puff Daddy/P. Diddy/Diddy, the rapper/CEO of Bad Boy Records-distributed by Atlantic Records, a division of the Warner Music Group (WMG)-who, in an ode to $100 bills, sang, "It's all about the Benjamins."
This statement is perhaps best answered with one from Oracle (ORCL) founder Larry Ellison, who said, "Wealth isn't the same thing as intelligence."
No, it most certainly isn't.
Last week, Italian fashion house Aeffe S.p.A. reported earnings for the first half of 2007. The company's net profit of €5.9 mln ($8.1 mln) was a jump of 121%, compared to the same period in 2006. Revenue was €141.6 mln ($193.4 mln), up 12.7% year-on-year.
Pretty healthy numbers. Do they prove Ellison's theory?
Take a look at this press release from the company, founded by Alberta Ferretti and home to some of the industry's most exclusive labels, including Rifat Ozbek, Narciso Rodriguez, and Moschino:
FOR IMMEDIATE RELEASE
NICOLE RICHIE WEARS MOSCHINO
July 26, 2007
Nicole Richie arrived this morning to the LA County Superior Court wearing a black Moschino dress with high collar and tie in back. This dress is part of the Moschino Fall/Winter 2007/8 Pre-Collection.
Moschino Public Relations
Aeffe USA, Inc.
What 2007's best-dressed DUI convicts are wearing…
As money can make one "better-looking" (if Donald Trump balanced wheels at AAMCO, he'd likely not be married to Melania Knauss), it can also make people quite ugly.
Patrick Gerschel, the grandson of storied Lazard Freres (LAZ) investment banker Andre Meyer, filed suit last week in Manhattan Supreme Court, claiming he is entitled to money from his mother's estate that went elsewhere.
Like The Emerald Foundation, a medical research charity.
And Marianne Gerschel, his sister.
Gerschel doesn't seem to be in such dire need of cash to warrant suing his mother's estate for more. He founded investment management firm Gerschel & Company, he is chairman and managing director of Santa Rita Resources, chairman of Residential Company of America, and a director of Executive RE Insurance Company.
Mr. and Mrs. Patrick Gerschel
Gerschel's mother, Francine Meyer de Cameret, seemed to have been affected in a not-so-attractive manner by her wealth, as well.
According to federal court records, two years before she died, Meyer de Cameret sued her other son Laurent over loans he hadn't paid back.
Obviously, not everyone with money behaves similarly.
A fund manager whose name I have agreed not to reveal for privacy purposes told me, "I have millions of dollars from guys in overalls. It's the guys in $2,000 suits I worry about. With the occasional idiot who was born on third and thinks he hit a triple, I find the richest people to be, generally speaking, exceptionally talented, and the very, very best are typically the most humble."
He boiled it down:
"I find the 'Thirty-Thousand-Dollar Millionaire' to be the most arrogant."
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