Wealth-Envy Has Become Part Of The Cultural Air We Breathe

And how Tom Wolfe’s Bonfire of the Vanities incited my own invidious comparisons

I have an impression, undoubtedly influenced by what I read on Substack, that there is growing discontent with American capitalism today. There are examples of dissatisfaction with capitalism across the political spectrum. On the left, there’s Robert Reich’s Substack series, “Why American Capitalism Is So Rotten.” On the right, there’s this Politico Article, “Conservatives Are Having an Epic Argument About Capitalism.” 

But when we look at the actual American economy––see this Treasury report–– we find that the real median income across demographics is favorable compared to any point in the past, including pre-pandemic levels. That means that the American economy is performing well, and gains are being achieved at every level. ¹

But what the report does not show is the seismic increase in economic inequality. As Kirsten Powers wrote, “The only people working less are the super wealthy, who live in a way almost comically disconnected from the average American’s existence.” ²

And the data is clear.  

The top 0.1% of households (about 130,000 households) now control about 14% of American wealth, up from about 9% in the late 1980s. This means that on average those 130,000 households have wealth of about $150 million (it takes minimum wealth of $50 million to be in the top 0.1%). ³

A large part of the economic dissatisfaction, however widespread, is based on the soaring wealth at the very top and the way that the extravagant, often outrageous lifestyles of the wealthiest are thrust into our faces in media, social and otherwise. In other words, invidious comparisons of wealth seem to prey upon us so much that they’ve become part of the cultural air we breathe.

And the wealthy are almost invariably portrayed in our media, fictional or not, as undeserving. (I’ve been guilty of that myself with some of my posts.) 

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But the portrayal of the wealthy as dysfunctional and cruel––Exhibit A: the Roy family of “Succession “––does not necessarily stop us from coveting what they have. I fell victim to that myself when I first read the novel Bonfire of the Vanities in the late 1980s.

Wolfe’s novel gives us a kaleidoscopic clash of various worlds of 1980s New York––the cynical and seedy justice system, the corrupt, race-riven politics, and Sherman McCoy’s Wall Street world of money and plutocratic society.

I envied the glamorous life of Sherman McCoy, Tom Wolfe’s Master of the Universe, and thought it would always be beyond my reach.

I was not yet thirty, about five years into what would be a long finance career, and naïve about so many things.

All the details of Sherman McCoy’s seemingly fabulous life at the start of the book ⁴ stuck with me as did his bold self-confidence, his self-declaration that he was one of only a few hundred Wall Street “Masters” who by force of will could take whatever they desired.

I envied that boldness, because while I was quick and sharp at numbers and analysis, I was a terribly shy young man and lacked the ability to bullshit. In finance, where your goal is to make money by moving money around, bullshit is often the necessary lubricant. I also was shy about courting the company of wealthy people. It would have been good for my career, but I imagined they would see through my crassness.

Envy, or “invidious comparison,” is a three-headed monster. We have a tendency to compare ourselves to those who have achieved, or appear to have achieved, greater success. We compare ourselves to our potential, a target that’s always moving beyond our grasp. And finally, our comparisons can rob us of gratitude for the reality of what we have.

The adage, “Comparison is the thief of joy” could just as well be changed to “Comparison is the thief of gratitude.”

Invidious comparison is called invidious precisely because we tend to select comparisons adverse to our self-esteem. This post is about wealth and financial status, but invidious comparison can strike many aspects of our lives–––our bodies and faces, our romantic lives, our children, and so on.

In Bonfire, Sherman McCoy and his wife, attend grand dinner parties with the plutocracy of New York. The top of Upper East Side “society,” for whom arriving or leaving in a taxi rather than a private car, even if you live just a few blocks away, is simply unsupportable.

The social events my wife and I attended in the late ‘80s and the early ‘90s were mostly Upper West Side playdates and birthday parties for our little daughter and infant son. No canapes and champagne, lots of Cheerios and diapers. Mode of transportation: walking with strollers.

Sherman lived in

“the sort of apartment the mere thought of which ignites flames of greed and covetousness under people all over New York…twelve foot ceilings…two wings, one for the white Anglo-Saxon Protestants who own the place and one for the help…The floor was a deep green marble and it went on and on. It led to a five-foot-wide walnut staircase that swept up in a sumptuous curve to the floor above.”

 Our apartment was perfectly nice, but we had bought it at one of the peaks of NYC real estate when it appeared that apartment values would always only go up. Our timing had been perfectly awful. We were just in time for the early ‘90s Savings and Loan crisis  At the abyss of the market, our apartment had declined in value by almost 40%, and I was sure we would never be able to trade up to the sort of apartment Sherman lived in.

Once, when traveling on a plane with a more senior business associate, he asked where I lived. When I told him West End Avenue, he said I should move my family to Central Park West, because that’s where I “deserved” to live. When I mentioned the question of affordability, he said, We’ll have to find you a “ten-bagger,” meaning a stock that would appreciate tenfold. And then he told me of a few recent ten-baggers of his own. As if these ten-baggers were just lying around, and if I had enough pluck and boldness, it should be easy enough for me to find them.  

In fact, I was constantly hearing from various people about investment coups in the stock market. Oddly, no one else but me ever seemed to have bought a stock that declined. I really thought there was something wrong with me. Yes, I was that naïve.

I can recall the first time I heard about two people my age setting up their own firm. They were going to be making seven figures. Going out on my own wasn’t in my DNA, but still I was envious. As my career progressed, the success stories of my peers establishing their own firms became more commonplace, and my sense of falling behind grew.

Sometime in the later ‘90s, I was recruited by an older legendary investment manager who I respected a great deal. I didn’t consider the position, because it would have required us to move out of New York. When I turned him down, he said, “It’s too bad, all the good people are out on their own.” 

Notwithstanding all these negative comparisons, these years were actually a period of prosperity for our family. Just not nearly as prosperous as the soaring peers to whom I paid attention. And far short of how prosperous I thought my potential was. Thieves of gratitude.

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Full transparency into another person’s financial life is rare. So we usually compare ourselves with embellished fictions of our own demonic, self-torturing design.

In fact, true financial transparency can usually only be found in fiction, and even then you have to be a careful and thoughtful reader. Which I was clearly not when I first read Bonfire and “met” Sherman McCoy.

Tom Wolfe lays out Sherman’s financial situation with great specificity and paints a completely different picture than the one I first came away with.

Sherman McCoy was making $980,000, which was a big deal on Wall Street in the mid-1980s. The problem was that in order to maintain the lifestyle he thought necessary for a Master of the Universe, Sherman was spending far more than he was making, especially after taxes. His biggest expense was $250,000 a year for interest on a $1.8 million personal loan on his envy-inducing Park Avenue co-op (interest rates were well into the teens back then). At an assumed 40% tax rate, that interest expense alone ate up $420,000 of Sherman’s pretax income.

After taking into account Wolfe’s voyeuristic list of all his other expenses, we are left with the absurd but realistic impression that Sherman is going into debt and going broke on a million dollars a year. He’s aware of his situation, but refuses to consider any downsizing.

“Once you had lived in in a $2.6 million apartment on Park Avenue––it was impossible to live in a $1 million apartment!” 

Sherman McCoy is an object lesson in how someone’s financial façade can be misleading.

All the time Sherman McCoy was in my head fueling envy, he was actually going broke. And I’m sure I made inaccurate invidious comparisons of real people about whom I had scant information.

I’ve created the spreadsheet below of the Sherman McCoy budget, as devised by Tom Wolfe.  Adjusted by me for inflation and other factors. Note the missing expense categories.

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This post was inspired by Kirsten Powers’ Substack essay The Way We Live In the United States Is Not Normal; Why we are buying land in Italy. The fact that her essay went viral and became so widely liked, shared, and restacked made me wonder just how widely spread the dissatisfaction was. (When I heard just how viral Kirsten’s essay had gone, I had my own moment of invidious Substack comparison as in, why don’t my essays ever go “viral” like that?)   

Together with her headlines, Kirsten’s sub-headings summarize her essay.

“Why Is Everything So Hard In the U.S.?

“Capitalism Has Gone Off The Rails”

“Still: I Can’t Quit You, America”

So, Kirsten and her husband, both accomplished professional writers, have purchased ten acres near a small town in Italy and plan to live there in the near future. Her comparison of her future life in Italy (and she’s spent a lot of time there, so it’s not her imagination) with life in America is invidious to America and virtuous to Italy. She retains hope for America to turn things around, although she’s in a “show me” frame of mind.

Certainly, there are obvious policies–––a more progressive tax code and a stronger safety net–– that could and should dampen inequality. That would help.

But until then, one simple, obvious, and decent step is for the wealthy (or faux wealthy) to stop using social media to display lifestyles unavailable to most Americans. And instead for the wealthy to understand that they have an outsized influence and thus an outsized responsibility to behave with decency.

Otherwise, there will be more people like Kirsten Powers, able to work from anywhere, who will leave. And that will be our nation’s loss.  

Question for the Comments:  Have you now or in the past been negatively affected by invidious comparisons of wealth?

Notes:

Invidious Comparison is a phrase first used by Thorsten Veblen in his book, “Theory of the Leisure Class.

1. A real median is adjusted for inflation and is not an average but the point at which there is an equal number above and below whatever’s being measured. 

The Treasury report shows that recent gains have been stronger for those lower on the economic ladder (the 25th percentile vs. the 75th percentile). There’s also a comparison of real wage gains over the past four years among America and six other countries, with America the only significant positive at 2.8% and Italy at the bottom with negative 9.1%.

2. From Kirsten Power’s Substack essay, The Way We Live In the United States Is Not Normal; Why we are buying land in Italy.

3. The data in the body of the essay are taken from the St. Louis Federal Reserve site, a treasure trove of economic statistics. Reasonably user friendly as well.

4. Plot spoiler: if you haven’t read the book or seen the atrocious movie adaptation.

As the book goes along, Sherman’s life takes a literal turn for the worse. In Bonfire’s inciting incident, Sherman picks up his mistress from the airport, misses the exit to Manhattan, gets lost in the Bronx, and commits a hit and run, killing a “young black man from the projects,” an honor student named Henry Lamb to emphasize his innocence. Eventually, Sherman is arrested.