Summer 2009. Unemployment is soaring. Across America, millions of terrified people are facing foreclosure and getting kicked to the curb. Meanwhile in sunny California, the hotel-heiress Paris Hilton is investing $350,000 of her $100 million fortune in a two-story house for her dogs. A Pepto Bismol-colored replica of Paris’ own Beverly Hills home, the backyard doghouse provides her precious pooches with two floors of luxury living, complete with abundant closet space and central air.
By the standards of America’s rich these days, Paris’ dogs are roughing it. In a 2006 article, Vanity Fair’s Nina Munk described the luxe residences of America’s new financial elite. Compared with the 2,405 square feet of the average new American home, the abodes of Greenwich Connecticut hedge-fund managers clock in at 15,000 square feet, about the size of a typical industrial warehouse. Many come with pool houses of over 3,000 square feet.
Steven Cohen of SAC Capital is a typical product of the New Gilded Age. He paid $14.8 million for his Greenwich home, which he stuffed with a personal art collection that boasts Van Gogh's Peasant Woman Against a Background of Wheat (priced at $100 million); Gauguin's Bathers ($50 million); a Jackson Pollock drip painting (also $50 million); and Andy Warhol's Superman ($75 million). Not satisfied, Cohen spent millions renovating and expanding, adding a massage room, exercise and media rooms, a full-size indoor basketball court, an enclosed swimming pool, a hairdressing salon, and a 6,734-square-foot ice-skating rink. The rink, of course, needs a Zamboni ice-resurfacer which Cohen houses in a 720-square-foot shingle cottage. Munk quotes a visitor to the estate who assured her, “You'd be happy to live in the Zamboni house.”
So would some of the over 650,000 Americans sleeping in shelters or under highway overpasses. [...]
The share of income going to the top 1 percent has doubled since the 1970s, returning to the levels of the 1920s. The greatest gains have gone to the very wealthiest and to executives and managers, especially of financial firms. From 1973 to 2008, the average income of the bottom 90 percent of American households fell even while the rich gained. The wealthiest 1 percent gained 144 percent or over $600,000 per household; and the richest 1 percent of the 1 percent, barely 30,000 people, gained over 455 percent or over $19,000,000.
That's enough to buy a nice doghouse. Or a mansion in Greenwich.