Monday, July 28, 2008

The Rich are NOT Different (at least not this time)!

First of all, rather than falling into the trap of citing a conversation between Scott Fitzgerald and Ernest Hemingway that never took place, let me offer an account provided by a letter to The New York Times in 1988 (back when the Times was a much better newspaper):

In 1926 Fitzgerald published one of his finest stories, ''The Rich Boy,'' whose narrator begins it with the words ''Let me tell you about the very rich. They are different from you and me.''

Ten years later, at lunch with his and Fitzgerald's editor, Max Perkins, and the critic Mary Colum, Hemingway said, ''I am getting to know the rich.'' To this Colum replied, ''The only difference between the rich and other people is that the rich have more money.'' (A. Scott Berg reports this in ''Max Perkins, Editor of Genius.'') Hemingway, who knew a good put-down when he heard one and also the fictional uses to which it could be put, promptly recycled Colum's remark in one of his best stories, with a revealing alteration: he replaced himself with Fitzgerald as the one put down. The central character in ''The Snows of Kilimanjaro'' remembers ''poor Scott Fitzgerald and his romantic awe of [ the rich ] and how he had started a story once that began, 'The very rich are different from you and me.' And how someone had said to Scott, yes, they have more money.''

Well, this may have been the case during the Roaring Twenties and even during the Great Depression; but, according to a report by Francesco Guerrera and Saskia Scholtes for the Financial Times, "it ain't necessarily so" today:

The US financial crisis is spreading from subprime borrowers to wealthier consumers, with evidence mounting that more affluent people are failing to pay their mortgages and credit card balances.

Growing concerns over the financial health of richer borrowers are prompting banks and card issuers to tighten lending practices in moves that could futher dampen consumer confidence and spending more.

In other words, while the rich may think they are rich enough to keep spending in the manner to which they have become accustomed, when it comes to paying the bills, they are no better than the rest of us. Indeed, those who are overextended in their real estate investments may find that selling some of that property to pay the bills will not work any better for them than it will for all those middle-class families faced with the prospect of selling their current (and only) house at a painful loss. Perhaps this economic crisis will turn out to be a great equalizer, one in which the rich have as much trouble paying bills and putting food on the table as everyone else. Realistically, this is unlikely to be the case; but it would still be nice to dream for a minute or two that the tide may be turning in the War Against the Poor!

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