It's Not Easy Being Ultra-Rich

[one...two...tree 2,762]

On Labor Day we customarily give a nod to America's underpaid and overworked blue and pink collar workers -- janitors, flight attendants, forklift operators and the like.

But this year let's go a step further and salute the most reviled and despised of the people who make our economy happen, the mere mention of whom causes the average forklift operator to spit on the floor. You are thinking perhaps of telemarketers, human traffickers, and the fiends who answer the phone when you to try to make a claim on your health insurance. But I'm talking about our CEOs.

Just in time for the holiday, two liberal groups -- United for a Fair Economy and the Institute for Policy Studies -- have issued a gleefully malicious new attack on our CEO class. They point out that the CEOs of large companies earn an average of $10.8 million a year, which is 362 times as much as the average American worker, and retire with $10.1 million in their special exclusive CEO pension funds.

They further point out that the compensation of US CEOs wildly exceeds that of their European counterparts, who, we are invited to believe, work equally hard.

And, in what they must think is their cleverest point of all, the UFE/IPS folks state that: "The 20 highest-paid individuals at publicly traded corporations last year took home, on average, $36.4 million. That's ... 204 times more than the 20 highest-paid generals in the U.S. military."

You know what we're supposed to think here: Wow, but generals have all that responsibility! They're responsible for national security, or at least for conducting the wars that increase the threats to our national security and thus help justify ever greater increases in our national security apparatus!

But someone has to speak up for our beleaguered CEO class, and let me begin with that spurious comparison to the top military brass. Could we put patriotic emotion aside for a moment and look at this in a hard-headed, bottom-line, sort of way?

Suppose you are the general responsible for all the service people currently in Iraq, about 130,000 in round numbers, and suppose you manage to lose every single one of them in some ghastly miscalculation. With the death benefit for the family of a dead soldier running at $100,000, your mistake will cost a total of $13 billion. Sounds like a lot, I know, until you consider that a hedge fund manager or financial company CEO can lose that much in a single afternoon, without anyone even noticing. Q.E.D., there is simply no comparison between a general and a CEO.

That's a side issue though. The real point, which the CEOs and their usual defenders are strangely reticent about making, is that it's damn expensive to be rich, and extravagantly expensive to be super-rich.

Before you start playing your air violins, consider the costs of maintaining up to five different homes, some of them up to 45,000 square feet in size, most with swimming pools, tennis courts, guest houses, and wine cellars requiring constant supervision.

The poor whine about having no home at all, or maybe a two-bedroom apartment for a family of six. They should just think for one moment of the tribulations involved in running four or more mansions, each with its own full-time staff. There's the problem of getting between them, for example. A friend of mine, of very modest means himself, consults for a billionaire couple who commute between London and Los Angeles by private jet, with their dogs following in a second private jet.

But much of what we know about the extreme costs of wealth comes from Wall Street Journal columnist Robert Frank's recent book Richistan. The ultra-rich, who are drawn largely from the CEO class, require staffs of about 40-50 people, including not only cooks, maids and nannies, but "lifestyle managers" (to set up the entertainment schedule) and -- in a throw-back to the original gilded age -- butlers.

It's the butler's job, among other things, to deal with any issues that may arise from the proliferation of homes. For example, if the boss is in Palm Beach, Frank reports, "and wants to send his jet to New York to pick up a Chateau LaTour from his South Hampton cellar, the butler makes it happen, no questions asked."

Nor are the ultra-rich in a position to cut back on their expenses -- by, say, running down to the supermarket for a $12 bottle of chardonnay. If they were to do so, their friends would despise them. As Frank explains, the Richistani word "affluent," meaning someone with less than $10 million in assets, translates into English roughly as "scum."

A mean-spirited critic of the ultra-rich CEO class might grumble that the rich should simply find a new circle of friends. But who exactly might these new friends be? If you were in the $100- million-in-assets set, you could hardly consort with the class of people for whom a pittance like $10,000 might be a transformative sum, possibly allowing granny to get her insulin and the children to have warm winter clothes.

People of that class could not be trusted not to pocket the silverware or rip out the gold fixtures in your powder room. They might even make a lunge for your throat.

(Barbara Ehrenreich admits to being on the board of the Institute for Policy Studies.)

Barbara Ehrenreich is the author of thirteen books, including the New York Times bestseller Nickel and Dimed. A frequent contributor to the New York Times, Harpers, and the Progressive, she is a contributing writer to Time magazine. She lives in Florida.

[Jason-Sasha 1]

Awww. So sad.... I feel so very bad for these CEOs. all the papercuts and coffee stains and all.

[mawilson 2,133]

Yeah Mr Fancypant, you blew it. No million dollar bonuses for you now.

[Fandango 1,439]

Socialist slanted & bitter article.

If someone works hard to get to where they are, they deserve it. OMG, a CEO makes 43249238425% more than a janitor! no sh!t!!!

Edited September 4, 2007 by LisaD

[Ban Hammer 13,337]

Suppose you are the general responsible for all the service people currently in Iraq, about 130,000 in round numbers, and suppose you manage to lose every single one of them in some ghastly miscalculation. With the death benefit for the family of a dead soldier running at $100,000, your mistake will cost a total of $13 billion. Sounds like a lot, I know, until you consider that a hedge fund manager or financial company CEO can lose that much in a single afternoon, without anyone even noticing. Q.E.D., there is simply no comparison between a general and a CEO.

absolutely correct. should a ceo screw up, money is lost. if a general screws up, lives are lost. absolutely no comparison there.

[GaryC 7]

More class envy. Without rich people we wouldn't have jobs.

[mawilson 2,133]

More class envy. Without rich people we wouldn't have jobs.

If there were no rich people, then everyone would be poor.

[Jasman0717 9]

I wonder what if feels like to be filthy rich. It takes me over 10 years to earn what Phil Mickelson won in four days work. They say Tiger is now a Billionaire! Heck, I have no idea what a billion is, I know I can't count that high, not enough time left for me, probably should have started when I was born

[one...two...tree 2,762]

More class envy. Without rich people we wouldn't have jobs.

Fair wages, Gary...that's all. The American Dream, working hard and being rewarded for it.

[ChristinaM 0]

I don't think it's so much "class envy" as a desire to see balance and proportion.

[w¡n9Nµ7 §£@¥€r 123]

More class envy. Without rich people we wouldn't have jobs.

Fair wages, Gary...that's all. The American Dream, working hard and being rewarded for it.

Who decides what is fair?

You? The Politburo? Or the market?

If the market decides, well... guess what - the market did decide. The wages CEOs make are market-driven.

But I suspect you don't want the market to make these decisions. Please tell us who should.

[GaryC 7]

More class envy. Without rich people we wouldn't have jobs.

Fair wages, Gary...that's all. The American Dream, working hard and being rewarded for it.

I work hard and I am rewarded for it. I don't feel "downtrodden" in any way because a CEO makes mega millions. Three cheers for them as a matter of fact.

[Mr. Big Dog 10,747]

If someone works hard to get to where they are, they deserve it.

I tend to agree. Though, that's a big IF there, Lisa. A really big IF.

[Trumplestiltskin 5,791]

If someone works hard to get to where they are, they deserve it.

I tend to agree. Though, that's a big IF there, Lisa. A really big IF.

Given that some of the CEO bonuses are not driven by performance, I'd have to agree.

There have been a few stories over the last few years about corporate bosses bailing out of their jobs with golden parachute payments.

[Mr. Big Dog 10,747]

If someone works hard to get to where they are, they deserve it.

I tend to agree. Though, that's a big IF there, Lisa. A really big IF.

Given that some of the CEO bonuses are not driven by performance, I'd have to agree.

There have been a few stories over the last few years about corporate bosses bailing out of their jobs with golden parachute payments.

Home Depot and basically all major US airlines come to mind.