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Generation excess

"Today's popular response to extravagant spending is `Why mock the rich when you can join `em'"

For all we know, Caleigh Perelman could be a perfectly normal 4-year-old. She may watch Blue's Clues and eat Spaghetti-Os, wear My Little Pony sneakers, struggle with preschooler "sharing issues," and dream of becoming a ballerina someday.

What we do know, based on testimony in a recent custody battle between Caleigh's estranged parents, is that the youngest daughter of billionaire businessman Ronald Perelman enjoys a lifestyle that is far from normal.

By her mother's accounting, monthly living expenses for Caleigh include $9,953 for travel, $3,175 for clothing, $3,585 for recreation, $1,450 for dining out, and $30,098 for hired help. When traveling, presumably in the company of well-trained (and well-paid) professionals, Caleigh also takes along her own pediatrician, just in case.

Before their divorce, the Perelmans divided family life among five opulent homes. Each was stocked with an identical wardrobe for Caleigh: As if shopping for royal quintuplets, the Perelmans bought her everything in lots of five. Their Manhattan townhouse boasts a two-story playroom and rooftop swimming pool. At the couple's 80-acre East Hampton, New York, retreat, there was a crew standing by whenever Caleigh wished to go sailing on a private lake.

Divorce is hard on any child, but for Caleigh, the pain would be eased by her father coughing up $350,000 to redecorate her new living quarters, or so her mother maintained. "These numbers speak for themselves," said one attorney in the case.

To which the only rational response is: Boy, do they ever.

What they speak to most loudly is the culture of excess that has permeated the upper strata of American society - and influenced how all of us dream, spend, and behave - as the 20th century draws to a close.

Riding the crest of a booming stock market and pumped ever higher by the twin forces of mass marketing and mass media, the American Dream has, over about the past four years, begun to look like the robber baron era of a century ago. Or the Roaring Twenties, when affluent America partied hard between world wars. Or the rip-roaring Eighties, whose ethos was memorably captured by Gordon Gekko's "greed is good" speech in the film Wall Street.

In the postmodern, globally expanded version of the dream, "making it" in America has been fast-forwarded and Trumped up until it resembles a kind of virtual Neiman Marcus catalog, a real-life gambol in the pages of the luxury monthly Robb Report. cq, no The Money is quite often no object; over the top is merely the starting point. And the spending habits of the superrich are reverberating throughout the economy, raising the bar for everyone while rewriting rules of wealth and status that have traditionally governed American society, even here in buttoned-down New England.

Statistics are one part of the story. At last count, America boasted 129 of the world's 275 billionaires - including the top seven, led by Microsoft's Bill Gates. The number of Americans worth at least $10 million has grown a whopping fourfold cq over the past decade, to 275,000.

Luxury spending in the United States has kept pace, growing more than than four times as fast as overall spending.

America's richest 20 percent are doing 50 percent of the consuming and hold 84 percent of the wealth. Although the economy expanded by only 4 percent overall between early 1998 and early 1999, spending on what economists call "consumer durables" - items like minivans and home entertainment centers - surged 12 percent higher during that same period.

Figures released by the US Census Bureau and other governmental agencies reflect an economy increasingly polarized between the haves and the have-nots. The highest-paid 5 percent of Americans earned more than $132,000 last year, over eight times what wage-earners in the bottom 20 percent took home. The median income for all Americans reached a record high of $38,885 last year, but the record gap between top and bottom is more indicative of why parts of America have embarked on a mind-boggling spending spree.

Even failure is extravagantly rewarded these days. Michael Ovitz was by all accounts a meddlesome, clueless leader during his 14-month presidency at the Walt Disney Co. To get rid of Ovitz, Disney executives handed him a severance package worth $190 million. Disney shareholders gagged, but to large segments of corporate America, it was business as usual: A pink slip in a platinum frame. Party on, Mike.

But it's not just about money. There is an attitudinal shift at work as well, a consumerist mentality as formidable in its own way as a fully loaded Chevy Suburban. With dot-com millionaires being created overnight and access to the trophy economy trickling steadily downward, everyone and everything is being Caleighed to some extent. "Americans used to amuse themselves by recounting the extravagant and wasteful doings of the rich," writes Roger Rosenblatt in a recent collection of essays on wealth and culture. Today, he observes, the popular response to conspicuous consumption is more like, "Why mock the rich when you can join 'em?"

In this new economy, bells and whistles that were regarded as frills not long ago are becoming basic features, baseline models. Goods and services are increasingly evaluated on their capacity to make a statement, not merely to provide comfort or satisfaction.

On Nantucket, where for generations Old Money has peacefully co-existed with traditional New England virtues like thrift and understatement, 8,000-square-foot houses are being built on spec, in some cases cutting off the views of the Old Money crowd. From March until October, the island's airport is clogged with tradespeople being flown in to work on the newly constructed McMansions.

Boston, the grand old dowager of New England cities, was once proud to have a hotel as grand and as dowagery as the Ritz-Carlton. Now a second Ritz is going up across the Common, within sight of the original. Suddenly Boston seems a little more like Dallas or Atlanta.

"Boston could support 10 Ritzes," said developer Christopher Jeffries in response to a question at a press conference this fall. "The demand for luxury hotel rooms is that enormous."

And so it goes. First it's "show me the money," then it's show off the money in the era of trophy homes, trophy spouses, trophy kitchens, trophy vacations, trophy zygotes, trophy yachts, trophy art, trophy implants, trophy political campaigns, even trophy trophies. A wealthy Philadelphia sheet-metal dealer bought O.J. Simpson's Heisman Trophy for $255,500 this year, reportedly to impress his girlfriend. What impression the statue made on the woman is unknown, but it must be quite a conversation starter at cocktail parties.

"If you're looking for an explanation, it's simple, really," says Cornell University economist Robert H. Frank, author of Luxury Fever: Why Money Fails to Satisfy in an Era of Excess. "People at the top of the economic ladder have a lot more money to spend. And what they're spending it on is luxury items, sometimes better versions of things they have and sometimes brand new things."

Maybe so. But is there really any simple explanation for the $2,300 eiderdown pillow, the $4,000 bottle of cognac, the $3 million diamond-studded bra? And if somehow all parents could give their children what Caleigh Perelman has, why would they want to?

The Robb Report, published in Acton, began life in the '70s as a magazine unofficially serving Rolls-Royce owners. More than two decades later, the magazine's subscriber base has reached an impressive 125,000 readers (up 300 percent over the past four years) with demographics that are solid gold card all the way. Average annual income of Robb Report subscribers: $755,000. Net worth: $3.6 million. The Robb Report - like the Neiman Marcus catalog and Forbes cf211,9.5FYI, only more so - is to luxury consumers what Pokemon card guidebooks are to suburban third-graders. "There is created wealth around now that hasn't been seen since the Vanderbilts," says Robb Report publisher Daniel Phillips. And the new young rich, once they've taken care of basics like food and shelter, "realize that disposable income is just that: disposable." For an inkling of what these dollars are being spent on and how trophy consumption is being marketed in the late '90s, check out the current Robb Report gift guide. Listed for sale are a $40 million yacht with wine cellar and motorcycle garage; a $1 million Roger Dubuis wristwatch; a home spa with "butler ready to live onsite for two years"; a $389,000 set of iron gates; bottles of 1907 Heidsieck & Co. champagne, salvaged from a sunken schooner and priced at $4,000 apiece; and a $31 million estate near Kensington Palace. "Keeping up with the Windsors takes on literal meaning when you live next to the British Royal Family," purrs the catalog copy, in what could pass for social satire in a different epoch but seems just another "lifestyle choice" today.

The Robb Report is just one small part of the growing luxury industry that sees to the care and feeding of the trophy culture, one of the institutional forces that have woven the notion of excess into the fabric of society. Television is another. Dallas, the quintessential '80s TV show that focused on the lives and loves of Texas oil tycoons, has been supplanted in the popular imagination by Who Wants to Be a Millionaire, a quiz show whose implicit message is that anyone can drive a Range Rover and wear $150 Brioni neckties. Even the local grocery store has expanded with the times: The average supermarket now stocks nearly three times as many different items (24,000) as it did a decade ago.

From Lifestyles of the Rich and Famous to Martha Stewart's far-flung media empire, from the gourmet section of Star Market to front-porch mailboxes stuffed with Williams-Sonoma catalogs, everyday people are barraged with information on how the other half - or tenth, or thousandth - lives. "One thing that's different now from, say, the turn of the century is the way information about the wealthy is transmitted throughout the culture," says Juliet Schor, a Harvard University economist. "The old model was face to face. Servants would go home and whisper to their neighbors about how the upper crust lived."

Today, says Schor, who has tracked the new economy in books like The Overspent American, "You've got TV shows, magazines, whole wings of the mass media publishing reams of material about the lifestyles of the rich and famous. And companies are catering to this top group of consumers as never before."

And that, in turn, gives everyone a touch of luxury fever, even if trophy spending is beyond the means of most wage-earners. Schor sees parallels between the current spate of conspicuous consumption and the Roaring Twenties in the sense that material goods like houses, home furnishings, and modes of transportation occupy the center of the trophy culture. "As I go around the world, a lot of people are shaking their heads and saying something's wrong here," she says "If [the superspenders] all went off to some deserted island, it would be less pernicious. We'd all feel less inadequate. But that isn't going to happen."

Yet another sign of the times is Luxury Finder.com, an Internet shopping site that went on line in October ("Where generation luxe shops the Web"). Customer services include personal cyber-shoppers and cyber-secretaries. In its first week of operation, the service sold, inter alia, 100 Asprey & Garrard travel bags - at $575 each. Visitors to the site are advised, "For purchases over $50,000, please call a customer service representative to make special delivery arrangements." Delivery is presumably not an issue when it comes to the five private islands (priced from $1.95 million to $7.5 million) offered for sale last month. "At the end of the day," says the site's founder, Jim Finkelstein, who also publishes the National Law Journal, "searching out the finest or the rarest on the market is a bigger issue if you're starting with a billion-dollar income base than with something smaller. We think there's a tremendous opportunity here."

According to James Twitchell, author of Lead Us Into Temptation: The Triumph of American Materialism, luxury marketing has been exceedingly good at repackaging basic products as objects of desire.

"It's as simple a thing as Evian water and as complicated as a Lincoln Town Car," says Twitchell. "Advertising media generate luxury value where our rational minds tell us no such value exists. Evian is bottled water, for chrissakes. What's being marketed here is non-intrinsic value."

Adds Twitchell, "It's all part of the great shift in the ethos of modern consumer America. If you go back to the '40s and '50s, you'll see that luxury advertising was more circumspect. The message in post-war Cadillac ads was, `Be careful, people will be envious.' Baby boomers were born Depression-free, though. They respond to different sorts of messages."

Social critic Bill McKibben, author of Christmas on a Hundred Dollars and a champion of the New Simplicity movement, pushes the generational theme even further. Boomers, he says, are "the first generation born into the TV world - and thus conceived in the full-blown consumer society that has gotten more intense with each passing year. They're the first generation, for instance, to have watched something like 400,000 commercials before age 20." And that, he says sorrowfully, "has had predictable results."

So who are these new trophy consumers? And what impact are they having on those who don't ordinarily go shopping for $5,000 backyard grills and 10,000-square-foot vacation homes with vaulted ceilings and designer driveways?

"I call the new generation `alpha capitalists,' because it's pure alpha-dog behavior; it's about who leads the pack," says Dominique Browning, editor of House & Garden magazine, a journal celebrating the trophy home and all its trimmings. "What's happening today puts the '80s to shame as far as conspicuous consumption goes."

Browning, who penned a column on the "starter chateau" phenomenon for her magazine's December issue, says the difference between today's trophy-case culture and the '80s version is partly attitude, partly liquid assets.

"Back then, luxury was less about displaying wealth and more about personal enjoyment," observes Browning. "Now it's about having the biggest house, the trophy garden, the art consultant who tells you which paintings to buy. Dealers tell me constantly about people who literally don't know what to do with their money. They're buying $80,000 rugs as an investment, not because they get any pleasure from them. "

Nowhere has the trophy mentality been more visible than in the housing market. The Boston office of Sotheby's auction house, which handles high-end residential sales in New England (average selling price: $1 million), just closed on a record-breaking $6.7 million deal for a Back Bay town house. Sotheby's vice president George Ballantyne says he's seen quite a change in the buyer profile recently. "It used to be senior corporate executives who acquired the ability to buy multimillion-dollar properties over time," he says. "Now these buyers are younger. They're Internet moguls and fund managers from Fidelity and Putnam, and they move very, very quickly."

This new crop of instant billionaires is leveling the playing field in ways America's first multimillionaires never experienced.

At least moguls like John D. Rockefeller and Henry Ford made money "in ways we understand," says James Twitchell, building their industrial-based fortunes over decades, not weeks, and flaunting their wealth in relatively confined areas. "They competed [by showing off] their wives, their mansions, their livery," says Twitchell, "what you saw in Newport three generations ago. Today, it's Joe Schmo who's buying if not the whole ensemble at least pieces of it."

And as recently as the 1950s, when the baby boom began, he adds, "You checked a list to locate yourself in the culture. Did your last name end in a vowel? Was your religion Episcopalian? Did you go to a `St. Grottlesex' private school? Today, nobody cares about schools or religion anymore. Even race has lost its social stigma, to some extent. So status in the material world carries far greater weight than it did before. You know, does your wife carry a Gucci handbag?

"All the threads that used to weave into our social culture have unspooled," he says. "Luxury has gone dramatically down-market. I don't have to own a Lincoln, I can lease one. Or take a deluxe cruise instead of owning a yacht." But the democratization of luxury is not altogether a bad thing, according to Twitchell. A $5,000 Vulcan kitchen range may be an extravagance, he concedes, but at least it lets the middle class feel it's on an equal footing with the Martha Stewarts of the world.

In the view of Cornell economist Frank, the biggest impact of all the high-end spending is being felt down below. As the upper end rises, he argues, pressure mounts on all segments of the marketplace to upgrade, add on, improve. What people desire and what's available for them to buy are thus directly linked to what the economic elite desire and buy.

"I don't know anybody who's trying to imitate Bill Gates and his 50,000-square-foot home," Frank says. "But I do know people with 15,000-square-foot homes, and their tastes have an effect on ordinary people's homes. The dot-com billionaires affect the Wall Street lawyers, who affect the ordinary millionaires. And so on down the line."

While he cautions against excessive moralizing, Frank maintains that the democratization of luxury consumption is not altogether good, either. Bigger houses and faster cars don't seem to make Americans any happier, he notes. In fact, people psychologically oriented to material goods are statistically prone to more depression.

When wealthy people tear down older houses to build palaces, says Frank, "it makes all of us less satisfied with what we have. To not feel worse off, we work harder or go into debt more so we don't feel left behind."

Writing in The Wall Street Journal, Daniel Akst took issue with critics like Schor and Frank. "America's frenzy of consumption poses ideological problems on all sides," Akst opined. "Liberals worry about an ecological meltdown when the Chinese and Indians take up our ways, and complain of `faceless suburbs,' sport utility vehicles, and big-screen TVs. Yet they're strangely untroubled by apartments on the Upper West Side, country houses in Vermont, and Volvo station wagons. The message, apparently, is Le Corbusier good, La-Z-Boy bad."

For conservatives, Akst added, the problem is "defending one set of cherished values (free choice, free markets) that may seriously undermine another (thrift, duty, family)."

Twitchell echoes Akst's point that aesthetics, rather than money, is the real issue for some critics. "If I wanted to spend $40,000 on a rare Robert Frost edition, nobody would have a problem with that," says Twitchell, who teaches literature at the University of Florida. "But if I want granite counter tops in my kitchen, they call me self-indulgent."

Where is the trophy economy headed? Will it implode, as the last boom did in the late '80s? Will it be dented by a slumping stock market or environmental crisis or some such external force? Or will the advent of the new millennium be as shiny as a new Dodge Viper, as sleek as a Gulfstream V jet airplane?

"I wouldn't be surprised if we're nearing the high-water mark of over-the-top materialism," offers Bill McKibben. "As an environmentalist, I hope so. Because while the question of whether it's good for us individually may be up in the air, the question of whether it's good for the planet is not."

McKibben, a Harvard graduate, says many of his Wall Street friends are questioning their lifestyles these days, private jet or no private jet. "What constitutes the good life may be comfortable, it just doesn't seem that interesting a way to live," says McKibben slyly. "My way of being subversive is having people suspect that you're having more fun than they are."

While the debate over virtues and values rages on, evidence mounts that at least a modest backlash is under way.

In many affluent communities across America, preservationists have cracked down on building ever-larger McMansions on ever-smaller lots. Places like Palo Alto, California, and Greenwich, Connecticut, are imposing building restrictions, in some cases putting older homes on their historical registers to protect them from demolition.

Stories like Caleigh Perelman's custody trial make headlines, meanwhile, and many people understand instinctively that growing up with a sense of proportion is virtually impossible for someone in her expensive shoes.

Diane Ehrensaft is a clinical psychologist and author of Spoiling Childhood: How Well-Meaning Parents Are Giving Children Too Much - But Not What They Need. Ehrensaft sees many superwealthy families in her Northern California practice, she says, including one couple who have been battling in court over a $20 million divorce settlement. One issue in the case, says Ehrensaft, was who could chauffeur the couple's three children home from the airport and whether the limo company was bonded or not.

For children in similar circumstance, says Ehrensaft, especially where couples in their 20s and 30s are newly wealthy and starting families, "What comes out [in therapy] is that all of this wealth buys these kids no happiness whatsoever. They're confused and upset. Overindulgence turns out to be a form of deprivation."

Of Caleigh Perelman, who may indeed be a perfectly normal 4-year-old, Ehrensaft offers this professional assessment: "She just seems like the classic poor little rich girl. Rich in worldly goods, poor in the emotional sense. I feel sorry for her," says Ehrensaft. "I really do."