Vol. 66: Paul Krugman’s blind spot

Why aren’t billionaires satisfied?

         For nearly a quarter-century, Paul Krugman has stood head and shoulders above the gaggle of American op-ed commentators, in many respects.

         If you like polemics, you’ll love Krugman. His slashing but mostly well-documented liberal attacks on conservative ideas are usually fun to read— no mean feat for an economist. Where most pundits spend their days pounding the pavement and working the phones, Professor Krugman has spent his waking hours teaching in elite classrooms at Yale, MIT, Princeton, and the London School of Economics. Most journalists aspire to win a Pulitzer Prize; Krugman has won a Nobel Prize (in 2008, for his contributions to new trade theory and new economic geography).

         Krugman can be faulted for treating his adversaries as fools or knaves; for lobbing his potshots from a safe distance instead of engaging with opposing viewpoints; and for his preoccupation with reminding us when he's been right and his foes wrong (as if anyone is always right all the time). But these are minor quibbles when you consider that a 2011 Hamilton College analysis of 26 politicians, journalists, and media commentators who made predictions in major newspaper columns or TV news programs found that Krugman was the most accurate of them all.

         Still, like most mortals, Krugman suffers from a blind spot: a consistent and long-standing inability— or maybe refusal— to understand what makes very rich people tick. It’s a flaw he’s demonstrated consistently almost since he joined the Times in 2000. For example:

— “It’s really amazing how quick billionaires are to portray themselves as victims because some people say nasty things about them… Billionaires really are feeling vulnerable despite their wealth and power, or perhaps because of it.” (April 17, 2014.)
— “If you’re a billionaire, you don’t need the extra money. At that level, purchasing power has nothing to do with the quality of life; having a 45,000-square-foot house instead of just 40,000, or flying to one of your multiple other residences in a bigger private jet, won’t make you significantly happier.” (August 12, 2019.)
— “Why are people who have more money than anyone can truly enjoy so determined to keep every penny?” (November 2, 2021.)

This month, Krugman was at it again. In an April 5 column about proposals to reduce taxes for billionaires, he wondered: “How much would the extra money really matter to people whose lifestyles are already incredibly lavish?”

The patrician who envied… me

         Why, indeed, can’t the rich be satisfied with their riches? Why do they always seem hungry for more?

         There is in fact a good answer to Krugman’s rhetorical question. I write as a journalist who spent many years chronicling the rich and super-rich for magazines like Town & County and Forbes. (In 1981 I helped create the “Forbes 400” list of wealthiest Americans.)

         In my pursuit of this specialty, I met some super-rich people I admired (the philanthropists Gordon Gund and Edwin Whitehead come to mind), some who seemed perpetually insecure (the publisher Walter Annenberg) or driven (the Hartz Mountain heir Leonard Stern), even a few who seemed outwardly happy (like Curtis Carlson, the creator of Gold Bond Stamps and Radisson Hotels), but none that I envied. In general, I found, the happiest billionaires and centimillionaires I encountered were those who had managed to maintain some semblance of an upper-middle-class lifestyle. pretty much like my own.

On one bizarre occasion, I interviewed an investment banker from an old and prominent Chicago family who professed to envy me. As I questioned him and his wife about their stately suburban mansion, their elegant gardens, their wardrobes, their cars, their children’s private schools, their country club, and their global vacations, the banker suddenly cut me off.

         “It’s true I have a lot of material possessions,” he sighed. “But you have a gift. That’s something I’ll never have.”

The Koch brothers’ paranoia

         Krugman to the contrary, numerous studies have concluded that money can indeed buy happiness— but only up to the point where it satisfies life’s necessities. Beyond that, as Joseph Thorndike Jr. put it in The Very Rich, “The only conclusion to draw is that great wealth may give its possessors a more than normal opportunity to become either happy or unhappy, depending on their own natures.”

         Since Thorndike penned those words in 1976, several studies have suggested that the super-rich tend to grow more paranoid rather than more secure as their wealth increases. Koch Industries of Wichita, Kansas, for example, is America’s second largest privately owned company; its second-generation CEO, Charles Koch, ranked this year as the world’s 23d richest man, with an estimated net worth of $64.9 billion. The four Koch brothers are often perceived as deploying their wealth to impose their libertarian and ultraconservative political views on the rest of us. Yet if you read their own writings, the opposite impression emerges: These guys sincerely believe the government is out to destroy them and their company. To judge from the seemingly endless lawsuits the Koch brothers filed against each other through the 1980s and ’90s, they also apparently feel the same way about each other.

         Happy campers? Not hardly.

Robber baron’s lament

         William Faulkner since observed that the only thing you can do for eight hours a day is work. You can’t eat, drink, read, exercise, play golf, attend the theater, dance, or make love for eight hours a day; only work will fill that time satisfactorily. People who don’t need to work for a living often seem unhappy because they have nothing else to do. That’s why even billionaires feel compelled to find some project to fill their days.

         Surely some rich folks somewhere must be content with their fortunes. But their discontent is hardly a new phenomenon. In George M. Cohan’s 1903 musical, Little Johnny Jones, the insatiable robber baron Anthony Anstey is asked how much wealth will satisfy him. He responds in song:

All I want is fifty million dollars,
And sealskins to protect me from the cold.
If I only knew how stocks would go on Wall Street
And was living in a mansion built of gold.
If the Vanderbilts would let me spend their money;
If I only had an heiress for a wife.
If I only stood in with the steel trust rake-off,
Then I know that I’d be satisfied with life.

All I want is partridge for my breakfast,
A champagne fountain sparkling at my feet.
Pierpont Morgan waiting on the table,
And Sousa’s band a-playing while I eat.
If I only owned the Western Union Cable;
If Hetty Green would only be my wife;
If I only owned the Pennsylvania Railroad,
Then I know that I’d be satisfied with life.

The ‘Wall Street miser’

         Cohan’s choice of subjects was unintentionally prescient. When Little Johnny Jones opened in 1903, the Pennsylvania Railroad was the world’s largest corporation, twice over; it went bankrupt in 1976. Western Union dominated American telegraphy for more than a century; today it survives mostly as a money transfer business for immigrants wiring money home. J. Pierpont Morgan died in 1913, bequeathing the mighty House of Morgan to his ineffectual son J.P. Jr., who deserved neither the honor nor the fear that his name commanded. Consuelo Vanderbilt, eldest daughter of the railroad baron William K. Vanderbilt, was forced at age 18 into a loveless marriage to the Duke of Marlborough, arranged by her status-seeking mother. Amy Vanderbilt, who carved a career as an etiquette authority, was married four times, divorced three times and fell or jumped to her death from her New York home at the age of 66.

As for Hetty Green— aka “the Wall Street miser”— she was once the world’s richest woman, but also in many respects the strangest. She habitually dressed in a voluminous black dress concealing a petticoat fitted with pockets to hold her bonds, stock certificates, and large sums of cash. She ate the cheapest dishes in the cheapest restaurants and left no tips. At a time when her money was earning roughly $500 an hour, she haggled over the price of shoes. When a druggist justified his charge of ten cents for a bottle of medicine by pointing out that the bottle alone cost five cents, Hetty went home to fetch an empty bottle of her own.

         And Paul Krugman is shocked to learn that the super-rich harbor feelings of insecurity?

         (When Little Johnny Jones was revived in 1981, most of these references were removed from Anstey’s song, presumably because the producers assumed modern audiences wouldn’t understand them. Sic transit gloria mundi.)

J. Paul Getty’s regret

         “There is a law of compensation in nature,” the oilman J. Paul Getty, who was once the world’s richest man, mused in his memoirs. “Every plus is somewhere, somehow offset by a minus. I have long been able to exercise a very considerable degree of control over my display of emotions. This has been an asset to me in business and in various other of my activities. In the more personal spheres of my life, it has often been a distinct liability.”

         To Paul Krugman, I say: Perhaps, as you contend, the super-rich have no rational reason to feel threatened. But they do. And maybe they don’t need tax cuts for economic reasons. But they do need them for psychological reasons.

         Let me be clear: Feeling threatened is no reason to bestow tax cuts on the rich or anyone else— because just about everyone in the world (aside, apparently, from me and maybe half a dozen other simpletons) feels threatened to some extent. For that matter, just about everyone is threatened to some extent. That’s the nature of human life, not to mention animal life.

         Billionaires may not deserve special privileges, but they are entitled to the same compassion that everyone else deserves from their fellow humans. Even from a Nobel Prize-winning New York Times columnist.

         So, where do I pick up my Nobel Prize?

Enjoy Dan Rottenberg’s new memoir, The Education of a Journalist: My Seventy Years on the Frontiers of Free Speech. You can also visit his website at www.danrottenberg.com