Sunday, January 31, 2010

Richistan - by Robert Frank

"Richistan" is a book that provides some insight into the lifestyles of the rich (some may not really be considered famous). The author, Robert Frank, maintains a blog for the Wall Street Journal entitled The Wealth Report. On June 5, 2007, his post, "Why Richistan? Why Now?" was about the release of this book on that day. In this article, he points out that "the wealthy weren’t just getting wealthier — they were forming their own virtual country. They were wealthier than most nations, with the top 1% controlling $17 trillion in wealth. And they were increasingly building a self-contained world, with its own health-care system (concierge doctors), travel system (private jets, destination clubs) and language. ... They had created their own breakaway republic — one I called Richistan. ... The real story behind all this wealth, however, isn’t in the numbers. It’s in the people, and how they’re changing the culture and character of wealth in America. Richistan is largely about a country in flux — one in which Old Money is being shoved aside by self-made entrepreneurs, philanthropy is changing from passive check-writing to “high-engagement philanthropy" ... Most of all, Richistan is about the entertaining way that today’s rich are making, spending, donating and living with their wealth."

Although Richistan's population is less than 10 million today, they control more than 90% of America's wealth. Even in Richistan, however, there is a hierarchy. Lower Richistan with its members having only $1 million to $10 million in net worth are considered by many to be simply affluent, rather than true Richistanis. The world of personal jets, amazing yachts, and corporation sized house staffs, are found in Middle and Upper Richistan, as well as Billionaireville. Just as the gap between the most wealthy and the poor is ever widening, so is a similar gap between the wealthiest and entry-level Richistanis. In case you are too jealous of those in Richistan, however, apparently, having all of that money brings its own set of problems. Improving (or even just maintaining) ones lifestyle can be stressful. For example, Richistan is faced with a much higher inflation rate.

Although this book is only a few years old, it precedes most of the recent and dramatic economic downturn. As such, a recurring thought to me throughout the book, was what impact, if any, that the recent economic crisis had on Richistan. In a March 18, 2009 blog post entitled "Help, I’ve Been Deported From Richistan", Frank somewhat addreses just this question. He explains that, "now, the Richistan border is jammed–with people getting deported. It turns out that many of these immigrants acted like they belonged but were really illegal aliens who got into Richistan with tourist visas and fake passports, also known as borrowed money. Others lost their right to citizenship through their investments: The number of millionaires dropped by a quarter last year and is likely to drop again this year." I would expect, however, that the things have probably turned around more quickly for Richistan than the rest of us. In reality, recent events have probably only accelerated even further separation of Richistan, and its wealth, from the rest of society.

As a former foreign correspondent, Robert Frank states his intent and goal to "cover Richistan just as I would cover another country. I wouldn’t judge the rich as heroes or villains, any more than I would judge Indonesians when covering Indonesia. My job would simply be to tell the reader what their world is like and what’s happening there." I think he did an admirable job of achieving this goal. I found the book both informative and entertaining, but always objective.

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