In an article from the Tribune organization publised in the Los Angeles Times, titled “Wall Street wives had the richer now they’re a bit poorer“, by Geraldine Baum, Wall Street wives lament their reduced circumstances, yet they still do not seem to understand or want to accept that the lavish life as exemplified by their exaggerated version of the American dream is not the norm for most of the American people.
The article does not focus on the Fat Cats at the top of the heap on Wall Street, which in all likelihood will weather the storm just fine and return to their piracy on another day, but on the vast majority of mid-level Wall Street employees, who, when compared, in our eyes, to the much larger majority of middle class Americans, are also relatively fat and happy as Baum writes:
About 185,000 people work in the securities industry in New York — the hard-core Wall Street world of investment firms, banks and hedge funds. The average income is about $365,000, although top-flight managers typically make many millions more. (In New York’s broader financial community of banks and insurance firms the average is $228,000.)
It’s hard to have sympathy for people who make that much money when the average New Yorker makes $85,000.
Hell, it’s hard for many people on the distant (from Manhattan) sides of the Hudson and East rivers to have sympathy for any New Yorker when according to the 2005 census the average American earns roughly $32,000 a year, lives in a household with an income of $46,000 with $24,000 of gross annual income per member (source, U.S. Census Bureau). (Personal income changes considerably over the life-time of the average American, from $28,000 at age 25 to about $42,000 at the age of 65 [Wikipedia].)
In the context of all of this, we learn from Baum’s article about Amar and Mona Mond:
She’d [Mona] married a man with a career on Wall Street, and at the very least she was going to live in a house, preferably brand new, with a Jacuzzi in her bedroom and a pool in that yard. There’d be a maid — and no skimping, no worrying that any day Amar, her husband, would lose his job.
The Monds would retire early with $10 million to $12 million in a rock-solid retirement account that would spew off enough interest to keep them going until . . . well . . . they actually got old.
Because that’s how it goes during good times on Wall Street…
For the last two years, Amar, 36, has run a technology unit in the capital markets division for Lehman Bros. until it went bankrupt and was bought in part by Barclays. He’s still there, adjusting with the change in management. His salary at Lehman’s was $400,000, including a bonus and restricted stock options. Amar’s base salary, about $200,000, remains the same, but there are no reports yet on what will happen to 2008 bonuses and options.
Only a base salary of $200,000 with bonus and options uncertain. And she laments that they sold their home back in the “good times” and cannot afford to buy a home on their paltry income. How then do the vast majority of American home owners who did not fall victim to the housing bubble and stuck with conventional financing, and did not borrow beyond their means, and who do not have a $200,000 income still manage to make their mortgage payments?
Baum also tells the story of Carlos and Fran Alvarez:
Fran Alvarez rarely spent lavishly, as she describes it, during the five years her husband, Carlos, 43, was making $250,000 writing software programs for Credit Suisse. He will be earning half that [$125,000!] in his new job away from Wall Street. It was either that or sell the house with its $3,000 monthly mortgage.
At 41, Fran is the caretaker of their daughters, Gabriella, 6, and Isabella, 4. In the last five months she has gone back to her daughter-of-a-mechanic mentality. She canceled magazine subscriptions and expensive cable — and stopped buying soft toilet paper.
“Growing up, my mom used to buy the scratchiest toilet paper, and when we complained she would say, “When you get your own job, you buy the expensive type,’ ” Fran says. “Well, we’re back to the scratchy stuff.”
Scratchy Stuff??? She laments having to downgrade her toilet paper, but still manages to stay in a house with a $3,000 note. Suggestion to Mrs. Alvarez: Don’t want to give up the soft stuff? Just tough it out for a year or two (and if you need to, spend some time visiting high end public restrooms, say in hotels, or check in to those mid-level hotels and motels while on vacation) then when real estate values have stabilized, and possibly recovered, somewhat, sell the house that you paid too much for in the first place, buy something you can afford, and get a conventional loan, at reasonable, realistic terms. And thank what ever entity that is sacred to you that your family is no longer a part of the unrealistic greed of Wall Street.
News flash for the Wall Street strivers (a sub-species of the American Conspicuous Consumer) — Eventually there is a price that has to be paid for every thing, quit your whining and accept it like the rest of us and make greed in your life a distant memory.
Speaking of toilet paper, get ready for the 2008 Loo Of The Year Awards brought to us by our always practical cousins across the pond. For more on the Loo Awards faithful readers may take a gander at the post at BFD Blog! about the 2007 awards.
Perhaps the poor Wall Street refugees can check out the Loo Awards when they come out this year and find themselves some nice clean, restrooms, with plenty of soft toilet paper that meets their standards.