Economy & Business

Conspicuous Consumption, Inconspicuous Poverty

Travis Scott at the 2017 MTV Europe Music Awards in London, England. (Hannah McKay/Reuters)
We don’t lack resources. What we lack is a constructive way to engage with the question of poverty.

Travis Scott is officially famous. I know he’s famous for real because he’s a rapper whose name is known to a conservative writer who is on the cutting edge of pop culture in 1989. True celebrity is inescapable.

The Houston-born musician’s “Sicko Mode” was the song of a season, and, like many contemporary songs, it offers a great deal of materialistic wish-fulfillment: private flights, riding around in a LaFerrari (to Jamba Juice of all places; I guess Jamba Juice really is for heroes), etc. We puritans and scolds are supposed to hate the materialism of the subculture represented by Travis Scott, but I myself am about 99 and 44/100 percent okay with it: Travis Scott’s isn’t exactly a rags-to-riches story — he grew up in a middle-class, suburban family — but I like those stories, too, and there’s nothing wrong with getting paid.

And somebody out there is getting paid.

Scott recently undertook a collaboration with Nike on a limited-edition sneaker, which came to market with a retail price of $160 — a fair amount of money for a pair of Nikes, but not insane. The shoes sold out in less than 60 seconds, and are now selling in the secondary market for $1,600, which is a hell of a lot of money for a pair of Nikes. It’s a weird market: There’s another pair of Nikes on auction with at least one $10,000 bid on them — far short of the asking price of $100,000.

Who are the buyers in that market? Beats me.

But I have a hard time believing that the United States of America is in the midst of some kind of general economic crisis crippling the middle class, however much we hear about their travails. We certainly seem to have money to spend: For nine years running, the U.S. liquor business has reported record sales, and the fastest-growing segments of the booze business are the high-priced premium and ultrapremium beverages. The only thing hurting the whiskey business is that exports have been tanked by tariffs as part of the recent trade war. BMW Group, which includes BMW-branded automobiles as well as Mini and Rolls Royce, sold more cars last year than ever before, a lot of them in the United States. Ford fell just short of record F-Series pickup sales but set a record for SUV sales. Rolex dealers can’t keep watches in stock.

And, yeah, a Rolex drought may sound like a rich-guy problem, which it surely is. Who can afford those? Well, consider: There are a lot of non-millionaires out there contributing to record ATV sales, and the best-selling ATVs cost about the same as a Rolex Submariner. That choice isn’t a question of price, but of taste. If that kind of conspicuous consumption isn’t your thing, know that Honda set a sales record for electric vehicles in 2018. So did Nissan. And the difference in price between a gasoline-powered Nissan Altima and an electric Nissan Leaf is a bit more than the price of Rolex’s most popular models. These are simply different kinds of status symbols for different kinds of people. Driving your new Leaf to Starbucks may not be the same as taking the LaFerrari to Jamba Juice, but it’s not The Grapes of Wrath either.

There’s a whole genre of conservative columns on the theme of: “Look at all the nice things supposedly poor people have: Flat-screen televisions! Air conditioning! Multiple cars per household!” It wasn’t my turn to write that column this year, and, while it’s a useful one for perspective, this isn’t that column. Not exactly. But it is the case that citizens and social critics and policymakers need to do a better job distinguishing between matters of price and choice. The fact of the latter does not obviate the former, but these are different issues and should be understood and approached as such.

Do you know what happened in 2016, when the presidential candidates and their cable-news spokesmouths were going on and on about how awful things are for Americans, especially the middle class? Median real household incomes hit a record high. They did the same thing the next year. When Bill Clinton was reelected in 1996, some Americans thought we’d discovered some kind of magic formula for the economy. We’d never seen it so good. It got better. And today, real median household income — which is to say, median household income adjusted for inflation — is about 11 percent higher than it was then. Pick your alleged golden age and the numbers will tell the same story.

But it is a complicated story.

Economists like to divide income groups into quintiles, and the view from the quintiles complicates things: In the dead middle, the third fifth, inflation-adjusted incomes are higher today than they were in 2000 — but those incomes declined in 2001 through 2004, after which they began going up again only to tank from 2008–2011. That 2016 record was the first time the incomes in the middle group exceeded their previous peak in 2000. Incomes in the next-wealthiest quintile recovered their 2000 level a year earlier, in 2015. (There was prior peak in 2007 and a decline after.) For the top fifth, the story was almost the same, as it was for the top 5 percent.

For the lower-income groups, it is a very different story: Households in both the lowest fifth and the second-lowest fifth earn less today in real dollars than they did in 2000.

Democrats used to talk about the poor more than they do today. Lyndon Johnson, for all his political shortcomings and personal hideousness, knew poverty, had seen and smelled poverty, and hated poverty. Democrats today talk about the middle class because that’s where the votes are. Republicans talk about . . . how many flat-screen televisions poor people have, mostly.

Socially and politically, the “inequality” that dominates the American conversation involves the lives of billionaires and their social set, the Davos gang and Monocle Man and the Silicon Valley venture capitalists, whose lives really are in many ways increasingly alien to the main stream of non-billionaire life and experience. But it isn’t the poor who are made anxious by Mark Zuckerberg and Jeff Bezos — it is the adjacent and nearly adjacent (socially, not in terms of gross income) upper-middle and lower-upper. As Megan McArdle once put it, in Washington “rich” means whatever is beyond the household income of a couple of top-shelf journalists. And that is of some interest in an economically segregated society in which the price of admission to the right side of the velvet rope is increasingly within reach of the upper middle.

That’s the one good thing you can say about American airports: They make plain the economic segregation that is elsewhere largely implied. You want to know your status? It’s right there on the ticket. That economic segregation is based on more than personal income: A consultant for a big firm who makes $100,000 a year and flies 100,000 miles a year with a lot of stamps on his passport has a life that is very different from that of a financially adjacent high-school principal, who might very well earn a quite a bit more money. This is an excellent time to be an organization man with Apple, Goldman Sachs, McKinsey, the State Department, Harvard, etc. The upper middle and lower upper are today so closely identified with the cluster of institutions in which they move that many important things about their lives and experience depend more on whether they are associated with very wealthy institutions than whether they themselves are very wealthy.

With that as context, consider: The anxiety about “inequality” prevalent in our discourse is the result of the friction between first class and business class, with scant attention paid to those seat 36B types who fly once every three years to visit grandma in Sheboygan. Or, to put it in the relevant automotive terms, it is an encounter between the E Class and the S Class. That’s why you’ll seldom if ever hear Travis Scott and his private-jet lifestyle come up in a Washington discussion about who has too much money, even as he brags about the mother of his child being on the cover of Forbes (Kylie Jenner over the headline “America’s Women Billionaires”). As the political scientist Hannibal Lecter observed, we covet what we see every day, and the lives of 26-year-old rappers are as remote from the Washington policy crowd as are those of Mongolian eagle-hunters. If you’re a New York journalist or a D.C. think-tanker, you might very well know somebody who knows Jeff Bezos or Mark Zuckerberg. You probably don’t know anybody who knows Travis Scott.

And hence the weirdness of our class politics: While our politicians are out there pandering to a middle class and an upper-middle who are doing relatively well, and while the members of that pandered-to class envy and resent those above them who are doing spectacularly well, the real incomes of the poorest quintile have declined by about 12 percent since 2000 — which is to say, they’ve gone down by a bit more than the incomes in the middle have gone up.

We have a welfare state that mostly is oriented toward the interests of the middle classes, with Social Security and Medicare being our most expensive social programs. All conversations about entitlement reform are predicated on ensuring the interests and the comfort of the middle class. The poor? They aren’t really considered as citizens with meaningful interests at all, but as problems to be managed as efficiently as possible — burdens only, lacking in agency. And many of them do exhibit an astonishing lack of agency. But they do have interests, including an interest in economic growth that will help to create the opportunity for them to improve the material conditions of their lives. Sometimes that gets mentioned. What does not get mentioned is the class politics of, e.g., public education, in which the interests of the poor who attend our failing schools and depend on them are sacrificed to the interests of the middle and upper-middle professionals who work in them. Let a few college-educated federal bureaucrats miss a paycheck and there’s a whole coyote pack of howling — let the incomes of the poor decline, steadily, for a couple of decades, and what happens?

Nothing, really.

Figures such as Dorothy Day, Mohandas Gandhi, and Lyndon Johnson had in common that they knew the poor. They also had in common, tragically, that they came to the wrong conclusions about them. Our so-called “war on poverty” has been a bonfire of capital that might have been put to productive uses and actually improved the lives of both the poor and the well-off. We don’t lack resources. What we lack is a model of engaging with the question of poverty that is liberated from the crude and destructive politics of transfer from a to b through programs administered by c, in which the benefits predictably accrue most heavily to c. Our thinking also must be liberated from the superstition that the poor are poor because the rich are rich, that Travis Scott’s high-dollar Nikes are 50 pounds of chicken in disguise, that the wealth of the billionaires is commutable in a meaningful way. And perhaps it could begin by working to understand that the interests of the poor as citizens is something larger and more meaningful than a check from the government.

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