Even The Rich Have Cut Back
There’s a saying that “misery loves company”. If that’s the case, then I’m sure there are many folks who are feeling comforted by the fact that, in these tough economic times, there’s a reality that it’s affecting rich people as much as, well, everyone else.
There’s a recent story on CNN about Beverly Hills, one of the richest areas of the country, and some of the financial issues they’re having. Sure, they’re not broke, but many of their shops are drying up and closing, and others are offering deep discounts on products, ready to take a loss just to try to sell something. One shoe store owner reported marking shoes she purchased for around $800 down from their selling price of around $2,400 to $300, just to try to move them. And the city itself says that it will lose around $24 million from its tax base for the year.
What’s the deal? Are the stars suddenly in trouble? No, it’s the same thing that places like las Vegas and Reno are seeing. These places usually thrive on tourists coming in to see what there is to see and to participate in some of the local endeavors that famous people love. Thing is, in this economy, these and other vacation spots are suffering, as most people are staying home and conserving their money, or possibly don’t have the money to travel to begin with. So, even though people with wealth are still buying whatever they want, the numbers of others are dwindling, and that’s what usually drives business.
To use an odd segue for a minute, it’s like what’s happened with health care over the past 20 years or so. People used to get admitted into the hospital for a few days for most surgeries back in the day, and hospitals were able to live off inpatient money and not have to worry all that much about outpatient services. Nowadays, more often most surgeries are basically in and out procedures, and yet hospitals still have to have inpatient beds for the truly sick, and thus they’ve been forced to figure out how to capture as many of the outpatient dollars, which means trying to convince more outpatients across the board to use their facilities and programs rather than going elsewhere, because outpatient money and volume is what saves hospitals in today’s world.
Back to the rich, and we find that it’s not just Beverly Hills rich who are changing up. No less a mogul than P.Diddy announced that he was giving up his private plane because it costs too much to keep around, and will now be flying commercial airlines; first class, of course, but still, it’s a major change in the life of someone who’s best known for throwing parties that cost millions of dollars to host in his past. Not only that, but we also did have stories of people like Steven Spielberg and Kevin Bacon who have lost significant amounts of money in the Bernard Madoff scandal.
Do we now weep for the rich? No, I wouldn’t say that, but I would say that seeing how the rich proceed with life is an interesting barometer into seeing which direction the country is heading into as far as the economy is considered. If we start seeing lavish excesses again, the Academy Awards tonight notwithstanding, then we’ll know all is right with the world. But if we start seeing more and more celebrities doing commercials,… perish the thought.