Not that overpaid CEO’s are crazy. You have to be pretty sharp to be where they are, and to remain there. But they suffer, in my view, from what I term “personal inflation.”
I define the phrase as a devaluation of one’s personal property, including physical possessions as well as currency, caused by overabundance. Thus, after you’ve made your first $1 million, that million does not have the value that it would for a struggling middle-class family. In fact, it is no longer $1 million. It may in its new form represent an embarrassingly puny sum, compared with the vaster earnings of your new peers. And it doesn’t matter what you buy with your million. A Lexus? A comfy spread in Malibu? These too will be devalued. You’re still keeping up with the Joneses, just new Joneses. So, when someone who is already among the richest people on earth, possibly among the richest people who have ever lived, spends his or her days in frantic search of new ways to squeeze profit from stones, that person is, in his or her mind, a pauper, a subsistence laborer one mistake away from utter ruin.
What does this mean for the struggling middle-class family, or for a family below the poverty line? Why should they worry about personal inflation?
They should worry because personal inflation is a reality at all levels of American society. I observed as an elementary teacher that kids in the free lunch program commonly owned first movie cassettes and later DVD’s that implied VCR’s and DVD players at home. The typical low-income kid today owns hundreds of dollars worth of cell phones, Ipods and other devices. The point is not that our low-income kids are not really low-income. Their families do face privations, often in critical areas such as health care. But they take as a given ownership of much expensive gadgetry that would have enthralled the wealthy classes of the past. And most of our low-income people are not low-income in the sense that people are in much of the rest of the world, where low-income entails starvation at worst, and at best an entire family sharing the cell-phone (Indian cell phones are now equipped with separately programmable contact lists to accommodate multiple users). But ownership of one’s own cell phone is scant comfort to a low-income kid in America, because personal inflation has devalued the cell phone. Everyone has one; it’s not an element of wealth.
The middle class as well has been hit with personal inflation. The subprime mortgage debacle was made possible by the expectation that the entire middle class is in a position to own a home. Descent to mere apartment dwelling is not taken here as the incredible boon of security that most of the world judges it.
Personal inflation is a worldwide phenomenon, but it has hit the U.S. hardest because of our unprecedented wealth. The post World War II abundance has been so extensive that almost no one has been immune to its effects, and no one knows anymore what the term “luxury” means. Is a cell phone a luxury? What kind of deprivation would it bring to deprive your child of the ability to text? Forget texting; how about indoor plumbing? Poverty used to entail an outhouse and a long schlep to the well with a bucket. Now everyone in the poorest part of town in any American city has a toilet and a tap. It means nothing. The point was brought home to me during a tour of Warwick Castle in England. High in the battlements I discovered the “throne” where King Henry II, among other notables, relieved his royal bowels: an outdoor stone bench with a round opening above a stinking shaft where one heard one’s productions splash into a stagnant pool 100 feet below. Tourists are left to speculate on the nature of the king’s toilet paper, but it’s a safe bet he didn't need to be told not to squeeze the Charmin. Nor was there evidence of hand washing facilities.
Today we perform our ablutions in a luxury that no king’s treasury could have purchased, but does it make us feel better? Does a trip to the bathroom assuage the rage we feel at the thought of what Goldman Sachs executives rake in? No, because CEO’s use the executive washroom! They have a special key! Storm the Bastille!
Henry II's throne, Warwick Castle
What should we do about our personal inflation? Each of us could take a moment to give thanks for our toilet, but I have a special idea for our villainous CEO’s: Meditate on the illusion that your money has lost its value. You are rich; get over it. Then try to figure out how you can use your wealth to help mankind deal with the dangers it appears to be heading for. And make sure we know about your efforts, so we can stop worrying about the obscenities.
What should we do about our personal inflation? Each of us could take a moment to give thanks for our toilet, but I have a special idea for our villainous CEO’s: Meditate on the illusion that your money has lost its value. You are rich; get over it. Then try to figure out how you can use your wealth to help mankind deal with the dangers it appears to be heading for. And make sure we know about your efforts, so we can stop worrying about the obscenities.
