Friday, December 6, 2013
William D. Cohan
(Continued from page 1)
www.businessinsider.com.au This 20,000-square-foot mansion in the Hamptons was listed for sale this spring for $58.5 million, according to The Real Deal. The eight-bedroom home and 4 acres on Mecox Bay has a tennis court, Jacuzzi, infinity pool, eight fireplaces, a wine cellar, and a private pier. The property also comes installed with Crestron security cameras that can be controlled and monitored from anywhere in the world — an important security measure for anyone willing to spend $58 million on a house.
Farrell thinks January's budget deal in Washington, which avoided the so-called fiscal cliff, helped unleash the latest round of animal spirits in the Hamptons. But what sent things into overdrive in his world -- where summer rentals are apparently approaching $1 million a pop -- are the policies of the Federal Reserve. "The stock market's flying through the roof and who's that helping, the middle class? No, I mean that's the reality," he said. "Out here, life goes on."
Sadly, recent data bolster his point. The incomes of the top 1 percent plunged during the recession, but economists Emmanuel Saez and Thomas Piketty show that the wealthy have since recovered almost all their lost ground. The incomes of the other 99 percent, meanwhile, have barely nudged upward. The gains from the bull market in stocks, rising home prices and glowing corporate profits are all flowing to the affluent.
Can the legacy of the 2008 financial crisis really be that the accidental rich have gotten rich again and have returned to their carefree, spendthrift ways? I am all for entrepreneurs getting unlimited financial rewards for figuring out better ways to do the things that people seem to want. But what really sticks in my craw is when the Wall Street bankers and traders who got us into the mess five years ago -- and whom the American people bailed out -- continue to get huge bonuses that come from taking risks with other people's money without so much as a second thought.
William D. Cohan, the author of "Money and Power: How Goldman Sachs Came to Rule the World," is a Bloomberg View columnist. He was formerly an investment banker at Lazard Freres & Co., Merrill Lynch and JPMorgan Chase.