Paying for the High Prices

Speaking of density, Mickey Kaus concludes some speculations on the disparity between wealth inequality and consumption inequality in the United States with a thought about rising restaurant prices:

My anecdotal sense parallel's Klein's--with the exception that all the good $45/person once-a-week restaurants on my side of L.A. seem overnight to have become $65/person restaurants, and I can't really afford them anymore. It's as if they suddenly realized they could survive on the business of the rich, and don't need the middle. ... Worst possibility: The rich will pay extra precisely to have the middle excluded. I don't think that's what is going on at, say, Chaya Venice. But I may have to go back to do some now-tax-deductible field research.



This doesn't strike me as particularly unlikely. Speaking personally, having abandonned a 1.5 pack-a-day smoking habit that was costing me upwards of $200 a month in January, I joined an inordinately expensive gym that still left me with substantially more cash for non-cigarette, non-gym expenditures. One of this gym's major selling points is precisely that it costs a lot of money, and therefore subsists with a relatively low number of members per unit of gym equipment. The point isn't to create a "rich people only" preserve as such (there are, after all, plenty of heavy smokers in the non-rich demographic); rather, you're paying high prices to avoid crowding.

It seems to me that that's what a lot of inequality-on-the-ground looks like in the contemporary United States. The laws of physics and the reality of regulatory policy means that the desirable physical space is ever-more at a premium as the population and economy grow. So one thing the very rich buy with their bigger-and-bigger share of national income is space. Not so much in gyms and restaurants (though perhaps in these circumstances as well) as in conventional real estate. The super-rich and the merely prosperous can both afford an 80 gig iPod, but look into buying a house in the most expensive neighborhoods of the country's big cities and you'll see that the rich really are getting something for their money.

On top of all that, of course, there's small matters like grossly unequal access to health care, education, legal services, and the small matter of America's low, low, low levels of social mobility, but I was trying to stay on topic!