Friday, January 27, 2017

Zillionaires Prepare for the End of the World

I was listening to NPR the other day and heard an interview that I found interesting. Evan Osnos of The New Yorker typed out a fairly interesting missive about survivalism; surviving the aftermath of the next great catastrophe.  You can read it here, Doomsday Prep for the Super-Rich, but the title says it all.

In part, it covers the survival preparations of the super rich, such as Steve Huffman, the thirty-three-year-old co-founder and C.E.O. of Reddit, Roy Bahat, the head of Bloomberg Beta, a San Francisco-based venture-capital firm, and Justin Kan, co-founder of Twitch, a gaming network that was sold to Amazon for a billion dollars.

These people, and a lot of others like them (billionaires and multi-millionaires), plan to flee the country to New Zealand, where both immigration and property sales have spiked, and the Māori have started erecting Go Away! signs.  Evidently they aren't crazy about adopting to Silicon Valley norms.

There's also the Survival Condo Project, a fifteen-story luxury apartment complex built in an underground Atlas missile silo.  The developer bought a decommissioned missile silo out in Kansas for 300 large, threw twenty million into renovations, and sold the resulting condominiums for a tidy profit.  He's working on two more similar developments, each significantly larger than the first, and both are sold out.  The enclaves include armed security guards dressed in BDUs and carrying semi-automatic rifles, although for my money the rifles are the full auto variety.

Owning a retreat is one thing; getting there is something else.  In the case of New Zealand, everyone concerned has a private plane capable of transatlantic flight.  The plane, however, requires a pilot (and probably a co-pilot), and the pilot had better be experienced.  In the event that the pellets really do hit the turbine blades, I'm wondering how many pilots will show up at the hanger with their family in tow, along with Bowser and Mister Whiskers, and then I wonder how many will understand when the billionaire states that the plane just won't hold everyone.  Not many, I'm thinking.  There's also the little matter of a no-fly executive order from the double wide in D.C.

I have no plans to buy a second home in New Zealand.  For one thing, it's over 5000 miles from Columbus, OH, so travel is somewhat problematical.  For another, my current economic situation (badly bent) prohibits such an expenditure.  What I find interesting is the motivation for the super rich to buy a new home in an out-of-the-way spot; South of the equator and East of the date line.

Let's say we have a calamity which causes the government to break down.  We're talking local government here, not Federal.  Let's take hurricane Katrina as an example.  I'm not going to recount the absolute hell on earth that was the aftermath of Katrina, except to say that two things became eminently clear:
  • The government is incapable of providing food, clothing, shelter, medical attention and safety for a large number of citizens.
  • The first priority of the government is to re-establish control of the area, over and above the welfare or civil rights of the citizens.
  • Decisions made by government employees are made arbitrarily, and are absolute, and this includes confiscation of property.

Residents of Florida are very familiar with hurricanes and government assistance.  In any given hurricane, most will board up their home and make sure their shotgun is loaded.  They wait it out, and after it's over they start cleaning up.  People have been known to help each other where possible, and to band together to protect their little slice of heaven from looters.  The government doesn't like this attitude, but so far they haven't done much about it.

The point here is that sooner or later, everything returns to some version of normal, because this is local government only.  The Federal government is cooling their heels in D.C. and worrying about being on time for the scheduled committee meeting, which is really a cocktail party.  Which brings me to what the super rich are really and truly worried about - the huge gap between the rich and poor, or the super rich and the Great Unwashed.  If you believe the New Yorker (and a few other sources), the gap is roughly the size of the Grand Canyon and it's getting wider.

From the article:
Robert A. Johnson sees his peers’ talk of fleeing as the symptom of a deeper crisis. At fifty-nine, Johnson has tousled silver hair and a soft-spoken, avuncular composure. He earned degrees in electrical engineering and economics at M.I.T., got a Ph.D. in economics at Princeton, and worked on Capitol Hill, before entering finance. He became a managing director at the hedge fund Soros Fund Management. In 2009, after the onset of the financial crisis, he was named head of a think tank, the Institute for New Economic Thinking.

The gap is widening further. In December, the National Bureau of Economic Research published a new analysis, by the economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, which found that half of American adults have been “completely shut off from economic growth since the 1970s.” Approximately a hundred and seventeen million people earn, on average, the same income that they did in 1980, while the typical income for the top one per cent has nearly tripled. That gap is comparable to the gap between average incomes in the U.S. and the Democratic Republic of Congo, the authors wrote.
And that, as is said, is that.  That's what a lot of these people fear.  Economic inequality has been a reality in the United States since The Pilgrims set up shop at Plymouth Rock, or the Spanish invaded St. Augustine, or... whatever.  Economic inequality is a fact of life.  Live with it.  I know I do.  I never give it a second thought, and I think the super rich are being a little foolish to be so worried about it.  The people who should be worried are the upper middle class.  Here's why.

Say you work for a living, and your boss is a real jerk.  Other expletives suggest themselves, but I'm trying to retain my PG rating.  You're salaried, and the jerk forces you to work a lot of unpaid overtime.  He rearranges your vacation schedule to suit his own personal convenience, and thinks nothing of ruining your carefully planned vacation (I actually watched this happen once - my coworker had a three week cruise planned, and the boss took a week of it right in the middle).  He's profane and has a bad temper.  What's worse is that you've built up a lot of seniority, and even if you did find another job it wouldn't pay what this one does, and you probably can't find one anyway.  Just think about the reference your boss will give you.

Along about July 4th, some heretofore unknown Islamic lunatic screams Allahu akbar! Die, Capitalist Pigs and Devil Worshipers! then unleashes a biological weapon (he sneezes, and the snot rocket hits someone).  The new disease has a three week incubation time and is airborne.  In a month the SHTF, and we're off and running.  You, being a working stiff, collect what food you can, thank the powers that be for your vegetable garden and chickens in the back yard, and you load every gun in the house.  No one goes anywhere by themselves or unarmed.

One fine day while you and your neighbor are walking down to the government food disbursement truck, you see a familiar face.  Your boss, now your ex-boss.  And, well, he never believed in guns, and he isn't doing so well.  He hasn't eaten in a day or two, he says, and because he's not armed he tends to get robbed a lot.

What do you think your reaction is going to be?

Should this ever happen to me, I hope I'd be able to handle it correctly.  That is, without vengeance or vindication.  But I truly don't know.  I really don't.

But that's who should be worried the most.  Middle management.  Not because of what they have, but because of what they don't have.  The love and respect of the people who work under them is conspicuously absent, and since it was never really needed until now, it was never a concern in the past.  Anyway, that's what I think.

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