Multinational Monitor

MAY/JUN 2009
VOL 30 NO. 3


The Nationalization Option: Considering a Government Takeover of Citigroup
by Robert Weissman


The Wall Street Rip Off: Fees and Consequences
an interview with
John Bogle

Eyes on the Prize: Incentivizing Drug Innovation Without Monopolies
an interview with
James Love

New Directions for Government Motors
an interview with
Jerry Tucker

A BIG Idea: A Minimum Income Guarantee
an interview with
Karl Widerquist

Grassroots Power and Non-Market Economies
an interview with
Beverly Bell



Behind the Lines

Single Payer Sanity

The Front
Dying for Work - Radioactive Mining

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


Greed At a Glance

Luxury on a Budget

SOS. All hands on deck. Batten down the hatches. The luxury yachting industry has hit rough recessionary waters. Really rough. The biggest boat builder in the United States filed for bankruptcy in June. In Europe, two yacht-builder powerhouses have keeled over since April.

No matter. At least one entrepreneur sees smooth sailing ahead — in timeshares. Alberto Castagna, the luxury guru at Italian yacht-maker Rodriquez Cantieri Navali SpA, has just put out to sea the first of 10 luxury boats that will offer five-week timeshares at $2.8 million apiece.

Twenty different owners have already signed up. The Ocean Emerald, the first of the seven-deck yachts, will cruise the Mediterranean and Caribbean with a seven-member crew.

Style Amid Meltdown

The latest casualties in the global economic crisis: the landlords who lease retail space in the world’s top luxury shopping destinations. From Union Square in San Francisco to the Pitt Street Mall in Sydney, rents are sinking, already nearly 25 percent off last year’s rate peak.

Realtors see little prospect for a quick market turnaround. Laments CB Richard Ellis realtor Jay Luchs in Los Angeles: “It isn’t chic anymore to go out and blow money.”

What qualifies as chic, on the other hand, can get confusing. At this year’s early summer annual luxury fair in Porto Cervo, the Sardinian getaway for the global glitterati, luxury automaker Pagani didn’t grab a single bid for its newest supercar, the $1.7 million Cinque.

But the makers of Exousia Gold Luxury Water did just fine at Porto Cervo. They sold 30 bottles — at $2,800 each.

Why such a big run on designer-label mineral water? Explains reporter Tara Loader Wilkinson: “No one wanted to come away from the fair empty-handed.”

Shame and the Shameful

Wealthy consumers, marketing consultants at Bain & Co. have started reporting to their clients, are feeling “luxury shame,” a hesitance to splurge at a time most people are scraping. Kepler Capital Markets analyst Jon Cox sees the core luxury industry problem: “No one wants to be showing off.”

Well, almost no one. Russian oligarch Roman Abramovich’s newest yacht, the 558-foot Eclipse, recently took its first test glide out of the German shipyard that’s been busy armor-plating it. The yacht — the world’s longest private pleasure craft, by 55 feet — comes better defended than some small nations. Among the security touches in the $608-million vessel: a military-grade missile defense system, bulletproof windows and a private submarine that “doubles as an escape pod.”

Abramovich hasn’t yet revealed whether he plans to unload any of his three other yachts. The smallest of the trio stretches half the length of a football field.

The Meandering Market

The rich are definitely cutting back on opulent consumption. Or maybe they’re not. Why so hard to tell? The luxury market keeps sending out remarkably mixed signals.

High-end winemakers and restaurants, for instance, are reporting sinking sales for pricey bottles of vino. The menus at the swank Morton’s The Steakhouse now feature wines down at $60 to $70. Diners, says Morton’s VP Tylor Field, no longer “want to pay for $200 or $300 wine.”

On the other hand, over at Patek Philippe, everything’s business as usual. The luxury watchmaker is once again this year marketing the Sky Moon Tourbillon, a timepiece “so complicated that only two are produced each year.” The price: $1.3 million.

Mansions with a View

In Switzerland, officials at the canton of Obwalden have been doing everything imaginable to make rich people feel wanted. Three years ago, the canton chopped corporate taxes and cut the personal income tax down to a flat 1.6 percent. Millionaire CEOs who’ve established legal residence in the canton now pay taxes at the same rate as the poorest locals.

But this generosity toward grand fortune hasn’t paid off. Few rich are actually moving in. They’re merely establishing post office box presences to reap the canton’s tax benefits. Disappointed Obwalden officials have now gone to Plan B. They’ve designated spectacularly scenic local land previously off limits to development as “special living zones” for millionaires.

Locals fighting the designation have Swiss environment chief Moritz Leuenbergeran for an ally. Charges the government minister: “These special living zones are nothing less than a form of apartheid.”

— Sam Pizzigati, editor of Too Much, an
online weekly on excess and inequality

Mailing List


Editor's Blog

Archived Issues

Donate Online


Send Letter to the Editor

Writers' Guidelines