Class War from the NY Times, Which Brought You Luxe Dog Houses and $9,500 Cruises to Japan

April 24th, 2016 3:57 PM

Class war returns to the front page of the Sunday New York Times, with business reporter Nelson Schwartz’s long jeremiad against special cruise ship packages which surely represent a new Gilded Age, “In New Age of Privilege, Not All Are in Same Boat.” On the list of lamentables was a special $10,000 cruise option "hidden" on a ship offering less expensive choices. Yet for a paper which seethes at such Dickensian injustice, it doesn’t have a problem with sponsoring cruises to Japan that cost a minimum of $9,595.The paper has a history of hypocrisy in slamming rich people while also avidly catering to its rich liberal readership.

Ezra Dyer reviewed the 2012 Ferrari FF car in June 2012 under the headline, "Family Travel at the $300,000 Price Point." The lead: "Imagine you are heading to your ski house in Aspen with a couple of friends and a weekend’s worth of luggage. The forecast calls for snow. Do you grab the keys to your practical family vehicle or climb into your Ferrari?"

Jennifer Kingson tackled the pressing middle-class issue of luxury dog houses that same month: "Many of them have carpeting, heating and air-conditioning, indoor and outdoor lighting, elaborate music and entertainment systems. Some are even eco-friendly, with solar panels or planted green roofs. In fact, the only superfluous accessory in the modern doghouse may be the dog."

My colleague Tim Graham captured the Times' outgoing Public Editor criticizing the many articles “that celebrate the excesses of the 1 percent -- like the recent real estate piece explaining that members of a certain class of homeowners feel they need something called a ‘four-pack’: a pied-à-terre in New York, a beach house in the Hamptons, a ski villa in Aspen and a winter condo in Miami.”

Schwartz, heedless of his paper’s history, targeted cruise lines and amusement parks for ushering in a new Gilded Age.

Behind a locked door aboard Norwegian Cruise Line’s newest ship is a world most of the vessel’s 4,200 passengers will never see. And that is exactly the point.

In the Haven, as this ship within a ship is called, about 275 elite guests enjoy not only a concierge and 24-hour butler service, but also a private pool, sun deck and restaurant, creating an oasis free from the crowds elsewhere on the Norwegian Escape.


With disparities in wealth greater than at any time since the Gilded Age, the gap is widening between the highly affluent -- who find themselves behind the velvet ropes of today’s economy -- and everyone else.

It represents a degree of economic and social stratification unseen in America since the days of Teddy Roosevelt, J. P. Morgan and the rigidly separated classes on the Titanic a century ago.

What is different today, though, is that companies have become much more adept at identifying their top customers and knowing which psychological buttons to push. The goal is to create extravagance and exclusivity for the select few, even if it stirs up resentment elsewhere. In fact, research has shown, a little envy can be good for the bottom line.

The Times used one of its favorite “inequality” obsessed left-wing economists for intellectual backup.

Emmanuel Saez, a professor of economics at the University of California, Berkeley, estimates that the top 1 percent of American households now controls 42 percent of the nation’s wealth, up from less than 30 percent two decades ago. The top 0.1 percent accounts for 22 percent, nearly double the 1995 proportion.

But even as income inequality and the wealth gap stoke the discontent that has emerged as a powerful force in this year’s presidential election, for American business it represents something else entirely. From cruise ship operators and casinos to amusement parks and airlines, the rise of the 1 percent spells opportunity and profit.

Today, ever greater resources are being invested in winning market share at the very top of the pyramid, sometimes at the cost of diminished service for the rest of the public. While middle-class incomes are stagnating, the period since the end of the Great Recession has been a boom time for the very rich and the businesses that cater to them.


In many ways, the rise of the velvet rope reverses the great democratization of travel and leisure, and other elements of American life, in the post-World War II era. As the Jet Set gave way to budget airlines, in places like airports and theme parks even the wealthiest often rubbed shoulders with hoi polloi.

Some of Schwartz’s supposedly outrage-meter-pegging details were pretty weak:

At SeaWorld, a family of four can jump to the front of the line and score the best seats for rides and shows for an extra $80, in addition to the basic $320 admission. For people in the market for something more exclusive, there is Discovery Cove, next door to SeaWorld’s traditional park in Orlando.

Forget merely swimming with the dolphins. Today, parents can relax at a cabana and beach of their own, while their budding marine biologists spend the day with a trainer, feed the park’s birds, otters, nurse sharks and other creatures and, of course, frolic with the dolphins as well.


Many companies, though, have discovered that offering ordinary customers just a whiff of the rarefied air can actually enhance the bottom line, even if it stirs a certain amount of envy and resentment.

“Envy and resentment” on the part of Times reporters, certainly. Schwartz returned to his initial focus on the Haven, the secret ship within a ship on the Norwegian Cruise Line, while throwing out a line about the late unlamented Occupy Wall Street movement, which he had previously hailed.

Executives describe the virtues of elite segmentation with a directness that might well serve as fodder for supporters of Occupy Wall Street or Senator Bernie Sanders. At its debut in 2006, the Haven was swamped by tourists from regular quarters who paid $200 to upgrade to one of its 40 or so rooms, Mr. Sheehan recalled.

And by last year, when the even newer Escape sailed on its maiden voyage, the Haven’s 95 staterooms were located so high up in the forward part of the ship that even guests in comparatively expensive staterooms might remain unaware of its existence. Depending on the season, a room in the Haven might cost a couple $10,000 for a weeklong cruise vs. $3,000 for an ordinary stateroom elsewhere on the ship.

While the Haven is hidden, or at least camouflaged, on Norwegian’s cruise ships, its archrival Royal Caribbean, by contrast, makes no secret of what is available to passengers who pay the most. Its Royal Suite class isn’t a ship within a ship, but it serves much the same function with one significant difference: Regular passengers can push their noses up against the glass, literally.

Yet for a paper which seethes at such Dickensian injustice, it doesn’t have a problem with sponsoring cruises to Japan that cost a minimum of $9,595.

The report concluded with a guilty liberal professor.

Even though this kind of pampering might be good for business, and delight those on the right side of the velvet rope, the gap between the privileged and the rest may ultimately leave everyone feeling uneasy, said Barry J. Nalebuff, a professor of management at Yale.

“If I’m in the back of the plane, I want to hiss at the people in first class,” said Mr. Nalebuff, who has advised many Fortune 100 companies. “If I’m up front, I cringe as people walk by.”

Schwartz has long been taken with the idea of income inequality as a clear and present danger. During the headstrong days of Occupy Wall Street in 2011 he wrote a condescending piece about bankers, and forwarded this piece of presience:

A smaller group of bank executives are taking the protests more seriously. They see them as a sign of the growing economic divide in this country -- and are even monitoring the latest developments on Twitter....Some believe it could be years before the swarms of protesters end their marches on bank branches.

Or maybe not.