A Donald Trump-Led Trip Back to the Gold-Plated ’80s
The American wealthy are about to enjoy a giant back-to-the-1980s party, hosted by the new billionaire in chief, Donald J. Trump.
From his gold-plated penthouse to his trickle-down tax cuts and his Reaganesque slogans, President-elect Trump is bringing back the ’80s prosperity gospel. His approach to wealth harks back to the days of “Dynasty,” DeLoreans and deficits, when the rich were admired and a former actor-turned-president restored America’s optimism and global muscle.
The wealthy are already partying like it’s 1989. If Mr. Trump makes good on his tax cut promises, billions are expected to go back into their pockets. The stock market is reaching record highs, and sales of Picassos and Warhols are resurgent. All that is missing now is Robin Leach’s “Champagne wishes and caviar dreams.” And Mr. Leach is optimistic.
“In the next four years, it will be O.K. to be rich again,” said Mr. Leach, whose hit TV show “Lifestyles of the Rich and Famous” helped define ’80s aspirations. “The cars will get bigger, the houses will be more luxurious, and it will be O.K. to wear jewelry and gowns again.”
Of course, times have changed since Gordon Gekko said that “greed, for lack of a better word, is good.” In a post-Thomas Piketty world where even traditional Republicans warn about the wealth gap and the effects of globalization and technology, Mr. Trump’s ’80s blueprint may prove as outdated as shoulder pads and the Cold War. His rewards for those at the top are likely to make inequality even wider and could draw criticism from the populist voters who helped elect him.
Still, Mr. Trump remains a creature of the decade that made him famous. Take his tax plan. He has proposed cutting the top rate to 33 percent from 39.6 percent, cutting the corporate rate to 15 percent from 35 percent, trimming the capital gains tax and eliminating the estate tax. These would be the largest tax cuts for the wealthy since the Reagan reductions of 1986.
According to the Tax Policy Center, the after-tax incomes of middle-class and lower-income taxpayers would grow less than 2 percent under the Trump plan. The incomes of the top 1 percent of earners, by contrast, would soar about 14 percent.
Put another way, nearly half of Mr. Trump’s tax cuts would go to the top 1 percent — recalling Reagan’s trickle-down theory: Money at the top will flow down to those at the bottom.
“The question is: In this economy, will that actually happen?” said Roberton Williams, a fellow at the Tax Policy Center.
Mr. Trump, of course, has invited the Reagan comparisons, borrowing Reagan’s 1980 slogan “Let’s make America great again.” And like Reagan, his combination of tax cuts for the wealthy and increased spending by government could lead to higher deficits.
Yet for now, Mr. Trump’s emphasis on tax cuts and deregulation is ushering in an ’80s-like euphoria among the rich. Since the election, stocks have reached record highs. Strong art sales this month at Sotheby’s, Christie’s and Phillips brought in a total of more than $1 billion. Christie’s sold a de Kooning for $66.3 million (well over its estimate of $40 million) and a favorite of ’80s collectors, a Monet, for $81.4 million.
High-end real estate, which was in a slump, is also poised for growth now that a real estate developer will be in the White House.
Sales of luxury goods are rising, after a slowdown in China and less conspicuous consumption put a damper on them last year. An executive with Net-a-Porter, the high-end fashion company, cited Mr. Trump’s wife in the 1980s — Ivana — as a “key inspiration” for some of the fall fashion lines, which emphasize “hard-edged, power-shoulder jackets,” bouffant hair and bright lipstick.
Even Mr. Trump’s celebratory election dinner was an ’80s throwback moment. Rather than heading to Maialino, Le Bernardin or any of the current power restaurants, Mr. Trump and his family opted for the “21” Club, a favorite haunt of the celebrities and power brokers in the 1970s and ’80s. As he told the wealthy crowd at the restaurant, “We’ll get your taxes down. Don’t worry about it.”
And Mr. Trump is reluctant to give up his ultimate homage to the ’80s: his apartment. The three-story penthouse in Trump Tower is filled with gold, marble, Greek gods painted on the ceiling and pillows embroidered with the Trump family “coat of arms.” For a man who once said, “Part of the beauty of me is that I am very rich,” it is no wonder he is having second thoughts about leaving his Versailles in the sky for public housing on Pennsylvania Avenue.
Mr. Trump’s flash and dazzle stand in stark contrast to the new culture of wealth. In the ’80s, success meant excess, bigger was better, and wealth was meant for display. Today’s wealth culture, by contrast, is all about staying under the radar — jeans and sneakers instead of suits, whitewall minimalism rather than gold, and a Tesla in the garage, not a Rolls. They prefer the attention of signing the Giving Pledge to buying a megayacht.
The question is whether Mr. Trump, leading by example, will make wealth glamorous again — and bring back the days of Champagne wishes and caviar dreams.
“The funny thing is, Donald Trump doesn’t even drink Champagne or any alcohol,” Mr. Leach said. “And he doesn’t eat caviar.”