When a topless painting of the late “Golden Girl” Bea Arthur and the Dow Jones industrial average sell at record prices on the same day, one doesn’t need to don a pair of Google glasses to realize that the bubble is back — at least for those in the top 1/2 of 1 percent who are cashing in on the spring blossoming in asset prices.
And that’s exactly what we saw this past Wednesday as John Currin’s nude painting of Arthur fetched $1.9 million at auction, and the Dow closed the week comfortably above 15,350 for the first time ever. Betty White must be stripping down for her own Currin portrait right now.
Junk bonds, Jasper Johns art and jazzy real estate on both coasts are being bid up in a buying frenzy not seen since the last bubble began to burst back in 2007. And on Friday, a Greenwich, Conn., estate went on the market with an asking price of $190 million. The Gatsby economy is back and better than ever.
Trouble is, for the 99.5 percent of Americans not living the West Egg lifestyle, it is becoming increasingly clear that Ben Bernanke’s near-zero interest-rate policy continues to be a bust even as the Fed chairman and the ivory-tower economists resist any efforts to bring it to an end.
Not only has the policy not generated the wage inflation that might lift all boats, it continues to blow the divide between über-rich and mere mortals wider at each turn.
Nowhere can this be better seen than in the stupendous auctions at Sotheby’s and Christie’s in recent weeks. On Wednesday, Christie’s auction of contemporary art netted a record $495 million. The very next day, Walmart reported that its sales turned cold in the first quarter as higher payroll taxes had its lower-income consumers cutting back.
That’s why it’s so troubling that Bernanke has seemed to turn a blind eye to the shifts in prices and demand all around him. Instead, in a strange Q&A session in Chicago, Bernanke pointed to the stock of Microsoft as one he monitors for signs of a bubble in stock prices. Earth to Dr. Bernanke: If you’re watching a tech stock, it should be Google, which has risen an astounding 50 percent in the past year alone.