I wonder if the instinct to show off or "peacock" one's wealth is part of a larger social level mean-reversion process. Wealth display might aid in securing mates and other forms of social prominence, yet it also triggers envy which causes others to find ways to drag the individual back lower into the pack or target with new tax findings. In a fictional case, the gangster was identified and targeted because for once we went "flashy" with a vulgar fur coat, and was immediately picked out in the crowd, which triggering his ultimate downfall (also, listening to a woman when he shouldn't have)

Then you have the lists compiled by media of "top earners" that some of the members might prefer not to be on. Every time you see these, you also see the left proposing solutions to level things– "they make more than all the kindergarten teachers in the world", for example. So it seems the list compilers are also playing a part to pull things down–generating the fanfare that triggers envy.

Do markets that "peacock" in an unusual way also undergo this same process. Perhaps the markets that create more "flashy" signals are dragged down sooner vs. those that quietly advance without fanfare. Don't know if any of that is true so I am making assumptions that would need to be defined and tested.

anonymous writes: 

Do you think it an accident that Lifestyles of the Rich and Famous followed a decade thoroughly forgettable from an economic perspective?





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