One of the more surprising investors on the Madoff list is the Muus Independence Fund. Muus Independence is a fund-of-funds linked to Tiger 21, the New York forum for wealthy investors.

tiger21.com

Tiger 21, as “Richistan” readers know, is a wealth peering group where people worth $10 million or more can meet regularly to give each other advice on everything from investments to family (mainly investments). The idea is to create a haven from the conflicts of Wall Street firms and banks, offering straight talk from other rich people rather than product pushing from other bankers.

Yet the Independence Fund appears to have blurred a line of independence at Tiger. Michael Sonnenfeldt, Tiger’s founder, was also the principal owner of Muus. His fund included a number of Tiger members as investors, though Mr. Sonnenfeldt wouldn’t say how many.

Mr. Sonnenfeldt says the fund was “totally independent of Tiger 21″ and that he created a Chinese wall between the two. Tiger members weren’t required to invest with Muus. While the Independence Fund collected a fee, he says the fees were waved for Tiger members to avoid an economic conflict.

“Muus didn’t derive any economic benefit from Tiger members,” he says. He added that there was no overlap between the management of the fund and the management of Tiger.

The big question though is why get involved in selling financial products to members in the first place? Especially since Tiger prides itself on a lack of financial conflicts?

Mr. Sonnenfeldt said his hope for the fund was to leverage the buying power of Tiger members. But he said he decided to shut the fund down last year since it wasn’t worth the time and trouble–in part because it couldn’t generate fees from Tiger members.

As for investing with Mr. Madoff, Mr. Sonnenfeldt says he and the Muus team did as much due diligence as they could, analyzing monthly statements and examining its strategy. He said the Madoff investment represented only 7% of the fund’s total; he declined to give a dollar figure.

“With the benefit of hindsight, after any fraud is uncovered it always seems too good to be true,” he said. “But this was such an unusual set of circumstances and he had built up such a high level of credibility with so many experienced investors vouching for him.”

In the end, Mr. Sonnenfeldt says he is proud of the fact that none of the Tiger 21 members who had invested on their own with Madoff were wiped out by the fraud. The reason: Tiger’s so-called “portfolio review”–where members closely scrutinize each other’s holdings–discourages members from putting too much of their money in one investment.

In the seventh century B.C., the Greek legal code stipulated that “no free woman should be allowed any more than one maid to follow her, unless she was drunk: nor was to stir out of the city by night, wear jewels of gold about her, or go in an embroidered robe, unless she was a professed and public prostitute.”

Associated Press

Sean ” P. Diddy” Combs directs photographers as they sing “Happy Birthday” to him on Nov. 4, 2004. Combs was celebrating his 35th birthday celebration at Cipriani in New York. (AP Photo/Kathy Willens)

Such rules, now known as sumptuary laws, were aimed at putting people (and professionals) in their place. And they proved equally useful in Elizabethan England, when royals sought to tamp down the expanding ranks of strivers with such dictates as: “None shall wear any in his apparel embroidery, taffeta, satin damask in his outermost garments unless he is a Baron’s sons or Knight.”

In his New York Times column Monday, David Brooks quips that the American rich are now subject to a new kind of sumptuary code. This time it isn’t royals imposing rules to tamp down the bourgeoisie, but the middle class creating rules to drag down the wealthy.

First, there were those auto executives who didn’t realize that it is no longer socially acceptable to use private jets for lobbying trips to Washington. Then there was John Thain, who was humiliated because it is no longer acceptable to spend $35,000 on a commode for a Merrill Lynch office suite. Then there are the Wall Street executives who were suddenly attacked from the White House for giving out the same sort of bonuses they’ve been giving out for years.

The rich, says Mr. Brooks, are undergoing “social self-immolation” because the rules of acceptable spending have changed. In a post-TARP, post-bailout, Obama world, spending rules for the rich aren’t being set by other rich people. They are being set by “Ward Three,” the area of D.C. populated by left-leaning regulators, journalists, lawyers, Obama aides and senior civil servants.

Ward Three folks are now in charge, and they don’t like rich people. This, he says, has “nationalized extravagance and privatized Puritanism.”

All of which raises a practical question for today’s rich: what are the new rules of spending? How is a rich guy supposed to enjoy the fruits of his labor and support the economy (or, as Mr. Obama put it, “live high on the hog“) without getting media-pitch forked by the angry mob?

Here are a few of my own Sumptuary Laws for the Age of Obama.

SHOPPING BAGS No free person shopping on Rodeo Drive, Madison Avenue or Worth Ave., shall carry items in attention-seeking shopping bags containing logos, ribbons, hand-crafted, silk-woven paper or encrusted jewels. Upon purchase, all luxury items must be shipped home via the U.S. Postal Service or carried home in unmarked white or brown paper bags. Grocery bags preferred.

BLING The wearing of $300 jeans, $300,000 watches that don’t tell time and visible jewels larger than a grain of kosher salt are strictly forbidden. All bling should be partially or completely concealed, although five-carat diamond tongue studs can be acceptable for women and men who “stir out of the city by night.”

TRAVEL Automobile use is restricted to the Prius and other hybrid models (the hybrid Escalade doesn’t count). Air travel is restricted to coach or the cargo hold. Flying private is forbidden, whether on charters, fractionals, jet card flights or private jets. Flying pets on private jets is allowed only if the pet isn’t accompanied by the owner.

PARTIES Expenses for birthday parties and Sweet Sixteens aren’t to exceed $2 million.

The late Leona Helmsley famously said, “only the little people pay taxes.”

The past week seems to have proved her right. It started with news that the 400 highest-earning Americans paid an effective tax rate of 17% in 2006. That was the lowest effective tax rate in the 15 years the IRS has been keeping stats. (Advocates for the wealthy point out that these individuals, who earned an average of $236 million, paid an average of $45 million each in taxes–surely not chump change).

Associated Press

Tom Daschle speaks on Capitol Hill in Washington.

But the real firestorm erupted over the weekend, with news that former Senate Majority Leader Tom Daschle, President Barack Obama’s nominee to be Secretary of Health and Human Services, had to pay $140,000 in back taxes and interest for a chauffeur service provided for him that he neglected to record as income. At the same time, Nancy Killefer, would-be transparency chief, once had a $946 tax lien.

Then there is the escalating criminal investigation into U.S. clients of UBS who had hidden offshore bank accounts. As many as 19,000 wealthy Americans could be implicated.

The fact that the wealthy avoid taxes is nothing new. In wealth-management circles it is known politely as “tax efficiencies.” Nobody likes to pay taxes, but the wealthy are more “tax efficient” because they can afford better tax advice. Most of the time their tax efficiencies are legal and accepted.

The problem is that in a post-TARP, government bailout economy–when taxpayers already feel like they are being asked to bail out the wealthy on Wall Street–the public has less tolerance for tax avoidance by the rich and powerful. The fact that tax-hiking Democrats have been nabbed for not paying taxes only adds to the resentment.

“It is easy for the other side to advocate for higher taxes because–you know what?–they don’t pay them,” said Rep. Eric Cantor, a Republican from Virginia.

All of this goes to a point I have made repeatedly in the Wealth Report. Perhaps Congress should focus less on raising taxes and more on getting current taxpayers to pay their fair share.

Even though the market for collectible wines is slumping, Sotheby’s recently announced it will sell off 9,000 bottles in two auctions in March and April. The sale is titled “Classic Cellar from a Great American Collector.”

Wikipedia

It is large by any standard. But what really caught my eye was the statement in Sotheby’s news release that the sale is a “single owner collection,” meaning that it is all coming from one seller’s cellar.

Who is this “Great American Collector?” And why would he or she try to unload 9,000 bottles at a time when wine prices are collapsing?

Sotheby’s won’t say. Jamie Ritchie, head of Sotheby’s North American wine department, was uncharacteristically silent when I asked about the seller. “Sorry, I just can’t comment,” he said.

According to three people familiar with the auction, the seller is Aubrey McClendon, chief executive of Chesapeake Energy. These people say at least one other broker kicked the tires on Mr. McClendon’s collection before it went to Sotheby’s.

Mr. McClendon is one of the top wine collectors in the country, known for his love of Burgundy and Bordeaux. He also is known for his cash crunch. Last fall, he was forced to sell 94% of his stake in Chesapeake to pay back margin loans. Mr. McClendon’s stake once was valued at more than $2 billion. So it wouldn’t be surprising if he were to want to liquidate some of his, er, liquid assets.

Mr. McClendon, through a spokesman, didn’t respond to a request for comment.

Sotheby’s says it expects the sale to fetch at least $5 million–not much for a former billionaire, but these days every little million helps.

It also remains to be seen whether the auction will be a success. An article in the San Francisco Chronicle quotes experts saying that lot prices for wines at auction have fallen as much as 30% since the summer. Some bottles, like 1986 Leoville-Las-Cases, averaged around $360 a bottle in the past two years but are now trading closer to $200. (For those interested in current wine prices, Steve Bachmann of Vinfolio has an informative blog analyzing auctions, valuations and advice for sellers and buyers).

The McClendon collection may fare better than others. It features more than 1,500 bottles of Domaine de la Romanee Conti–a favorite Chateaux of the nouveaux that has held up relatively well in price. The collection also has plenty of Mouton Rothschild, Margaux and Lafite, also blue-chip names.

What is more, Sotheby’s is hedging its bets by splitting the auction in two, with half being offered in New York and half in Hong Kong. While U.S. collectors are pulling back, Hong Kong collectors have proven more resilient, with recent auctions there posting healthy results. (Sotheby’s is shipping 4,000 or more of the bottles in temperature-controlled containers to Hong Kong, something it has never done before).

Mr. McClendon may be the biggest wine seller so far in the financial crisis, but he most certainly won’t be the last. With many collectors running light on cash, I suspect more and more will turn to their wine cellars in search of real liquidity.

There were two revealing events in Palm Beach, Fla., Saturday.

The most publicized was the Red Cross Ball, the annual see-and-be-seen event for the island’s rich and semi-famous (See Richistan for more on the history of bare-knuckled social climbing behind the Red Cross ball).

Robert Frank

Tickets cost $1,000 a person, and guests don white tie, tuxes and tiaras and glide down the red carpet of the Mar-a-Largo Club between a neat row of Marines and foreign ambassadors. Host Donald Trump expected the ball to raise as much money this year as last year. For a moment, you could almost imagine an island completely sheltered from the recession or Bernie Madoff.

But a second event held over the weekend showcased the starker reality for today’s wealthy. Kofski Antiques across the Intracoastal Waterway in West Palm Beach held a two-day Madoff Estate sale, selling the personal possessions of two Madoff investors who lost the bulk of their fortunes in the alleged fraud.

When I visited the sale Saturday morning, the Kofski warehouse had the feel of a billionaire’s yard sale, with dozens of bargain-hungry buyers picking through the wreckage of a family’s once-privileged life.

There was a $3,000 mink coat and $350 fur stole. There was a $1,250 porcelain guinea fowl, a $3,850 crystal horse head and several $300 vases. One of the two Madoff investors obviously had a taste for the Far East, since the sale was filled with Asian carvings, ivory and furniture. One investor was literally selling off the family silver, with a Eureka Grand Baroque Sterling flatware set being offered for $350.

Chris Hill, Kofski’s owner, said he is lining up another Madoff sale, with two more clients who lost their fortunes to Madoff. He also has a sale lined up from a top executive of Lehman Brothers Holdings, who also lost a fortune.

“I guess it would be wrong to say I haven’t benefited from this,” Mr. Hill told me, as he was bargaining with throngs of customers. “But it’s very sad. I’ve got people coming to me selling things that have been in their family for generations.”

The buyers were less remorseful.

“I’m here to find some treasures,” said Cindy Davis, a Palm Beacher who picked up a $100 lamp. “I feel bad for some of these people, but maybe we’re helping them by buying some of their things. Maybe it’s like charity.”

And maybe the crisis has created two Palm Beaches–one selling the family silver and another buying it in the name of upper-class charity.

The realtors and housing analysts who argued that the top of the housing market would be immune to the housing market’s travails have now mostly given up. Most agree high-end homes have followed the rest of the market into the tank.

Sotheby

But what if the high end actually does worse than the rest of the market?

I haven’t heard anyone of repute raise this theory, but consider the following:

JUMBO DEFAULTS. An article today by my colleague Nik Timiraos shows that delinquency rates for jumbo mortgages–those that are too high to qualify for backing by the government–are more than three times as high as regular conforming loans. About 6.9% of prime jumbo loans were at least 90 days delinquent in December, compared to 2.1% for other mortgages. That suggests mortgages taken out by the affluent and wealthy, or at least the aspiring or former wealthy, are deteriorating at a faster rate.

FEWER BUYERS. When everyone was getting richer, selling a high-end home was a plus, since there was a rising number of buyers. Now, with Richistan evacuating faster than Malibu in a mudslide, the number of potential buyers for big, $1 million-plus homes is on the decline. At least on the middle and lower end of the housing market, there is a crowd of first-time buyers and discount-seekers ready to take up the slack. At the top, well, it is getting much more lonely among buyers.

WORST REGIONS. The regions with the highest-valued properties–New York, California, Nevada–have reported the biggest fall in prices. That means homes that once were priced at the top of the national market may take the biggest spill, and have the hardest time recovering.

THE INDEBTED RICH. Everyone assumed that the wealthy were living more within their means than the rest of the population. But they may have been just as leveraged as everyone else–and certainly owe more in dollar terms. From 1995 to 2004, the top 1% of Americans by wealth more than doubled their mortgage and residential debt to $494 billion. Since the recession reached the rich later than the rest of the country, that mountain of debt could become a huge overhang on the high-end housing market.

Pity today’s trust funders.

Their bright futures of easy money and endless leisure went up in smoke with the stock markets and financial crisis. They have seen their future Hamptons homes and Aspen villas crash in value, their charitable foundations get poorer and their bling budgets drastically curtailed. Some may not even get to replace their Bentleys this year.

Associated Press

Madoff’s house still had toilet paper on it Monday.

Then there is the group we might call Bernie’s Kids–the economically orphaned
trust funders whose parents lost money in Mr. Madoff’s fraud. We have read about dozens of foundations that lost millions of dollars in that alleged Ponzi scheme, and while most were created for philanthropy, some are vehicles for passing money from parents to their children.

Trust fund kids everywhere are up in arms. And in Palm Beach, Fla., they took matters into their own hands. According to an article in the Palm Beach Post, several teenage boys claimed responsibility Sunday night for festooning Bernie Madoff’s front yard in Palm Beach with toilet paper. The boys said they were “acting in retaliation after they lost their trust funds to the accused swindler” and that their act of toilet-paper justice was sanctioned by their parents.

By the time Palm Beach police arrived at the home Monday morning, the toilet paper was gone and the housekeeper chose not to make a police report, police spokeswoman Janet Kinsella said.

Among those who oppose inherited wealth, like Warren Buffett, the Madoff fraud might actually have a silver lining. While no one likes to see wealth destroyed, some may see Mr. Madoff’s impact on trust funds as a healthy corrective to inherited wealth and dynasty. Mr. Madoff may have finally achieved what Paris Hilton couldn’t–to limit the damages from unearned family money. It may even force some of today’s wealthy offspring to consider more drastic measures for their future–like working for a living.

Of course, it is a tragedy when anyone gets defrauded–whether the wealth is earned or inherited. But rather than this Halloween prank, which seems so, well, Middle School, couldn’t they have been more constructive, or least creative. Perhaps exercising their constitutional right to petition the government for some of that bailout cash? Readers, what other ways could Bernie’s Kids have struck back?

“Giving while living” became a mantra of philanthropy in recent years. Now, with the living running out of cash, it is the nonliving who are back in the lead as donors.

According to Slate magazine and the Chronicle of Philanthropy, 7 of the top 10 charitable donors in 2008 were from estates. That is a big change from 2007, when all of the top 10 donors were alive when they made their gifts.

Associated Press

“In the 13 years we’ve published the Slate 60 list, this is the first time a majority of the top donors have come from estates,” said David Plotz, editor of Slate. “Regardless, we continue to be inspired by the charitable donations the list recognizes and hope our readers are, too.”

What gives? The rich, according to the Chronicle of Philanthropy, just aren’t giving the way they used to. Donors in the finance sector are a big reason: about a quarter of the top donors in 2008 came from the financial world. Next year will see even fewer donations of $100 million or more, experts say.

Nonfinancial donors also are paring back. Among those who have dropped off the list this year are Pierre and Pam Omidyar, T. Boone Pickens and Oprah.

The biggest donors in 2008 were:

1. Leona M. Helmsley (bequest), $5.2 billion
2. James LeVoy Sorenson (bequest), $4.5 billion
3. Peter G. Peterson and Joan Ganz Cooney, $1.02 billion
4. Harold Alfond (bequest), $360 million
5. Donald B. and Dorothy L. Stabler (bequest), $334.2 million
6. David G. And Suzanne Booth, $300 million
7. Frank C. Doble (bequest), $272 million
8. Robert and Catherine McDevitt (bequest), $250 million
9. Michael R. Bloomberg, $235 million
10. Dorothy Clarke Patterson (bequest), $225 million

Destination clubs seemed like such a good solution for the new leisure class.

Photo credit: The LUSSO Collection

Rather than buying vacation homes, customers could sign up with a destination club and have their choice of a wide variety of high-end, private residences around the world, from a ski chalet in Aspen to a beach villa in Cabo. It was where the wealth boom met the why-own-it movement.

Destination clubs boomed in 2006 and 2007. Some even touted themselves as “experience investing”–allowing members to buy not only membership but also a share in a real-estate fund. Now, most investors have had all the “experience” they can take.

First, there was the demise of Tanner & Haley in 2006. The club, which pioneered the business, had all manner of operational and financial problems, many of which stemmed from the apparently surprising fact that members wanted to vacation in the same places at the same times of year. Clearly, not even the best computerized vacation models could have forecast that many guests would want to go skiing during winter holidays or visit the beach in August.

Now, a new round of troubles is hitting the industry. Lusso Collection, a destination club in Eden Prairie, MN.,–slogan “Perfect Vacations Start Here”–is in bankruptcy. Members paid $425,000 in a supposedly refundable deposit for membership and annual dues of $28,000. It is unclear what will happen to the investors or members.

That follows some controversy over at Ultimate Escapes, which is telling members it has to raise $22 million with a one-time charge. The fee is “designed to cover heavy losses in real estate value and a sharp decline in new membership sales,” according to an item on Haolgen Guides, which follows the industry. “One hundred percent of this [assessment] charge is slated to pay for the operational costs of the club,” said CEO Jim Tousignant. “We think it’s a one-time measure to deal with an absurd market measure.”

Needless to say many members are angry and asking tough questions about the club’s operations.

All of this highlights the core problem with destination clubs: you aren’t buying into a collection of homes, you are buying into a company, a management and one of the most volatile sectors of the property market.

When times are good, joining a destination club seems ideal: less money, more choice, equal quality. “The annual costs of my Lusso membership are less than half of what it cost to maintain my vacation home,” one member says on Lusso’s Web site.

But when times are bad, the company could implode. (I am sure Lusso has a fine management team, but I might have raised questions on learning that the founder’s main business experience consisted of being finance chief for a Finnish fishing-lure company.)

If the Lusso member quoted above still owned her vacation house, she would at least have the house. Instead, she has a membership in a club that may or may not continue to exist.

UPDATE: Since the comments were so lively on this, I thought I’d suggest more reading today…there’s an interesting piece on destination clubs by Susan Klime on Fraxfinder called “The Dark Side of the Dream” and news in the Denver Business Journal about High Country Club filing for Chapter 7.

Remember that proposed Greenwich, Conn., mansion with 26 toilets? Well its Russian owner, rejected by town planners on the first plan, downsized the home from 27,000 square feet to a more modest 21,000. And the toilet count has gone down to 15.

Jemal Wright Bath Designspan>

A little bathroom sparkle from Jemal Wright’s Swarovski-encrusted toilet from the Isis Collection ($75,000).

Yet Greenwichers still say “Nyet.” At a hearing Tuesday night to discuss the fate of the home, several local residents complained about its size and potential use, according to a Bloomberg article. The planning board hasn’t made a decision yet.

Russian airport-tycoon Valery Kogan plans to build the home on a seven-acre parcel he purchased in 2005, tearing down the 20,000 square-foot mansion located there.

The new plans call for an indoor pool in the basement and a gymnasium totaling more than 1,200 square feet. The basement also would feature a 12-seat theater, billiards room, game room, massage room and wine cellar. (It is unclear whatever became of the Turkish bath, Finnish bath and special room in the basement for grooming dogs).

Perhaps the most unusual new feature is a set of fiber-optic lights arching into a swimming pool. The house would have a patio shaped like an electric guitar and a winter garden with four statues. The septic system would have capacity for handling 480 people.

“We object to this proposal on three grounds: scale, traffic and use,” said Charles Lee, who lives across the street from the site. “It’s a big limestone government-like building” that, he said, “isn’t at all consistent” with the locale.

It is a bit rich for the residents of Greenwich–home to the hedge-funder palaces–to say a mansion isn’t consistent with its surroundings. Steve Cohen’s house is 35,000 square feet and has a reported 19 toilets, besting Mr. Kogan in both size and plumbing.

I’d guess the real objection is to the home is its imposing design (you can see a pic here) and, perhaps, its Russian owner. Maybe if Mr. Kogan started a hedge fund and added an ice rink to his plans he would have better luck.

In 2006, the auto-auction world was flooded with multimillion-dollar Ferraris and record-shattering Bugattis. Now the top sellers are Chevy Camaros and Corvettes–all for much less than $1 million. Car collecting, like many markets for the wealthy, is moving from the hyper-priced and exotic to the reasonably priced and familiar.

Barrett-Jackson

Barrett-Jackson’s annual auction in Scottsdale, Ariz., which wrapped up over the weekend and is known as the “car collector’s Woodstock,” brought in $63 million with more than 1,100 cars sold. That continues the steady decline Scottsdale sales, with last year’s auction fetching $88 million and 2007’s $111 million.

This year, far fewer cars sold for more than $1 million. In fact, the only vehicle that broke the big buck wasn’t even a car: it was a Ford 4-AT-E Tri-Motor airplane that sold for $1.21 million. How is that for a clever business strategy?

Here are the top 10 sellers:
• 1929 Ford 4-AT-E Tri-Motor airplane – $1.21 million
• 1955 Ford Thunderbird convertible “Production No. 1″ - $660,000
• 1996 Buick Custom “Blackhawk” – $522,500
• 1970 Plymouth Superbird custom tribute – $501,100
• 2006 Chevrolet Monte Carlo NASCAR “Jeff Gordon’s” $500,000
• 2005 Saleen S7 Twin-Turbo 2-door coupe – $412,500
• 2009 Ford Mustang FR500CJ Cobra Jet prototype – $375,000
• 2010 Chevrolet Camaro “First Retail Production” – $350,000
• 1969 Chevrolet Camaro ZL-1 COPO coupe – $319,000
• 1969 Chevrolet Camaro Yenko COPO coupe – $297,000

There was a bright spot for those nostalgic for the crazy auctions of 2006. An undisclosed buyer paid $4.95 million Saturday for a 1960 Ferrari 250 California Spider at the Gooding & Co. auction, also held in Scottsdale.

Yet Steve Davis, president of Barrett-Jackson, told me that the auto-auction business is moving away from the blockbuster Ferrari-Bugatti model to a more broad-based (let’s face it, cheaper) market. He said 70% of the buyers at Barrett-Jackson’s weekend auctions were first-time buyers–mostly baby boomers who want the dream cars of their youth. He said the “sweet spot” for price is now $50,000 to $150,000. He said the auction’s lower totals are mainly the result of the company’s decision to stock the sale will lower-priced cars.

“These are people who’ve seen their 401(k)s shrink and they’re frustrated,” he said. “They’ve always wanted that ‘57 Chevy or 63 Corvette, they understand those cars and they know they can enjoy them. Unlike their 401(k), the car won’t disappear overnight. These cars are like comfort food during times of uncertainty and disarray.”

For the wealthy, Tuesday’s inauguration is the dream party: a chance to rub elbows with the similarly rich and powerful, to become part of a historic moment, and (most importantly), to get access to the man of the moment.

Reuters

People fill the National Mall in the early morning hours before the inauguration of Barack Obama as the 44th President of the United States of America.

It also is a chance to drown their financial sorrows in an emotional wave of optimism.

Yet it may come as a surprise that at a time of financial crisis and Green correctness, many of the wealthy are choosing to arrive by private jet.

According to an article in Bloomberg, as many as 600 private jets were expected to touch down in D.C. for the inauguration. The runway at Washington Dulles was closed Saturday to allow as many as 100 small planes to park. And the Metropolitan Washington Airports Authority said it expected a total of 500 small jets to land from Jan. 16 through Jan 21.

“That would set a record, topping the 300 the airport accommodated for President George W. Bush’s 2004 inaugural,” an Airports Authority says in the article.

Of course, flying private to a celebration of a populist, pro-environment President is a bit like the Detroit execs jetting to Washington for bailout money. How do you call for social responsibility after touching down in a $40 million, gas-guzzling Gulfstream? (Maybe travelers will buy carbon credits).

Of course, as the jet industry will remind me, jets save time, they are important business tools and they are ideal for fliers with special needs. And just because the next president has vowed to raise their taxes doesn’t mean the wealthy can’t join the fun.

Many of the jets are probably filled with lobbyist-funded junkets, corporate groups and wealthy politicos taking along their friends. It is a chance for that Boca Raton, Fla., health-care entrepreneur who bundled donations for Barack to impress his friends and clients with an all-expense paid trip to the real party of change. It is a chance for that Hollywood producer to fly in some actor friends and bask in true celebrity, or the trial lawyer from Texas to get his “Barack-and-me” photo.

At a time when stuff is no longer cool, the best way to show status among the wealthy is through access. And nothing will turn heads at dinner parties like the line “When I met Barack at the inaugural ball….”

The presence of so many wealthy and their jets also underscores a stark reality of Mr. Obama’s election and presidency. As much as some people wish that Mr. Obama–the face that launched millions of grass-roots Internet donors–will eliminate the influence and impact of the wealthy on politics, the wealthy will always have a center table in Washington. And, of course, a prime spot to park their Gulfstreams.

As any private banker will tell you, the wealthy have become gold bugs. They are buying gold futures, gold bars, gold coins, just about anything made from the shiny stuff. It is the ultimate crisis bet: when the world is falling apart, gold will always retain value (that is the theory anyway).

Reuters

Serendipity-3’s the Frrrozen Haute Chocolate

The wealthy in Abu Dhabi have another way to enjoy gold: eating it. An article by Bradley Hope in the National says the Emirates Palace hotel served up five kilograms, or about 11 pounds, of edible gold to its dining guests in 2008. “That amounts to 5,000 one-gram bottles of gold leaf flakes from a German distributor, which each go for about $100,” the article states. The edible-gold budget for the Emirates Palace, which prides itself on its gold theme, could be as high as $500,000 a year.

The gold, in flake, powder or sheet form, is served up in everything from a rose champagne ($2,995 for a three-liter bottle) to chocolate cake and cappuccinos. The article says the Russians are especially avid consumers of gold, and like to eat it with their caviar and oysters.

Plenty of U.S. restaurants serve up gold to those who like to wear their bling on the inside. A New York chef came up with a $1,000 bagel featuring white truffle cream cheese and goji berry-infused Riesling jelly with golden leaves. An L.A. candy maker sells treats called Holiday Nougat, made with flakes of 23-karat edible gold leaf.

Stephen Bruce, owner of New York ice cream parlor Serendipity3 famously came up with the $25,000 Frozen Haute Chocolate sundae, covered in 23K edible gold-infused whipped cream. (The shop had to close for a while after the health department found rodents in the kitchen. Presumably even Manhattan mice also have developed a gilded palate.).

As much as these marketing gimmicks may have served their purpose during the shiny, happy boom times, they probably will lose their luster in the age of thrift. “A lot of people still ask why we use gold in food,” said Jean Pierre Garat, the head of food and beverage at the Emirates Palace. “We tell them it’s a sign of excellence.”

But who will want to eat a $3,000 bottle of excellence after their fortunes have crashed and their private jets are being repossessed? Maybe the ever-creative chefs of the world will come up with a more timely replacement. Perhaps iron shavings or finely layered sheets of 401K statements.

For the past 10 years, the world of finance has found its way into more aspects of our lives, from our homes and retirements to our milk and gas prices. It also crept into relationships and marriages.

Getty Images

Anna Nicole Smih

Wealthy couples will almost always deny any wealth effect in their relationships. When the 30-year-old blonde says she married her 60-year-old husband for love (and not the $300,000-a-year “personal budget”) you know there likely is more to the story. Even longtime couples I met for “Richistan” often had agreements and deals related to money, whether it involved post-nups to required funds for pet philanthropy projects. It’s naive to believe money doesn’t play a role in every relationship, even if that role is small.

The question now is what happens when the world of finance retreats? Do mercenary marriages unravel or become closer?

High-end divorce attorneys I talk to say they are seeing far fewer divorces now that the wealthy have less wealth. The reason is simple: neither the wife nor husband feel like they can afford to divorce. “If a couple’s wealth has dropped by 30%, the wife or husband would get that much less if they split,” Bill Zabel, a prominent New York attorney told me a few weeks ago.

Another scenario is that more money-infused marriages will collapse because the wife or husband who was in it for the money now has less of it. This was seen in an amusing quote in a New York Times article by Peg Tyre, from a mom in Manhattan’s trendy Tribeca neighborhood.

This women, who is married, at least for now, to a Wall Street executive, put it rather bluntly:

“My job was to run the household and the children’s lives,” she said. “His job is to provide us with a nice lifestyle.” But his bonus has disappeared, and his annual pay has dropped to $150,000 from $800,000 a year. “Let me just say this,” she said, “I’m still doing my job.”

Setting aside the likely trials of her job versus his, the quote highlights the financial dynamic underlying their relationship. His “job” is to earn a certain amount of money, my “job” is to manage the house and kids. “In sickness health, for rich or for poor” has been replaced by “Earn six figures or else.”

What the quote ignores is basic economics: He can’t possibly do his “job” if the economy is collapsing. His stated “job” relied on a massive financial bubble and overpaid Wall Streeters. It isn’t like his choice is earning either $150,000 OR $800,000 a year and he choose the lesser amount, or that he isn’t working hard enough. Hopefully this marriage isn’t dependent on this mirage of finance.

Yet while the quote is good for stirring emotions, I don’t think it is reflective of the real impact of the financial crisis on marriages. The more likely impact is that mercenary marriages freeze for a while until things pick up.

What do you think readers? How will the crisis affect mercenary marriages?

When it comes to spending and flaunting their millions, the American wealthy have had no shortage of role models in recent years, from Trump and Stephen Schwarzman to Larry Ellison and Ira Rennert.

But now that thrift is in and bling is out, who can they look to for guidance?

Minnesotans.

Setting aside some obvious differences (for most of the rich, Sub-Zero is a luxury appliance, not a six-month climate), it turns out Minnesotans can teach the rest of the nation’s wealthy a thing or two about thrift, guilt and luxury shame.

An article in the Star Tribune by Kristin Tillotson says that luxury goods are the new porn, “things that must be hidden behind plain brown wrappers lest one be viewed as marching down the road to Prada perdition.”

And apparently when it comes to concealing their impure purchases, no one tops Minnesotans. “Conspicuous consumerism has never been in fashion for Minnesota’s anti-ostentation old money,” the article says. “Their idea of being flashy is breaking out Grandma’s diamond necklace once a year, and then only for a Wayzata fundraiser.” (For non-Minnesotans, Wayzata is a country club).

Of course, anyone who’s been to Boca or Naples, Fla. knows that some of the Minnesota wealthy are happy to spend for status, as long as it’s far away from home. And let it be said that not all New Yorkers or Californians feel compelled to keep up with the Joneses and Gates’s.

I’ve always said that the rich should spend their money as they please, especially if they earned it. But the coastal wealthy seem to have developed a culture of spending and status that is far removed from their more stripped-down Midwest compatriots. And now, it’s also out of sync with the times. Maybe Minnesotans can come to their rescue.

Minnesota can hold wealth seminars for the coastal rich on how to trade in Ferraris for Fords, how to host a 60th birthday party for less than $3 million and how to find coupons at Louis Vuitton. They can start five-step wealth-management programs called “The Minnesota Way,” featuring rigorous savings plans and models for conservative investing (example: CD’s count as an alternative investment).

All we need now is a front-man (or woman) from Minnesota to step up, go public and promote themselves. Or maybe not, since that wouldn’t be very Minnesotan.