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Color of Money: What allegations of Manafort's lavish spending say about society

Michelle Singletary on

At this point in the investigation, what's the money lesson for those of us watching all of this unfold? How can we relate this to our everyday lives?

How about this: Why do so many people have a need to show their wealth?

One Princeton University economic researcher examined the need for people to flaunt their financial status. In a 2004 paper, Ori Heffetz wrote, "In the signaling game we call life, when deciding upon a course of action, we consider not only the direct effects of our choice on our welfare, but also the indirect (or social) effects resulting from society observing our choice."

I've often heard people say that they look forward to the day they can buy a certain luxury-brand car. But practically speaking, the goal of a vehicle is to get you from point A to point B. So why does it matter so much about the make of the car if everything else is equal in terms of reliability and safety?

It matters to many because it signals they've arrived at some destination point of social standing. It's a sign of success. People like to tell themselves that their BMW, Mercedes or Range Rover is far superior to other vehicles. But on Consumer Reports' 2017 list of the 10 most reliable cars, half are priced under $30,000.

Often the motivation behind a purchase is the desire to draw attention to the appearance of affluence. If a Timex watch tells the same time as a Rolex, why then are we impressed with the higher-priced timepiece?

In his 1899 book "The Theory of the Leisure Class," American economist Thorstein Veblen coined the term "conspicuous consumption" to describe wealthy people who broadcast their bountiful life and attempt to boost their reputation by purchasing expensive things.

"Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure," Veblen wrote.

But conspicuous consumption is now not limited to the rich. People who can least afford to show their wealth are doing so nonetheless. And they are doing so at the expense of a secure retirement or having savings for a financial emergency.

In Proverbs, there's a scripture that can keep your conspicuous consumption in check. It says, "One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth."

I wonder, if they are convicted, if Manafort and Gates will regret living so large despite the cost.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

(c) 2017, Washington Post Writers Group

 

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