How the Super-Rich Are Surviving the Meltdown

If you'd wanted to gauge the mood of Manhattan's richest people in the midst of the economic meltdown, you might have dropped in on Swifty's restaurant the other night, in the chic precincts of the Upper East Side, where the brown leather banquettes are home to insiders who don't mind sitting in proximity to people just like themselves. (Article continued below...)

Whether they are neighbors at the Park Avenue co-op down the block or played together on the Exeter lacrosse team 30 years ago, almost everyone in Swifty's knows everyone else. Even in this cozy refuge, the catastrophe unfolding a limousine ride away on Wall Street is being felt, leading co-owner Robert Caravaggi to call a special employee meeting last week. "We told the staff to be mindful of the economic situation and to take extra-good care of the customers and to be aware of what's going on in their lives," he said.

Business at Swifty's is holding up, because misery loves company even among millionaire bankers, and because belt-tightening in this set doesn't mean cooking your own dinner, it means flying commercial instead of chartering a jet to fly to Aspen for the Columbus Day weekend. (Not that they couldn't afford the $80,000 round trip, I heard several say, but it just didn't "feel right.") Everyone is talking about the fabulous new JetBlue terminal at JFK airport with its gourmet food delivery.

The bottom line, so to speak: on the Upper East Side, where I have lived for 30 years in a few buildings on the same street, I've never seen a mood quite like this one. Everyone is just plain scared, but no one is talking specifics. The thing about rich people is you never know exactly how rich they are or where their money is. Some of my neighbors are a hundred times richer than I will ever know. Others have a palatial city apartment and a house on Gin Lane in Southampton, but very little cash. So they may look rich from the driveway, but they actually sweat the bills each month. Figuring out who's been hardest hit means knowing where their assets lie: art, real estate and piles of cash and Treasury bills; others were rich mostly in the now worthless stock of the Wall Street companies they worked for.

To see signs that the crisis has struck the Upper East Side, you have to know where to look: at the health clubs, say, where there are a few more men than usual working their abs at 10 o'clock on a Tuesday morning. Or in front of the chic private schools like Spence, Chapin or St. Bernard's, where I've noticed more men doing the 8 a.m. drop-off—and in jeans, not pinstripes. The number of superluxury residences for sale in Manhattan—apartments or townhouses costing $15 million or more—has nearly doubled in the last two years, according to The New York Observer. Some of that is inflation, but there also is reason to think sales are slowing, particularly in co-op buildings whose boards often demand that buyers show a net worth of two to three times the cost of the apartment. One architect told NEWSWEEK he hadn't had any inquiries for new business in months. "It's the worst it's been in 25 years. The silence is deafening."

Perhaps, if you've been going to Swifty's for a few years, you might realize that some of the outfits look familiar. "I've noticed that women are more cautious" about their wardrobes, says Amanda Ross, the ultrachic stylist for NBC's "Lipstick Jungle" who also has many private clients on the Upper East Side. "These women who regularly drop $30,000 a season at Bergdorf's alone are now reaching into their closets to see what is recyclable for one more season." Back in the day, being photographed in a dress for the society pages automatically consigned the outfit to the charity bin. No more. A certain socialite whose outfits are studied like a bar exam by women up and down the avenue confided to me she would be going to the 2008 American Ballet Theatre's opening-night gala this week in a 2007 Oscar de la Renta dress that had already made the society pages once. In the current economic climate, she said, giving it away just didn't make sense anymore. In last year's economic climate, presumably, it did. The dress cost $10,000.

Just last year, this crowd was jetting to art fairs in Miami, London and Basel, Switzerland, to buy something to hang in the big space in the entry foyer—and to be seen among the international glitterati. Though Damien Hirst made a historic sale totaling almost $200 million a few weeks ago at Sotheby's, the art market has started to feel the chill wind of the recession. One family told us they'd been trying to get their hands on any work by a coveted artist. But when four paintings valued at $250,000 to $400,000 each became available, they declined. "We actually had the money," a family member said, but they balked anyway.

So should we feel sorry for these people, so many of whom have profited in spectacular ways from a largely unregulated industry? Probably not. There are families who've lost their homes and have no place to turn. We all know putting food on the table isn't ever going to be a problem for these Upper East Sliders. But if you want to let a little humanity kick in, remember many of these families face losing almost everything they've worked for over decades, or even generations. It's not just the goods they're in danger of losing, it's their self-esteem, their confidence, their hope. And that's a place it seems where everyone, from Main Street to Fifth Avenue, is stuck for now. And maybe for a long way down the road.