Stealth Wealth: Flaunting is so ... 2008

'When the going gets tough, the tough go shopping" used to be a joke that shopaholics would uneasily repeat, telling themselves, "Hey, I'm growing the economy." Not anymore.

Sashaying down the street with a telltale Tiffany-blue box and an Oval Room dress bag could get you arrested in the public court of opinion. Flaunting is out, shame shopping is in.

In Manhattan, the nation's shopping mecca, Upper East Siders are still buying scarves at Hermes -- they're just asking for generic bags to stash them in.

Is rich the new poor? Not exactly. Inverted class envy will never afflict those who have plenty. But being able to afford the ridiculously unnecessary has been tainted by the slime trail of billion-dollar bailouts.

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. Chanel and Sotheby's are laying off employees. Louis Vuitton has packed away its plans to open a megastore in Japan. Yacht sales, which have risen every year over the past 10, are approaching dead calm. On the home front, even the Starbucks near 50th and France in Edina recently offered, for the first time, 20 percent off a bag of coffee beans.

Conspicuous consumerism has never been in fashion for Minnesota's anti-ostentation old money. Their idea of being flashy is breaking out Grandma's diamond necklace once a year, and then only for a Wayzata fundraiser.

"There's certainly less mass luxury on parade in the Midwest than either coast," said George John, who as chair of the Carlson School of Management's marketing department tracks buying trends. Even the virtuous rich are probably spending just as much as ever but "we just don't see it. Public consumption is only public to the extent we can see it, like the cars people drive, partly because American society is so segmented."

Some Americans in those lesser-earning segments are still in denial. Just before Christmas, a survey by Dollar Savvy magazine found that 58 percent did not plan to cut back on holiday spending this year -- and 20 percent said they were dipping into savings to make that happen. Also in denial are the stealth shoppers. What satisfaction can really be taken from buying top designer goods at a private party or online and then daring to wear them only in the same rarefied circles, lest the accusing eyes of an unemployed commoner waiting for the bus outside Gaviidae Common kill the buzz?

Modern-day Marie Antoinette

Snark-the-Rich is the blogosphere's favorite new ranting game. Alexandra Penney, a once-wealthy self-made woman who blogged about the sacrifices she's making after losing everything in the Bernard Madoff fallout, is pilloried as a modern-day Marie Antoinette at the gallows. Meanwhile, "$700 billion bailout celebrated with lavish $800 billion executive party," reads a headline on the Onion's website.

It's enough to work the have-nots into a storm-the-Bastille frenzy. And yet, that doesn't seem likely.

"You see people go to Washington and march against all sorts of injustices, but not the economy," said Stephen Gudeman, an economic anthropologist at the University of Minnesota. "They're not picketing Wall Street shouting, 'You people earn too much money.'"

As everything else tanks, aspiration is still a viable commodity. The lower and middle classes would still trade places in a heartbeat with the upper. And lumping hard-working self-made millionaires in with the schemers, cheaters and idlers is unfair, says Milton Pedraza, CEO of the Luxury Institute, which bills itself as "the global voice of the high-net-worth consumer."

"The shame of Wall Street casts a negative shadow on Main Street wealth," Pedraza said. "All the executive excess and Ponzi schemes have created this atmosphere that no one who's wealthy has earned their money -- even the person who sweats for 16 hours a day to buy their first McDonald's franchise and now owns 10."

Owning a private jet has gone from the ultimate status symbol to a scourge. "Because of all the bad press the auto execs got, everybody else who has one also must be bad," Pedraza said. But he has some upbeat news for the high-end retailer: Luxury is cyclical.

"Luxury has gone through wars, famines, 9/11, and has survived. If you work to achieve the best, you have the right to it. That's a legitimate premise, unless you live in Belarus. When the unemployment rate is really low, luxury outperforms mainstream retail. When it's really high, logically it does worse. There's a reduction in consumption across all population segments, but there's less at the top and more at the bottom."

Ernest Hemingway is often misquoted as having said that the rich are different from you and me "because they have more money." But there are some qualities the über-wealthy share with some of the rest of us.

Strong balance sheets

"A lot of multimillionaires have always been conservative about their money," Pedraza said. "They have very strong balance sheets and don't consume above their means. If they buy a yacht, it means they can afford it."

They haggle, too.

"They know they'll get a better deal after the holiday, so they'll wait till that $3,000 coat is marked down to $1,500. They know luxury brands will cry uncle much more in the first quarter of the new year. They're smart and savvy. That's how they got rich."

They also have what Pedraza calls "pent-up demand" and "consumption fatigue."

"If someone has always bought Brioni suits, he'll continue to do so this year, but maybe just two instead of 10. Instead of five handbags this year, a woman will buy just one, but it will have to be very special. So luxury items become dear and unique again."

And there's that reassuring cycle.

Way back when being rich meant owning 10 togas instead of just two, Plato observed, "Wealth is the parent of luxury and indolence, and poverty of meanness and viciousness, and both of discontent." Even though everyone knows money can't buy happiness, it can buy a Patek Philippe watch. Or pay a gas bill and put oatmeal on the table.

Word to the wealthy: Just admit you have it, and continue spending it to make up for those who can't. Don't swan around some macrobiotic ashram as if you're learning to live without. And by all means, continue those charitable contributions, knowing they're needed now more than ever.

As for the next big thing in designer labels, how about Ponzi? The name has the right ring to it.

Kristin Tillotson • 612-673-7046