Michael Barone:

The headlines are full of economic bad news — mortgage foreclosures, the collapse of an investment bank, higher gas and food prices, and lower home prices. Voters routinely list the economy as their chief concern, and consumer confidence has sunk to low levels.

Yet at the same time, the economic numbers are not so bad. A recession is defined as two quarters of contraction. But we haven’t had one yet. The gross domestic product has grown, albeit only by 0.6 percent, in the last two quarters. As my U.S. News colleague James Pethokoukis blogged after the most recent numbers came in, “Dude, where’s my recession?”

By any historic standard, our economic numbers are good, though possibly headed in a negative direction. April’s unemployment was 5 percent — a figure that once upon a time was considered full employment. The Consumer Price Index was up 3.9 percent, largely due to price rises in energy and food. “Core inflation” was 2.3 percent. Productivity was up 2.2 percent.

Those are numbers that would have been taken as a sign of very good times when I was growing up.

Oddly these good tidings are of no comfort to the ruling class:

The wealthy don’t generally speak publicly about their finances, in good times or bad. It’s in poor taste, for one, and their employers could fire them for talking even a little. But people who provide services to the wealthy — lawyers, art advisers, personal trainers and hairstylists — say they are getting an earful about their clients’ financial anxieties.

Interviews with the people who actually see the bank statements, like divorce lawyers and lenders, say their clients are definitely living on less than they did a year ago, regardless of how expansive the definition of “less” may be. Hairstylists and private jet rental companies say the wealthy are cutting back on luxuries like $350 highlights and $10,000-an-hour jet rentals. Even nutritionists and personal trainers notice a problem. The wealthy are eating more and gaining weight because of the stress.

These financial problems — if they can be called that — will hardly elicit tears from the rest of us. But in those gilded living rooms, there is a quiet nervousness about keeping up appearances.

“Even if they’re not in danger of not paying their mortgage, there’s still a psychological change,” said Chris Del Gatto, chief executive of Circa, which has watched its business jump by 50 percent in the last year as wealthy clients sell their spare diamonds and Rolexes. “The economy is an issue even for people who don’t need the money.”

THEIR spouses could leave them when they discover that their net worth has collapsed to eight figures from nine. Friends and business associates could avoid them as they pass their lunchtime tables at Barney’s or the Four Seasons. And these snubs could trickle down to their children.

“They fear their kids won’t get invited to the right birthday parties,” said Michele Kleier, an Upper East Side-based real estate broker. “If they have to give up things that are invisible, they’re O.K. as long as they don’t have give up things visible to the outside world.”

[...]

Other wealthy clients are cutting luxuries that they think their friends and relatives won’t notice, according to Mr. Del Gatto of Circa. At Circa’s midtown offices, he said, the seven consultation rooms have been busy with customers selling their precious gems. Some older couples, he said, are selling estate jewelry to help support their children who have lost Wall Street jobs. Bankers are paring down their collections of Patek Philippe watches. Wives from Greenwich and Scarsdale are selling 2-carat to 35-carat single-stone diamond rings. One recent client explained to Mr. Del Gatto that she was selling $2 million in diamonds she rarely wore, because her friends wouldn’t notice that they were gone.

“She said, ‘If I sold my Bentley or my important art, they would notice,’ ” he said. “That we hear, in differing examples, every day.”

Or, put another way:

Pawnbroker: Burnt my fingers, man.
Louis Winthorpe III: I beg your pardon?
Pawnbroker: Man, that watch is so hot, it’s smokin’.
Louis Winthorpe III: Hot? Do you mean to imply stolen?
Pawnbroker: I’ll give you 50 bucks for it.
Louis Winthorpe III: Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is *the* sports watch of the ’80s. Six thousand, nine hundred and fifty five dollars retail!
Pawnbroker: You got a receipt?
Louis Winthorpe III: Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad.
Pawnbroker: In Philadelphia, it’s worth 50 bucks.
Louis Winthorpe III: Just give me the money.
Louis Winthorpe III: [looking in display case] How much for the gun?