Yikes! You’re In Überclass City, Post-Cab Hike

Three new Furies have suddenly appeared over Manhattan, inducing faux-shock in the media and nervous laughter at parties. Please welcome the Million-Dollar Apartment, the $200 pair of jeans and the $10 cross-town cab fare-you’ll be seeing a lot of them.

The taxi-fare hike was eight years in the making, but it arrived exactly as the dam was breaking-the one that, for a couple of years there, held prices in the city fairly steady. The result has been a new flood of price hikes in everything from a bagel and cream cheese at Murray’s on Sixth Avenue (now $1.75, up 35 cents from a year ago), to a martini at Whiskey Park ($12, up from $10), to a pedicure at Avon Salon & Spa ($58 for the basic; last year it was $56).

As a city, New York is no longer upper-middle-class-it’s übermiddleclass , and the shifting of the ground under our feet is just beginning to register.

“I noticed somebody in New York magazine, an organizer who was charging $450 an hour to organize your closet,” said Tim Geary, a novelist who lives in the East Village. “That’s when it hit me.”

It was the new $10.25 movie ticket that jolted theatrical publicist Richard Kornberg. “It’s that extra fucking quarter for a movie that just kills you. If $10 was bad enough, then they tack on another quarter ? Come on. You don’t mind paying for tickets; it’s that extra little thing that puts a capper on it.”

“Everybody’s talking about gas,” chimed in Jeffrey Sachs, president of Sachs Consulting. “I filled up my car, and it was almost $50! That was pretty shocking.”

Remember when it used to be annoying to get $50 bills from the A.T.M.? The price jump happened so suddenly, so stealthily, that we barely saw it coming. And now, we’re just blithely, perhaps numbly, handing over 50’s to the guys at the deli, the salon, the bar. Manhattan right now is a vicious fleecing machine, preying on the naïve and the status-minded in our sudden financial semi-recovery (a recovery that might, incidentally, be only a mirage or an echo).

And all those work freebies-the car service, those fashion-shoot clothes, books, drinks-that you count against your outgoing expenses: They don’t mean you’re living cheap, baby. They’re merely a component of your sorry rationalizations as you quickly spend the money elsewhere.

Luxury Obsession Disorder

Of course, in many ways, the recent spate of price hikes couldn’t have hit a more willing metropolis. In the übermiddleclass city, “luxury” is an ever-present enticement-a competitive sport, a reward and a salve. Nothing, it seems, is too petty a motivation to throw down that extra 10 bucks. “The Four Seasons, it’s $25 for a burger and an appetizer. And then you have to buy the Pellegrino water,” said David Duggan, a real-estate attorney with an office on Lexington Avenue, explaining the ever-escalating price of the status lunch. “Because you can’t be that one person in the dining room who’s drinking tap water.”

You can’t?

Mr. Duggan’s dining partner, Catherine Spencer, a real-estate broker at Prudential Douglas Elliman, knows why you can’t. “We sat at the bar at the Four Seasons. We each ordered burgers. I had a tuna burger; David had a bison burger. It was the Julian Niccolini signature lunch. And by the time we got the bill, it was $100! I couldn’t believe it. For lunch! But then when we walked out, we were standing right behind Edgar Bronfman. We turned to each other and said, ‘It’s so totally worth it.’ When you sit in that perfect space and observe the waterfall of beaded curtains, it’s why we live here. It’s worth it.”

But just like actual junkies, we’re not victims-we’re unthinking volunteers. The pisser is that once you step up to spending the extra cash New York life is now demanding of you, once you whiff the chum of the alleged high life, you won’t stop, because the withdrawal sucks.

As Barry Schwartz, a professor of psychology at Swarthmore, explained, “The psychological impact of losing something is about 2.5 times as great as the psychological impact of gaining the same thing.” In other words, there’s no turning back once you’ve signed on to the übermiddleclass economy. “Once you’re accustomed to particular patterns of consumption, it’s really hard to give them up,” Mr. Schwartz continued. “You don’t get as much of a kick out of trading up to Starbucks as you will get a kick in the ass for going back to whatever the low-priced alternative is.” (At $3.86, a grande latte at a Manhattan Starbucks, by the way, costs 17 percent more than the same exact beverage in Princeton. But drink up!)

You might as well stop getting manicures and move to Dubuque.

Or, Mammon forfend, Dallas: “Average income in Manhattan is the highest in the country at $92,000,” said W. Michael Cox, the senior vice president and chief economist at the Federal Reserve Bank of Dallas. “A person earning $100,000 in Dallas needs to make $266,000 in New York just to maintain the same lifestyle. In New York, it’s not the high cost of living. It’s the cost of living high.”

Mr. Cox actually seems to think Manhattanites have a sickness. He cites an issue of The American Economic Review of June 1991: “The authors compared consumers in New York and Moscow. In Russia, if you told two people they could both become richer, but one would become wealthier than the other, they would take the proposition, no problem. In New York, people surveyed rejected this scenario. Only in New York would people rather be poorer, if they knew that at the same time, someone else wasn’t getting ahead either.”

Well, exactly! How are the bankers going to plant their seed in the perfect blond receptacle if another man, who’s got more hair and better cufflinks, has just bought a larger apartment?

“If you live in Dubuque, Iowa,” said Gregg Easterbrook, senior editor of The New Republic and author of The Progress Paradox: How Life Gets Better While People Feel Worse , “you expect prices to be driven to rock bottom. It’s the Wal-Mart phenomenon. But in New York, the opposite happens: You expect prices to rise. Now you order a glass of chardonnay and it’s $12 and you’re fine with that.”

What are Manhattanites doing to cope with the rising expenses of the city? “Saving less money,” said political consultant Howard Wolfson. Brilliant! Drinks all around.

Couture Jeans and the Million-Dollar Apartment

A few facts: Yes, the average cost of a Manhattan apartment is a million bucks, but the median price in all real-estate transactions in the first quarter of 2004 was only (only!) $625,000, as Jonathan Miller, president of Miller Samuel, a real-estate appraisal firm that, in April, released the first-quarter 2004 Douglas Elliman Manhattan Market Overview , pointed out.

It’s the nice, round, misleading number that launched a thousand articles, with publications like Details and New York weighing in to tell you that as outrageous as a million-dollar two-bedroom with no view and two tiny closets sounds, you better buy one now, now, now . A million dollars, as a concept, is jading and terrifying and exhilarating. “There’s a lot of activity above a million dollars that’s pulling the numbers up,” said Mr. Miller. “But people fixate on the one-million-dollar figure. It’s about perception.

“The reality is, you have tight inventory, you have a small amount of apartments available, and as prices are rising, people are competing for them.” In other words: Everything “normal” people can afford is unworthy crap.

Frantic buying took place all winter, leaving some disgusted.

“I looked at places. I don’t want 800 square feet. I think it’s an outrage,” vented Adam Epstein, a producer of Hairspray . “Let’s put it this way: I don’t want to pay $1 million for an apartment. What am I getting? The price of everything in the last six months? It’s out of control. I’m going to stay where I am. Wait for the air to clear. There’s something about it in principle, I don’t think it’s worth it. I love Manhattan, but it’s not worth it to spend that kind of money.”

As apartments go, so go the pants, and you would be forgiven for confusing the prices of the jeans with the prices of the apartments.

“The designer jeans-I was shocked,” said Kal Ruttenstein, fashion director of Bloomingdale’s. “I believe we have 30 women’s brands in our Soho store, and 16 for men. I remember when jeans were $78 retail, and that was considered designer jeans. If you go out in the evening, women are in a Chanel jacket, you see jeans and high-heeled shoes on everybody at Spice Market and Schiller’s. It’s like a uniform. They have to have it, and they’re willing to spend for it. We have some at $88, but a lot between $100 and $150, and going up as high as $200. We’re selling them especially in Soho, where I thought everybody was young, hip and poor.” (Well, one or two out of three, Kal.)

“Our jeans start, I think, at $98,” said Jeffrey Kalinsky of the terribly young and hip meatpacking-district store Jeffrey, “and they go up to Y-3 limited-edition jeans that are around $750, approximately.”

Christ. “One benefit of creating outrageously high-priced goods is it makes other outrageously high-priced goods not seem so outrageous,” Mr. Schwartz pointed out.

There will be few retail sales this year; the stores are moving inventory. “I would say that markdowns are a lot less,” said Mr. Ruttenstein.

“I agree that things aren’t as likely to go on sale,” said The Jeffrey.

And the “bargains” that exist are studies in classic suckerdom. “Take Brooks Brothers,” said the obviously-helpless-in-a-store Mr. Duggan. “They run these ‘promos,’ but you walk in to buy one tie and then you get the second at half-price. There’s almost a bait-and-switch: You get caught up in the moment, but at the end of the day, you end up spending more money! The definition of the bargain has changed.”

After Sept. 11, 2001, we had crisis sex, screwing as a sign of life and liveliness and fuck-it-all-ness. As the Iraq war-whoops, “engagement”-rolls on, with its related specter of more terrorism in the U.S., we’ve perfected crisis shopping.

Coupled with Luxury Obsession Disorder, this means that, as far as the retail and luxury industries can tell, the financial pall of 9/11 has finally lifted-at least in the minds of the Manhattan übermiddleclass. “Thank God, business just couldn’t be better,” said The Jeffrey.

“First of all, at retail, we’re all experiencing a great period. Business has been terrific” for Bloomingdale’s, said Mr. Ruttenstein.

“Business has been fantastic,” said Eli Halliwell, of the high-end salon Bumble and bumble. “We usually raise prices twice a year; this year we did it a second time, because we opened a second salon.”

“Our business is 30 percent ahead of last year,” said Stefani Greenfield, co-owner of Scoop boutiques. “The only way I’ve seen it go up in my business is that we take very little cash, people live on credit-for example, when you see someone buying something and putting it on more than one credit card, you know they’re a little strapped. When you see fewer people buying with cash, you see that they are willing to live for the moment and deal with it later.”

Dealing with it later-because there won’t be a later? “As an employer,” said Paco Underhill, managing director and founder of Envirosell, a research and consulting firm, “I have had employees come crying in my office who are telling me that they are having trouble paying their bills here, and I was paying them $85,000 a year. I have a hard time not looking at them and going, ‘What are you doing with yourself?'”

What they’re doing is spending that cash on the staples of the übermiddleclass life: jeans and strappy shoes and cabs and cocktails and croissants. “It’s more than they’re trying to treat themselves,” said Dr. Gail Saltz, an Upper East Side psychoanalyst. “They are looking for an escape from feeling a general sense of malaise and anxiety. I think it’s not wanting to think about the future.”

“At the end of March,” said Stephanie Pesakoff, an agent for commercial illustrators, “I bought four pairs of summer shoes at Jeffrey, ranging from $320 to $500. I bought all four at full price-I’ll let you figure out how much it came to. I haven’t spent money in that mad way since 2000.” ( Business just couldn’t be better! )

“If you came into your adulthood in the late 80’s here,” Mr. Underhill said, “you had a 12- or 13-year run of just fabulous times. We have a whole bunch of people out there who have hit a wall over the past six years, and some of them are asking the question, ‘If not now, when? Why postpone joy when there may not be a future?'”

$25 and way, way Over

Twelve years ago, The New York Times launched “$25 and Under,” a weekly column cataloging good (or at least decent) restaurants for cheap. A spokesperson for The Times declined to comment on whether the paper would consider changing the column to reflect today’s elevated prices.

On April 14, 2004, its writer, Eric Asimov, reviewed the meatpacking district’s Barbuto: “Best of all,” Mr. Asimov wrote, “the main courses are under $20 and almost all appetizers are under $10, providing a rare opportunity to try a celebrity chef’s work without celebrity prices.” Err, just what is our definition of “celebrity prices” these days?

Recently, Mr. Asimov hit Shore in Tribeca, which boasts a $29 steak, and La Nacional on 14th Street, with a $15-per-person paella and “tiny lamb chops,” also for $15.

Some recalibration would seem to be in order. “It wouldn’t be incorrect to say the literal meaning of ‘$25 and Under’ doesn’t always apply anymore,” Mr. Asimov said. “It just so happens that in Manhattan, the neighborhood restaurant has greatly increased in price. In the 1990’s, when the economy was cruising along, all these neighborhood restaurants started serving foie gras.”

There are still cheap eats in Manhattan-but thrift isn’t going to get you laid, better-regarded or temporarily emotionally content. Masa, the new hotness in the Time Warner Center, could conceivably get you all three, at least for 30 minutes and for only 800 bucks for two, with tip and drinks.

“At Masa restaurant, it’s a flat prix-fixe menu at $300 per head,” said maître d’ Carolyn Wang. “We’ve been pretty much getting full houses since we opened. I’m sure if we do bump it up to $500, the ingredients will make it well worth it.” At $500 a head, no doubt the place will be packed.

Let’s not even mention the $1,000 omelet-a heady mix of eggs, lobster and caviar-that debuted this week at Le Parker Meridien.

Forget $25 and under: Once you go Masa, can you ever go back to Monster Sushi? “It’s like coming out of a hot, humid New York day into an air-conditioned room, and for the first 10 minutes you just feel spectacular,” said Mr. Schwartz. “And then you just feel neutral. You stop getting a kick out of being in air-conditioned comfort. And the same thing happens in general: As you adapt to things that give you pleasure, you need to find other things that give you pleasure. It’s sometimes known as the hedonic treadmill-because you never get anywhere. All that happens is you keep spending more and more money to stay in place.”

Happy Hour, Every Hour

Early in David Lynch’s Twin Peaks: Fire Walk With Me , two F.B.I. agents walk into a diner. “Wanna hear about our specials?” asks the menacing waitress. They nod. She replies with scorn: “We don’t have any specials!”

Take this piece of dialogue with Z. Smith, the office manager of Bryant Park Grill:

The Observer : Do you have a happy hour?

Z. Smith: Yes.

T.O. : How much are drinks?

Z.S. : Beers are $7-8.

T.O. : How much are drinks normally?

Z.S. Same price, $7-8.

T.O. : Well, how come it’s called “happy hour” if it’s not a better deal?

Z.S. : It’s happy hour every hour here. The bartenders are very happy-hour-inclined, so if you ask the bartender, they’ll say it’s happy hour every hour. We don’t have any special drink discount.

Manhattan, always its own Lynchian underworld, doesn’t have any specials any more-so we’ve all agreed to keep pretending.

It’s happy hour every hour here! And after the happy hour of the hedonic treadmill has finally ended here in the übermiddleclass metropolis, after you’ve grabbed a $15 taxi back up to your $865,000, 900-square-foot apartment, after you’ve slipped out of your $248 Notify jeans, you’ll look around and realize you’re not just in debt, you’re not just hung over-you’re also feeling decidedly … bloated. You recall that you nervously tossed back a full night’s worth of forbidden carbs. You’ll have to work them off on the actual treadmill: at Equinox, for a $545 “initiation fee,” then $143 a month, up from $120 last year.