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The Nation's Pulse
A Tale of Two Schemers
In the dining car of the Auto Train on the way to impoverished Palm Beach.
PALM BEACH, Fla. —- For dinner, they sat my wife next to a self-declared gigolo on the Auto Train to Florida.
The seating in the train’s dining car is four to a booth, and the couple across the table from us looked like a nice elderly pair, each 80 years old as it turned out.
It wasn’t long after we discussed what to order based on our previous dining experiences aboard the Auto Train — the not-too-good chicken or the not-too-good steak (our server told us to “stay away from the salmon”) — that we started to talk about where we lived and what we did for a living.
Our dinner companions said they were both professional dance instructors, working for a nationwide chain with well-known dance studios (they said the name, but I won’t state it here).
It was a good half-century ago when they were cutting a rug, back when the fox trot, tango, mambo, and ballroom spins were hot.
“We would try to sign up elderly women for $20,000 lifetime memberships,” explained the husband. That was the price of a nice house back then (our first house, a three-bedroom, two-story brick colonial in a nice suburb, was $12,500 in 1964).
“We would become their regular dance partners, several times a week,” he said. “We would flatter them on their appearance, suggest what they should wear and recommend how they could vary their makeup and hair. We would take them on trips to New York City, to shows, restaurants, fancy hotels, and have them meet the principals of the company.”
The wife said she didn’t get into that part of things. “Men aren’t as gullible,” she asserted.
There was never any hanky-panky, explained the husband (but his wife was sitting next to him with a steak knife).
“I look back now and I’m ashamed of some of the things I did,” he acknowledged. “You had to do what you had to do,” his wife responded. They said they were both now evangelicals.
The instructors got a 10 percent bonus, $2,000, for every $20,000 lifetime member they signed up, and it wasn’t hard for a handsome fox trotter to pick out the rich widows, as our dinner partner explained: “They’d say, ‘My husband owned a string of lumber yards.’”
But his career at the dance studio ended with a lawsuit. “I had to sue them because I signed up two women for lifetime memberships in one month and they refused to pay me the $4,000. They just told me to clean out my locker.”
When we arrived and got to the beach, we noticed that several of the best restaurants on the uber-wealthy island of Palm Beach were gone. As U.S. Attorney General Eric Holder said in 2010, “Palm Beach is, in many respects, unfortunately ground zero in the $65 billion Ponzi scheme perpetuated by Bernard Madoff.”
One of Madoff’s fallouts may be that there are fewer folks around now who are willing and able to pay $21 for a hamburger and $59 for a pork chop — salad not included.
There is a Starbucks, though, right next to Gucci and Louis Vuitton. Several years ago, a storm of protest occurred when the owner of a building on super-tony Worth Avenue asked the town council to approve a permit for a Starbucks inside his building, discreetly tucked away and not visible from the street.
The town newspapers published a collection of anti-Starbucks letters. The locals weren’t sure if people drinking coffee through small slits in plastic lids on paper cups were their type of people. Resident Jere Zenko expressed a popular sentiment: “Is Nike next? How about a Disney store?”
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
Letter to the Editor View all comments (11) | Leave a comment
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Bill Hussein O'Stalin| 1.18.12 @ 6:11AM
No mention of Corzine? He is Bernie Madoff lite.
There are schemers in our own government whose dreams and schemes dwarf the schemers you mentioned.
Just the EPA alone has more schemers than a carnival.
Appleby| 1.18.12 @ 6:31AM
Nice work if you can get it. I wonder how much longer sports teams are going to be able to pay untried teenagers $800,000 per year and charge the hoi polloi (known here as "Leafs Nation") $500 for a family night out at the game to see a team that, over its 95 year history, is only 10 games over .500?
Why is it that nobodey seems to count sports teams with Millionaires and Billionaires?
Old Soldier| 1.18.12 @ 10:18AM
Some athletes make it to become for real millionaires, most don't.
The average pro-football career is less than 4 years. If a football player is lucky enough to make a million a year for four years, he's lucky to see half of that after his agent, the IRS, and every state he played a game are through with him. 78% of them are bankrupt a couple of years later.
Another example of how unfair the progressive income tax is - some people don't have the ability to spread their income out over many years.
Bob Grant| 1.18.12 @ 12:44PM
One of the biggest Ponzi schemes around is the college/professional sports syndicate, subsidized by tax breaks (or NO taxes in the case of colleges) and shaking down ignorant city council members or state representatives for corporate welfare.
Massive debt incurred by cities and states due to funding overpriced sports complexes and incredibly over valued sports franchises spells yet another gigantic bubble ready to pop.
Read about Greece and massive debt they incurred hosting the Summer Games. Gigantic, unused sports complexes sitting idle for years, only used during the Olympics many years ago.
I believe you will see many Palm Beach examples in the coming years as the cold, hard realities set in and the destruction imposed on this country by this administration.
Appleby| 1.18.12 @ 6:47PM
Montreal will second that motion -- they will never make back anything like what it cost them to hold the Olympics. (The best selling item I saw was the t-shirt that wondered in French, "When will these people go home?"
I know a lot of the guys who made good money in my generation were swindled out of it because they generally left school at 14 to sign a "c" contract with one of the Original Six hockey teams; today's players are more savvy and they have a powerful union. Any 19 year old who makes $800,000 for one year ought to be able to save most of it and live on the interest and dividends and what he makes from playing before empty seats in highly leveraged rinks in cities where ice is an indoor phenomenon and everybody watches NCAA Football. A guy playing right wing for the Columbus Blue Jackets will still make more money by the time he is 30 than I will make in my lifetime. Obama should hate him. Why doesn't he?
Bob K.| 1.18.12 @ 10:13AM
Good article Professor Reiland.
I notice that your travels are not by Jet Plane like Ben Steins. Judging from his complaints about it, it looks like you eat somewhat better than he does in First Class Stratosphere.
There is an Auto-Bus company in Northeastern PA that runs a luxury bus to Florida weekly. It takes 2 or 3 days and stops at various places for dining and sleeping on the way to Florida. Your car is shipped by itself to Florida on a train. It began in the mind of the founder over 50 years ago when he started a company with one truck and it became a small conglomerate.
Entrepreneurs have all kinds of ideas.
mbd| 1.18.12 @ 11:34AM
Palm Beach has always been 'ground zero' for hordes of gigolos - especially during the winter season. Not all of them work for the A.M. or F.A. dance studios. The most successful are not the ones who receive the 10% commissions on sale of memberships, but those who marry the lonely widow or divorcee - there is far more money to be had in that arrangement.
Incidentally, there is no shortage of expensive restaurants remaining in Palm Beach. The restaurant business is always volatile, with a few opening and a few closing all the time. During the past several years in this area there has been no noticeable trend either way. Whatever else may have been the fallout of the Madoff affair, it does not seem to have impacted that segment of the economy.
cicero| 1.18.12 @ 2:45PM
Want to beat a $21.00 hamburger? It was reported just today that our ever amazing First Lady was treated to a $28.00 Obamaburger at a posh eatery somewhere in Palm Beach on the Potomac. You just have to find out where all the money goes to find such fare.
Bob Grant| 1.18.12 @ 2:57PM
Wrong! She chose the $81.00 steak over the obummerburger.
Michelle's doctor advised her to eat more steak if she wants to keep that badonkadonk of hers.
Arugula from her garden? ...um kay, right.
albert constantine jr.| 1.18.12 @ 4:07PM
Welcome back from your brief hiatus.
Bob Grant| 1.18.12 @ 5:00PM
Thanks Al,
I see SOME posters refuse to be on hiatus, brief or otherwise...you know, those non RINO/CINO's...