What rich people buy: assets. What bubbles are made of: assets.

In this recent essay in the NYT, Robert Frank suggests all kinds of problems that result from the consumption patterns of rich people, especially the consumption of access to power, which the rich use to change the laws that might prevent them from getting even richer at the expense of the poor. They also buy expensive things produced by a very narrow slice of people who then join them as rich people.

But these are things that poor people buy too, in smaller quantities. One purchase choice, however, stands alone: ASSETS.

Asset bubbles are created when people bid up the price of some thing to crazy heights only to see the price crash, leaving destruction and debt in its wake.

But there cannot be a hamburger bubble. Just can't happen. In fact, the history of asset bubbles is the history of things only bought by rich people.

Tulip Mania, Netherlands 1637.

Representative Wikipedia Quotation: "At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman."

Verdict: Rich People.

Railway Mania, UK 1846.

Who bought the shares?  The average factory worker's salary in 1843 was 33 shillings per week or about 86 pounds a year. Meanwhile, just a single share of railway stock generally cost between 25 and 100 pounds at issue and more as funds were "called-up".

Verdict: Rich People.

Enchilhamento, Brazil 1892.

The "mounting" or "saddleing up" (get on the horse now because an opportunity like this won't come again) was caused by massive speculation by folks rich off the spoils of slavery in various business enterprises in a country where the average person was either a recently freed slave (15%) or an immigrant legally not entitled to own property.

Verdict: Rich People

There's more, but they are all like the above: rich people with more money than sense trying to get even richer.

The obvious solution: find a way to put more money in the hands of people who will spend it on hamburgers and less money in the hands of people who will spend it on assets. Also known as: exactly the opposite of what the GOP wants.