The Hamptons in New York State, on the eastern tip of Long Island, has long been the summer playground for Wall Street executives, according to Xinhua.
Only a 90-minute drive from Manhattan, this small piece of heaven on earth along the Atlantic coastline is dotted with multi-million dollar summer homes for some of Wall Street`s best known names.
This summer, one year after Lehman Brother`s collapse, even people in the Hamptons can tell times have changed for some of the wealthiest seasonal residents of their villages.
Real estate is the most important business in the Hamptons. In Southampton, a village of a little over 6.3 square miles, the real estate value of properties exceeds 10 billion dollars, according to Mark Epley, mayor of the Village of Southampton.
But this business is "kind of dried up" this summer, the mayor told Xinhua. Revenue from the real estate sector is down by 33 percent compared to the same time last year. Realtor offices on or near Main Street are mostly empty. Few property pictures are displayed in the windows.
"People are holding on to their money," said Dan Rattiner, who has watched the Hamptons up close for more than 50 years and is the founder and owner of the local publication, Dan`s Papers.
Reporting in the tight-knit communities of the Hamptons and being a member of the now famous Atlantic Golf Club, where Bernard Madoff was also a member, Rattiner knows people who have lost all they had to Madoff.
"There is one wealthy man I know who is helping out a friend who doesn`t have any money, who lost everything," Rattiner said.
But despite what happened on Wall Street in the fall of 2008, which caused tremendous upheaval in the U.S. and global financial system, and which cost, as in the Madoff case, many people`s life savings, Rattiner says Wall Street people vacationing in the Hamptons don`t feel any resentment of guilt. "Because they didn`t do it collectively. They played by the rules that were enforced," Rattiner said.
Rattiner blamed the Reagan era tax cut policy and an over-dependence on the wealthy`s goodwill to protect the public`s interest for the collapse.
"The wealthy got this tremendous advantage and were expected to trickle it down to everybody else," Rattiner said. "There was much too much dependence on that."
Skip Ralph, commercial real estate owner in Southampton and New York, said the problem was that Wall Street took their clients` money and gambled it with too much risk. "Many lost a lot of money with regard to the way they managed it, the leverage, the risks they took. But others were more conservative."
He said many smaller banks in the United States were not as heavily affected by the meltdown as the big banks because they took more conservative investment strategies.
Having managed a private business all his life, Ralph sees inherent injustice as one of the major ills in the U.S. financial system, where the bottom line of a company is the only measure for performance and greed is encouraged.
"Freedom is good, but you have to have freedom that`s fair. We have a lot of unfairness in this country," said Ralph. "We are free, but we have institutionalized injustice."
In the second quarter of 2009, in which investment firm Morgan Stanley lost 1.3 billion dollars in the value of funds it managed, the company announced it would pay 5.9 billion dollars in bonuses to its staff, about 70 percent of the revenue for the quarter. The bonus to revenue ratio was higher than the average of 48 percent for the past decade.
Ralph has doubts if U.S. President Barack Obama`s comprehensive overhaul of financial regulations, which include restrictions on executive pay and bonuses, would succeed in an industry entrenched in its own play book for decades.
"It may take generations because if you are born and raised a certain way, you don`t want to change," he said.