The Gatsby Budget

Kevin Roose estimates it, concluding that “Jay Gatsby was probably either living paycheck-to-paycheck or digging himself into debt”:

I ran Gatsby’s estimated cash flows by Rocco A. Carriero, a Southampton-based private wealth advisor. Carriero said that he would never take Gatsby on as a real-life client, given the illegality of his bootlegging business. But after looking at my estimates, he agreed with me that there’s no way a person earning as much as Gatsby did should be spending with such abandon. “He’s got to cut back on the lifestyle expenses,” Carriero told me of a hypothetical Gatsby-like client. “Rather than having fifteen parties at $150,000 apiece [in 2013 dollars], he may want to consider having one party, with maybe half the people.”

Yglesias thinks it’s not so simple:

The problem here is the dread relative price shifts. Over long time horizons not only does the overall price level shift but the relative price of different goods and services shifts. In particular, back in the 1920s labor-intensive services were very cheap. In her autobiography, Agatha Christie writes that when growing up she thought she’d never be so wealthy enough to own a car nor ever be so poor as to be unable to afford servants. And recall that Nick Carraway, who does not earn a lavish salary, has a “demoniac Finn” who cleans his house and cooks him breakfast on a daily basis. But if you were to calculate the 2013 price of a full-time servant and then retroactively attribute that income level to Nick, you’d end up vastly overstating how much he’s making in the bond game. It’s just that cars were expensive back then and unskilled human labor was incredibly cheap. The cost of throwing a giant party is primarily the cost of the labor involved, so huge parties would have been much more affordable in the twenties than today.