NORTHEAST HARBOR -- Philip "Phipps" Moriarty II, a hedge fund manager from Chicago, seemed exhilarated as he returned to the harbor after testing out a new model Downeast-style motor yacht he wanted to buy.

While he heaped praise on the $380,000 yacht, he was even more exuberant about his experience cruising in eastern Maine, with its rugged granite coastline, mountain views and multitude of islands.

"This is a boater's paradise," he said.

Maine's coast, particularly the region around Mount Desert Island, has been a summer playground for the wealthy for more than a century. The visitors' money and tastes have fueled and shaped the boatbuilding industry, which has come to specialize in production of high-end custom and semi-custom sail and motor yachts.

While the nation's manufacturers of cheaper, mass-produced boats continue to be in a slump, particularly in states that have seen a sharp downturn in housing prices, Maine boatbuilders are prospering. Maine has more builders of high-end custom boats than any other state, and it's benefiting from a huge increase in the number of super-wealthy people globally and nationally, said Thom Dammrich, president of the National Marine Manufacturers Association.

"For people who can afford a boat that costs $1 million, there are no cycles or slumps," he said.

And never in the nation's history have there been so many rich people.

The top 1 percent of earners receive a bigger share of the nation's income today than at any time since the late 1920s, said Mark Weisbrot, an economist and co-director at the Center for Economic and Policy Research, a nonpartisan think tank based in Washington, D.C.

"Over the last 30 years, you have seen one of the most massive upward redistribution of income in the history of the United States," he said.

Weisbrot worries that the widening income disparity is unhealthy for society and democracy.

But for Maine boatbuilders, the surging numbers of millionaires translates into more customers and more jobs. The industry, the third-largest manufacturing sector in the state, is seen as one of the segments of the Maine economy that has growth potential.

Stephen Mullane, 50, of Bar Harbor, manager of production for Morris Yachts at its Trenton yard, said a career in boatbuilding has allowed him stay in Maine, buy a home and raise a family.

"I remember reading a newspaper article years ago," he said, "about how people can make a living in Maine by going where the rich folks were."

Mullane is leading the production of a 57-foot sailboat that costs $3.5 million. He said he prefers building custom boats rather than mass-production models. Custom work, he said, allows for more personal expression and the chance to establish lasting friendships with the boat owners.

He said the owners treat boatbuilders as social equals. He described the relationship as that of patrons who support the work of artisans.

That respect was evident at the Morris Yachts pier, at the company's head office in Bass Harbor. A 50-foot sloop from Maryland was docked at the pier. Skipper Lex Birney, a commercial real estate and golf course developer from Annapolis, was on board with his family.

The boat was built in nearby Trenton by now-defunct Able Marine, and Morris Yachts later built boats using the same mold, obtained after purchasing the boatyard's assets.

Birney told Cuyler Morris, president of Morris Yachts, that he had traveled to Bass Harbor to meet him, and he invited him to come aboard and talk about his boat and their shared love of long-distance sailing excursions.

"We're come back to its roots," Birney told Morris.

Mount Desert has been a summer retreat for the wealthy ever since the Gilded Age of the late 1800s, when America's most socially prominent families -- the Astors, Rockefellers, Fords, Morgans, Pulitzers and Vanderbilts -- began spending their summers in Bar Harbor and nearby Seal Harbor and Northeast Harbor.

Many of their palatial summer estates burned down in 1947 in a forest fire that consumed more than 17,000 acres on the eastern half of the island.

Today, while the very rich still flock here, they are generally more subtle about their money.

Northeast Harbor, for example, looks like a quintessential New England village. There's a hardware store on Main Street, hole-in-the-wall art galleries and a restaurant that offers an all-you-can-eat pasta special on Monday nights for $9.95.

The wealth, though, is on full display in the harbor, which on a recent summer day hosted six visiting mega-yachts. Those huge boats, more than 100-feet long and able to hold as much as 9,000 gallons of fuel, were built out-of-state or overseas.

Most of the people who summer here prefer boats built by local yards, as evidenced by the vessels in the harbor that are here all season. People describe them using the names of the yards that built them or the owners of those yards -- Hinckley, Morris, Bunker and Ellis, Jock Williams, Ralph Stanley, Jarvis Newman. There are also a number of J-boats, which are speedy, high-performance sailboats that Bob Johnstone, a summer resident here, helped design.

Although the boats are often built with high-tech methods and materials, they are traditional and understated in appearance -- much like the million-dollar summer cottages that dot the island.

A boat's size alone does not mark status here. Rather, it's the name of the yard that built it and the quality of the craftsmanship and materials.

In fact, aging baby boomers are trading their large boats for classier, smaller boats that are easier to use, like the empty-nesters who trade their big house for an expensive waterfront condo, said Johnstone, who was showing off his Downeast-style power boat, the 34z, built by MJM Yachts of Boston.

"People are bagging out of the big boats," he said. "They are downsizing in size but going up in quality."

One of the most spectacular sailboats in the harbor is the Far Out, a 52-foot Morris-built racing boat owned by summer resident Hal Kroeger, chairman of Tower Hill Wealth Management of St. Louis. Kroeger, who also has a home in Aspen, Colo., employs two men to crew the boat all summer.

An even richer collection of boats can be found around the bend in Gilpatrick Cove, home of the Northeast Harbor Fleet, a private yacht club. Farther down Somes Sound, Seal Harbor's most famous summer resident, Martha Stewart, moors her 36-foot Hinckley picnic boat.

The elite are drawn here because this part of the Maine coast is one of the most beautiful places in the world to go cruising, said Peter Bergman, 69, a University of New Haven finance professor and former Bank of America executive. He was in the harbor on a 1968 Gulf Star cutter that he and his 15-year-old son had sailed from Connecticut.

He said the wealth of the summer visitors supports the boatbuilders, who are known for producing some of the finest small and mid-sized sailboats and powerboats in the world.

"This is one of the premier money spots in the United States," he said.

While the wealthy pay the bills, they don't set the standards, said Cuyler Morris. Local boatbuilders want to create boats that meet their own high standards and would rather lose customers than lower them.

Still, clients often come up with ideas that improve the boat designs, he said, and the final product is often shaped by their desires.

"It goes both ways," he said.