Extreme Wealth Is Bad for Everyone—Especially the Wealthy

wealthy not happy

 

The addendum of conventional success we have mostly adhered to sounds like this: “the more you achieve, the more dissatisfied you must be to continually perpetuate your success.” As creatures induced by desires and wants, it is inevitable for us to crave for some things, and try to do something, or anything, to get what we look out for. This applies for all the history, and it is also a driving force that makes our society advance.

But does ‘the more, the merrier’ rule apply indefinitely? If everything were left unconstrained, you would definitely encounter a perfect inequality. A ‘winner-takes-all’ situation where, in a realm of limited resources, people are racing savagely to gain something, like a zero-sum competition. And here, inequality has become one issue. It is not that competition is bad; we are, instead, being faced with ‘free-for-all’ mindset. And too much of it is increasingly a bad thing, not a good thing after all.

Read the full article in New Republic about the growing inequality in United States, and what should, ideally, be done about it.

 

Excerpt:

 

Billionaires seems to have been sparked by West’s belief that rich people, newly empowered to use their money in politics, are now more likely than usual to determine political outcomes. This may be true, but so far the evidenceand evidence here is really just a handful of anecdotessuggests that rich people, when they seek to influence political outcomes, often are wasting their money. Michael Bloomberg was able to use his billions to make himself mayor of New York City (which seems to have worked out pretty well for New York City), but Meg Whitman piled $144 million of her own money in the streets of California and set it on fire in her failed attempt to become governor. Mitt Romney might actually have been a stronger candidate if he had less money, or at least had been less completely defined by his money. For all the angst caused by the Koch Brothers and Sheldon Adelson and their efforts to unseat Barack Obama, they only demonstrated how much money could be spent on a political campaign while exerting no meaningful effect upon it.

As West points out, many rich people are more interested in having their way with specific issues than with candidates, but even here their record is spotty. Perhaps they are having their way in arguments about raising federal estate tax; but the states with the most billionaires in them, California and New York, have among the highest tax rates on income and capital gains. If these billionaires are seeking, as a class, to minimize the sums they return to society, they are not doing a very good job of it. But of course they aren’t seeking anything, as a class: it’s not even clear they can agree on what their collective interests are. The second richest American billionaire, Warren Buffett, has been quite vocal about his desire for higher tax rates on the rich. The single biggest donor to political campaigns just now is Tom Steyer, a Democrat with a passion for climate change. And for every rich person who sets off on a jag to carve California into seven states, or to defeat Barack Obama, there are many more who have no interest in politics at all except perhaps, in a general way, to prevent them from touching their lives. Rich people, in my experience, don’t want to change the world. The world as it is suits them nicely.

A Tale of Two Londons

london

 

It’s not about the London that we always perceive as the epicenter of numerous icons, the testament of its heydays of colonial rule; it’s another London, one embedded in secrecy, with anonymous accounts carrying huge sums of money, stored safely in elite condominiums, linked strongly to offshore banks, in its overseas territories (including its ex-colonies, say Hong Kong and Singapore), and one, in invincible pattern, which influences global banking industry worldwide in ways the public may never have imagined before.

There doesn’t simply exist one London, though; there is one where the Britons live, and the other one, a self-isolated microcosm where dictators, cronies, plutocrats, oligarchs, and tax evaders all store their vastly accumulated wealth here, at the same time when most of their home countries need the money the most.

Read the full article in Vanity Fair, released in April 2013 edition.

 

Excerpt:

 

Starting in the 1960s, new buyers began to fire up the market: crises of the Greek monarchy brought a significant influx of Greeks, pockets of which endure today. Next came the first wave of Americans, a trickle of bankers lured by London’s unregulated Euro-markets, and West Coast buyers, often from Hollywood. “They swarmed in,” remembers veteran London real-estate agent Andrew Langton, of Aylesford International. “They turned Chester Square into Little L.A. and tidied up all these properties, at enormous expense, with American kitchens, bathrooms, and showers.”

The OPEC oil crisis, of the 1970s, lit the big fire under this market. Arab money surged into the so-called golden triangle of Knightsbridge, Belgravia, and nearby Mayfair, to buy high-end properties. Real-estate agents remember it as a tidal wave: “They came as a force,” says Hersham. “When they wanted to buy, there were no hysterics or reticence.” The fall of the Shah of Iran brought a surge of Iranian money, followed by buyers from the biggest African ex-colony, newly oil-rich Nigeria.

The market paused for breath in the 1980s, with Britain’s economy in the doldrums and as sagging world oil prices sapped wealthy foreign buyers’ demand. But Margaret Thatcher’s financial reforms, notably her “Big Bang” of Wild West financial deregulation, in 1986, caused the stream of bankers to turn into a river, then a deluge. “We would wait for those e-mails ending in ‘gs.com’ to come rolling in,” remembers Jeremy Davidson, a Belgravia-based property consultant. “Goldman [Sachs] partners, Morgan [Stanley] partners: they were the top of the market, and we had lots of them.”

The fall of the Soviet Union, in 1989, and the vast, corrupt post-Soviet privatizations, brought the biggest, most reckless wave of foreign buyers London had ever seen, with often questionable money sluicing in via the secretive British-linked stepping-stone tax havens of Cyprus and Gibraltar. “There is no real accountability of these guys coming in—the cops don’t really investigate them,” says Mark Hollingsworth, co-author of Londongrad, a 2009 book about the Russian invasion. “They see the capital as the most secure, fairest, most honest place to park their cash, and the judges here would never extradite them.”

Movie title: Dead in Paris

dead in paris

 

I have no idea which directors may have the best expertise to handle such plots, but I think there may be some possible prospective ones:

1. Woody Allen

2. Joel & Ethan Coen

3. David Lynch

4. Steven Soderbergh (okay, he’s already retired at 50)

5. Atom Egoyan (sorry, you’re just on bottom of the list then)

A Paradise of Untouchable Assets

rarotonga

 

Rarotonga, the main island in Cook Islands. Source: Japan Focus

 

The story about a semi-sovereign state, populated in a number barely exceeding 20,000, and hugely dependent on New Zealand, which also serves as an influential, and mostly lawsuit-free, international tax haven.

Read the full story in The New York Times.

 

Excerpt:

 

Win a malpractice suit against your doctor? To collect, you will have to go to the other side of the globe to plead your case again before a Cooks court and under Cooks law. That is a big selling point for those who market Cook trusts to a broad swath of wealthy Americans fearful of getting sued, and some who have been.

“You can have your cake and eat it too,” says Howard D. Rosen, a lawyer in Coral Gables, Fla., who has set up Cook trusts for more than 20 years, in a video on his website. Anyone with more than $1 million in assets, his firm’s site suggests, should consider Cook trusts for self-preservation, but especially real estate developers, health care providers, accountants, architects, corporate directors and parents of teenage drivers.

International regulators have become more aggressive in efforts to clamp down on tax haven countries, offshore banks and their customers, but they have paid scant attention to the Cooks. Yet Americans are the biggest customers of the trusts, which may be held only by foreigners, not Cook Islanders. The islands’ official website calls the Cooks a “prime choice” for “discerning wealthy clients.” There are 2,619 trusts, according to the Cooks’ Financial Supervisory Commission, offering anonymity as well as legal protections. The value of the assets is not disclosed and it is against the law in the Cooks to identify who owns the trusts or to provide any information about them.

Qatar Chronicles

Qatar Looks To 2022 FIFA World Cup

 

 

A journalist on a dispatch to one of the most Midas Touch-ed countries, and the hardened people, all imported abroad, who build it.

Welcome to Qatar, a nation, which, decades ago, was nothing more than a string of pearl-fishing villages, but now becomes one of booming nouveau riches, megalomaniac displays of wealth, glitzy, often un-Euclidean skyscrapers, huge shopping malls, and megaprojects flourishing in, thanks to its luck that the country is sitting on the planet’s largest gas field. As it prepares itself for the history’s most expensive game ever made (imagine 220 billion US$ for World Cup 2022 preparation compared to Putin’s squandering a ‘mere’ 50 billion US$ for Winter Olympics in Sochi), the whole nation is prepping up for changes, readying itself for a gargantuan plastic surgery of its own, but oftentimes at the huge expense of millions of foreign migrants who toil laboriously – and more frequently than not, in inhumane condition – to make the dreams happen.

Read the full article on SB Nation.

 

Excerpt:

 

These were air horns, not car horns, and the more the rhythm of these wamp-wamp-wamps emerged, the more it became clear that they were coming from a soccer game. So I walked past the hotel and down an increasingly dingy avenue I’d wandered my first night in Doha, past industrial supply stores and dim small hotels and the garish Oscado Saloon, which was not a saloon but a salon whose young haircutters — all sporting identical Drake-ish squared-off cuts — hung over a rail smoking cigarettes.

And then a left along Al Muthaf Street. There were no more hotels. There was a shisha bar in which men smoked hookah dispassionately under fluorescent light; there was a far brighter Pakistani grocery. There were low dun-colored apartment blocks, nameless and with all the windows unlit, either abandoned or occupied by people who used them only for what hours of hard sleep they could get.

This neighborhood was it — the place where the less well-paid foreign laborers lived, and how they lived.

This was what every service employee I talked to — Pakistani, Filipino, Nepali, Kenyan, Indian, Ghanaian, Bangladeshi — told me when I asked what they thought of Doha. “Only work,” a Ghanaian cabbie said. “Work and sleep.” A Filipino cabdriver, blasting a homemade CD of Queen songs, bemoaned the lack of karaoke options. This neighborhood was it — the place where the less well-paid foreign laborers lived, and how they lived. A place to sleep and maybe eat, quietly and out of the way. The streets were dusty and tired. A woman in an abaya, her sleeping daughter slung over her shoulder, climbed grim yellow steps into an apartment building. An airplane roared up over the rooftops, huge and shockingly close.

Fleeing South Africa

map_of_south-africa

 

 

What exactly happens to the country’s dominant minority, the White South Africans, in the post-apartheid era. Approximately 5 million people strong in an overall population of 50 million, many of them are expressing a strong desire to leave the country, now already marred by the world’s highest crime rates only comparable to those of countries at the brink of war.

Will the passing out of Nelson Mandela, father of the brand-new South Africa it is now, as he’s being buried today, exacerbate the whole matters for the nation? Will Mandela’s vision of a united nation, either black and white, continue in the long term? Such questions are yet to be answered at this moment.

This is the full article from Newsweek, published in February 2009.

Excerpt:

The primary driver for emigration among all groups, but especially whites, who still retain the majority of South Africa’s wealth, is fear of crime. With more than 50 killings a day, South Africa has one of the highest per capita murder rates in the world. The same goes for rape—ranking the country alongside conflict zones such as Sierra Leone, Colombia and Afghanistan. Future Fact polling indicates that more than 95 percent of those eager to leave South Africa rate violent crime as the single most important factor affecting their thinking. Lynette Chen, the ethnic-Chinese CEO of Nepad Business Group, is the only member of her family left in South Africa. Her parents departed in 2002 after being carjacked—twice. Her brother, also a victim of crime, followed suit shortly thereafter. “They’re always getting homesick,” she says. “But they won’t come back unless the crime is reduced.”

Another largely unnoticed problem is the growing number of attacks on South Africa’s white farmers. As in neighboring Zimbabwe, some of the attacks appear to be racially motivated. Others seem simply opportunistic, but the result is that white farmers’ numbers continue to decrease, leading to fears that despite the government’s good intentions, a Zimbabwe-style crisis—where the flight of skilled farmers led to an agricultural collapse—is possible here too.

The two faces of Singapore

singapore rich

 

 

The existence of this tiny, little, 5.5-million-people-strong nation is primarily due to the inflow of two main things this country critically needs: capital inflow and foreign talents.

Speaking of capital influx, it takes this city-state no more than five decades of absolute one-party control to restore law and order, from a previously poverty-laden, conflict-plagued shantytown into one of the world’s richest metropolises equivalent to its doppelgangers, either Hong Kong, Shanghai, Tokyo, New York City, or London. With social stability perfectly well-maintained, the flow of capital is well sustained. It is now one of the planet’s most promising banking hubs, and also tax havens, tantamount to that of Switzerland or Cayman Islands.

Simultaneously, as Singaporean population’s fertility rate is critically below its replacement rate (1.2 instead of 2.0), the government also finds itself increasingly necessary to attract foreigners to come, work, and also live in this tiny country whose GDP size is equivalent to that of its counterpart, Malaysia. Approximately 1 million foreign workers make up one-third of Singapore’s workforce currently, and overall, nearly 2.5 million people living in Singapore are not born in this island. The government has even announced plans to import ‘another’ 1.5 million migrants until 2030 to stabilize the population structure, which is expected, altogether with the number of migrants, to reach 7 million by that year.

Nevertheless, there are unexpected costs with such phenomena.

With global nouveau riches, and also an influx of foreign workers from Third World countries, flocking in to Singapore, problems arise. Relationship between them and the locals becomes intense, social gap widens, and most commonly, political repression prevails. Many, among the latter, who do menial jobs, complain of low pay and unequal treatment, but opinions are frequently suppressed in the highly strict government.

And with the Little India riots recently taking place two days prior (and conducted, ironically, by foreign migrant workers), this is becoming an increasingly alarming concern among all the populace in the country.

Two articles below highlight the two faces of Singapore: one dominated by the globe’s millionaires, and the other by commoners struggling for a better life in a brand-new megalopolis.

 

This is the article, about the former, from Wall Street Journal. Here is the excerpt:

 

Welcome to the world’s newest Monaco, a haven for the ultra-rich in what until recently was mocked as one of the most straight-laced, boring cities in the world. When most people think of Singapore, if they do at all, they think of an order-obsessed Asian version of Wall Street or London’s Canary Wharf, only with implausibly clean, sterile streets and no crime. The southeast Asian city-state of five million people is perhaps best known for banning the sale of chewing gum or caning vandals, including American Michael Fay in 1994 for spray-painting cars. Drug traffickers face the death penalty, and even Ault complains the authorities won’t let him import his prized gun collection, which now sits in his other homes in Palm Beach and Manhattan.

But over the past decade, Singapore has undergone a dramatic makeover, as the rich and famous from Asia and beyond debark on its shores in search of a glamorous new home—and one of the safest places to park their wealth. Facebook co-founder Eduardo Saverin gave up his American citizenship in favor of permanent residence there, choosing to live on and invest from the island while squiring around town in a Bentley. Australian mining tycoon Nathan Tinkler, that country’s second wealthiest man under 40, whose fortune is pegged at $825 million by Forbes, also chose to move to Singapore last year. They join Bhupendra Kumar Modi, one of India’s biggest telecom tycoons who gained Singapore citizenship in 2011, as well as New Zealand billionaire Richard Chandler, who relocated in 2008, and famed U.S. investor Jim Rogers, who set up shop there in 2007. Gina Rinehart, one of the world’s richest women, slapped down $46.3 million for a pair of Singapore condominium units last year.

 

And this is the latter, from The Daily Beast, primarily concerned about foreign-hired construction workers. Here is the excerpt:

 

Construction workers don’t get issued regular work visas; they are considered “transient workers,” welcome in Singapore only for the labor they are doing. The rules stipulated in their work permits bar them from marrying Singaporean citizens (unless approved by the government) and from changing jobs. With permission to be in Singapore conditional upon their employer, workers are discouraged from rocking the boat. Complain too much and you could find your work permit cancelled and your right to remain in Singapore withdrawn. An unlucky worker might even find himself forcibly repatriated.

This gives employers an enormous amount of power over their migrant workers. Activists say they’ve come across contracts with all sorts of unreasonable and downright illegal clauses. A 2008 contract from a subcontractor stipulated that workers would not be entitled to payment for overtime or work done on public holidays. Workers who complained to any government ministry could also be made to pay between $80—$240, which could account for about three to ten days’ worth of wages, for the employers’ trouble in addressing these complaints. And these are for the ‘lucky’ ones, who actually have contracts.