23 December 2011

Prophets and Profits

Karen Armstrong [Religion Scholar]
It has been suggested that Jesus was crucified by the Romans for an attempted rebellion: some Biblical scholars have seen the account of his overturning the tables of the moneylenders in the Temple as a truncated version of a coup, by means of which he and his followers took over the Temple for a period of three days.

The Woman with the Alabaster Jar by Margaret Starbird
The action that led to his immediate arrest by the authorities in Jerusalem was the overturning of the tables of moneychangers in the temple of Jerusalem during the Passover festival. Scattering coins all over the temple floor was a radical attack on the religious establishment of the Temple priests and Sadducees, the ruling elite who collaborated with the Roman authorities to preserve peace and order in the province.

 Muhammad - A Biography of the Prophet by Karen Armstrong, 1993, Excerpts
The Quraysh had become rich beyond their wildest dreams in the old nomadic days. They saw wealth and capitalism as their salvation, which seemed to have rescued them from a life of poverty and danger and given them an almost godlike security. They were no longer hungry, no longer plagued by enemy tribes. Money began to acquire a quasi-religious value. But aggressive capitalism was not really compatible with the old communal tribal ethic. It encouraged a rampant greed and individualism.

Instead of sharing their wealth equally, according to the old tribal ethic, individuals were building up personal fortunes. They were exploiting the rights of orphans and widows, absorbing their inheritance into their own estates, and were not looking after the weaker, poorer members of the tribe as the old ethos had required. Their new prosperity had severed their links with traditional values and many of the less successful Quraysh felt obscurely disoriented and lost. Naturally the most successful merchants, bankers, and financiers were delighted with the new system. Only two generations away from the penury of the nomadic life, they believed that money and material goods could save them. They made a new religion of money.

The new prosperity drew people’s attention to the disparity between rich and poor. All the great religious leaders and prophets had addressed themselves to these issues and provided their own distinctive solutions. The younger generation was growing disenchanted and seemed to be searching for a new spiritual and political solution to the malaise and disquiet in the city.

Richest 2% Own ‘Half the Wealth'
06 Dec 2006
The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute. The report, from the World Institute for Development Economics Research at the UN University, says that the poorer half of the world's population own barely 1% of global wealth. What they mean by wealth in this study is what people own, less what they owe - their debts. The assets include land, buildings, animals and financial assets. Wealth is heavily concentrated in North America, Europe and some countries in the Asia Pacific region, such as Japan and Australia. These countries account for 90% of household wealth.

Chairman Alan Greenspan -- Monetary Policy Report to the Congress
16 Feb 2005
In a democratic society, such a stark bifurcation of wealth and income trends among large segments of the population can fuel resentment and political polarization. These social developments can lead to political clashes and misguided economic policies that work to the detriment of the economy and society as a whole.

Jesus Christ Superstar - Money Changers and Merchants

Roll on up Jerusalem,
Come on in Jerusalem,
Sunday here we go again,
Live in me Jerusalem.

Here you live Jerusalem,
Here you breathe Jerusalem,
While your temple still survives,
You at least are still alive.
I got things you won't believe,

Name your pleasure I will sell.
I can fix your wildest needs,
I got heaven and I got hell.
Roll on up, for my price is down.
Come on in for the best in town.
Take your pick of the finest wine.
Lay your bets on this bird of mine.

What you see is what you get.
No one's been disappointed yet.
Don't be scared give me a try,
There is nothing you can't buy.

Name your price, I got everything.
Hurry it's going fast.
Borrow cash on the finest terms.
Hurry now while stocks still last.
Roll on up Jerusalem,
Come on in Jerusalem,
Sunday here we go again,

Live in me Jerusalem.
Here you live Jerusalem,
Here you breathe Jerusalem,
While your temple still survives,
You at least are still alive.
I got things you won't believe,
Name your pleasure I will sell.
I can fix your


My temple should be a house of prayer,
But you have made it a den of thieves.
Get out! Get out!

Carl Heinrich Bloch - Casting Out the Money Changers

14 December 2011

Elite Moneyed Life

The Power Elite by C. Wright Mills, 1956, Excerpts
Whenever the standards of the moneyed life prevail, the man with money, no matter how he got it, will eventually be respected. A million dollars, it is said, covers a multitude of sins. It is not only that men want money; it is that their very standards are pecuniary. In a society in which the money-maker has had no serious rival for repute and honor, the word ‘practical’ comes to mean useful for private gain, and ‘common sense,’ sense to get ahead financially. The pursuit of the moneyed life is the commanding value, in relation to which the influence of other values has declined, so men easily become morally ruthless in the pursuit of easy money and fast estate-building.

The very rich in America have been culturally among the very poor; the only kinds of experience for which they have been models are the material ones of money-getting and money-keeping. Material success is their sole basis of authority. The elite of wealth and power do not feel in need of any ideology. Perhaps nothing is of more importance to the conservative mood than the rhetorical victory and the intellectual and political collapse of American liberalism.

The higher immorality is a systematic feature of the American elite; its general acceptance is an essential feature of the mass society. The absence of any firm moral order of belief makes men in the mass all the more open to the manipulation and distraction of the world of the celebrities. A great deal of American corruption is simply a part of the old effort to get rich and then to become richer.

13 December 2011

Elite Military Policy

The Power Elite by C. Wright Mills, 1956, Excerpts
There is no free and wide debate of military policy or of policies of military relevance. It is in line with a mass society for manipulation to replace explicitly debated authority, as well as with the fact of total war in which the distinction between soldier and civilian is obliterated. The military manipulation of civilian opinion and the military invasion of the civilian mind are now important ways in which the power of the warlords is steadily exerted. The content of this great effort reveals its fundamental pose: to define the reality of international relations in a military way, to portray the armed forces in a manner attractive to civilians, and thus to emphasize the need for the expansion of military facilities.

The younger are growing up in the atmosphere of the economic-military alliance and are being intensively and explicitly educated to carry it on. Religion, virtually without fail, provides the army at war with its blessings, and recruits from among its officials the chaplain, who in military costume counsels and consoles and stiffens the morale of men at war.

11 December 2011

Elite Propaganda

The Power Elite by C. Wright Mills, 1956, Excerpts
The rise of the power elite rests upon the transformation of the publics of America into a mass society. Life in a society of masses implants insecurity and furthers impotence; it makes men uneasy and vaguely anxious; it isolates the individual from the solid group; it destroys firm group standards. Acting without goals, the man in the mass just feels pointless.

As the scale of institutions has become larger and more centralized, so has the range and intensity of the opinion-makers’ efforts. The means of opinion-making have paralleled in range and efficiency of the other institutions that cradle the modern society of masses. The mass media, especially television, encroach upon the small-scale discussion, and destroy the chance for the reasonable and leisurely and human interchange of opinion.

Alongside the elite, there is the propagandist, the publicity expert, the public-relations man, [Edward Bernays] who controls the very formation of public opinion. The greatest kind of propaganda with which America is beset, the greatest at least in terms of volume and loudness, is commercial propaganda for soap and cigarettes and automobiles; it is to such things or rather to Their Names, that this society most frequently sings its loudest praises.

[1] The media tell the man in the mass who he is – they give him identity.
[2] They tell him what he wants to be – they give him aspirations.
[3] They tell him how to get that way – they give him technique.
[4] They tell him how to feel that he is that way even when he is not – they give him escape.

10 December 2011

Elite Educational Path

The Power Elite by C. Wright Mills, 1956, Excerpts
The daughter of an old upper-class New York family, for example, is usually under the care of nurse and mother until she is four years of age, after which she is under the daily care of a governess who often speaks French as well as English. When she is six or seven, she goes to a private day school, perhaps Mis Chapin’s or Brearley. She is often driven to and from school by the family chauffeur and in the afternoons, after school, she is in the general care of the governess, who now spends most of her time with the younger children. When she is about fourteen she goes to boarding school, perhaps to St. Timothy’s in Maryland or Miss Porter’s or Westover in Connecticut. Then she may attend Finch Junior College of New York City and thus be ‘finished,’ or if she is to attend college proper, she will be enrolled in Bryn Mawr or Vassar or Wellesley or Smith or Bennington. She will marry soon after finishing school or college, and presumably begin to guide her own children through the same educational sequence.

The boy of this family, while under seven years of age, will follow a similar pattern. Then he too will go to day school and to prep school: St. Mark’s or St. Paul’s, Choate or Groton, Andover or Lawrenceville, Phillips Exeter or Hotchkiss. Then he will go to Princeton or Harvard, Yale or Dartmouth. As likely not, he will finish with a law school attached to one of these colleges.

Harvard or Yale or Princeton is not enough. It is the really exclusive prep school that counts, for that determines which of the ‘two Harvards’ one attends. That is why in the upper social classes, it does not by itself mean much merely to have a degree for an Ivy League college. That is assumed: the point is not Harvard, but which Harvard? By Harvard, one means Porcellian, Fly, or A.D.: by Yale, one means Zeta Psi or Fence or Delta Kappa Epsilon; by Princeton, Cottage, Tiger, Cap and Gown, or Ivy. It is the prestige of a properly certified secondary education followed by a proper club in a proper Ivy League college that is the standard admission ticket to the world of urban clubs and parties in any major city of the nation.

Harvard Porcellian Club - Social Network

09 December 2011

Elite Schooling

The Power Elite by C. Wright Mills, 1956, Excerpts
The one deep experience that distinguishes the social rich from the merely rich and those below is their schooling, and with it, all the associations, the sense and sensibility, to which this educational routine leads throughout their lives. Each stage of this education is important to the formation of the upper-class man or woman; it is an educational sequence that is common to the upper classes in all the leading cities of the nation.

As a selection and training place of the upper classes, both old and new, the private school is a unifying influence, a force for the nationalization of the upper classes. The school – rather than the upper-class family – is the most important agency for transmitting the traditions of the upper social classes and regulating the admission of the new wealth and talent. It is the characterizing point in the upper-class experience. In the top fifteen or twenty such schools, one finds a prime organizing center of the national upon social classes. For in these private schools for adolescents, the religious and family and educational tasks of the upper social classes are fused, and in them the major tasks of upholding such standards as prevail in these classes are centered.

08 December 2011

Elite Law and Finance

The Power Elite by C. Wright Mills, 1956, Excerpts
The very rich have used existing laws, they have circumvented and violated existing laws, and they have had laws created and enforced for their direct benefit. The inner core of the power elite includes men of the higher legal and financial type from the great law factories and investment firms, who are professional go-betweens of economic, political and military affairs, and who thus act to unify the power elite. By the nature of their work, they transcend the narrower milieu of any one industry, and accordingly are in a position to speak and act for the corporate world.

The corporation lawyer and the investment banker perform the functions of the go-between effectively and powerfully. The corporation lawyer is a key link between the economic and military and political areas; the investment banker is a key organizer and unifier of the corporate world and a person well versed in spending the huge amounts of money the American military establishment now ponders. When you get a lawyer who handles the legal work of investment bankers, you get a key member of the power elite.

06 December 2011

Elite Prestige

The Power Elite by C. Wright Mills, 1956, Excerpts
Prestige is the shadow of money and power. Since the men of the higher political, economic, and military circles are an elite of money and power, they accumulate a prestige that is considerably above the ordinary; all of them have publicity value and some of them are downright eminent; increasingly, by virtue of their position and by means of conscious public relations, they strive to make their names notable, their actions acceptable, their policies popular, to become national celebrities.

The celebrities are The Names that need no further identification. Wherever the celebrities go, they are recognized, and moreover, recognized with some excitement and awe. Whatever they do has publicity value. More or less continuously, over a period of time, they are the material for the media of communication and entertainment. These national means of mass communication have been the channels through which those at the top reach the underlying population.

As military men have become more powerful during the wars and during the war-like interludes between, they too have joined the new national prestige scheme. They derive such importance as they have from the simple fact that violence is the final support of power and the final resort of those who would contest it. Only when war threaten international order do the generals and admirals come to be recognized for what at all times they are: indispensable elements of the order of power that prevails within and between the national states of the world.

04 December 2011

Elite Clique

The Power Elite by C. Wright Mills, 1956, Excerpts
Those who sit in the seats of the high and the mighty are selected and formed by the means of power, the sources of wealth, and the mechanics of celebrity. As the requirements of the top places in each of the major hierarchies become similar, the types of men occupying these roles at the top – by selection and by training in the jobs – become similar. That it is a fact revealed by the heavy traffic that has been going on between the three structures, often in very intricate patterns.

The chief executives, warlords, and politicians came into contact with one another in an intimate, working way during World War II; after that war ended, they continued their associations, out of common beliefs, social congeniality, and coinciding interests. Noticeable proportions of top men from the military, the economic, and the political worlds have during the last fifteen years occupied positions in one or both of the other worlds. They have come to look upon the government as an umbrella under whose authority they do their work.

The men of the higher circles are not representative men; their high position is not a result of moral virtues; their fabulous success is not firmly connected with meritorious ability. They are not men selected and formed by a civil service that is linked with the world of knowledge and sensibility. They are not men shaped by nationally responsible parties that debate openly and clearly the issues this nation now so unintelligently confronts. They are not men held in responsible check by plurality of voluntary associations which connect debating publics with the pinnacle of decision.

03 December 2011

Elite War Economy

The Power Elite by C. Wright Mills, 1956, Excerpts
The story of the American economy since the Civil War is the story of the creation and consolidation of this corporate world of centralized property. During World War II, the merger of the corporate economy and the military bureaucracy came into its present-day significance. Within the span of one generation, America has become the leading industrial society of the world, and at the same time one of the leading military states. Without the industrial economy, the modern army could not exist; it is an army of machines.

Since World War II, the general direction of pure scientific research has been set by the military. Scientific and technological development has increasingly become part of the military order, which is now the largest single supporter and director of scientific research. Some universities are financial branches of the military establishment.

The military has become enlarged and decisive to the shape of the entire economic structure; and, moreover, the economic and the military have become structurally and deeply interrelated, as the economy has become a seemingly permanent war economy; and military men and policies have increasingly penetrated the corporate economy.

American capitalism is now in considerable part military capitalism, and the most important relation of the big corporation to the state rests on the coincidence of interests between military and corporate needs. Within the elite as a whole, this coincidence of interest between the high military and the corporate chieftains strengthens both of them and further subordinates the role of the merely political men.


02 December 2011

Elite Centralization - Political, Economic, and Military

The Power Elite by C. Wright Mills, 1956, Excerpts
The political order has become a centralized executive establishment which has taken up into itself many powers previously scattered, and now enters into each and every cranny of the social structure.

The economy has become dominated by two or three hundred giant corporations, administratively and politically interrelated, which together hold the keys to economic decisions. The trend within the corporate world is toward larger financial units tied into intricate management networks. Today the great American corporations seem more like states within states than simply private businesses. The economy of America has been largely incorporated.

The military order has become the largest and most expensive feature of government, and, although well versed in smiling public relations, now has all the grim and clumsy efficiency of a sprawling bureaucratic domain.

In each of these institutional areas, the means of power at the disposal of decision makers have increased enormously; their central executive powers have been enhanced; within each of them modern administrative routines have been elaborated and tightened up. Religious, educational, and family institutions are increasingly shaped by the big three.

Jekyll Island

29 November 2011

Obama: “biggest tax scam on record”

05 Jan 2008
"You've got a building in the Cayman Islands that supposedly houses 12,000 corporations. That's either the biggest building or the biggest tax scam on record."

US Uncut, Yes Men to Bust Corporate Tax Dodgers in Cayman Islands, June 18
10 Jun 2011

The activism groups behind a widely circulated (and false) AP report stating GE would return its entire 2010 tax refund of $3.2 billion to the US Treasury appear to be getting the band back together. US Uncut and The Yes Men are planning another event to draw attention to the massive problem of corporate tax dodging, but this time they’re taking their activism directly to the source of America’s lost revenue: the Cayman Islands.

One of Obama’s stock applause lines was a true-life story he would tell about a single building in the Cayman Islands which houses 12,000 corporations. "That's either the biggest building,” then-Senator Obama would say, “or the biggest tax scam on record.” Cue wild applause. The building Obama was referring to is called the Ugland House in George Town, and it actually houses about 19,000 registered companies. Since being elected, however, President Obama has done little to stem the problem of corporate tax havens. Legislative paralysis is precisely why US Uncut and The Yes Men are planning this action to draw the American people’s attention back to the problem of tax dodging.

Ugland House

28 November 2011

Tax Havens Shift Tax Burdens

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
In the large economies, tax burdens are being shifted away from mobile capital and corporations onto the shoulders of ordinary folks. The rich have been paying less, and everyone else has been forced to take up the slack. Tax havens overturn the healthy dynamics by providing escape routes for their elites. The secrecy jurisdictions are the biggest culprits.

27 November 2011

Tax Haven Investments

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
The two biggest sources of foreign investment into China in 2007 were not Japan or the United States or South Korea but Hong Kong and the British Virgin Islands. Similarly, as of 2009 the biggest source of foreign investment into India, at over 43 percent of the total, is the treaty haven of Mauritius, a rising star in the offshore system. It also specialized in channeling Chinese investments into Africa’s mineral sectors. Mauritius illustrates how the British spiderweb is no imperial relic but a modern and self-renewing system. Although French-speaking, the country has a long history of British colonial involvement. Mauritius set up its offshore center in 1989 under the tutelage of experts mostly from the City of London, Jersey, and the Isle of Man. The Netherlands is another major European tax haven. In 2006, while the Irish musician Bono browbeat Western taxpayers to boost aid to Africa, his band, U2, shifted its financial empire to the Netherlands to cut its own tax bill.

Chinese officials stole $120 billion, fled mainly to US
2011 Jun 17
Thousands of corrupt Chinese government officials have stolen more than $120bn (£74bn) and fled overseas, mainly to the US, according to a report released by China's central bank. The officials used offshore bank accounts to smuggle the funds, according to the study posted on the People's Bank of China website this week but which has since been removed. It said the officials smuggled about 800 billion yuan into the US, Australia, Canada and Holland through offshore bank accounts or investments, like property or collectables.  The stolen funds were covered up by disguising them as business transactions by establishing private companies to receive the money transfers.

26 November 2011

Tax Haven Secrecy

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
Tax havens don’t just offer an escape from tax. They also provide wealthy and powerful elites with secrecy and all manner of ways to shrug off the laws and duties that come along with living in and obtaining benefits from society – taxes, prudent financial regulation, criminal laws, inheritance rules, and many others. Offering these escape routes is the tax havens’ core line of business. It is what they do.

Offshore secrecy shifts control over information and the power that flows from it toward the insiders, helping then take the cream and use the system to shift the costs and risks onto the rest of society.

These zones of ultra-freedom for financial interests are so often repressive places, viciously intolerant of criticism. The offshore world is steeped in a pervasive inverted morality: Turning a blind eye to crime and corruption has become good business practice: a way of attracting money; while alerting forces of law and order to wrong doing has become the punishable offense. Here in the tax havens, rugged individualism has morphed into disregard, even a contempt, for democracy and for societies at large.

25 November 2011

United States’ Tax Haven Structure

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
Along with Britain and Europe, the United States anchors the third big offshore pole. At the federal level, on the top tier, the United States dangles a range of special tax exemptions, secrecy provisions, and laws designed to attract foreign money in true offshore style. U.S. banks may, for instance, legally accept proceeds from a range of crime - such as handling stolen property – as long as the crimes are committed overseas. Special arrangements are made with banks to make sure they do not reveal the identities of foreigners parking their money in the United States.

The next tier involves individual U.S. states. Florida’s banks have a long history of harboring mob money, often in complex partnerships with the nearby British Caribbean havens. Other U.S. states like Wyoming, Delaware, and Nevada have specialists in offering low-cost and very strong forms of almost unregulated corporate secrecy, which has attracted illicit money, and even terrorist money, from around the globe.

The third U.S. offshore rung is the U.S. Virgin Islands, a minor haven used by Bank of America, Boeing, FedEx, and Wachovia, among others. The Marshall Islands provides the anything goes, unregulated flag, among many others, the Deepwater Horizon, the BP-operated rig that caused environmental chaos off the U.S Gulf Coast in 2010.

The biggest tax haven in the U.S. zone of influence is Panama. The country is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest companies. The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the world.

The U.S. government and many others have allowed tax havens to proliferate because the elites who use them are the world’s most powerful lobbyists. Nearly every multinational corporation uses tax havens, and their largest users – by far – are on Wall Street.

24 November 2011

City of London – Tax Haven Mothership

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
This network of offshore satellites does several things for the City of London. First, it gives it a global reach. These jurisdictions funnel money through to London. Second, the spiderweb lets the City get involved in business that might be forbidden in Britain, giving the financiers in London sufficient distance from wrongdoing to allow plausible deniability.  By the time the money gets to London, it has been washed clean.

Offshore Magic Circle: Its members are made up of highly profitable multijurisdictional law firms mostly originating in Britain or its Overseas Territories and Crown Dependencies: a smartly dressed regiment of accountants, lawyers, and bankers forming a private global infrastructure that, in league with captured legislatures in the secrecy jurisdictions, makes the whole system work.

City ‘to be offshore currency market for China’
11 Jan 2012
Talking to bankers and lawyers, there is growing optimism that the City of London will join Hong Kong as an offshore center where the Chinese currency, the Renminbi, can be traded - and that an announcement on all this may not be far off. The RMB would be on its way to becoming a proper globally traded currency, commensurate with China's status as the world's second biggest economy.

22 November 2011

Tax Haven Structure

Treasure Islands by Nicholas Shaxson, 2011, Excerpts
The world tax havens can be divided roughly into four groups: a set of continental European havens, a British zone of influence centered in the City of London and parts of Britain’s former empire, a zone of influence focused on the United States, and a fourth category holding unclassified oddities like Somalia and Uruguay.

Each jurisdiction offers one or more offshore specialties. Each attracts particular kinds of financial capital, and each develops a particular infrastructure of skilled lawyers, accountants, bankers, and corporate officers to cater to their specific needs.

The drug smugglers, terrorists, and other criminals use exactly the same offshore mechanisms and subterfuges – shell banks, trusts, dummy corporations, and so on – that corporations use. Offshore connects the criminal underworld with financial elites and binds them together with multinational corporations and the diplomatic and intelligence establishments. Offshore drives conflict, shapes our perceptions, creates financial instability, and delivers staggering rewards to les grands, the people who matter. Offshore is how the world of power now works.

18 November 2011

Expropriating Wealth

Citigroup Plutonomy Report, 2005, Excerpts
Organized societies have three ways of expropriating wealth - through the revocation of property rights, through the tax system, or to slow down the rate of wealth creation. The three levers governments and societies could pull on to end plutonomy are benign. Property rights are still intact and taxation policies are neutral to favorable.

There seems little threat from the first of these challenges: blatant expropriation of property by governments. There are few examples of governments changing the rules in the plutonomies and engaging in widespread nationalization, or asset re-distribution. Governments have learnt the lessons of regulatory certainty and the sanctity of property rights.

The more likely means of expropriation is through the tax system. Corporate tax rates could rise and personal taxation rates could rise. Dividend, capital-gains, and inheritance tax rises would hurt the plutonomy. In the U.S., the current administration’s attempts to change the estate tax code and make permanent dividend tax cuts plays directly into the hands of the plutonomy.

So long as economies continue to grow, there is little threat to Plutonomy.

17 November 2011

Plutonomy Limits

Citigroup Plutonomy Report, 2005, Excerpts
Concentration of wealth and spending in the hands of a few has its limits. There are signs around the world that society is unhappy with plutonomy. If voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. The population at large might still endorse the concept of plutonomy, but feel they have lost out to unfair rules. This is a threat more clearly felt during periods of falling wealth. A collapse in wealth in the plutonomies, felt by the masses, could easily raise the prospects of anti-plutonomy policy.

The “global imbalances” is not as dangerous and hostile as one might think. A more balanced view acknowledges these nasty imbalances, but predicts a gentle, gradual dollar decline, a yuan revaluation, and the hope that Asians and European consumers will embark on a spending journey, righting the world.

16 November 2011

Plutonomy Drivers

Citigroup Plutonomy Report, 2005, Excerpts
What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time.

15 November 2011

Managerial Aristocracy

Citigroup Plutonomy Report, 2005, Excerpts
Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties. In the early 20th century, capital income was the big chunk for the top 0.1% of households, since the mid-eighties, mainly from oversized salaries. The rich in the U.S. went from coupon-clipping, dividend-receiving rentiers to a Managerial Aristocracy indulged by their shareholders.

The Managerial Aristocracy commandeers a vast chunk of that rising profit share. We think the trend of cost-cutting-balance-sheet-improving CEOs might just give way to risk-seeking CEOs, re-leveraging, going for growth and expecting disproportionate compensation for it. The earth is being held up by the muscular arms of its entrepreneur-plutocrats, like it, or not.

Globalization is keeping the supply of labor in surplus. On-going globalization is making it easier for companies to either outsource manufacturing from cheap emerging markets like China and India, or “offshore” manufacturing, move production to lower cost countries. Those being undercut are losers in the short term. This tends to lead to calls for protectionism and anti-immigration policies.

Louis XIV

12 November 2011

Plutonomies and the Rest

Citigroup Plutonomy Report, 2005, Excerpts
The World is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. In a plutonomy, there are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie. At the heart of plutonomy is income inequality. Societies that are willing to tolerate/endorse income inequality are willing to tolerate/endorse plutonomy. Society and governments need to be amenable to disproportionately.

The U.S., UK, and Canada are world leaders in plutonomy. Eastern Europe is embracing many of these attributes, as are China, India, and Russia. Countries and regions that are not plutonomies: Scandinavia, France, Germany, other continental Europe [except Italy], and Japan.

There are 1,011 billionaires in the world this year. These titans control entire swaths of the global economy, from energy and steel to fashion and telecom.

Photograph: Jimmy Sime, 1937, Toffs and Toughs

10 November 2011

Ownership Skewed by Legal Definitions

OWN: to have or hold as property : POSSESS
POSSESS: to have and hold as property : OWN

OWN: to have legal title or right to something. Mere possession is not ownership.

Note how the legal definition explicitly states that possession in not ownership.
Common Axiom: Possession is 9/10ths Law.

to divide and distribute

1) a portion of a benefit from a trust, estate, claim or business usually in equal division (or a specifically stated fraction) with others ("to my three daughters, in equal shares").
2) a portion of ownership interest in a corporation, represented by a stock certificate stating the number of shares of an issue of the corporation's stock.

assured reliance on the character, ability, strength, or truth of someone or something

an entity created to hold assets for the benefit of certain persons or entities, with a trustee managing the trust (and often holding title on behalf of the trust). Most trusts are founded by the persons (called trustors, settlors and/or donors) who execute a written declaration of trust which establishes the trust and spells out the terms and conditions upon which it will be conducted. The declaration also names the original trustee or trustees, successor trustees or means to choose future trustees. The assets of the trust are usually given to the trust by the creators, although assets may be added by others. During the life of the trust, profits and, sometimes, a portion of the principal (called "corpus") may be distributed to the beneficiaries, and at some time in the future (such as the death of the last trustor or settlor) the remaining assets will be distributed to beneficiaries. A trust may take the place of a will and avoid probate (management of an estate with court supervision) by providing for distribution of all assets originally owned by the trustors or settlors upon their death. There are numerous types of trusts, including "revocable trusts" created to handle the trustors' assets (with the trustor acting as initial trustee), often called a "living trust" or "inter vivos trust" which only becomes irrevocable on the death of the first trustor; "irrevocable trust," which cannot be changed at any time; "charitable remainder unitrust," which provides for eventual guaranteed distribution of the corpus (assets) to charity, thus gaining a substantial tax benefit. There are also court-decreed "constructive" and "resulting" trusts over property held by someone for its owner. A "testamentary trust" can be created by a will to manage assets given to beneficiaries.

a person who owns real property and rents or leases it to another, called a "tenant."