Tuesday, February 27, 2007

A Bunch of Bankers

The ├╝ber-exclusive Yellowstone Club, 13,000 acres under the "big sky" of Montana, a retreat where the super-rich can relax, spend time with their families, or entertain. The entry fee is $250,000 (£130,000), though you'll have to be invited and you'll have to buy a house (the developers are currently building the world's most expensive, a $155m mansion ) in order to gain acceptance. It is rumoured that the members - of whom there are fewer than 300 - include Bill Gates, the former US Vice-President Dan Quayle and stars including Brad Pitt .

Pity them, they need help. A fortune can be a terrible burden when it must be protected, invested and sheltered from the tax man, parcelled out ready for future generations. Even giving it away is not easy, requiring all sorts of expertise to navigate the world of philanthropy and competing demands for donations and sponsorships. So step forward - the private wealth manager.

The private wealth manager is a banker-cum-broker-cum-butler to the super-rich.

He or she will be trusted with the family's financial secrets, relied upon to advise and to manage its financial needs, perhaps also, in a spare moment, to pick up an impossible-to-find box at a sports game or to deal with a pesky bill that has been overlooked.

"This is all about money," said Russ Prince the founder of Prince & Associates, a consultancy that studies the habits of the super-rich. "If you want to deal with the super-rich, it is important to have some measure of success of your own. A man in a mansion is not going to take advice from a man who lives in a hovel." .

Todd Thomson did not live or work in a hovel. At 45, Thomson was one of the finance industry's fastest-rising stars, and was heading the wealth management division of the banking giant Citigroup, which acts for hundreds of the richest individuals and families in America, making him one of the most powerful advisers of the super-rich.

His holiday home at the Yellowstone Club became a favoured venue for skiing parties for clients - and those he hoped would soon become clients. But Yellowstone was not his only indulgence. Far from it. When he was suddenly fired at the start of this year, what was revealed about his free-spending way with Citigroup's corporate credit card provoked shock and awe in equal measure. News that the beneficiary of much of his corporate largesse was one of America's most telegenic business reporters turned the usually austere front page of The Wall Street Journal into something akin to a celebrity gossip rag.

Thomson's attempts to impress his Yellowstone counterparts and other potential clients, had extended to a costly make-over for his 50th-floor office back in New York, where the views of Central Park were not apparently enough of a draw. The floor's boardroom, almost exclusively used by Thomson, is decked out with marble flooring and polished wood cabinets; in his main office was installed a tropical fish tank and Persian rugs and, in an expense too far, a giant wood-burning fireplace. Visitors have compared it to a "Swiss chalet" or the inner sanctum of the Wizard of Oz; Citigroup insiders dubbed it the "Todd Mahal".

Russ Prince says that contacts and connections are vital, and that moving in the right circles and giving the right impression can be a more surefire way of securing lucrative business than any other.

The top independent advisers typically take home more than $5m a year from perhaps just a handful of clients, and many take home double that. Those who operate inside much bigger financial institutions are lavished with bonuses that can break the million-dollar mark because of the profits they can generate.

Other clubs to join .

Palm Beach in Florida is the number one holiday resort for America's rich and powerful. The Bath and Tennis is its most exclusive country club. It was built by the architect Addison Mizner for Gatsby generation of the 1920s, and sits on several hundred prime acres off Ocean Boulevard.
The members are anyone who's anyone in American Society. Brits to have been welcomed range from the Duke and Duchess of Windsor to the current Duke of Marlborough and Prince and Princess Michael of Kent.
How much to join - if you have to so much as ask, you've no chance of getting in. For a ball-park figure, it's worth noting that at Donald Trump's Mar-a-Lago club next door, membership costs a cool $250,000.

The poshest "yotties" retreat on the East Coast, it was founded in 1889 to organise regattas for weekending New Yorkers. Runs serious racing teams, coaches the offspring of the super-rich and, away from the water, organises cocktail parties and conferences for white-collar networkers.
Connecticut is spiritual home to the hedge fund billionaire. The club's Commodore, Peter J Cummiskey, and Vice Commodore, Samuel B Fortenbaugh III all made fortunes on Wall Street before deciding to spend more time with their yachts.
$10,000 a year membership fee , with about the same again in joining fees. But only if you can become a member - and the waiting list is more than 15 years long.

The rich get richer - the poor get poorer

From the Independent :-

The number of Americans living in severe poverty was nearly 16 million people living on an individual income of less than $5,000 (£2,500) a year or a family income of less than $10,000, according to an analysis of 2005 official census data.

The analysis, by the McClatchy group of newspapers, showed that the number of people living in extreme poverty had grown by 26 per cent since 2000. Poverty as a whole has worsened, too, but the number of severe poor is growing 56 per cent faster than the overall segment of the population characterised as poor - about 37 million people in all according to the census data. That represents more than 10 per cent of the US population, which recently surpassed the 300 million mark.The numbers of severely poor have increased faster than any other segment of the population.

The causes of the problem are no mystery to sociologists and political scientists [ or socialists -aj ]. The share of national income going to corporate profits has far outstripped the share going to wages and salaries. Manufacturing jobs with benefits and union protection have vanished and been supplanted by low-wage, low-security service-sector work.

The richest fifth of US households enjoys more than 50 per cent of the national income, while the poorest fifth gets by on an estimated 3.5 per cent.

The average after-tax income of the top 1 per cent is 63 times larger than the average for the bottom 20 per cent - both because the rich have grown richer and also because the poor have grown poorer; about 19 per cent poorer since the late 1970s.

Every income group except for the top 20 per cent has lost ground in the past 30 years, regardless of whether the economy has boomed or bust .

United States poverty league: States with the most people in severe poverty

California 1.9m
Texas 1.6m
New York 1.2m
Florida 943,670
Illinois 681,786
Ohio 657,415
Pennsylvania 618,229
Michigan 576,428
Georgia 562,014
North Carolina 523,511

Source: US Census Bureau

Sunday, February 25, 2007

U.S. Backs Terrorism

Per usual , political posturing and hypocrisy always goes together . According to the Sunday Telegraph the United States are financing Iranian terrorist groups to undermine and subvert the present Iran regime .

In the past year there has been a wave of unrest in ethnic minority border areas of Iran, with bombing and assassination campaigns against soldiers and government officials.
Such incidents have been carried out by the Kurds in the west, the Azeris in the north-west, the Ahwazi Arabs in the south-west, and the Baluchis in the south-east. Non-Persians make up nearly 40 per cent of Iran's 69 million population, with around 16 million Azeris, seven million Kurds, five million Ahwazis and one million Baluchis. Most Baluchis live over the border in Pakistan.

Funding for their separatist causes comes directly from the CIA's classified budget but is now "no great secret", according to one former high-ranking CIA official in Washington who spoke anonymously to The Sunday Telegraph.

His claims were backed by Fred Burton, a former US state department counter-terrorism agent, who said: "The latest attacks inside Iran fall in line with US efforts to supply and train Iran's ethnic minorities to destabilise the Iranian regime."

John Pike, the head of the influential Global Security think tank in Washington, said: "The activities of the ethnic groups have hotted up over the last two years and it would be a scandal if that was not at least in part the result of CIA activity."

A row has also broken out in Washington over whether to "unleash" the military wing of the Mujahedeen-e Khalq (MEK), an Iraq-based Iranian opposition group with a long and bloody history of armed opposition to the Iranian regime.The group is currently listed by the US state department as terrorist organisation.

Mr Pike said: "A faction in the Defence Department wants to unleash them. They could never overthrow the current Iranian regime but they might cause a lot of damage."

It is a cliche but one man's terrorist are another man's freedom fighter .

Latest Fashion Accessories

There is always a niche in the market under capitalism .

Heightened airport security has provided inspiration for next season's most desirable accessory: the see-through handbag.

Several leading designers, including Chanel, Dolce and Gabbana, Fendi and Oscar de la Renta, are producing high-fashion interpretations of the transparent plastic bags necessary for carrying liquids and medicines on to planes.

Early versions, which cost from £250 to £850, have already been spotted .

The bags are part of a wave of security-friendly travelling accessories about to arrive on the market.
These include self-weighing suitcases, belts and bras guaranteed not to set off metal detectors. Non-liquid-based toiletries including paper shampoo, solid shampoo bars and a pre-pasted toothbrush - just add the water.

Saturday, February 24, 2007

Powers of the Mind

Just to emphasise that it is thinking that is the real power of the mind and not some sort of extra sensory perception psychic power the BBC reports a Ministry of Defence experiment that failed to show any foundation for "remote viewing".

Defence experts attempted to recruit 12 "known" psychics who had advertised their abilities on the internet ( I wonder why) and instead invited novice volunteers to participate in tests that involved blind-folding volunteers and asking them about the contents of sealed brown envelopes . Most subjects consistently failed to establish what was in the envelopes.

The study concluded there was "little value" in using "remote viewing" in the defence of the nation.

"The remote viewing study was conducted to assess claims made in some academic circles and to validate research carried out by other nations on psychic ability," said a spokeswoman. She added: "The study concluded that remote viewing theories had little value to the MoD and was taken no further."

One more for James Randi .

Tuesday, February 20, 2007

Kennedy assassination again

For many it is a matter of "who did it - who cares " but previously unreleased footage of John F. Kennedy's fateful motorcade in Dallas moments before he was gunned down was released on Monday according to this report . The footage was taken less than 90 seconds before the fatal shots were fired.

The president's coat is clearly if briefly seen bunched up on his back . Kennedy's jacket was riding high on his back which explains why the entry wound in his body did not match the expected position in his coat . No longer a need to explain away the discrepancy by a second ( or third or fourth ) sniper . The " Magic Bullet " wasn't so magic after all .

Sunday, February 18, 2007

The Other World

Something that helps to describe this strange Capitalist society

Hey , whats a million these days

From the Independent reports that a millionaire living in 1907 Britain would today need nearly £86m to enjoy the same standard of living.

£17.2m today would have the same spending power as a millionaire in 1957.
The value of £1m would drop by two-thirds in real terms over the next 50 years even if inflation rose in line with the Government's target of 2 per cent a year.

"The value of £1m will be reduced significantly further over the next 50 years, even if inflation is kept firmly under control... £1m is no longer enough to fund a lavish lifestyle... " said Rob Devey, managing director of Clerical Medical.

Its all rather relative isn't it ...

Friday, February 16, 2007

Loan Sharking - Grand Scale

The BBC is reporting on the rise of personal debt but another BBC report prepared by Greg Palast for Newsnight exposes the hidden loan sharks that are exploiting the poverty of the Third World nations and basically sending around the debt collectors to their capitals . An interview can be seen and listened to at Democracy Now

“Vulture fund” companies buy up the debt of poor countries at cheap prices, and then demand payments much higher than the original amount of the debt, often taking poor countries to court when they cannot afford to repay . Vulture fund is a term that’s used for bond speculators who take the bonds, the cheap debt of the third world, that may sell ten cents on the dollar, because no one expects to ever collect on these debts, they buy up the debts really cheap, and then they use political muscle, bribery or lawsuits to try to squeeze til the pips squeak , as they say .

One company , Debt Advisory International (DAI) owned by Michael Sheenan , has won the right to collect $20 million from the government of Zambia after buying its debt for $4 million.
Here's how the vultures got Zambia. In 1979, Romania lent them $15 million. By 1998, Zambia was broke, so Romania offered to write off the entire debt for just $3 million. But before the deal was final, a vulture swooped in, and somehow snatched Romania’s cheap offer for his own company. Michael Sheehan and his associates are now suing Zambia, not for the $3 million they paid, but for the original debt, plus interest: $42 million.
Then there is Elliott Associates of billionaire Paul Singer. Singer practically invented the vulture fund. In 1996, he bought up some of Peru's debt for $11 million, then threatened to bankrupt Peru if they didn't give him $58 million. He got his $58 million.

Then Singer bought some discounted debt from Congo Brazzaville for only about $10 million. His company then sued the Congo and turned the $10 million into $127 million . Singer's company says the Congo government is corrupt and hid assets from creditors. Courts have agreed, allowing Singer to seek tripled damages under US racketeering law. They could get $400 million.

Gordon Brown to the United Nations :
"We particularly condemn the perversity where Vulture Funds purchase debt at a reduced price and make a profit from suing the debtor country to recover the full amount owed - a morally outrageous outcome".

That was 5 years ago .

Saying something and doing something are very much two different things for politicians .

Wednesday, February 14, 2007

The New Tsars

From the Independent i read Roman Abramovich has been dethroned as Russia's wealthiest individual for the first time since rich lists began. He has been replaced by Oleg Deripaska , a controversial oligarch who controls much of the world's aluminium production and owns a £25m house in Belgravia, London.

According to a rich list published by Finans magazine, Mr Deripaska is worth $21.2bn (£10.9bn), making him Russia's richest man. Mr Abramovich has the next spot, with $21bn.

Mr Deripaska enjoys a reputation as the hard man of the infamously ruthless metals business . It is claimed that he had made his fortune from "physical force, bribery and extortion".
Mr Deripaska enjoys excellent relations with President Vladimir Putin and Russia's political elite in general

Capitalism - It's certainly not for kids

The BBC features a story on a UNICEF report that the UK comes bottom of a league table for child well-being across 21 industrial countries and that according to Unicef UK executive director David Bull all the countries had weaknesses that needed to be addressed.

The Children's Commissioner for England, Professor Sir Al Aynsley-Green stated "...I think the shocking conclusion is that as a nation we have been failing our children and young people."

Colette Marshall, UK director of Save the Children, said "This report shows clearly that despite the UK's wealth, we are failing to give children the best possible start in life...The UK government is not investing enough in the well-being of children, especially to combat poverty and deprivation."

The Children's Society's chief executive Bob Reitemeier said "Unicef's report is a wake-up call to the fact that, despite being a rich country, the UK is failing children and young people..."

UK child poverty has doubled since 1979
Children living in homes earning less than half national average wage - 16%
Children rating their peers as "kind and helpful" - 43%
Families eating a meal together "several times" a week - 66%
Children who admit being drunk on two or more occasions - 31%

Tuesday, February 06, 2007

American Military Spending for 2008

The Financial Times reports :-

President George W. Bush on Monday unveiled the largest defence budget in history, asking Congress for $623 billion to fund the US military and the wars in Iraq and Afghanistan for 2008.

Congressional approval would allow the Pentagon to spend almost $20,000 a second for 2008.

If the Pentagon were a country, it would rank in size just behind the Netherlands, the world’s 16th largest economy.

In a Democracy Now interview , Linda Bilmes, lecturer in Public Policy at Harvard's Kennedy School of Government , an Assistant Secretary of Commerce in the Clinton Administration , has estimated that the total cost of the Iraq War will be $2 Trillion , a conservative estimate .

In a new report she predicts that providing the cost of medical care and compensation benefits for returning veterans once those troops return home could be between $350 billion and $700 billion.

Monday, February 05, 2007

Deal or No Deal

The Independent reports that the head of the Transport and General Workers' Union, Tony Woodley, is to face the wrath of British Airways cabin crew furious at the way they believe the union leadership "sold out" in last week's deal to avert a strike.

Mr Woodley, the union's general secretary, had been due to appear today before a mass meeting of cabin crew at a hotel near Heathrow to defend the settlement, but it has been delayed for a week in an attempt to allow tempers to cool.

Members of the British Airways Stewards and Stewardesses Association (Bassa), a branch of the T&G, are angry at what they see as the failure of union negotiators to extract sufficient concessions from the airline's management. The nine-strong Bassa branch committee voted 6-3 to accept the deal and two of those who voted against the deal, the convenor Nigel Stott and deputy convenor Chris Harrison, have subsequently resigned their posts.

The union leadership defends the settlement as ".... the best that could be achieved by negotiation..." and that "...the vast majority of cabin crew were relieved and pleased the issue has been resolved..."

A ballot of the union membership was held for the authority to call the strike . A vote should be conducted on whether to accept or reject the agreement . Is there going to be one ?

What Poverty Means

Jyoti Dave is pregnant, but when the 30-year-old gives birth in March the baby will not be taken home but will instead be handed over to an American couple unable to conceive.
Jyoti Dave is a surrogate mother . She says it's money she desperately needs to feed her poor family after an industrial accident left the family's only breadwinner unable to work.

"My husband lost his limbs working in the factory," Dave told Reuters. "We could not manage even a meal a day. That is when I decided to rent out my womb."

Surrogate motherhood is among the latest in a long list of roles being outsourced to India, where rent-a-womb services are far cheaper than in the West.

"In the U.S. a childless couple would have to spend anything up to $50,000," stated Gautam Allahbadia, a fertility specialist "In India, it's done for $10,000-$12,000."

But of course the likes of Jyoti won't receive that sum . Fertility clinics usually charge $2,000-$3,000 for the procedure while a surrogate is paid anything between $3,000 and $6,000.

Some are calling it the "commoditisation of motherhood" and an exploitation of the poor by the rich.

( Of course , this is nothing really new when in the past the rich employed the poor to breast-feed their babies as wet-nurses )

Thursday, February 01, 2007

Erich Fromm

Another posting of an early Socialist Standard ( January 1995 ) article that has yet to be put on the net upon the fathers of psycho-analysis

To Have or to Be

The title of this article is taken from the book of the same name by the psychologist , Erich Fromm. It is probably true to state that many Socialist Party members view psychology with some suspicion because of its tendency to see “abnormal” human behaviour in isolation; but Fromm is in no doubt that it is our sick society that leads to such behaviour , and not the reverse . Thus , his ideas are worthy of study by socialists .

Fromm commences To Have Or To Be by stating that the failure of capitalism , aside from its economic contradictions lies in its two main premises :

“The first is ‘that the aim of life is happiness , defined as the satisfaction of any desire or subjective need a person may feel ( radical hedonism )”;

The second is ‘that egotism. Selfishness, and greed , as the system needs to generate them in order to function, leads to harmony and peace’”

With regard to the first premise , Fromm distinguishes between subjectively felt needs (desires) whose satisfaction leads to monetary pleasure , and objectively valid needs that are rooted in human nature , and whose realisation is conductive to human growth which produces “well-being”

Fromm notes the contradiction between the concept of unlimited pleasure and the ideal of disciplined work , and between obsessional work ethic and the ideal of complete laziness. “Both contradictory attitudes” , we are told , “correspond to an economic necessity ; twentieth-century capitalism is based on the maximum consumption of the goods and services as well on routinised teamwork”

Fromm sums up the first section by stating that “…[the] pursuit of happiness does not produce well-being”. We are a society of notoriously unhappy people lonely , anxious , depressed , destructive , dependent - people who are glad when we have killed the time we are trying so hard to save!

The second psychological premise of capitalism , that the pursuit of individual egoism leads to harmony and peace , is equally rejected by Fromm .To be an egoist means:

“I want everything to myself, that possessing , not sharing , gives me pleasure; that I must become greedy because if my aim is having , I am more the more I have .
I can never be satisfied , because there is no end to my wishes : I must be envious of those who have more and afraid of those who have less.”

Fromm is in no doubt that the passion for having must lead to never - ending class war and , in global terms, international war. He states that “Greed and peace preclude each other” . He is also in no doubt that the development of an economic system as an autonomous entity , independent of human needs and human will , is a recent development . The question , therefore , is no longer “What is good for the system?” - and the assumption is that the latter is good for the former.

And this assumption is bolstered by the further assumption:

“That the very qualities that the system required of human nature - egotism, selfishness and greed - were innate in human nature ; hence, not only the system but human nature itself fostered them”

Societies in which egotism , selfishness and greed did not exist , were supposed to be “primitive” and their inhabitants “childlike” . People refused to recognise that their traits were not natural drives that caused industrial society to exist , but that they were the products of social circumstances .

Fromm reinforces his assertion with the little-known , but surprising , fact that the majority of the world’s languages have no word for “to have” . Such languages express possession in the form “it is to me” , whilst others have only developed the construction “I have” at a much later date . “This fact”, argues Fromm, “suggests that the word for “to have” develops in connection with the development of private property , while it is absent in societies with predominantly functional property ; that is , possession for use” And “While private property is supposed to be natural and a universal category , it is in fact an exception rather than the rule if we consider the whole of human history”

Thus , for Fromm , the difference between “being” and “having” is between a society centred around persons and one centred around things such as property , profit and power . The distinction is between “I have knowledge” and “I know” - where “knowing” means to “see reality in all its nakedness”.

Fromm therefore concludes that the character traits engendered by or socio-economic system are pathogenic , and produce sick people and a sick society . Given that fact , we are headed for an economic catastrophe unless we change our social system . The physical survival of the human race depends on it .
Richard Layton

And Fromm Where…

Born in Frankfurt , Germany , in 1900 ,Erich Fromm was one of the first to attempt a synthesis of Marx and Freud ( Reuben Osborn had previously made such an attempt , in his Freud and Marx, in 1937 , from a Stalinist viewpoint ), and to develop a Marxian social psychology . Fromm was trained in psychoanalysis , and worked with the Institute for Social Research in Frankfurt from 1930 to 1933 , when he fled from Nazi Germany . He then went to America .
In his early essays , Fromm combined the dialectical and materialist elements in both Marx and Freud ; and applied Marxian social psychology to interpret such phenomena as religion and the sado-masochistic roots of the authoritarian personality .

In 1941 Fromm wrote probably his best known work , Escape From Freedom , published in Britain in 1942 under the title The Fear of Freedom . In it he asks if freedom is a psychological problem ;and discusses in detail authoritarianism , destructiveness and conformity . He also deals with the psychology of Nazism . His conclusion is that “changing social conditions result in changes of the social character ; that is , in new needs and anxieties …social conditions influence ideological phenomena through the medium of character ; character , on the other hand , is not the result of passive adaptation to social conditions , but of a dynamic adaptation on the basis of elements that either are biologically inherent in human nature or have become inherent as a result of human evolution”

Fromm’s old friend , Herbert Marcuse , engaged in polemics with him during the 1950s , beginning with his Eros and Civilisation. Marcuse accused Fromm of being a “Neo-Freudian revisionist” and Fromm retaliated by calling Marcuse a “nihilist” Fromm , however argued , that people must free themselves , whilst Marcuse , particularly in his One-Dimensional Man , looks largely to the “substratum of the outcasts and outsiders , the exploited and the persecuted of other races and other colours , the unemployed and the unemployable “ , when “they get together and go out onto the streets , without arms” to lead the fight against “domination”

In 1955 Fromm wrote The Sane Society in which he deals with the concept of alienation in some depth , as well as so-called education in capitalist society and what he calls the “roads to Sanity” , a sane socialist society . In 1949 he had already written Man For Himself : An Enquiry into the Psychology of Ethics , and in 1957 hew wrote The Art of Loving - not a sex instruction manual , I might add . In 1965 , Fromm published a collection of essays based on a symposium of various academics such as the Polish writer , Adam Schaff , Maximilien Rubel , T.B Bottomore and others , titled Socialist Humanism .

Erich Fromm actively opposed the Vietnam war , and all other wars in which the United States became involved . He died in 1980 Of all his works , I have found his Fear of Freedom and The Sane Society the most useful , although all are worth reading .
Peter E . Newell

Further reading:

Letters here and here