The rich are different from you and me. They have Swiss bank accounts.
Well, at least Mitt Romney does.
That was one of the big revelations when Romney released his tax records in January -- a revelation that Vanity Fair recently looked into, along with the rest of his finances. Of course, it's no secret that Mr. Romney is a man of means. But what is still secret is just how Romney has invested those means.
Maybe not so much secret as secretive. Romney has released his return for 2010 and an estimate for 2011. So we have a broad outline of what his personal finances look like. And they look something like an Epcot of financial investments: There is a blind trust with offshore accounts in Switzerland, Bermuda, and the Cayman Islands -- not to mention an almost comically large IRA account. None of this is illegal. But it has raised questions about Romney's Caribbean tax havens and his Swiss bank account. The former makes sense. The latter not as much.
Question #1: Remind me: Why does Romney have money in the Caribbean?
Let's take a quick detour. Imagine that a tax-exempt entity -- like a university endowment -- buys or otherwise acquires a business. Maybe a macaroni company. That company would have a nice little competitive edge. It wouldn't have to pay taxes. That's exactly what happened when some wealthy alums donated the Mueller Macaroni Company to the New York University Law School in 1948. This loophole prompted Congress to close it 1950. Only a tax-exempt entity's "related" businesses would in fact be tax exempt. Everything else would be taxed as "unrelated business income".
What does this have to do with Mitt Romney? Well, university endowments and public pensions are some of the biggest investors in private equity funds like Romney's Bain Capital. Those investors don't want to be hit with the unrelated business tax -- so Bain Capital sets up shop in the Caymans where it can avoid the unrelated business income tax. You might still be wondering: What does this have to do with Mitt Romney -- at least now? He left Bain Capital in 1999 (or 2001). He did, but he didn't. He still gets a share of Bain Capital's profits every year as part of his retirement package. And Bain still has corporate blockers in the Caymans. That's why Romney has investment income from the Caymans.
Question #2: Why does Romney have a Swiss bank account? And what's so great about a Swiss bank account versus any other tax haven?
Swiss banks are the gold standard of tax havens because of their secrecy and stability. Actually, that sentence should be in the past tense. Swiss banks are not nearly as secret as they used to be. Time was, the Swiss government jealously guarded its banks' reputation for never revealing client information. It was a crime to do so. High-net individuals the world over flocked to the Alps to hide money from tax collectors back home. But that started to change in 2008. A former UBS banker came forward with tales of how he helped wealthy American clients evade taxes -- including such charming details as smuggling diamonds in tubes of toothpaste. The IRS launched an investigation, and came up with a list of 52,000 names it wanted from the Swiss banking giant. A settlement followed, and then a new U.S. law. Now foreign banks have to cooperate with the IRS or face fairly tough penalties. Auf Wiedersehen, Swiss banking secrecy über alles.
But Swiss banks still have plenty going for them. They can thank the Swiss franc for that. It's a safe-haven currency -- and that makes their banks safe havens too. The Swiss are famous for their fiscal prudence and low inflation, which makes their currency particularly strong. That's even more true now thanks to the euro crisis. Demand for Swiss francs is so great that the Swiss National Bank had to cap the value of their currency last year. It was getting so expensive that it threatened to push the Swiss economy into deflation.
The Romney camp has hinted that he only had a Swiss bank account because he wanted Swiss francs. In other words, he was hedging against the dollar declining in value. That's fair, even if it's a bit odd for someone with $250 million. But you don't need a Swiss bank account to get Swiss francs. You can just buy Swiss francs.
Another possibility is that Romney had the Swiss bank account to make it easier to wire money from one European investment to another. We can't say without seeing more tax returns. All we do know is his lawyer closed this Swiss bank account in 2010.
That's the final point. Mitt Romney's long-time lawyer, R. Bradford Malt, has managed Romney's personal finances since Romney was elected governor of Massachusetts. That's when Romney set up a blind trust, to avoid any possible conflicts of interest. Still, there are questions about just how blind the trust has been. And, besides, Romney is ultimately responsible for his own money.
Question #3: Is it fair for the Obama campaign to go after the Swiss bank account?
When most people hear the words "Swiss bank account" they think "tax evasion". That's not always fair. There are plenty of good reasons an American might have a Swiss bank account. Maybe they live abroad. Or work for a Swiss company. But those are good reasons that don't apply to Mitt Romney. He didn't live abroad. And he didn't work for a Swiss company.
That doesn't mean Mitt Romney was up to no good. There's no evidence of that. It's entirely possible that Romney really was just hedging against the dollar. That's the legitimate reason a very wealthy person would want a Swiss bank account. The not-so-legitimate reason is the secrecy -- to hide money from the IRS. It's unfair for the Obama campaign to insinuate Romney was doing the latter. But it'd be a lot more unfair if Romney was more transparent. We just don't know enough to say anything definitively. We don't know how long the account existed. We don't know whether Romney's lawyer or Romney himself set it up.
What we do know is that this kind of stuff doesn't seem weird to Romney. It's what the über-wealthy do. But it is weird to most everyone else. It's not what the 99 percent do. Actually, we know one more thing. Romney can end this controversy whenever he wants. He just has to release more tax records. He's running for office for Pete's sake. He should say something.
In other words, Romney should take a page from the Swiss. Even they're less secretive nowadays.
A rock structure, built deep underground, is one of the earliest hominin constructions ever found.
In February 1990, thanks to a 15-year-old boy named Bruno Kowalsczewski, footsteps echoed through the chambers of Bruniquel Cave for the first time in tens of thousands of years.
The cave sits in France’s scenic Aveyron Valley, but its entrance had long been sealed by an ancient rockslide. Kowalsczewski’s father had detected faint wisps of air emerging from the scree, and the boy spent three years clearing away the rubble. He eventually dug out a tight, thirty-meter-long passage that the thinnest members of the local caving club could squeeze through. They found themselves in a large, roomy corridor. There were animal bones and signs of bear activity, but nothing recent. The floor was pockmarked with pools of water. The walls were punctuated by stalactites (the ones that hang down) and stalagmites (the ones that stick up).
Speculation about how Ramsay Bolton might die reveals the challenges of devising a cathartic TV death—and illuminates a larger issue facing the series.
Warning: Season 6 spoilers abound.
Ever since Ramsay Bolton revealed himself as Westeros’s villain-in-chief, Game of Thrones fans have wanted him dead. He first appeared in season two disguised as a Northern ally sent to help Theon Greyjoy but quickly turned out to be a lunatic whose appetite for cruelty only grew as the series progressed. (Last year, Atlantic readers voted him the actual worst character on television.) After several colorful and nauseating years of rape, torture, murder, and bad visual puns, speculation about the Bolton bastard’s looming death has reached its peak this sixth season. But “Will Ramsay die this season?” also gives way to a slightly more complicated question: “How should Ramsay die?”
What’s harder to believe: that it took a year for Andrea Constand to accuse the star of sexual assault, or that it’s taken 11 years and dozens more women coming forward for those accusations to be heard in court?
To date, more than 50 women have accused Bill Cosby of sexual misconduct. Constand was the first. In January of 2005 she told police that a year earlier, Cosby had touched and penetrated her after drugging her. A prosecutor decided against proceeding with the case, and Constand followed up with a civil suit that resulted in a 2006 settlement. After that came an accelerating drip of women making allegations about incidents spanning a wide swath of Cosby’s career, from Kristina Ruehli (1965) to Chloe Goins (2008).
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
Washington voters handed Hillary Clinton a primary win, symbolically reversing the result of the state caucus where Bernie Sanders prevailed.
Washington voters delivered a bit of bad news for Bernie Sanders’s political revolution on Tuesday. Hillary Clinton won the state’s Democratic primary, symbolically reversing the outcome of the state’s Democratic caucus in March where Sanders prevailed as the victor. The primary result won’t count for much since delegates have already been awarded based on the caucus. (Sanders won 74 delegates, while Clinton won only 27.) But Clinton’s victory nevertheless puts Sanders in an awkward position.
Sanders has styled himself as a populist candidate intent on giving a voice to voters in a political system in which, as he describes it, party elites and wealthy special-interest groups exert too much control. As the primary election nears its end, Sanders has railed against Democratic leaders for unfairly intervening in the process, a claim he made in the aftermath of the contentious Nevada Democratic convention earlier this month. He has also criticized superdelegates—elected officials and party leaders who can support whichever candidate they chose—for effectively coronating Clinton.
For toymakers like Lego, where is the line between making products children love and telling kids how they should play?
Two years ago, a 7-year-old girl named Charlotte wrote a letter to the toymaker Lego with a straightforward request.
“I love Legos,” she wrote, “but I don’t like that there are more lego boy people and barely any lego girls.” The girls in the Lego universe, Charlotte had noticed, seemed preoccupied with sitting at home, going to the beach, and shopping—while the boys had jobs, saved people, and went on adventures.
Charlotte, Lego acknowledged, had a point. “It’s fair,” said Michael McNally, a Lego spokesman who says the company receives letters from kids all the time. “Why wouldn’t there be more female representation?”
Years before Charlotte sent her letter, Lego was already keenly focused on how girls perceived the brand. It was 2008 when the toymaker decided to gather global data about who buys Legos. What they found was startling. In the United States, roughly 90 percent of Lego sets being sold were intended for boys. In other words, there was a huge untapped market of girls who weren’t building with Legos.
In recent years, the idea that educators should be teaching kids qualities like grit and self-control has caught on. Successful strategies, though, are hard to come by.
In 2013, for the first time, a majority of public-school students in this country—51 percent, to be precise—fell below the federal government’s low-income cutoff, meaning they were eligible for a free or subsidized school lunch. It was a powerful symbolic moment—an inescapable reminder that the challenge of teaching low-income children has become the central issue in American education.
The truth, as many American teachers know firsthand, is that low-income children can be harder to educate than children from more-comfortable backgrounds. Educators often struggle to motivate them, to calm them down, to connect with them. This doesn’t mean they’re impossible to teach, of course; plenty of kids who grow up in poverty are thriving in the classroom. But two decades of national attention have done little or nothing to close the achievement gap between poor students and their better-off peers.
Whatever banking’s post-recession connotations may be, the historian William Goetzmann argues that monetary innovations have always played a critical role in developing civilization.
The title of the financial historian William Goetzmann’s new book is hard to argue with: Money Changes Everything.
In his book, Goetzmann, a professor of finance and the director of the International Center for Finance at the Yale School of Management, has documented how financial innovations—from the invention of money to capital markets—have always played a critical role in developing every culture around the world. In the fallout from the Great Recession, it’s been commonplace to vilify those working in the financial-services industry. But Goetzmann argues that finance is a worthwhile endeavor, beyond just earning a ton of money: Its innovations have made the growth of human civilization possible.
For centuries, philosophers and theologians have almost unanimously held that civilization as we know it depends on a widespread belief in free will—and that losing this belief could be calamitous. Our codes of ethics, for example, assume that we can freely choose between right and wrong. In the Christian tradition, this is known as “moral liberty”—the capacity to discern and pursue the good, instead of merely being compelled by appetites and desires. The great Enlightenment philosopher Immanuel Kant reaffirmed this link between freedom and goodness. If we are not free to choose, he argued, then it would make no sense to say we ought to choose the path of righteousness.
Today, the assumption of free will runs through every aspect of American politics, from welfare provision to criminal law. It permeates the popular culture and underpins the American dream—the belief that anyone can make something of themselves no matter what their start in life. As Barack Obama wrote in The Audacity of Hope, American “values are rooted in a basic optimism about life and a faith in free will.”
Now that the entertainer seems to have wrapped up the Republican nomination, who will he choose as his running mate?
For decades, a few antiquated bon mots about the vice presidency have held sway in discussions about running mates. For example, there’s Teddy Roosevelt’s declaration, “I would a great deal rather be anything, say professor of history, than vice president.” Even better was John Nance Garner’s verdict that the office he held under FDR was “not worth a bucket of warm piss.” Those quips really hardly apply anymore; they’re as archaic as their authors. These days the Naval Observatory is a nice place to land. You could end up amassing unprecedented power and a man-sized safe, like Dick Cheney. You could end up with impressive power andbecome an aviator-clad folk hero, like Joe Biden.
Or maybe not. Will anyone want to be the running mate to presumptive Republican nominee Donald Trump? There are the character risks in cozying up to a man who’s liable to make a racist comment or accuse a rival’s father of being involved in the Kennedy assassination. There are the career risks of becoming associated with a man who much of the Republican Party still doesn’t like. And there are the organizational risks to signing on as No. 2 to a man who’s famously a go-it-alone maverick.