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.
What use is there today for one of the oldest virtues?
As many Americans go about their days, I imagine they have two little angels perched on their shoulders, whispering conflicting messages about happiness and material wealth. One angel is embodied by James Altucher, a minimalist self-help guru recently profiled by The New York Times. Altucher claims to have only 15 possessions, after having unburdened himself a few months ago of 40 garbage bags’ worth of stuff and never looking back. As I read about Altucher, I rolled the numbers 15 and 40 over in my mind, thinking about the belongings in my bedroom and the garbage bags under my kitchen sink.
The other angel is Tyler Brûlé, the editor in chief of the fantastically high-end lifestyle magazine Monocle and a columnist for the Financial Times. He is the sort of writer who tosses off such lines as “I zipped along the autostrada through the Val d’Aosta with the ever-trusty Mario (my Italian driver for the past 20 years) at the wheel” with little regard for how privileged and pretentious he sounds (especially in his superfluous parentheticals). Still, there is something, I’m a little ashamed to say, that I envy about Brûlé’s effortless cosmopolitanism—which, it’s hard to miss, is only made possible by unusual wealth.
Why the WikiLeaks revelation about a “pay-to-play” deal with Morocco is a quintessential Clinton controversy
The chief complaint that critics make about the Clinton Foundation is that the former and perhaps future presidents engaged in a “pay-to-play” scheme, whereby donors—many of them foreign governments—would contribute money to the charity in exchange for access to Bill or Hillary Clinton, or worse, beneficial treatment from the State Department.
On Thursday, hacked emails from WikiLeaks suggest that is precisely what happened when the king of Morocco agreed to host a Clinton Global Initiative summit and give $12 million, but only if Hillary Clinton attended the May 2015 meeting.
“No matter what happens, she will be in Morocco hosting CGI on May 5-7, 2015,” Huma Abedin, a top Hillary Clinton aide, wrote in a November 2014 email to several other advisers, including campaign chairman John Podesta. “Her presence was a condition for the Moroccans to proceed so there is no going back on this.”
Choosing a president isn’t easy in this election, but here are three ways a principled conservative might vote.
The day of decision is nearing. All the talk fades, and one mark must be made beside one box on the ballot. Many Republicans are agonizing. They reject Donald Trump; they cannot accept Hillary Clinton. What to do?
I won’t conceal, I’m struggling with this question myself. I’ve listened to those Republicans, many my friends, who feel it their duty to stifle their anger and disappointment, and vote for Trump; to cast a protest vote for the Libertarian Gary Johnson or the independent Evan McMullin; or to cross the aisle and vote for Hillary Clinton as the lesser evil. On the way to my own personal answer, I found it helpful to summarize the best case for each of these options.
Emphasize the word “best.” If your case for Trump rests on the assumption that America is hurtling toward national doom, if your case for McMullin rests on the hope of tossing the election into the House of Representatives, if your case for Hillary argues that she is a large soul eager to work cooperatively with those who think differently from her. I’d say you are not thinking very clearly. Despair and fantasy are misleading counselors.
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.
Everything you think you know about those 13 days is wrong.
On october 16, 1962, John F. Kennedy and his advisers were stunned to learn that the Soviet Union was, without provocation, installing nuclear-armed medium- and intermediate-range ballistic missiles in Cuba. With these offensive weapons, which represented a new and existential threat to America, Moscow significantly raised the ante in the nuclear rivalry between the superpowers—a gambit that forced the United States and the Soviet Union to the brink of nuclear Armageddon. On October 22, the president, with no other recourse, proclaimed in a televised address that his administration knew of the illegal missiles, and delivered an ultimatum insisting on their removal, announcing an American “quarantine” of Cuba to force compliance with his demands. While carefully avoiding provocative action and coolly calibrating each Soviet countermeasure, Kennedy and his lieutenants brooked no compromise; they held firm, despite Moscow’s efforts to link a resolution to extrinsic issues and despite predictable Soviet blustering about American aggression and violation of international law. In the tense 13‑day crisis, the Americans and Soviets went eyeball-to-eyeball. Thanks to the Kennedy administration’s placid resolve and prudent crisis management—thanks to what Kennedy’s special assistant Arthur Schlesinger Jr. characterized as the president’s “combination of toughness and restraint, of will, nerve, and wisdom, so brilliantly controlled, so matchlessly calibrated, that [it] dazzled the world”—the Soviet leadership blinked: Moscow dismantled the missiles, and a cataclysm was averted.
A neuropsychological approach to happiness, by meeting core needs (safety, satisfaction, and connection) and training neurons to overcome a negativity bias
There is a motif, in fiction and in life, of people having wonderful things happen to them, but still ending up unhappy. We can adapt to anything, it seems—you can get your dream job, marry a wonderful human, finally get 1 million dollars or Twitter followers—eventually we acclimate and find new things to complain about.
If you want to look at it on a micro level, take an average day. You go to work; make some money; eat some food; interact with friends, family or co-workers; go home; and watch some TV. Nothing particularly bad happens, but you still can’t shake a feeling of stress, or worry, or inadequacy, or loneliness.
According to Dr. Rick Hanson, a neuropsychologist, a member of U.C. Berkeley's Greater Good Science Center's advisory board, and author of the book Hardwiring Happiness: The New Brain Science of Contentment, Calm, and Confidence, our brains are naturally wired to focus on the negative, which can make us feel stressed and unhappy even though there are a lot of positive things in our lives. True, life can be hard, and legitimately terrible sometimes. Hanson’s book (a sort of self-help manual grounded in research on learning and brain structure) doesn’t suggest that we avoid dwelling on negative experiences altogether—that would be impossible. Instead, he advocates training our brains to appreciate positive experiences when we do have them, by taking the time to focus on them and install them in the brain.
Science says lasting relationships come down to—you guessed it—kindness and generosity.
Every day in June, the most popular wedding month of the year, about 13,000 American couples will say “I do,” committing to a lifelong relationship that will be full of friendship, joy, and love that will carry them forward to their final days on this earth.
Except, of course, it doesn’t work out that way for most people. The majority of marriages fail, either ending in divorce and separation or devolving into bitterness and dysfunction. Of all the people who get married, only three in ten remain in healthy, happy marriages, as psychologist Ty Tashiro points out in his book The Science of Happily Ever After, which was published earlier this year.
Social scientists first started studying marriages by observing them in action in the 1970s in response to a crisis: Married couples were divorcing at unprecedented rates. Worried about the impact these divorces would have on the children of the broken marriages, psychologists decided to cast their scientific net on couples, bringing them into the lab to observe them and determine what the ingredients of a healthy, lasting relationship were. Was each unhappy family unhappy in its own way, as Tolstoy claimed, or did the miserable marriages all share something toxic in common?
It isn’t the only democratic institution that finds itself in danger.
Four years ago, as a speechwriter for President Obama, I commissioned a binder full of women.
A little context. It was the morning of the Al Smith Dinner, the election-year tradition in which both parties’ nominees don white-tie attire and deliver comedy monologues to New York City’s elite. Our opponent, Governor Mitt Romney had recently used the words “binders full of women” while discussing gender parity in government. Eager to mock the clumsy phrase, I asked a staffer on the advance team to put together a prop.
But our binder never saw the light of day. Obama nixed the idea. I remember being disappointed by the president’s decision, and wondering if POTUS was phoning it in. Of the jokes that did make it into the final draft, one in particular stood out for its authenticity.
First there was McCain’s caving to Bush’s signing statement on his own torture bill, then his selection of an extremely unqualified and unvetted running mate, then he backed Trump until nearly the bitter end—even after Trump insulted his POW experience and his fellow vets with PTSD. And now, a shameless betrayal of constitutional principle that would have gotten far more attention this week if Trump hadn’t one-upped McCain with all his incendiary “rigged” rhetoric. Reader Don explains:
I don’t know if your readers have seen this yet, but it seems that McCain has announced that his fellow GOP Senators will not confirm any Supreme Court nomination by Clinton. Trump is an ignorant, narcissistic, nasty piece of work. But McCain used to be a guy who remembered and honored (at least sometimes) the old bipartisan traditions of the Senate. His statement is just outrageous and inexcusable. What he’s basically saying is that only Republican presidents get to appoint Supreme Court Justices.
I understand that their thinking is that they don’t want the bias of the Court to shift from conservative to liberal. But the Court has shifted back and forth over the years, and we have managed to survive those changes. Apparently, today’s Republican Party feels that the country somehow won’t survive a Democratic administration or a liberal Supreme Court.
We have what might be described as an asymmetric politics. One party disagrees with the other party’s policy domestic policy positions, but recognizes the legitimacy of an opposition party and accepts that the other party is patriotic and loyal to the country. The other party rejects the legitimacy and loyalty of the other party. The efforts to de-legitimize former President Clinton, President Obama, and likely future President Hillary Clinton are part of this effort. The refusal of the GOP Congress to allow Obama any legislative accomplishments was another part of it. I expect that a GOP House will adopt the same obstructionist tactics starting in 2017.
People predict that the U.S. population will continue to get younger, better educated, and less white. I hope our political experiment lasts long enough to see that day.
Why do men buy diamond rings for our fiancées? There's the emotional story. We enjoy making grand gestures of commitment to the people we love. Behind that, there's the marketing story. DeBeers' historic ad campaign, crafted by the real-life mad men at N.W. Ayers, convinced generations of lovers that diamond bands were synonymous with eternal devotion. But behind that, there is economic story that is just as important and fascinating.
Once upon a time, diamond rings weren't just gifts. They were, frankly, virginity insurance.