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.
It happened gradually—and until the U.S. figures out how to treat the problem, it will only get worse.
It’s 2020, four years from now. The campaign is under way to succeed the president, who is retiring after a single wretched term. Voters are angrier than ever—at politicians, at compromisers, at the establishment. Congress and the White House seem incapable of working together on anything, even when their interests align. With lawmaking at a standstill, the president’s use of executive orders and regulatory discretion has reached a level that Congress views as dictatorial—not that Congress can do anything about it, except file lawsuits that the divided Supreme Court, its three vacancies unfilled, has been unable to resolve.
On Capitol Hill, Speaker Paul Ryan resigned after proving unable to pass a budget, or much else. The House burned through two more speakers and one “acting” speaker, a job invented following four speakerless months. The Senate, meanwhile, is tied in knots by wannabe presidents and aspiring talk-show hosts, who use the chamber as a social-media platform to build their brands by obstructing—well, everything. The Defense Department is among hundreds of agencies that have not been reauthorized, the government has shut down three times, and, yes, it finally happened: The United States briefly defaulted on the national debt, precipitating a market collapse and an economic downturn. No one wanted that outcome, but no one was able to prevent it.
The June 23 vote represents a huge popular rebellion against a future in which British people feel increasingly crowded within—and even crowded out of—their own country.
I said goodnight to a gloomy party of Leave-minded Londoners a few minutes after midnight. The paper ballots were still being counted by hand. Only the British overseas territory of Gibraltar had reported final results. Yet the assumption of a Remain victory filled the room—and depressed my hosts. One important journalist had received a detailed briefing earlier that evening of the results of the government’s exit polling: 57 percent for Remain.
The polling industry will be one victim of the Brexit vote. A few days before the vote, I met with a pollster who had departed from the cheap and dirty methods of his peers to perform a much more costly survey for a major financial firm. His results showed a comfortable margin for Remain. Ten days later, anyone who heeded his expensive advice suffered the biggest percentage losses since the 2008 financial crisis.
American society increasingly mistakes intelligence for human worth.
As recently as the 1950s, possessing only middling intelligence was not likely to severely limit your life’s trajectory. IQ wasn’t a big factor in whom you married, where you lived, or what others thought of you. The qualifications for a good job, whether on an assembly line or behind a desk, mostly revolved around integrity, work ethic, and a knack for getting along—bosses didn’t routinely expect college degrees, much less ask to see SAT scores. As one account of the era put it, hiring decisions were “based on a candidate having a critical skill or two and on soft factors such as eagerness, appearance, family background, and physical characteristics.”
The 2010s, in contrast, are a terrible time to not be brainy. Those who consider themselves bright openly mock others for being less so. Even in this age of rampant concern over microaggressions and victimization, we maintain open season on the nonsmart. People who’d swerve off a cliff rather than use a pejorative for race, religion, physical appearance, or disability are all too happy to drop the s‑bomb: Indeed, degrading others for being “stupid” has become nearly automatic in all forms of disagreement.
Patrick Griffin, his chief congressional affairs lobbyist, recalls the lead up to the bill’s passage in 1994—and the steep political price that followed.
For those who question whether anything will ever be done to curb the use of military grade weaponry for mass shootings in the United States, history provides some good news—and some bad. The good news is that there is, within the recent past, an example of a president—namely Bill Clinton—who successfully wielded the powers of the White House to institute a partial ban of assault weapons from the nation’s streets. The bad news, however, is that Clinton’s victory proved to be so costly to him and to his party that it stands as an enduring cautionary tale in Washington about the political dangers of taking on the issue of gun control.
In 1994, Clinton signed into law the Public Safety and Recreational Firearms Use Protection Act, placing restrictions on the number of military features a gun could have and banning large capacity magazines for consumer use. Given the potent dynamics of Second Amendment politics, it was a signal accomplishment. Yet the story behind the ban has been largely forgotten since it expired in 2004 and, in part, because the provision was embedded in the larger crime bill.
The Internet caused my addiction, but it also helped me find a cure.
About a year ago, I was regularly seeing a therapist. During one session, I mentioned the niche porn I had watched and how I was unsure whether or not I wanted to embrace some of the "kinkier" fantasies, like rape and incest, through role-play in my real sex life. It was the only time I could remember her telling me that certain fantasies--not acted out in real life, just imagined--could be "wrong" or considered a "sickness." In retrospect, understanding my condition as an illness might actually have been empowering if explained differently, but at the time, it shut me right up. I never brought it up to her again.
I'm not alone in feeling silenced. Every day it prevents a lot of people from recovering. From porn.
The U.K.’s vote to leave the European Union betrays a failure of empathy and imagination among its leaders. Will America’s political establishment fare any better?
If there is a regnant consensus among the men and women who steer the Western world, it is this: The globe is flattening. Borders are crumbling. Identities are fluid. Commerce and communications form the warp and woof, weaving nations into the tight fabric of a global economy. People are free to pursue opportunity, enriching their new homes culturally and economically. There may be painful dislocations along the way, but the benefits of globalization heavily outweigh its costs. And those who cannot see this, those who would resist it, those who would undo it—they are ignorant of their own interests, bigoted, xenophobic, and backward.
So entrenched is this consensus that, for decades, in most Western democracies, few mainstream political parties have thought to challenge it. They have left it to the politicians on the margins of the left and the right to give voice to such sentiments—and voicing such sentiments relegated politicians to the margins of political life.
It’s not because they’re inherently harsher leaders than men, but because they often respond to sexism by trying to distance themselves from other women.
There are two dominant cultural ideas about the role women play in helping other women advance at work, and they are seemingly at odds: the Righteous Woman and the Queen Bee.
The Righteous Woman is an ideal, a belief that women have a distinct moral obligation to have one another’s backs. This kind of sentiment is best typified by Madeleine Albright’s now famous quote, “There is a special place in hell for women who don’t help each other!” The basic idea is that since all women experience sexism, they should be more attuned to the gendered barriers that other women face. In turn, this heightened awareness should lead women to foster alliances and actively support one another. If women don’t help each other, this is an even worse form of betrayal than those committed by men. And hence, the special place in hell reserved for those women.
A hotly contested, supposedly ancient manuscript suggests Christ was married. But believing its origin story—a real-life Da Vinci Code, involving a Harvard professor, a onetime Florida pornographer, and an escape from East Germany—requires a big leap of faith.
On a humid afternoon this past November, I pulled off Interstate 75 into a stretch of Florida pine forest tangled with runaway vines. My GPS was homing in on the house of a man I thought might hold the master key to one of the strangest scholarly mysteries in recent decades: a 1,300-year-old scrap of papyrus that bore the phrase “Jesus said to them, My wife.” The fragment, written in the ancient language of Coptic, had set off shock waves when an eminent Harvard historian of early Christianity, Karen L. King, presented it in September 2012 at a conference in Rome.
Never before had an ancient manuscript alluded to Jesus’s being married. The papyrus’s lines were incomplete, but they seemed to describe a dialogue between Jesus and the apostles over whether his “wife”—possibly Mary Magdalene—was “worthy” of discipleship. Its main point, King argued, was that “women who are wives and mothers can be Jesus’s disciples.” She thought the passage likely figured into ancient debates over whether “marriage or celibacy [was] the ideal mode of Christian life” and, ultimately, whether a person could be both sexual and holy.