Sam Wilkin (2015) Wealth Secrets of the 1%. How the Super Rich Made Their Way to the Top.

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Roll up. Roll up. You too could become one of the super-rich. The kind of person that if they won a couple of million on the National Lottery would hand the winnings to their son or daughter and advise their child to buy lunch and keep the change, but don’t give any to some poor bastard, because they’ll probably spend it  on drink and drugs.

SECRET #1. DON’T BE THE BEST. BE THE ONLY.

I’ve been reading the Sunday Mail’s sly propaganda campaign against Abellio who run the train network in Scotland. It has focused on things that many of us would be familiar with from the days of British Rail. Trains overcrowded and late. The use of rolling stock that is antiquated and dirty. A relatively recent innovation has been to criticise the pay the director running such service gets (I can’t be bothered googling who that is, and does it really matter?) British Rail was a monopoly. Scot Rail a branch of that monopoly had to put its operations out to tender. Are we any better off? The answer is no. And my concern isn’t solely with our poor, dilapidated, rail network. James Meek Private Island: Why Britain Now Belongs to Someone Else shows that in rail, we subsidize other nation’s taxpayers, in this case Holland. Energy companies, water companies, postal services and council housing there has been that old cliché winners and losers. The winners have been the rich and losers the poor, with a regressive tax system taking away the institutions we built and giving them to the rich. Then taxing us again, because they aren’t efficient enough.  The big beast (or elephant) in the room is our NHS. Scotland and England have different systems but both use around a third of our taxation budget to fund the NHS. This is a beneficent monopoly system under siege. And as Nicholas Timmins a biographer of the welfare state observes, post-war America used to come over here looking for ideas on how to run a health service. We’ve flipped that now and look increasingly likely to sell out in the interest or dogma of efficiency savings, that mantra of the rich that penalises the poor and blames them for being poor.

For every Rockefeller rolling up and eating up competition as with Standard Oil in a series of horizontal and vertical acquisitions and mergers there’s a Carlos Slim, who won the right to operate a monopoly in fixed-line telephone services. That might not sound that great. Certainly nowhere near the value of our NHS, but a 2012 OECD report suggested he was the richest man in the world. How did this happen? Simple. Meek touched on it. We can do it or we can let someone else do it for us. Think of the stupidity of not building schools, letting someone else do it, paying them economic rent over an extended period, then complaining later because the walls to schools fall down.   Like cheap and nasty food we always pay more in the long run. Someone eats for free.

 

SECRET #2. BIGGER IS STILL BETTER. The argument goes that diseconomies of scale set in when a business, such as healthcare gets too big. Or the US military, the biggest user of oil in the world. Nobody much argues with the US military. Or Amazon. Or Walmart. Or Microsoft. This reminded me of Philip Green, that former -or is he still-  darling of the Conservative Party. Green whom they asked for advice, gave him a knighthood. Green notorious diddler of  pensioners, whom like everyone else, he ripped off to fund his extravagant life style in a tax haven. Try this trick at home.  One of his regular suppliers was told she was getting x price, then when she fulfilled her quota was taken aside and told she’d need to take y price. Why? Because Green, like Walmart, Amazon or the US military has the big stick, or leverage. A valid argument here is that the NHS, for example, doesn’t use its leverage to ensure profits for drug companies are not excessive. But for the super wealthy, there’s no such thing as excessive.

SECRET #3. THE WORST PLACE TO DO BUSINESS IS REALLY THE BEST. Perhaps not North Korea. But perhaps soon it may be. Bill Browder Red Notice showed that after the fall of the Berlin Wall, when the USSR economy contracted by 50% and the average return on capital was 5% his company, Hermitage Capital, generated returns of 1500%. What’s not to like? Hans Chung’s mantra that economics is politics applies here. The workshop of the world is China, but he reminds us that like his country, South Korea, these used to be considered economic basket cases. The African continent would be a good bet, but with the moron’s moron as President of the richest country in the world and the likelihood of nuclear war ratcheted up, if fallout doesn’t get us, global warming will. Place your bets.

SECRET #4. WHEN LENDERS CAN’T LOSE. YOU WIN.

That old favourite if we give you money we must have a reasonable expectation that we will get it back ( a return on our investment). Unless of course, you’re a too-big-to-fail bank. Let me put that into perspective. Royal Bank of Scotland (RBS) losses since 2008, £50 billion. RBS loss this financial year, around £7 billion. Chancellor of Exchequer Philip Hammond’s budget giveaway to Scotland under the Barnett formula, £350 million, a figure disputed by the Scottish National Party. That’s one bank. Rich people don’t get punished for not paying their way.

 

SECRET #5. YOU’VE GOT TO OWN IT, BABY, OWN IT.

If you live in a council house you are scum. If you rent your house from someone else you’re a sucker, throwing away good money after bad. If you own your own house, outright, you’ve got a revenue stream and money to burn, or borrow. But, of course, to be truly rich you don’t just own property. For example, only around 130 of the 1600 fortunes listed in Forbes Global Rich List are in real estate. You own a portfolio of wealth because you own the people on the land and they create wealth for you. In the post-Soviet collapse billionaires mushroomed overnight.

SECRET #6. SPIN LAWS INTO GOLD.

Britain is a good place to live if you’re rich. It’s a county that keeps giving. The United States advisers, such as Steve Bannon’s aim is, like Lenin’s, to destroy the state. A simple formula: give money to the rich in tax breaks and it will trickle down. It doesn’t. Get rid of red tape. That sounds great. What it means is displacing costs onto the poor for things like health care and to everyone else for necessities such as clean air and water. Simple solutions to complex problems always work for the rich. To borrow a phrase it’s ‘dictatorship by tedium’. Nobody pays much attention to Phil Hammond’s budget speech. We’ve heard it all before. Yawn, more tax on whisky. I don’t drink whisky. Less welfare spending. Serves them right.

SECRET #7. IF YOU WANT TO SUCCEED IN BUSINESS, NETWORK, NETWORK, NETWORK.

Sam Wilkes uses the example of Cornelus Vanderbilt in the 1860s taking over the New York & Harlem Railroad. The incestuous banking network J.P. Morgan created described in a report to U.S Supreme Court sounds very Putinish or indeed Trumpish, or both together:

J.P. Morgan (or a partner), a director of the New York, New Haven and Hartford Railroad, causes the company to sell to J.P.Morgan and Company an issue of bonds. J.P.Morgan and Company borrow the money to pay the bonds from the Guarantee Trust Company, of which Mr Morgan (or a partner) is a director. The New Haven spends the proceeds of the bonds in purchasing steel rails from the United States Steel Corporation, of which Mr Morgan (or a partner) is a director. United States Steel Corporation spends the proceeds of the rails in purchasing electrical supplies from the General Electric Company of which Mr Morgan (or partner) is a director…[and so on].

Good luck making those billions. Just remember to love money more than your friends, because you won’t have any. Not really. You’ll have servants and shape-shifting alliances. I could quote Jimmy Reid’s rat-race polemic here, it still stands true. http://www.independent.co.uk/news/uk/politics/still-irresistible-a-working-class-heros-finest-speech-2051285.html

I’m not with the rats. I’m with the common working man. We find secrets in strange place and, funnily enough, I’m quoting here from a character in another Scottish writer, William McIlvanney’s ‘Laidlaw’ novel, Strange Loyalties:

Any social contract is a two-way agreement. It’s one thing to make the people serve the economy. But the economy must also serve the people. If we disadvantage the present of one section of society, we disadvantage the future of all society. The children of the well-off will not just inherit the wealth of their parents. They will also inherit the poverty of the parents of others. Even self-interest, if it is wise, will concern itself with the welfare of all. Not just the poor will inherit the bad places. All of us will.

One in five children in Scotland are classified as living in poverty. My loyalty is with these people, not the pampered rich, super-rich or mega-rich. Whatever way you want to put it, they haven’t been paying their way. The problem is ours.  Rat race. You better believe it.

Ian Probert (2016) Dangerous: An Intimate Journey into the Heart of Boxing.

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A reminder—if we need one— how Dangerous boxing can be is the Sunday Mail front-page headline: ‘My baby has lost his daddy, I’ll never let him fight,’ with a prominent picture of Chloe, holding her infant Rocco, with an insert photo of her partner, and the baby’s father, twenty-five-year old Mike Towell, crouching in a standard boxing stance and fighting Dale Evans on Thursday evening at St Andrew’s Sporting Club. Towell lost more than the bout, he lost his life. The Observer ranks it further down the news order and puts it on page 14, but the headline message is much the same. It asks ‘How many more lives will have to be lost?’ The answer follows. ‘Boxing ban calls grow after Glasgow death.’  It also cites the brain-injury charity Headway’s call for boxing to be banned and offers as further evidence the bout between Chris Eubank junior and Nick Blackwell, seven months ago, with the latter stopped in the tenth round and taken to hospital bleeding from the brain. Boxing is dangerous.

Here’s Probert’s take on it at the standard media meet and greet at the Hilton in London’s Park Lane. ‘And then I spot the Eubanks arrive. ’ [sic, should read arrival, in a book of almost 300 pages I spotted three errors, perhaps it needed another proofread] ‘A pair of Eubanks: father and son. Boxer and ex-boxer…  ‘What everyone here is aware of, however that his son’s last fight ended in near tragedy. Just as his father did almost 25 years earlier when he fought Michael Watson, the younger Eubank managed to put his opponent into intensive care…Although Blackwell is now out of danger he will never fight again. It’s fair to say that our malprop of Eubanks have since endured a perfect storm of negativity, bordering on abuse, both in the news and in social media’.

‘As press conferences go it’s a pedestrian affair. Nobody is that that interested to hear about Eubank Jr’s latest fancy promotional deal. Equally, no one seems particularly concerned about Eubank’s next fight, not even it must be said, his next opponent, one Tom Dorran of Wales’. The business as usual model has been restored and in several months we can expect to see Dale Evans’s manager doing the same thing.

But the intimate part of the Probert’s journey comes from the world-title fight over 25 years ago between Chris Eubank and his friend and boxing mentor Michael Watson, whose rise up the boxing ranks somehow seemed linked to the writer’s own success.  He decided after Watson’s near-death experience and subsequent brain damage, not to write about boxing again, but like many of the boxers he meets on his return journey, he couldn’t stay away from boxing. Boxing really is their life and it’s his too.

I’m a fan of Probert’s writing. Rope Burn marks out his younger days with the kind of honesty you get after drinking twelve pints, spewing up, and saying, I shouldn’t have ate the last three kebabs. Dangerous is more of the same, but I wasn’t knocked out by the Prologue. Probert describes meeting his therapist who has a very strong Chinese accent. ‘We went into her office and I politely asked if I could take a seat. She gave me a shrug, which I quickly translated as meaning: ‘Why are you asking me if you can sit down you moron? What a ridiculous question…’ Or perhaps she thought I was actually going to take a seat, pick it up and exit the building with it under my arm.’

The jokey tone doesn’t work for me and almost all the episodes with his therapist could be deleted as they detract from what is a smashing book. I was privileged to be one of the few to read at least two of Probert’s chapters on ABCtales, including ‘Scars’ which follows on from the Prologue, is where the book should really start in a windswept hotel on the outskirts of Essex.  A before and after shot of the author and Michael Watson. Pan in. ‘It was 23 years ago when I last saw him. His eyes were closed and an oxygen mask was strapped to his mouth. His magnificent muscular torso was a tangle of tubes and sensors…he could never again be the person he used to be.’

What we find out is every boxer thinks he can be, until that notion is punched out of his head, and even then he remains unconvinced. Steve Watson, one of the few undefeated world champions, who retired, tells Probert he got bored with the game and could no longer get himself up for a fight, but is back training boxers and there’s a hint that he might have had some kind of fit, or blackout that forced his hand. But for warriors like Watson, every school should have a boxing ring. ‘There are very few bullies who are successful boxers’ he tells Probert. ‘Because if you get a punch in the face that is not a nice thing.’

I’m not going to go head to head and argue with Steve Watson. The usual anecdotal evidence pops up that playing rugby, for example, is more dangerous, which is unremarkable. But the message Probert keeps reiterating is ‘How nice boxers are’ seems  contrary to the popular view. Even Tyson Fury and his family come out sounding not too bad. A sport of contrasts.  ‘Perhaps more than any other human endeavour, boxing can be an unforgiving business…On the basis of little more than an off-night today’s champion can be tomorrow’s forgotten man’.  How many days or weeks, for example, will it take to forget Mike Towell and business to go on as usual?

The most poignant part of the book, which gives it real bite, is another chapter which appeared on ABCtales, ‘Lung’. It shows how Probert’s thirteen-year-old daughter Sofia started with a shallow cough, but almost died. Probert berates himself for all the things he did wrong. How he should have been more assertive with his GP, how he should not have went to McDonalds to get something to eat and allowed his wife and child to be sent home from hospital…how he was too trusting and human. These are not particularly bad characteristics and it shows in his writing. I’d go as far to say I like Ian Probert and don’t think he’s very Dangerous. I’m not interested in boxing, but this is an up close and personal account of those inside the sport, inside the passion and outside the money and chicanery. Read on to find out what makes us human.

Your Days are Numbered.

It’s in the papers – so it must be true

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I read the papers on a Sunday, starting at the back with the sports’. It’s called haruspex, a bit like looking from omens that Celtic are getting better by examining a sacrificed animal’s liver, and I wear my green-tinted specs when looking over the evidence. If the portents are good, or sufficiently bad, I’ll read the real news.

Two stories caught my interest. I’m prejudiced like everybody else, but not prejudiced in the same way as everybody else. But these got on my goat. The first one is from Norman Silvester the Sunday Mail. It’s quite a simple story. The high-hied yins of the police have decided they don’t like smartphones. They’re not banning them. Gee-whiz thanks Mr Dixon of Dock Green. But they’re just reminding us that they can and will take smartphones off us for obstructing justice and preventing their officers performing their duties. I’ll translate. No I won’t. If you don’t understand what they mean you shouldn’t have a smartphone, because you’re not smart enough to use it. But I’m prejudiced here too. I’ve not got a smartphone.

But I’d just add as a clincher, they quote FBI boss James Conway. He tells us smartphones have led to a rise in violent crimes in the US. Police officers in ghettos don’t put on a uniform and go shooting black people without good reason. I know that.  See, I’m smart that way. If I’d a smartphone I’d be violent and I’d be out mugging grannies. Filming it and putting it on YouTube.

The second story that got on my goat comes from Carole Cadwalladr and it’s all about MOPAC, which sounds, if you stretch it a bit like the bleating of some animal. I love these acronyms. It makes everything sound so modern and sensible. I’m not even going to tell you what it means, because you’d just be disappointed. You probably don’t remember when landowners, such as the Duke of Buccleauch, or Duke of Argyle, or pretty much any noblemen used to have the power to raise their own private armies. Here have a few regiments they used to say to whoever was king or queen. You probably don’t remember when there used to be a private police force. Good news. It never went away. London boroughs are offering a buy-one-and-get-one-free. £200 000 a year will buy three police officers and the public purse will fund another three. Hampstead and Highgate are getting a couple of those MOPACs for themselves. I just hope these officers bow their heads and salute as their owners pass in their cars. Perhaps they could train their children to fling rose petals. They could live in a gatehouse and make deliveries on demand. Do a bit of gardening work to supplement their income. Convene a Neighbourhood Watch scheme in case anybody has smartphones, know how to use them, and subvert the natural order of things.