Search Results for: economy

How to Write About Tax Havens and the Super-Rich: An Interview with Nicholas Shaxson

I met Nicholas Shaxson last summer at a gay barbecue in Berlin. Shaxson isn’t gay, but he’s the kind of dude who will rock up at a gay barbecue, wife and child in tow, and unself-consciously eat sausage and ribs with the inverts. We discovered, lounging on a blanket, that we both work for small NGOs, live in Berlin, and dabble in journalism. And we both work on issues (me: corporate human rights violations; him: tax havens) that the rest of the world manages to ignore for most of their day.

Last year Shaxson published a Vanity Fair article, “A Tale of Two Londons,” that described the residents of one of London’s most exclusive addresses—One Hyde Park—and the accounting acrobatics they had performed to get there.

Here’s how it works: If you’re a Russian oil billionaire or a Nigerian bureaucro-baron and you want to hide some of your money from national taxes and local scrutiny, London real estate is a great place to stash it. All you need to do is establish a holding company, park it offshore and get a-buying. Here’s Shaxson:

These buyers use offshore companies for three big and related reasons: tax, secrecy, and “asset protection.” A property owned outright becomes subject to various British taxes, particularly capital-gains and taxes on transfers of ownership. But properties held through offshore companies can often avoid these taxes. According to London lawyers, the big reason for using these structures has been to avoid inheritance taxes. […]

But secrecy, for many, is at least as important: once a foreign investor has avoided British taxes, then offshore secrecy gives him the opportunity to avoid scrutiny from his own country’s tax—or criminal—authorities too. Others use offshore structures for “asset protection”—frequently, to avoid angry creditors. That seems to be the case with a company called Postlake Ltd.—registered on the Isle of Man—which owns a $5.6 million apartment on the fourth floor [of One Hyde Park].

Shaxson argues that this phenomenon has taken over the U.K. real estate market—extortionate penthouses for the ultrarich sitting empty while the rest of us outbid each other for the froth below.

Shaxson’s piece was one of the best long-form pieces I read last year (I did in fact believe this before I met him, but you can take that with a grain of salt if you’d like), and last week I asked Shaxson to sit down with me for a proper conversation about how the story came about and whether it achieved what he wanted.

Read more…

There Are Three Types of People Who Can Afford to Write Books

Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years; advances on mid-list titles—books that are expected to sell modestly but whose quality gives them a strong chance of enduring—have declined by a quarter. These are the kinds of book that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing, despite the pitiful salaries. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects. Those who do so anyway will have to expend a lot of effort mastering the art of blowing their own horn. “Writing is being outsourced, because the only people who can afford to write books make money elsewhere—academics, rich people, celebrities,” Colin Robinson, a veteran publisher, said. “The real talent, the people who are writers because they happen to be really good at writing—they aren’t going to be able to afford to do it.”

Seven-figure bidding wars still break out over potential blockbusters, even though these battles often turn out to be follies. The quest for publishing profits in an economy of scarcity drives the money toward a few big books. So does the gradual disappearance of book reviewers and knowledgeable booksellers, whose enthusiasm might have rescued a book from drowning in obscurity. When consumers are overwhelmed with choices, some experts argue, they all tend to buy the same well-known thing.

George Packer, in The New Yorker, on Amazon and the book business. Read more from Packer.

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Photo: chasblackman, Flickr

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What Happens When Public Complaining Becomes a Career Aspiration

The Op-Ed Economy meanwhile means that whatever the event, we’re treated to what is essentially “commentariat tryouts.” Twitter was already the free-floating comment section ready to wrap itself around whatever the topic is. But once CNN began reading tweets aloud on-air sometime around the first election of President Obama, and op-ed columns spread across every site, the auditions began in earnest. Now Twitter is filled with people hoping their complaints are favorited, commented on, favstarred, and viral. Complaint as aspiration—everyone competing to be the star complainer. And increasingly, to that end, the key players in each scandal are suddenly accountable for something they tweeted in 2009, 2011, their Facebook from high school. Every blog they ever abandoned is combed for something to take them down and prove they are not good enough, pure enough, to keep their status. All of it is conducted in the manner of possible oppo research, as if it were all a campaign for president. It’s no longer enough to expose politicians and celebrities and reality stars—social media is increasingly everyone trying to be a reality star, because reality entertainment has become one of the few remaining ways you can transcend your economic class.

Writer Alexander Chee, on Twitter outrage. Read more from Chee in the Longreads Archive.

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Image via BlurMarTen, Twitter

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Why Hosting the Olympics Makes No Economic Sense

Before the 1990s hosting was usually a low-key affair. Los Angeles was the only bidder for the 1984 Olympics. It funded its games almost entirely with private money, as largely did Atlanta in 1996. Most football World Cups were played in scarcely renovated older stadiums.

But globalisation and new television channels showing sport changed that. Each new host raised the bar, with spiffy new sporting facilities. Politicians, needing to justify the rising cost, claimed that hosting would boost the economy. They invoked hordes of shopaholic visitors, the free advertising of host cities and the long-term benefits of the roads and stadiums that would be built. When Tokyo was named host of the 2020 Olympics, Shinzo Abe, Japan’s prime minister, said: “I want to make the Olympics a trigger for sweeping away 15 years of deflation and economic decline.”

Yet these claims of economic bonanza are false. Most economists agree that hosting big sporting events is an economic strain, says Stefan Szymanski, economics professor at the University of Michigan, with whom I have co-authored a book.

This is largely because the things a country buys for a sports tournament – stadiums, roads to the stadiums, extensive security – are rarely the things it needs for daily life. Often the venues become white elephants the moment the tournament ends. That happened in South Africa after the World Cup of 2010, and is forecast to happen to many Brazilian stadiums after this year’s tournament. London’s Olympic stadium eventually found a tenant, West Ham United Football Club, but the state is paying most of the costs of revamping the venue.

Simon Kuper, in the Financial Times, on the economics of hosting a major world sporting event. Read more on the Olympics.

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Photo: rapidtravelchai, Flickr

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What It’s Like to Grow Up Gay in Russia

Edited by Masha Gessen and Joseph Huff-Hannon | OR Books | February 2014 | 11 minutes (2,575 words)

 

Download as a .mobi ebook (Kindle)

Download as an .epub ebook (iBooks)

 

This week we are proud to feature a chapter from Gay Propaganda, a collection of original stories, interviews and testimonials from LGBT Russians both living there and in exile. The book was edited by Masha Gessen and Joseph Huff-Hannon, and will be published by OR Books in February. We’d like to thank them for sharing this chapter with Longreads Members. 

 

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TATIANA ERMAKOVA

“I had a career in Russia, a nice apartment, friends, family. 

I sacrificed all that to be with Ana.”

I was born and grew up in Saratov, Russia. It’s a provincial town, built on a mix of old-fashioned Orthodox Christian values (which condemned homosexuality as a sin) and Soviet beliefs (when most people thought that homosexuality didn’t exist in the Soviet Society at all).

Both of my parents worked, and I was on my own a lot. I was a good kid, though. I did my homework, stayed home, and didn’t get into trouble. I was also shy and sometimes had a hard time socializing. My father was a history professor at the university, and my mom worked for a non-profit organization. Read more…

Planet Money Makes a T-Shirt

Longreads Pick

A multimedia report on how the global economy works, from the perspective of the people making a T-shirt for NPR:

In the case of the Planet Money T-shirt, the buyer is Jockey. The company told us that the pattern of pulling out when wages rise may be coming to an end for now, because there’s no country that’s ready to replace Bangladesh as the cheapest place in the world to make clothes.

Wages in Bangladesh are going to rise, Marion Smith, a senior vice president at Jockey, told us. “That’s good news from a humanitarian point of view.”

Author: Editors
Source: NPR
Published: Dec 1, 2013

Riders on the Storm

Longreads Pick

An examination of Colorado’s mental health care system after the Aurora theater shooting. The state passed a $25 million initiative to restructure its crisis system for mentally ill patients, but still has a lot of work to do:

Colorado has underfunded mental health care for decades. Exactly how much is uncertain because there are at least 34 separate mental health line items in the state budget. “At the state Legislature, we cut provider rates for Medicaid and for drug and alcohol [programs] in 2002, when we had the downturn,” says Moe Keller, who spent 16 years in the state Legislature and is now the vice president of public policy and strategic initiatives at Mental Health America of Colorado , the local outpost of a national group that advocates for mental wellness reform. “We cut beds, and we closed a couple of units around the state. We never really re-funded that when the economy came back.” Then in 2008, the state again cut Medicaid providers and closed more units along with consolidating and reducing services. “Today, the prison system is by default the largest behavioral health center,” Keller says. “Police are the first responders.”

Source: 5280 Magazine
Published: Nov 26, 2013
Length: 31 minutes (7,839 words)

Making Marijuana Legal Might Not Save Police Money

“When legal marijuana goes on sale, sometime next spring, the black market will not simply vanish; over-the-counter pot will have to compete with illicit pot. To support the legal market, Kleiman argued, the state must intensify law-enforcement pressure on people who refuse to play by the new rules. A street dealer will have to be arrested in the hope that ‘you will migrate that dealer’s customers into the taxed-and-regulated market.’”

“He left the city councillors with a warning: without intensified law enforcement, pot legalization might not succeed. ‘The illicit market is a paper tiger,’ he concluded. ‘But a paper tiger doesn’t fall over until you push it.’”

Patrick Radden Keefe goes to Washington State for The New Yorker to explore what it really takes to create a legal marijuana economy. Read more on marijuana.

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Photo: eggrole, Flickr

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The Growth of Financial Services in the U.S.

“The financial services sector as a whole accounts for more than 20 percent of US GDP, and this share has grown by around 10 percentage points since the 1970s. Additional expansion has taken place in the business services sector, encompassing law and accounting firms and other outgrowths of a financialized economy. Overall, it seems reasonable to conclude that Wall Street in its various forms accounts for around 20 percent of total US income, a share comparable to that of the US government.”

John Quiggin, in Jacobin, on whether the growth of the financial sector has paid off for America. Read more on banking.

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The 40-Year Slump

Longreads Pick

A bleak picture of working in the United States. Meyerson points to 1974 as the pivotal year in which worker pay stopped rising in accordance with productivity, and traces all the changes have since wiped out the American middle class:

All the factors that had slowly been eroding Americans’ economic lives over the preceding three decades—globalization, deunionization, financialization, Wal-Martization, robotization, the whole megillah of nefarious –izations—have now descended en masse on the American people. Since 2000, even as the economy has grown by 18 percent, the median income of households headed by people under 65 has declined by 12.4 percent. Since 2001, employment in low-wage occupations has increased by 8.7 percent while employment in middle-wage occupations has decreased by 7.3 percent. Since 2003, the median wage has not grown at all.

Published: Nov 17, 2013
Length: 21 minutes (5,289 words)