Archive for November, 2016

The Free Trade Fallacy

by John Michael Greer

The Archdruid Report (November 23 2016)

Druid perspectives on nature, culture, and the future of industrial society


As longtime readers of this blog know, it’s not uncommon for the essays I post here to go veering off on an assortment of tangents, and this week’s post is going to be an addition to that already well-stocked list. Late last week, as the aftermath of the recent election was still spewing all over the media, I was mulling over one likely consequence of the way things turned out – the end of at least some of the free trade agreements that have played so large and dubious a role in recent economic history

One of the major currents underlying 2016’s political turmoil in Europe and the United States, in fact, has been a sharp disagreement about the value of free trade. The political establishment throughout the modern industrial world insists that free trade policies, backed up by an ever-increasing network of trade agreements, are both inevitable and inevitably good. The movements that have risen up against the status quo – the Brexit campaign in Britain, the populist surge that just made Donald Trump the next US president, and an assortment of similar movements elsewhere – reject both these claims, and argue that free trade is an unwise policy that has a cascade of negative consequences.

It’s important to be clear about what’s under discussion here, since conversations about free trade very often get wrapped up in warm but vague generalities about open borders and the like. Under a system of free trade, goods and capital can pass freely across national borders; there are no tariffs to pay, no quotas to satisfy, no capital restrictions to keep money in one country or out of another. The so-called global economy, in which the consumer goods sold in a nation might be manufactured anywhere on the planet, with funds flowing freely to build a factory here and funnel profits back there, depends on free trade, and the promoters of free trade theory like to insist that this is always a good thing: abolishing trade barriers of all kinds, and allowing the free movement of goods and capital across national boundaries, is supposed to create prosperity for everyone.

That’s the theory, at least. In practice? Well, not so much. It’s not always remembered that there have been two great eras of free trade in modern history – the first from the 1860s to the beginning of the Great Depression, in which the United States never fully participated; the second from the 1980s to the present, with the United States at dead center – and neither one of them has ushered in a world of universal prosperity. Quite the contrary, both of them have yielded identical results: staggering profits for the rich, impoverishment and immiseration for the working classes, and cascading economic crises. The first such era ended in the Great Depression; the second, just at the moment, looks as though it could end the same way.

Economists – more precisely, the minority of economists who compare their theories to the evidence provided by the real world – like to insist that these unwelcome outcomes aren’t the fault of free trade. As I hope to show, they’re quite mistaken. An important factor has been left out of their analysis, and once that factor has been included, it becomes clear that free trade is bad policy that inevitably produces poverty and economic instability, not prosperity.

To see how this works, let’s imagine a continent with many independent nations, all of which trade with one another. Some of the nations are richer than others; some have valuable natural resources, while others don’t; standards of living and prevailing wages differ from country to country. Under normal conditions, trade barriers of various kinds limit the flow of goods and capital from one nation to another. Each nation adjusts its trade policy to further its own economic interests. One nation that’s trying to build up a domestic steel industry, say, may use tariffs, quotas, and the like to shelter that industry from foreign competition. Another nation with an agricultural surplus may find it necessary to lower tariffs on other products to get neighboring countries to buy its grain.

Outside the two eras of free trade mentioned above, this has been the normal state of affairs, and it has had two reliable results. The first is that the movement of goods and capital between the nations tends toward a rough balance, because every nation uses its trade barriers to police hostile trade policy on the part of its neighbors. Imagine, for example, a nation that tries to monopolize steel production by “dumping” – that is, selling steel on the international market at rock-bottom prices to try to force all other nations’ steel mills into bankruptcy. The other nations respond by slapping tariffs, quotas, or outright bans on imported steel from the dumping country, bringing the project to a screeching halt. Thus trade barriers tend to produce a relative equilibrium between national economies.

Notice that this is an equilibrium, not an equality. When trade barriers exist, it’s usual for some nations to be rich and others to be poor, for a galaxy of reasons having nothing to do with international trade. At the same time, the difficulties this imposes on poor nations are balanced by a relative equilibrium, within nations, between wages and prices.

When the movement of goods and capital across national borders is restricted, the prices of consumer products in each nation will be linked via the law of supply and demand to the purchasing power of consumers in that nation, and thus to the wages paid by employers in that nation. Of course the usual cautions apply; wages and prices fluctuate for a galaxy of reasons, many of which have nothing to do with international trade. Even so, since the wages paid out by employers form the principal income stream that allows consumers to buy the employers’ products, and consumers can have recourse to the political sphere if employers’ attempts to drive down wages get out of hand, there’s a significant pressure toward balance.

Given trade barriers, as a result, people who live in countries that pay low wages generally pay low prices for goods and services, while people who live in countries with high wages face correspondingly high prices when they go shopping. The low prices make life considerably easier for working people in poor countries, just as the tendency of wages to match prices makes life easier for working people in rich countries. Does this always work? Of course not – again, wages and prices fluctuate for countless reasons, and national economies are inherently unstable things – but the factors just enumerated push the economy in the direction of a rough balance between the needs and wants of consumers, on the one hand, and their ability to pay, on the other.

Now let’s imagine that all of the nations we’ve imagined are convinced by a gaggle of neoliberal economists to enact a free trade zone, in which there are no barriers at all to the free movement of goods and capital. What happens?

When there are no trade barriers, the nation that can produce a given good or service at the lowest price will end up with the lion’s share of the market for that good or service. Since labor costs make up so large a portion of the cost of producing goods, those nations with low wages will outbid those with high wages, resulting in high unemployment and decreasing wages in the formerly high-wage countries. The result is a race to the bottom in which wages everywhere decline toward those of the worst-paid labor force in the free trade zone.

When this happens in a single country, as already noted, the labor force can often respond to the economic downdraft by turning to the political sphere. In a free trade zone, though, employers faced with a political challenge to falling wages in one country can simply move elsewhere. It’s the mismatch between economic union and political division that makes free trade unbalanced, and leads to problems we’ll discuss shortly.

Now of course free trade advocates like to insist that jobs lost by wealthier nations to poorer ones will inevitably be replaced by new jobs. History doesn’t support that claim – quite the contrary – and there are good reasons why the jobs that disappear will never be replaced. In a free trade system, it’s more economical for startups in any labor-intensive industry to go straight to one of the countries with low wages; only those industries that are capital-intensive and thus employ comparatively few people have any reason to get under way in the high-wage countries. The computer industry is a classic example – and you’ll notice, I trust, that just as soon as that industry started to become labor-intensive, it moved offshore. Still, there’s another factor at work.

Since wages are a very large fraction of the cost of producing goods, the overall decrease in wages brings about an increase in profits. Thus one result of free trade is a transfer of wealth from the laboring majority, whose income comes from wages, to the affluent minority, whose income comes directly or indirectly from profits. That’s the factor that’s been left out of the picture by the proponents of free trade – its effect on income distribution. Free trade makes the rich richer and the poor poorer, by increasing profits while driving wages down. This no doubt explains why free trade is so popular among the affluent these days, just as it was in the Victorian era.

There’s a worm in the bud, though, because a skewed income distribution imposes costs of its own, and those costs mount up over time in painfully familiar ways. The difficulty with making the rich richer and the poor poorer, as Henry Ford pointed out a long time ago, is that the wages you pay your employees are also the income stream they use to buy your products. As wages decline, purchasing power declines, and begins to exert downward pressure on returns on investment in every industry that relies on consumer purchases for its income.

Doesn’t the increasing wealth of investors counterbalance the declining wealth of the wage-earning masses? No, because the rich spend a smaller proportion of their incomes on consumer goods than the poor, and divert the rest to investments. Divide a million dollars between a thousand working class family, and the money’s going to be spent to improve the families’ standard of living: better food, a bigger apartment, an extra toy or two around the Christmas tree, and so on. Give the same million to one rich family and it’s a safe bet that much of it’s going to be invested.

This, incidentally, is why the trickle-down economics beloved of Republican politicians of an earlier era simply doesn’t work, and why the Obama administration’s massive handouts of government money to banks in the wake of the 2008-9 financial panic did so little to improve the financial condition of most of the country. When it comes to consumption, the rich simply aren’t as efficient as the poor. If you want to kickstart an economy with consumer expenditures, as a result, you need to make sure that poor and working class people have plenty of money to spend.

There’s a broader principle here as well. Consumer expenditures and capital for investment are to an economy what sunlight and water are to a plant: you can’t substitute one for the other. You need both. Since free trade policies funnel money away from expenditure toward investment by skewing the income distribution, it causes a shortage of the one and a surplus of the other. As the imbalance builds, it becomes harder for businesses to make a profit because consumers don’t have the cash to buy their products; meanwhile the amount of money available for investment increases steadily. The result is a steady erosion in return on investment, as more and more money chases fewer and fewer worthwhile investment vehicles.

The history of free-trade eras is thus marked by frantic attempts to prop up returns on investment by any means necessary. The offshoring fad that stripped the United States of its manufacturing economy in the 1970s had its exact equivalent in the offshoring of fabric mills from Britain to India in the late Victorian era; in both cases, the move capitalized on remaining disparities in wages and prices between rich and poor areas in a free trade zone. In both cases, offshoring worsened the problem it was meant to fix, by increasing the downward pressure on wages in the richer countries and further decreasing returns on investment across the entire spectrum of consumer industries – then as now, the largest single share of the economy.

A gambit that as far as I know wasn’t tried in the first era of free trade was the attempt to turn capital into ersatz income by convincing consumers to make purchases with borrowed money. That’s been the keystone of economic policy in the United States for most of two decades now. The housing bubble was only the most exorbitant manifestation of a frantic attempt to get people to spend money they don’t have, and then find some way to pay it all back with interest. It hasn’t worked well, not least because all those interest payments put an additional downward pressure on consumer expenditures.

A variety of other, mostly self-defeating gimmicks have been put in play in both of the modern free trade eras to try to keep consumer expenditures high while wages decline. None of them work, because they don’t address the actual problem – the fact that under free trade, the downward pressure on wages means that consumers can’t afford to spend enough to keep the economy running at a level that will absorb the available investment capital – and so the final solution to the problem of declining returns on investment arrives on schedule: the diversion of capital from productive investment into speculation.

Any of my readers who don’t know how this story ends should get up right now, and go find a copy of John Kenneth Galbraith’s classic The Great Crash 1929 (1955). Speculative bubbles, while they last, produce abundant returns; when free trade has driven down wages, forced the consumer economy into stagnation or contraction, and decreased the returns on investment in productive industries to the point of “why bother”, a speculative bubble is very often the only profitable game in town. What’s more, since there are so few investments with decent returns in the late stages of a free trade scheme, there’s a vast amount of money ready to flow into any investment vehicle that can show a decent return, and that’s exactly the environment in which speculative bubbles breed most readily.

So the great free trade era that began tentatively with the repeal of the Corn Laws in 1846, and came into full flower with Gladstone’s abolition of tariffs in 1869, ended in the stock market debacle of 1929 and the Great Depression. The road there was littered with plenty of other crises, too. The economic history of the late nineteenth and early twentieth centuries is a cratered moonscape of speculative busts and stock market crashes, culminating in the Big One in 1929. It resembles, in fact, nothing so much as the economic history of the late twentieth and early twenty-first centuries, which have had their own sequence of busts and crashes: the stock market crash of 1987, the emerging markets crash of 1994, the tech-stock debacle of 2000, the housing bust of 2008, and the beat goes on.

Thus free trade causes the impoverishment and immiseration of the labor force, and a cascading series of economic busts driven by the mismatch between insufficent consumption and excess investment. Those problems aren’t accidental – they’re hardwired into any free trade system – and the only way to stop them in their tracks is to abandon free trade as bad policy, and replace it with sensible trade barriers that ensure that most of the products consumed in each nation are made there.

It’s probably necessary to stop here and point out a couple of things. First of all, the fact that free trade is bad policy doesn’t mean that every kind of trade barrier is good policy. The habit of insisting that the only possible points along a spectrum are its two ends, common as it is, is an effective way to make really bad decisions; as in most things, there’s a middle ground that yields better results than either of the two extremes. Finding that middle ground isn’t necessarily easy, but the same thing’s true of most economic and political issues.

Second, free trade isn’t the only cause of economic dysfunction, nor is it the only thing that can cause skewed income distribution and the attendant problems that this brings with it. Plenty of factors can cause a national or global economy to run off the rails. What history shows with painful clarity is that free trade inevitably makes this happen. Getting rid of free trade and returning to a normal state of affairs, in which nations provide most of their own needs from within their own borders and trade with other nations to exchange surpluses or get products that aren’t available at home readily, or at all, gets rid of one reliable cause of serious economic dysfunction. That’s all, but arguably it’s enough to make a movement away from free trade a good idea.

Finally, the points I’ve just made suggest that there may be unexpected benefits, even today, to a nation that extracts itself from free trade agreements and puts a well-planned set of trade restrictions in place. There are plenty of factors putting downward pressure on prosperity just now, but the reasoning I’ve just sketched out suggests that the destitution and immiseration so common in the world right now may have been made considerably worse than they would otherwise be by the mania for free trade that’s been so pervasive in recent decades. A country that withdraws from free trade agreements and reorients its economy for the production of goods for domestic consumption might thus expect to see some improvement, not only in the prosperity of its working people, but in rates of return on investment.

That’s the theory I propose. Given the stated policies of the incoming US administration, it’s about to be put to the test – and the results should be apparent over the next few years.






On a different and less theoretical note, I’m delighted to report that the third issue of Into The Ruins {1}, the quarterly magazine of deindustrial science fiction, is on its way to subscribers and available for sale to everyone else. The Fall 2016 issue includes stories by regular authors and newcomers alike, including a Matthew Griffiths tale set in the universe of my novel Star’s Reach (2014), along with book reviews, essays, and a letter to the editors column that is turning into one of the liveliest forums in print. If you’re not subscribing yet, you’re missing a treat.

On a less cheery note, it’s been a while now since I proposed a contest, asking readers to write stories about futures that went outside the conventional binary of progress or decline. I think it was a worthwhile project, and some of the stories I received in response were absolutely first-rate – but, I’m sorry to say, there weren’t enough of them to make an anthology. I want to thank everyone who wrote a story in response to my challenge, and since a good many of the stories in question deserve publication, I’m forwarding them to Joel Caris, the editor of Into The Ruins, for his consideration.




John Michael Greer is Past Grand Archdruid of the Ancient Order of Druids in America {2}, current head of the Druidical Order of the Golden Dawn {3}, and the author of more than thirty books on a wide range of subjects, including peak oil and the future of industrial society. He lives in Cumberland, Maryland, an old red brick mill town in the north central Appalachians, with his wife Sara.

If you enjoy this blog and can handle discussions of Druidry, magic, and occult philosophy, you might like my other blog, Well of Galabes {4}.






Categories: Uncategorized

Household Net Worth in the US

Hits a New record, but the Wealthy Reap the Benefits

Household net worth has reached its highest in history, fueled by rising stock and housing prices. But with income and wealth inequality widening, most of the gains are still benefitting the wealthy.

by Bryan Cronan, Staff writer

The Christian Science Monitor (September 18 2014)

On the whole, Americans are richer than ever before.

Household wealth in the US hit the highest level ever in the second quarter of this year. The Federal Reserve’s study on Financial Accounts of the US reports that household net worth increased $1.4 trillion between April and June. The 1.7 percent gain means Americans now hold a record $81.5 trillion in assets, which includes the values of stocks and home value minus debts and other liabilities. The increase comes after a downwardly revised $1.23 trillion in the first quarter.

“Taken together, the reported growth in household net worth should continue to encourage consumer spending growth through the wealth effect”, Barclays said in a statement. “The increases … are consistent with our outlook for moderate private consumption growth of 2.5% over the next few quarters”.

The report found that household borrowing rose at an annualized rate of 3.6 percent in the second quarter, the fastest since the first quarter of 2008. In a good sign for the housing market, real estate values were up $230 billion in Q2. Consumer credit, which includes student loans, rose 8.1 percent.

The total value of stocks and mutual funds rose $1 trillion in the second quarter thanks to a high performing stock market. Wednesday, the Federal Reserve announced it would keep interest rates low for the coming months, and the Dow Jones Industrial average closed at an all-time high of 17,156.73. But questions remain about who is actually profiting from the increases in the stock market.

“Much of the nation’s rising wealth also goes disproportionately to the wealthy, who tend to own stocks and save their money, reducing the benefits to the overall economy”, wrote The Wall Street Journal. Ten percent of Americans own eighty percent of stocks.

The Federal Reserve’s Survey of Consumer Finances report found that the median household net worth was $81,200, which is down two percent from 2010. The top ten percent of households had an average net worth of $3.3 million, while the lowest five percent had an average household net worth of $6,400.

“The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with few assets to fall back on”, Janet Yellen, chairman of the Federal Reserve, said in a news conference Thursday.

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Global Wealth Update

0.7% of Adults Control $116.6 Trillion In Wealth

by Tyler Durden

Zero Hedge (November 22 2016)

Today Credit Suisse released its latest annual global wealth report {1}, which traditionally lays out what is perhaps the biggest reason for the recent “anti-establishment” revulsion: an unprecedented concentration of wealth among a handful of people, as shown in its infamous global wealth pyramid, an arrangement which as observed by the “shocking” political backlash of the past few months suggests that the lower ‘levels’ of the pyramid are increasingly unhappy about.

As Credit Suisse tantalizingly shows year after year, the number of people who control just shy of a majority of global net worth, or 45.6% of the roughly $255 trillion in household wealth, is declining progressively relative to the total population of the world, and in 2016 the number of people who are worth more than $1 million was just 33 million, roughly 0.7% of the world’s population of adults. On the other end of the pyramid, some 3.5 billion adults had a net worth of less than $10,000, accounting for just about $6 trillion in household wealth. And in between is the so-called global middle class – those one billion people who rising anger at the status quo made Brexit and Trump possible.

Incidentally, we tracked down the first Credit Suisse report we found in this series from 2010 {2}, where the total wealth of the top “layer” in the pyramid was a modest $69.2 trillion for the world’s millionaires. It has nearly doubled in the six years since then. Meanwhile, the world’s poorest have gotten, you got it, poorer, as those adults who were worth less than $10,000 in 2010 had a combined net worth of $8.2 trillion, a number which has since declined to $6.1 trillion in 2016 despite a half a billion increase in the sample size. The same goes for the layer right above, also known as the “middle class”.

How About the Very Top?

Things here are even more nuanced, with 28.9 million people whose net worth is between $1 and $5 million gradually tapering off to just 140,900 Ultra High Net Worth individuals who control more than $50 million in assets each. Of these, 50,800 are worth at least $100 million, and 5,200 have assets above $500 million. The total number of Ultra High Net Worth adults is about three percent higher than a year ago (4,100 individuals), and the increase has been relatively uniform across regions, except for the higher than average rise in Asia- Pacific countries (ten percent).

Here is the commentary from Credit Suisse:



Wealth Differences Within and Between Countries



Wealth differences between individuals occur for many reasons. Variation in average wealth across countries accounts for much of the observed inequality in global wealth, but there is also considerable disparity within countries. Those with low wealth are disproportionately found among the younger age groups, who have had little chance to accumulate assets. Others may have suffered business losses or personal misfortune, or live in regions where prospects for wealth creation are more limited. Opportunities are also sometimes constrained for women or minorities. In contrast, many individuals can be found at the other end of the spectrum who have acquired large fortunes through a combination of talent, hard work and good luck.

The wealth pyramid in Figure 1 captures these differences. The large base of low wealth-holders underpins higher tiers occupied by progressively fewer adults. We estimate that 3.5 billion individuals – 73% of all adults in the world – have wealth below $10,000 in 2016. A further 900 million adults (nineteen percent of the global population) fall in the $10,000 to $100,000 range. While average wealth is modest at the base and in the middle tiers of the pyramid, total wealth there amounts to $35 trillion, underlining the economic importance of this often overlooked segment.

The Base of the Pyramid

The layers of the wealth pyramid are quite distinctive. The base tier has the most even distribution across regions and countries (Figure 2), but also the most uneven range of personal circumstances.

In developed countries, only about twenty percent of adults fall within this category, and for the majority of these individuals, membership is either transient – due to business losses or unemployment, for example – or a lifecycle phase associated with youth or old age. In contrast, more than ninety percent of the adult population in India and Africa falls within this range. For many residents of low-income countries, life membership of the base tier is the norm rather than the exception.

Mid-Range Wealth

In terms of global wealth, $10,000 to $100,000 is the mid-range band. It covers around 900 million adults who represent a high proportion of the middle class in many countries. The average wealth of this group is quite close to the overall global mean wealth, and its combined net worth of $29 trillion provides it with considerable economic clout. India and Africa are under-represented in this segment, whereas China’s share is disproportionately high. China and India provide an interesting contrast. India accounts for just 3.1% of those with mid-range wealth, and that share has changed very little during the past decade. In contrast, China accounts for 33% of those with wealth between $10,000 and $100,000, ten times the number of Indians, and double the proportion of Chinese in 2000.

The High Wealth Bands

The top tiers of the wealth pyramid – covering individuals with net worth above $100,000 – comprised 5.9% of all adults at the turn of the century. The proportion rose rapidly until the financial crisis, but has remained quite stable since that time. It currently comprises 8.2% of the global total, nearly the same as in mid-2015. Regional composition differs markedly from the strata below. Europe, North America and the Asia-Pacific region (omitting China and India) together account for 89% of the group, with Europe alone providing 144 million members (36% of the total). This compares with just five million adult members (1.2% of the global total) in India and Africa combined.

The pattern of membership changes once again for the US dollar millionaires at the top of the pyramid. The number of millionaires in any given country is determined by three factors: the size of the adult population, average wealth, and wealth inequality. The United States scores high on all three criteria, and has by far the greatest number of millionaires at 13.6 million, or 41% of the worldwide total (Figure 3). For many years, Japan held second place in the millionaire rankings by a comfortable margin – with thirteen percent of the global total in 2011, for example, which was double the number of the third placed country. However, the number of Japanese millionaires has fallen, alongside a rise in other countries. As a consequence, Japan lost its second place to the United Kingdom in 2014, but bounced back again this year because of exchange rate appreciation.

After a drop this year, the United Kingdom falls to third place with seven percent of millionaires worldwide, followed by Germany, France, and China with five percent each, and Italy, Canada, and Australia with three percent each. Switzerland, Korea, Spain, and Taiwan are the four other countries with more than 350,000 millionaires, which is the minimum requirement for a one percent share of the global total.

Changing Membership of the Millionaire Group

Year-on-year variations in the number of millionaires can often be traced to real wealth growth and exchange rate movements. Last year, we reported that widespread depreciation against the US dollar had resulted in a significant reduction in the number of millionaires between mid-2014 and mid-2015. This year, the changes in both directions have been relatively modest: a net increase of 596,000 or two percent. Japan reversed the trend of recent years, adding more than a third to its total (up 738,000 to 2.8 million). Millionaire numbers rose again in the United States, but only by 283,000, which is less than the typical rise in the period since the financial crisis. The downside was experienced by the United Kingdom, which lost around fifteen percent of its millionaires (406,000 adults), and to a lesser extent by Switzerland (down 58,000), and China (down 43,000).

High Net Worth Individuals

The usual source of information on wealth data – official household surveys – tends to become less reliable at higher wealth levels. To estimate the pattern of wealth holdings above $1 million, we therefore supplement the survey data with figures from “rich lists” such as the Forbes annual tally of global billionaires. These rich list data are pooled for all the years since 2000, and well-known statistical regularities are then used to estimate intermediate numbers in the top tail which are consistent with the Forbes data. This produces plausible estimates of the global pattern of asset holdings in the high net worth (“HNW”) category from $1 million to $50 million, and in the ultra high net worth (“UHNW”) range from $50 million upwards.

While the base of the wealth pyramid is occupied by people from all countries at various stages of their lifecycles, High Net Worth and Ultra High Net Worth individuals are heavily concentrated in particular regions and countries, and tend to share more similar lifestyles, for instance participating in the same global markets for luxury goods, even when they reside in different continents. The wealth portfolios of these individuals are also likely to be more similar, with a focus on financial assets and, in particular, equities, bonds and other securities traded in international markets.

For mid-2016, we estimate that there are 33.0 million HNW adults with wealth between $1 million and $50 million, of whom the vast majority (28.9 million) fall in the $1 to $5 million range (Figure 4).

There are 2.5 million adults worth between $5 million and 10 million, and 1.5 million more have assets in the $10 to $50 million range. In terms of HNW membership, Europe briefly overtook North America in 2007, but North America regained the lead in 2010, and now accounts for a much greater number, namely 14.7 million (45% of the total), compared to 9.8 million (30%) in Europe. Asia-Pacific countries, excluding China and India, have 6.0 million members (18%), and another 1.6 million are found in China (5% of the global total). The remaining 816,000 High Net Worth individuals (2% of the total) reside in India, Africa or Latin America.

Ultra High Net Worth Individuals

Our calculations suggest that 140,900 adults worldwide can be classed as Ultra High Net Worth individuals, with net worth above $50 million. Of these, 50,800 are worth at least $100 million, and 5,200 have assets above $500 million. The total number of Ultra High Net Worth adults is about three percent higher than a year ago (4,100 individuals), and the increase has been relatively uniform across regions, except for the higher than average rise in Asia-Pacific countries (ten percent).

North America dominates the regional rankings, with 73,400 Ultra High Net Worth residents (52%), while Europe has 29,800 (21%), and 18,800 (13%) live in Asia-Pacific countries, excluding China and India. Among individual countries, the United States leads by a huge margin with 70,400 Ultra High Net Worth adults, equivalent to fifty percent of the group total (Figure 5). This is a small increase of 500 compared to mid-2015. China occupies second place with 11,000 Ultra High Net Worth individuals (up 640 on the year), followed by Germany (6,100, up 500). The United Kingdom lost by far the greatest number of Ultra High Net Worth individuals (down 700 to 4,700), but still heads France (4,100, up 600). In contrast, Japan gained the most (3,600, up 1,000), and now occupies sixth place. Italy (3,300, up 400), Canada (2,900, up 100), Korea (2,500, up 200), and India (2,300, up 100) are the other countries with the highest numbers of Ultra High Net Worth individuals.

The Wealth Spectrum

The wealth pyramid captures the contrasting circumstances between those with net wealth of a million US dollars or more in the top echelon, and those lower down in the wealth hierarchy. Discussions of wealth holdings often focus exclusively on the top tail. We provide a more complete and balanced picture, believing that the base and middle sections are interesting in their own right. One reason is the sheer size of numbers and their political power. However, their combined wealth of $35 trillion also yields considerable economic opportunities, which are often overlooked. Addressing the needs of these asset owners can drive new trends in both the consumer and financial industries. China, Korea and Indonesia are examples of countries where individuals have been rising rapidly through this part of the wealth pyramid. India has not shown similar progress to date, but has the potential to grow rapidly in the future from its low starting point.

While the middle and lower levels of the pyramid are important, the top segment will likely continue to be the main driver of private asset flows and investment trends. Our figures for mid-2016 indicate that there are now nearly 33 million High Net Worth individuals, including 1.6 million in China, and more than six million in other Asia-Pacific countries. At the apex of the pyramid, 140,900 Ultra High Net Worth adults are each worth more than $50 million. This includes 11,000 Ultra High Net Worth individuals in China (eight percent of the global total), a 100-fold rise since the turn of the century. A further 8,500 Ultra High Net Worth adults (six percent of the total) can be found in Hong Kong, India, Korea, and Taiwan.





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Why Hillary Clinton Deserved to Lose

by Gopal Raj Kumar

Malaysia Outlook (November 14 2016)

The silence of Hillary Clinton’s hand maidens in Southeast Asia is deafening in the wake of her resounding and unequivocal trouncing at the hands of Donald Trump.

Just in case one needs reminding, Donald Trump (“The Donald”) was the successful presidential candidate in the recent US presidential election.

The reality of that election result is something Hillary Clinton simply cannot come to terms with.

She is after all not invincible.

The extra wide margin she expected just for being a woman was rejected by the masses in preference of merit.

The outcome was simply too painful for her [to] bear.

Hillary’s cowardly conduct in withdrawing and failing to meet her constituents in the aftermath of her defeat, waiting instead till the next day when she delivered her bitter concession speech, many say was insincere and as affected as her election campaign itself.

It was an insult to all Americans.

Not so much one might say to her many followers, the vast majority being women in the nineteen to forty age group whose character she reflected in many ways.

Here is one reason which reference to that demographic is hard to disagree with.

Many of the younger voters like the protestors in the aftermath of Hillary’s defeat are like all of us when we were in that same age group – anti-establishment, irresponsible and did not vote.

Other reasons stem from the fact that Generationz X, Y and Millennials especially the women in these categories have a sense of entitlement, especially where they are white, or middle class and “educated”.

The remainder of that class does not fit into the elitism of those fortunate enough to belong to that social pedigree.

The elites speak in the stock phrases adopting the vocabulary of college educated women distinguishing them from the rest.

A classic class divide and amongst these are Korean, Indian (subcontinents like Huma Abedin), Chinese, imports or immigrants who temporarily shed their cultural backgrounds just to be accepted and to belong.

When Women are Women and Why When They are Not?

Inspite of all the rhetoric and pious condescension when it comes to describing “women” in the west, it is always the Caucasian English speaking Judeo Christian variety that matters.

The rest are mere tokens whether they are able to identify that slur or not.

It is why feminism has not reached the masses.

In Hillary’s hollow concession speech there was not even a brief mention in passing of pioneering women leaders.

Sirimov Bandarnaike the first female leader of any country anywhere prime minister of Sri Lanka.

Indira Gandhi the second female prime minister and prime minster of the world’s largest democracy did not warrant a mention.

Benazir Bhutto of Pakistan or Sheik Hasina of Bangladesh (the later two of course being Muslim and choosing to wear their Islamic credentials on their sleeve would not have qualified in an Islamophobic country as the US even in Hillary Clinton’s circles).

Huma Abedin of course is different for a variety of reasons.

I cringed at the number of Indian middle class women as American citizens defending a Hillary who kept referring to a glass ceiling in which she made 18,000,000 cracks the last time she tried.

For crying out loud these Asian prime ministers, all women broke that glass ceiling decades ago.

And in case Hillary and her little brown slaves have not come to terms with it, Mao once said that women (not white or Chinese women) hold up half the sky.

A quote western “feminists” never hesitate to avail themselves of when in need.

As for Hillary Clinton’s experience in public service, regime change and through it bloodshed stands out as her most prominent contribution to humanity over the past decade.

From the other end of her mouth Hillary preached “rights”, equality for women and democratic values.

Analysing The Donald’s Remarks

The chants of racism, misogyny and hate in reference to Donald Trump, needs to be examined in closer context in order to demolish these myths once and for all.

Donald Trump did indeed say he would like to stop Muslims coming to the US during the election campaign.

But what most people fail to have noticed and the way the media reported it was the statement in the fullness of the sentence in which it was made.

Trump said, “we do not know what or who ISIS is. And till we do we must halt all migration of Muslims here. Our government does not know who they are.”

The US in any event continues with the practice of “rendering”.

This is the illegal practice of kidnapping Muslims wherever they are to be found on the suspicion they were a threat to US interests.

The list of Muslims barred from entering the US is far greater than any other religious group.

That’s not a Trump initiative.

The largest group of people profiled in the US by the US is Muslims.

Hillary did nothing as secretary of state to abate or stop that practice.

Trump’s is a threat.

Her failure to stop the practice is part of her experience and qualification to rule.

Again she was soundly rejected by American voters.

As to deporting Mexican gangs, it is a widely held sentiment amongst a majority of Americans that these gangs need to be dealt with in an effective manner.

It would be according to a Trump aide, also apply to Chinese, Vietnamese and other Indo-Chinese gangs like the triads.

As to the wall Trump has threatened to build, it is already built.

It began even before George Bush I and II and continued during Bill Clinton’s time as president, spilling over into Barack Obama’s presidency.

The media made it into a race issue and Trump specific.

Going to the misogyny accusation, the Americans are such hypocrites.

That includes Michelle Obama who said she did not want Trump’s language reaching her children.

Her children are in that group of between fifteen to 35 who by a majority of 76% in the US in a published survey said they wanted most to be like Kim Kharadashian (sex tape hero), Millie Cyrus the singer famous for inviting her audience to touch her “there”, and Madonna who masturbates on stage as part of her act.

The Khobragade Affair – Selective Women Rights

For Hillary Clinton’s camp to be so precious about race and women it is astonishing how they stood silently by whilst the young Indian diplomat and mother of two, Devani Khobragde, was two years ago “cavity searched” (another name for digital rape) in New York after being handcuffed and roughed into the back of a police car at her children’s school.

Her crime: An Indian maid in her household (with a record of lodging similar and false complaints before) had complained of being underpaid by Khobragade.

The ignominious degrading treatment dished out to the young Khobragade drew a deafening silence in the Hillary Democratic camp even though it occurred under an Obama administration when Hillary was secretary of state.

Now when is a woman and when is she not?

Rigging the System

As for the slur that Trump would not recognise the election results because the system is rigged, Hillary ear bashed the world with her sanctimonious constitution abiding responses only to fall flat on the issue when she lost.

Seizing the very same Trump allegation to support her failure, Hillary through her supporters now wants to attack weaknesses in the electoral system for its flaws.

As a lawyer her complaint is hollow and embarrassing shallow. Trump was right.

But Hillary driven by hubris and conceit was seemingly “invincible” and could even fight a “rigged system”.

So she thought.

Women of Courage and the Principles of Fairness

What’s noticeable in all of this is the same rhetoric and platitudes Hillary’s hand maidens in Malaysia employ to destabilse government.

Suddenly they realise that the primary vote really means little at the end of the day.

With so little knowledge of the system they want to change.

It is no wonder the Ambigas and their sermons have fallen on deaf ears in spite of the generous funding received from the Hillary linked foundations.

Women of courage indeed but without knowledge.

Hillary’s campaign raised over US$900,000,000 from over 3,000,000 donors.

What a bad investment from people with even poorer judgments.

Donald Trump may make a bad president.

But he can’t be any worse than a lying bunch of women who cry foul when they lose fair and square.

With that kind of money they could have fed and educated a very large number of women in a number of more deserving countries around the world.

And that could have been Hillary’s greatest contribution to women.

But women of colour don’t really matter even to women of colour like the Asians in the US and Asia who support Hillary.

Hillary and her supporters of women have set women’s opportunities to equality back by 100 years.

If it is equality she sought in this presidential election she would have been a little more inclusive.

It was revenge.

And that revenge breeds the hatred that prevailed during her campaign sufficient to deny her the dignity of the office she pursued.

Hillary may indeed be more experienced.

But her experiences are in failure, greed, dishonesty and revenge.

By the looks of it, it ain’t over yet by a long shot. Hell hath no fury …

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How Obama’s Legacy Lost the Elections for Hillary

Instead of jobs and relief, the Obama administration offered only half-measures to struggling people in the Rust Belt and beyond.

by Walden Bello

Foreign Policy in Focus (November 17 2016)

The Obama administration failed to break up the big banks, provided no relief for hard-up homeowners, and offered struggling workers more ill-advised trade deals. Is it any surprise the Rust Belt turned on Democrats? (Photo: Andrew Bardwell / Flickr)

If there’s one certainty that emerged in the 2016 elections, it was that Hillary Clinton’s unexpected defeat stemmed from her loss of four so-called “Rust Belt” states: Wisconsin, Michigan, and Pennsylvania, which had previously been Democratic strongholds, and Ohio, a swing state that had twice supported Barack Obama.

The 64 Electoral College votes of those states, most of which hadn’t even been considered battlegrounds, put Donald Trump over the top. Trump’s numbers, it is now clear, were produced by a combination of an enthusiastic turnout of the Republican base, his picking up significant numbers of traditionally Democratic voters, and large numbers of Democrats staying home.

Wrong Messenger, Right Message

But this wasn’t a defeat by default. On the economic issues that motivate many of these voters, Trump had a message: The economic recovery was a mirage, people were hurt by the Democrats’ policies, and they had more pain to look forward to should the Democrats retain control of the White House.

The problem for Clinton was that the opportunistic message of this demagogue rang true to the middle class and working class voters in these states, even if the messenger himself was quite flawed.

True, these working class voters going over to Trump or boycotting the polls were mainly white. But then these were the same people that placed their faith in Obama in 2008, when they favored him by large margin over John McCain. And they stuck with him in 2012, though his margins of victory were for the most part narrower.

By 2016, however, they’d had enough, and they would no longer buy the Democrats’ blaming George W Bush for the continuing stagnation of the economy. Clinton bore the brunt of their backlash, since she made the strategic mistake of running on Obama’s legacy – which, to the voters, was one of failing to deliver the economic relief and return to prosperity that he had promised eight years earlier, when he took over a country falling into a deep recession from Bush.

These four states reflected, on the ground, the worst consequences of the interlocking problems of high unemployment and deindustrialization that had stalked the whole country for over two decades owing to the flight of industrial corporations to Asia and elsewhere. Combined with the financial collapse of 2007~2008 and the widespread foreclosure of the homes of millions of middle class and poor people who’d been enticed by the banks to go into massive indebtedness, the region was becoming a powder keg.

The Stimulus Debacle

In 2015, the number of unemployed Americans nationwide was still about two million above the 6.7 million unemployed at the beginning of what is now called the “Great Recession” in 2007.

While the unemployment rate is now down from the ten percent peak in late 2009, its decline has been painfully slow, and the improvement stems less from improved labor conditions than a falling participation rate, as discouraged workers withdrew from the labor force.

That the ranks of the jobless have shown little actual improvement stemmed from a fateful decision taken by the administration in 2009, when the Democrats controlled both houses of Congress. Instead of pushing a stimulus program of $1.8 trillion, which his top economic advisers told him would be required to bring the country rapidly out of recession, Obama decided to propose only $787 billion.

Why? Not out of economic rationality but out of political expediency, from a desire to appear to the Republican budget hawks as “reasonable”. Much of the economic misery at the grassroots that blanketed the succeeding years of the Obama presidency could have been avoided or truncated had Obama shown more political will.

As Barry Eichengreen points out in Hall of Mirrors (2015),



An administration and a president convinced of the merits of a larger stimulus could have campaigned for it. Obama could have invested the political capital he possessed as a result of his recent electoral victory. He could have appealed to GOP senators from swing states like Maine and Pennsylvania. Going over the heads of Congress, he could have appealed to the public. But Obama’s instinct was to weigh the options, not to campaign for his program. It was to compromise, not confront.



Abandoning the Foreclosed

Obama’s shortcomings on the employment front were paralleled by his failure to bring relief to the millions of households that had been reduced to bankruptcy or near-bankruptcy by the collapse of the housing bubble created by the banks.

Despite appeals from all quarters that the government had to step in to help homeowners in crisis by having the banks write down their mortgages, Obama and his crew chose to focus only on bailing out the banks and refrain from doing anything that would have prevented them from returning quickly to profitability.

So little was done to help four million homeowners avoid foreclosure that even the normally restrained National Journal called Obama’s response to the housing crisis “tepid, half-hearted, and conflicted … a disastrous approach that did little for a market in free fall or for the millions of Americans still underwater and facing foreclosure”.

Like Florida, another competitive state that flipped from the Democrats to Trump’s side, the Rust Belt was littered with abandoned or foreclosed houses, their dispossessed owners burning with resentment at an administration in which they’d initially placed hopes for relief.

The Regulators Regulated

Perhaps the signature debacle of the Obama administration was its complete failure to discipline and regulate the banks whose managers the president had warned at the beginning of his first term to submit peaceably to tighter regulation. “My administration is the only thing that stands between you and the pitchforks”, he cautioned.

Yet eight years after the shenanigans of the big banks nearly brought the economy to its knees, no senior Wall Street executive has been jailed for the myriad of white collar crimes connected with the trade in subprime mortgage and derivatives.

In fact, the salaries of top bank executives have continued their unrestrained upward climb, with the top chief executives of the twenty leading banks pocketing nearly $800 million in bonuses owing to tax loopholes, according to the Institute for Policy Studies, even though the stocks of their companies remained at pre-crisis levels. Leading the pack in total pay packages (salary plus bonuses plus stock options) were two CEOs that helped bring about the 2007 crash: Jamie Dimon of JP Morgan, who made $27.6 million in 2015, and Lloyd Blankfein of Goldman Sachs, who awarded himself $23.4 million.

When Obama signed his administration’s comprehensive financial reform package, the so-called Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, he said, “The American people will never be asked again to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts. Period.” Yet assuring the big banks that they were too big to fail was precisely what the legislation did by declaring that every financial organization worth more than $50 billion was “systemically important”.

Derivatives, the financial instruments that investment magnate Warren Buffet had called “weapons of mass destruction”, were not banned, as many reformers had advocated. Instead of prohibiting banks from using depositors’ money to trade on the banks’ own accounts, Dodd Frank allowed it. Practically all the changes that reform groups had proposed to avert another financial crisis were, in the words of Cornell’s Jonathan Kirshner, “watered down (or at least waterboarded into submission) by a cascade of exceptions, exemptions, qualifications, and vague language”.

Not surprisingly, concentration of financial assets increased after 2009, with the four largest banks owning assets that now come to fifty percent of the entire country’s $18.6 trillion GDP.

When in the weeks before the elections, Wells Fargo – headed by a CEO, John Stumpf, who made over $19 million in 2015 – was revealed to have fabricated millions of accounts in the names of their depositors (possibly including mine) without their knowing it, this could only be interpreted on the ground as a result of the administration’s coddling of Wall Street and created tremendous skepticism with Hillary Clinton’s promise to “get tough” with the banks if elected.

Dead End Vision

A vision of a better future is what voters expect of their leaders.

To the people of the Rust Belt that had been devastated by the export of their jobs to China and other low-wage enclaves, the vision that Obama gave them of their future as he entered his second term was more alarming than inspiring. This was the Trans-Pacific Partnership (“TPP”), another free trade agreement that they realized would complete the deindustrialization of their region. Even Hillary Clinton realized that this was one Obama initiative it would have been suicidal to support. But turning her back on a trade deal that she had aggressively supported as secretary of state was instead seen as cynical and opportunistic.

Clinton had her share of problems, but they weren’t enough to kill her chances in the elections. What really sunk her was her running on the economic legacy of Obama, which was one of unremitting failure for working people. Distancing herself from that legacy instead of defending it would probably have been the better strategy.

During the 1992 elections, her husband’s advisers ran a disciplined campaign on the theme “It’s the economy, stupid”. It was an advice she failed to follow. For all Trump’s bizarre flamboyance, Clinton’s demagogical opponent kept on message, at least as far as the Rust Belt was concerned, and that made all the difference.

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US Wealth Inequality


Wealth inequality can be described as the unequal distribution of assets within a population. The United States exhibits wider disparities of wealth between rich and poor than any other major developed nation.

Defining Wealth

We equate wealth with “net worth”, the sum total of your assets minus liabilities. Assets can include everything from an owned personal residence and cash in savings accounts to investments in stocks and bonds, real estate, and retirement accounts. Liabilities cover what a household owes: a car loan, credit card balance, student loan, mortgage, or any other bill yet to be paid.

In the United States, wealth inequality runs even more pronounced than income inequality

Household Wealth

Source: Congressional Budget Office, “Trends in Family Wealth, 1989-2013”, August 2016

Over the past quarter of a century, only America’s most affluent families have added to their net worth.

Source: Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data, Emmanuel Saez and Gabriel Zucman, August 2015

Over the past century, the share of America’s wealth held by the nation’s wealthiest has changed markedly. That share peaked in the late 1920s, right before the Great Depression, then fell by more than half over the next three decades. But the equalizing trends of the mid twentieth century have now been almost completely undone. At the top of the American economic summit, the richest of the nation’s rich now hold as large a wealth share as they did in the 1920s.

Source: Distribution of Household Wealth in the U.S.: 2000 to 2011, US Census Bureau, August 2014

The 21st century has not been kind to average American families. The net worth – assets minus debts – of most US households fell between 2000 and 2011. Only the top two quintiles of the nation’s wealth distribution saw a net increase in median net worth over those years.

Source: Household Wealth Trends in the United States, 1962-2013: What Happened over the Great Recession?, Edward N. Wolff, December 2014

The rich don’t just have more wealth than everyone else. The bulk of their wealth comes from different – and more lucrative – asset sources. America’s top one percent, for instance, holds nearly half the national wealth invested in stocks and mutual funds. Most of the wealth of Americans in the bottom ninety percent comes from their principal residences, the asset category that took the biggest hit during the Great Recession. These Americans also hold almost three-quarters of America’s debt.

The Forbes 400

Source: Combined Net Worth, Forbes 400, 1982-2015

The most visible indicator of wealth inequality in America today may be the Forbes magazine list of the nation’s 400 richest. In 1982, the “poorest” American listed on the first annual Forbes magazine list of America’s richest 400 had a net worth of $80 million. The average member of that first list had a net worth of $230 million. In 2015, rich Americans needed net worth of $1.7 billion to enter the Forbes 400, and the average member held a net $5.8 billion, over ten times the 1982 average after adjusting for inflation.

Source: Combined Net Worth, Forbes 400, 1982-2015

Inequality is skyrocketing even within the Forbes 400 list of America’s richest. The net worth of the richest member of the Forbes 400 has soared from $2 billion in 1982 to $76 billion in 2015, far outpacing the gains at either the Forbes 400 entry point or average.

The Racial Wealth Divide

Source: Institute for Policy Studies, Billionaire Bonanza: The Forbes 400 and the Rest of Us, December 2015

The billionaires who make up the Forbes 400 list of richest Americans now have as much wealth as all African-American households, plus one-third of America’s Latino population, combined. In other words, just 400 extremely wealthy individuals have as much wealth as 16 million African-American households and 5 million Latino households.

Source: Pew Research Center analysis of Federal Reserve Survey of Consumer Finances data, December 2014

The Great Recession deepened the longstanding racial and ethnic wealth divide in the United States. The typical white family held a net worth six times greater than the typical black family at the end of the twentieth century. That gap has now doubled. The wealth gap between white and Hispanic households has widened as well.

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A Masterpiece of Biography …

… and a Mesmerizing Detective Story

by Douglas (November 17 2016)

Program Note: Lew has interviewed author Peter Janney for the podcast which will be on LRC this weekend, November 19~20.

Mary’s Mosaic: The CIA Conspiracy to Murder John F Kennedy, Mary Pinchot Meyer, and Their Vision for World Peace (2013) by Peter Janney is several things at once: an insightful and sensitive biography of both Mary Meyer and her one-time husband, CIA propaganda specialist Cord Meyer; a murder mystery; a trial drama; an expose of secret knowledge and cover-ups inside the Washington DC Beltway during the 1950s and 1960s; and of course, a love story about the late-developing relationship between President John F Kennedy and Mary Pinchot Meyer, whom he had first met at an Ivy League prep school dance when she was only fifteen years old. Their paths had crossed briefly once again in the Spring of 1945, at the founding conference of the United Nations in San Francisco. (Mary, her new husband Cord Meyer, and John F Kennedy all attended the conference as journalists reporting on the events there, at the birth of the United Nations.)

One of the fascinating aspects of this well-researched book is how it traces the evolution and personal development of Mary Pinchot Meyer, Cord Meyer, and John F Kennedy. As Cord Meyer – a scarred war hero who was once an idealist and a pacifist, and who aggressively lobbied for a united world government following World War Two – became a disillusioned cynic and was subverted to the “dark side” by Allen Dulles of the CIA, his all-consuming commitment to the Cold War (and his abandonment of his former idealism) slowly killed his marriage to Mary Pinchot. Mary remained an idealist and an independent thinker, and it was this very independent and unconventional woman whose orbit finally intersected with that of President John F Kennedy again late in 1961, about two years before his assassination.

Janney convincingly documents how their relationship became much more than a series of mere sexual trysts – it became a personal and political alliance of two people who had become thoroughly convinced of the insanity of war between nation states in the Nuclear Age, and who were both determined to do something about it. Jack Kennedy, already sickened by war and skeptical about the wisdom of senior military officers because of his World War Two experiences, had become even more skeptical about the desire of many to seek simplistic, military solutions to complex international problems following the bad advice he received from the Joint Chiefs of Staff about the Bay of Pigs and Laos in 1961. After the searing crucible of the Cuban Missile Crisis in the fall of 1962, JFK embarked upon a program of moral action not only in civil rights but undertook bold efforts to begin to end the Cold War; to commence a withdrawal from Vietnam which would have been completed by the end of 1965; and behind the backs of the Pentagon and the CIA, embarked upon what he thought was a clandestine rapprochement with Fidel Castro’s Cuba. Mary Pinchot Meyer, who had ever been critical and distrustful of the CIA, became a natural ally of President Kennedy’s throughout 1963 as he moved to curb the unbridled power of the Agency and defuse the Cold War. (She was present at the “Peace Speech” at American University on June 10 1963, and Jackie Kennedy was not.) One of Janney’s most convincing sources about the nature of the relationship between Mary Meyer and Jack Kennedy was an extremely well-placed official with intimate knowledge of JFK’s daily activities and thinking: Kennedy’s Presidential Appointments Secretary, Kenneth O’Donnell. Janney used O’Donnell’s oral history interview with the late author Leo Damore, recorded years ago shortly before O’Donnell’s death, as one of the foundations for his book.

For those who revel in study of the Cold War culture in Washington in this era, the book is full of well-documented revelations about Phil and Katherine Graham of the Washington Post; James Jesus Angleton (the Head of CIA Counterintelligence), who was godfather to the children of Cord and Mary Meyer; and Ben Bradlee, editor of the Washington Post during the Watergate era (who is exposed in the book as one of the CIA’s major media assets). In my view, knowing that Bradlee was in the CIA’s pocket helps explain why the Washington Post was so successful in taking down Richard Nixon following the Watergate break-in. Nixon had used his Chief of Staff, Haldemann, to attempt to get the CIA to “warn off” the FBI in its investigation of the Watergate break-in and the “plumbers”. Nixon instructed Haldeman to threaten the CIA (Richard Helms) with exposure of its involvement in the JFK assassination, as an incentive for the Agency to cooperate with him. This “hardball” leverage failed, and Bradlee was allowed (and perhaps encouraged) to take down Nixon. He acted as the CIA wished in the Watergate matter.

Unaccountably, Bradlee never employed the considerable investigative resources of the Post to look into the Kennedy assassination … well, perhaps that is not so “unaccountable” after all, now that we know he had been a CIA asset since the early 1950s, a part of the Agency’s remarkably successful penetration and control of foreign and domestic media. As Janney reveals, Cord Meyer (Mary’s husband from 1945 until the late 1950s) was in charge of that CIA program of media penetration and propaganda, and Ben Bradlee was married to Mary Pinchot’s sister, Toni. The proximity of these relationships – between Cord Meyer, James Angleton, and Bradlee – make it easy to believe that Bradlee’s links with the CIA, that began in the early 1950s, continued into the 1960s and early 1970s when he was in powerful positions at Newsweek and the Washington Post.

Peter Janney’s own father, a World War Two Naval aviator and a recipient of the Navy Cross, was also a CIA man, and Peter grew up amidst the CIA culture in Washington. Mary Meyer’s son Michael was his best childhood friend. He knew Mary Meyer as his best friend’s mother. He was therefore perfectly placed to write this book, for his own family had frequent social contacts with Cord and Mary Meyer, James Angleton, Richard Helms, Tracy Barnes, Desmond FitzGerald, and William Colby. Janney’s knowledge of the CIA Cold War culture in our nation’s capital in the 1950s and 1960s is very well-informed, on a personal level.

Janney compellingly relates how the DC metropolitan police and the US Justice Department attempted to railroad an innocent black man, Ray Crump, for the mysterious murder of Mary Meyer in October of 1964, just three weeks after the Warren Report was issued. Due to the heroic efforts of African American female attorney Dovey Roundtree, Janney explains how against all odds, Crump was acquitted. Peter Janney reveals the likely motive for her murder – she was about to publicly oppose the sham conclusions of the Warren Report as a fraud. Furthermore, she had kept a private diary which presumably recorded details of her relationship with President Kennedy (and perhaps even of affairs of state). In October of 1964, she was literally “the woman who knew too much”. This book reveals the numerous lies and falsehoods told about her diary (and its disposition) by Ben Bradlee, James Jesus Angleton, and others, in a way not adequately covered by previous articles and books. The media in this country, misled by the CIA and by former acquaintances of Meyer’s who had much to hide, has consistently distorted the true story of what likely happened to her diary, and Peter Janney lays all of this out in a way that anyone can understand.

Peter Janney also solves the mystery of her murder 48 years ago, in as convincing a fashion as one can, so many years later. Many have asked, “If Ray Crump did not kill Mary Meyer, then who did?” This book answers that question. (I will not provide any spoilers here.)

So purchase a copy of this book today. Extensively footnoted and persuasively written, it is the best account in print about the life and death of Mary Meyer, easily eclipsing the sole biography previously written about her by Nina Burleigh. Peter Janney has courageously finished the investigative journey into her life and death begun by the late Leo Damore, and briefly resumed (and then abandoned) by John H Davis. Mary’s Mosaic is part film noir thriller, part biography, and also provides a remarkably frank view of the Cold War culture in Washington, and the dark side of the national security state. It belongs on the bookshelf of every Cold War historian, and everyone who is interested in President Kennedy’s assassination.

Reprinted from

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