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Generation Wealth: How the Modern World Fell in Love With Money

Linked by Paul Ciano on November 8, 2018

Rupert Neate, The Guardian:

Greenfield introduces us to characters all motivated by the accumulation of wealth. “No matter how much people had, they still wanted more,” Greenfield says of her subjects. We meet Florian Homm, a hedge fund manager living in self-imposed exile in Germany to avoid extradition to the US where he has been sentenced to 225 years in jail. Smoking cigars and dripping in gold, Homm, who became known as “the antichrist of finance” for ripping off his investors for hundreds of millions of dollars, tells Greenfield that morality changed in the 80s. “The value system changed completely. It wasn’t about who you are, but about what you are worth… Morals are completely non-productive in that value system.”

As his hedge fund was imploding during the financial crisis of 2008, Homm, now 58, fled the €5m Majorcan villa he shared with a 27-year-old Russian lingerie model. With $500,000 stashed in his underwear and a humidor in hand, Homm boarded a plane to Colombia and disappeared for five years. We learn that he used his fortune to buy his son, then 15, the services of a Dutch prostitute. Homm was later arrested at the Uffizi Gallery in Florence.

One of the photos that best sums up Greenfield’s work is of the DJ, rapper and producer Lil Jon flashing a smile showing $50,000 worth of diamond and platinum dental work. There’s also the former porn star Kacey Jordan, who received $30,000 to attend a sex party at Charlie Sheen’s home. Jordan tells Greenfield of seeking greater wealth through extreme sex, which may have made her temporarily wealthier but didn’t make her happy. She made numerous suicide attempts, and ends the film in the same dead-end job she had before starting porn.

Then there’s Eden Wood, six, a beauty pageant princess and star of reality TV show Toddlers & Tiaras, who tells Greenfield “My favourite princess is me” and says beauty means “that I get money, and I’ll be a superstar.”

The stories Greenfield tells about rich families detached from the world around them, living in bubbles separated from reality by armies of nannies and household staff, chime with my own experiences covering the super-rich as wealth correspondent for the Observer and the Guardian. From Knightsbridge to Monaco, the Upper West Side and the Hamptons, the wealthiest people in society are richer than they’ve ever been before. More of them have five, six, seven or even a dozen homes in the world’s most desirable locations and it is not unusual for them to fly their nannies, tutors and security details between them on private jets. Their houses may cost as much as the £135m a Ukrainian billionaire paid for a penthouse in One Hyde Park, but that doesn’t mean they’ll spend much time there.

A growing number of academics warn that the widening gulf between the richest 1% and everyone else could lead to a backlash. The richest 0.1% of the world’s population has increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980, according to the World Inequality Report. The report, by the French economist Thomas Piketty and 100 other researchers, also found that the richest 1% of the global population “captured” 27% of the world’s wealth growth between 1980 and 2016. Piketty warns that inequality has ballooned to “extreme levels” in many countries, and will only get worse unless governments take co-ordinated action to increase taxes and prevent tax avoidance.

A four-storey, nine-bedroom house complete with cinema, indoor swimming pool and Japanese garden sold for £51m in 2015 to an offshore company. The stamp duty alone set back the unknown buyer £7.6m. The owner is paying £220,000 a year in extra tax in order to keep their identity a secret.

“The photos are evidence of a sea change in our values over the last 25 years,” she says. “I felt like we had gone from the American dream of opportunity for all to a desire for ever more wealth, in the currency of money, fame, beauty or youth.” She says it’s not just an issue that effects the wealthy, but everyone in society. “We’re all complicit in generation wealth.”

Greenfield interviewed several experts for the film, but just one survived the cut. Former New York Times journalist and leftwing activist Chris Hedges is quoted as saying “Wealth is whatever gives us value” and warns that “Societies accrue their greatest wealth at the moment they face death.” This last remark might trouble Americans in particular: last year Professor Philip Alston, United Nations special rapporteur on extreme poverty, made a statement accusing Donald Trump and the Republican party of consciously distorting the shape of American society in a “bid to become the most unequal society in the world”.

Alston, who acts as a watchdog on extreme poverty, said Trump’s administration had passed tax laws that “overwhelmingly benefitted the wealthy and worsened inequality”. He said Trump’s policies “seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege”.

But Greenfield says the chasm between rich and poor was widening well before the reality TV star’s 2016 election. “The American dream – that everyone has equal opportunity – became a fiction long before Trump,” she says. “Americans don’t hate the rich, as they imagine they could become the rich. They don’t want high taxes as they think they could become rich and won’t want to pay them. But what they dream of is an increasingly unbelievable fantasy.”

She says that while examining her photos it became clear to her that “We have left behind the American dream of my dad’s generation where there was the possibility of social mobility and the belief that anyone could make it. The things that were valued then – discipline, hard work and frugality – are not so important now. We have a culture that prizes celebrity, bling and narcissism.” Trump, she says, “is the apotheosis of generation wealth. With Trump you have wealth and celebrity achieving the ultimate goal. Trump is the natural evolution of the values of our culture.”

The children Greenfield met were sometimes more aware of the potential damage created by free flowing cash than their parents. She recalls a 13-year-old called Adam who told her: “Money ruins kids, money has ruined me”.

Numerous official reports detail the widening gap between rich and poor. UBS, the Swiss bank which prides itself on advising more uber-wealthy families than any other bank, published research showing that the super-rich hold the greatest concentration of wealth since the time of the Carnegies, Rockefellers and Vanderbilts at the turn of the 20th century. There are now 1,542 billionaires across the world, more than ever before. The richest 500 people alive increased their wealth by 23% last year, taking their combined fortunes to $5.3tn – more than twice the gross domestic product of the UK.

Josef Stadler, the lead author of UBS’s report, says his billionaire clients are aware of the widening gulf between rich and poor and fear that hard-pressed people might rise up and take direct action. “We’re at an inflection point,” he says. “Wealth concentration is as high as in 1905, this is something billionaires are concerned about. The question is, to what extent is that sustainable and at what point will society intervene and strike back?”

Looking back on her work, Greenfield recalls being startled by ostentatious displays of wealth but says what might have been shocking then is day-to-day reality now. In her first few days visiting Crossroads, three boys asked her what she was doing by the school gates every day. When she told them she was working on a documentary about growing up in LA, they told her it was “all about money” and pulled cash out of their pockets, posing for the camera.

“It wasn’t until I developed the film that I saw that these 13-year-olds were waving $100 bills.”

Paul Ciano

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