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What Does Jeff Bezos' $165 Million House Purchase Tell Us About Thomas Piketty's Theory of Hidden Old Money?
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As I’ve often mentioned, one of my favorite perhaps crackpot but also perhaps legit theories is French leftist economist Thomas Piketty’s claim that his famous equation r > g proves that the Forbes Magazine lists of billionaires have to be wrong because there must be far more old money billionaires, while the Forbes lists are dominated by fairly recent wealth. Piketty suspects there are vast hidden fortunes passed down through the generations that Forbes isn’t finding.

Even though Piketty’s book Capital in the 21st Century was a huge bestseller, few else seemed to pay much attention to the most glamorous and intriguing idea in the whole book. I, however, immediately started thinking about how we could find this wealth. For example, what about using Google Earth to look for evidence of palatial estates? For example, golf courses are instantly recognizable from the air, so personal golf courses are readily visible on Google.

Here’s a NYT article on Jeff Bezos spending $165 million on a Beverly Hills estate plus nearby 9 digit properties that’s relevant to the Piketty Theory: just about everybody involved in owning these properties is famous, most track their fortunes back no further than the 20th Century, backyard golf courses seem to be a dying breed, and, by implication, only trashy Russian oligarchs really like all the steel and glass boxes that have been built on spec in the Hollywood Hills in recent years.

Jeff Bezos Buying $165 Million Estate, a California Record

The Amazon leader reached a deal for the Warner Estate in Beverly Hills with David Geffen, who has owned it since 1990.

By Candace Jackson, Feb. 14, 2020

The national housing market has cooled, but in Los Angeles the ultrarich are still shattering price records. An heiress to the Formula One racing empire sold her home for $119.75 million last July. In December, Lachlan Murdoch paid $150 million for a home in Bel Air.

The latest buyer at the top: Jeff Bezos, the Amazon chief and world’s richest person.

Setting a new high for a home sold in California, Mr. Bezos is paying $165 million for a Beverly Hills estate owned by David Geffen, the media mogul and co-founder of DreamWorks, according to two people familiar with the purchase.

That wasn’t all. In a separate transaction, Bezos Expeditions, which oversees The Washington Post and Mr. Bezos’ charitable foundation, is buying 120 undeveloped acres in Beverly Hills for $90 million, the two people said. The land was put on the market for $150 million in 2018 by the estate of Paul Allen, the Microsoft co-founder, who died that year….

The superrich are spending huge amounts for some of California’s premier properties. Mr. Murdoch, chief executive of the Fox Corporation, bought Chartwell, which TV viewers of a certain age may remember as the Clampetts’ home in “The Beverly Hillbillies.” Petra Ecclestone, whose father, Bernie Ecclestone, ran Formula One for more than 40 years, sold the Manor. The television producer Aaron Spelling had built the mansion, in the city’s Holmby Hills neighborhood, in 1988.

For Mr. Bezos, it was the Warner Estate, which was designed in the 1930s for Jack Warner, the president of the Warner Bros. film studio. The roughly 13,000-square-foot home is considered one of the premier mansions built during Hollywood’s golden era.

… The Georgian Revival-style estate was designed for hosting the Warners’ elaborate parties, with guests like Albert Einstein and Howard Hughes.

The property also included a nine-hole golf course, which Mr. Geffen removed when he renovated the grounds, Mr. Hyland said in an interview.

David Geffen doesn’t like golf. I wonder why?

A home next door also had a nine-hole course, allowing the Warners and their neighbors to play 18 holes right in the middle of Beverly Hills.

That was the Harold Lloyd Estate, built by the silent movie comedy star. It’s now owned by financier Ron Burkle, who likes to buy and restore houses with a lot of entertainment industry history, such as Bob Hope’s houses in Toluca Lake and Palm Springs.

Both backyard golf courses are no longer visible on aerial photos. My estimate is that the the number of personal golf courses in Southern California is around only a half dozen — e.g., Oracle founder Larry Ellison is in the news for announcing a Trump fundraiser at his personal golf course in the Palm Springs area. There’s one out in some canyons near Zuma Beach whose owner is unknown to me, but most of the others were built by well-known individuals: Bob Hope, Walter Annenberg, Jerry Perenchio and the like.

The Warner Estate, whose sale to Mr. Bezos was reported earlier by The Wall Street Journal, stands out from the speculatively built glass-box homes that have flooded the local market…. “Everybody today would like to see classical architecture,” Mr. Hyland said. “They want substance. They want acreage.” He said he and his business partner, Rick Hilton, had the most expensive current listing in the area, the $225 million Conrad Hilton estate, which is on eight and a half acres in Bel Air.

So not much evidence for Hidden Old Money from the Beverly Hills real estate market. But where does the Hidden Old Money congregate? And let’s see the aerial photos!

By the way, showing the utility of aerial photos for identifying the rich, another Beverly Hills house has a backyard full size basketball court decked out in the colors of the Detroit Pistons. So I looked up the owner of the Pistons. He’s an interesting first generation self-made man, a Greek-Lebanese Catholic born Tewfiq Georgious in Nazareth who grew up in Michigan, then made it big in business in Los Angeles.

 
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  1. One thing Bezos has in common with other big money is that his real-estate portfolio represents a trivial portion of his total wealth. And one thing this means is that you can’t find the real money with Google Earth. Real money is very, very skilful at hiding.

  2. oh God!

    stop being such a fag steve.

    there’s still time to change the road you’re on.

    • Replies: @MEH 0910
  3. J.Ross says:

    For years, the talking heads would not shut up about how programmatic shilling on social media was an existential threat to our democracy. Turns out it’s okay when Mike Bloomberg does it.
    https://www.politico.com/amp/news/2020/02/14/bloomberg-meme-changes-facebook-instagram-115333
    “Branded content” from politicians (a deceptive phrasing, because this isn’t about marked ads with an “I endorse this” bit at the end, this is about shills pretending to not be shills), previously banned by default, bought into legality by Mike Bloomberg.

    • Replies: @SFG
    , @Anonymous
  4. It may be true that r > g; but it is probably also true that 0.6 r < g.

    In other words, it is possible for return on investment to exceed growth only if you do not pay tax.

    The possibilities for tax avoidance increased when finance was globalized, with wealth held through a web of offshore companies and trusts, in multiple jurisdictions. I suspect that these tricks were widely used only from the late 20th Century.

    • Replies: @Steve Sailer
  5. Piketty suspects there are vast hidden fortunes passed down through the generations that Forbes isn’t finding. A. … I, however, immediately started thinking about how we could find this wealth.

    Maybe you can approach it from the other direction, timewise: find super-rich people from the distant past and trace their eldest-son lineage to today, see if their descendants are top-out-of-sight rich guys?

    • Replies: @Steve Sailer
    , @Art Deco
  6. @Daniel Williams

    A few years ago there were still four people named Hearst on the Forbes 400, or 1%. Their fortune traces back to the Nevada silver strike of 1859, along with a lot of subsequent events, such as major mining discoveries at the end of the 19th Century, plus a whole lot of media business fictionalized in Citizen Kane.

    • Replies: @Yojimbo/Zatoichi
  7. SFG says:
    @J.Ross

    In the writer’s defense, the memes were kind of dumb. “Which meatball has been replaced with Bloomberg’s face?”

  8. @James N. Kennett

    For example, Microsoft cut its tax bill by something like >60% in one year about a decade ago by newly declaring it made most of its profits in Puerto Rico, Israel, and Singapore, while operating a money-losing R&D facility in Redmond, Washington.

  9. Lot says:

    These old money types often don’t know their own wealth. Savvy granpa set up a web of trusts and shelters and holdings companies. Granddaughter is happy as long as the checks roll in.

    Is a Bloomberg joke stolen from /pol/ on topic? I lol’d loudly.

    [MORE]

    • Replies: @Redneck farmer
  10. inertial says:

    You are making an implicit assumption that Hidden Old Money rich have the same tastes as American nouveau riche. In particular, that they’d like to live in Beverly Hills and own a golf course. I suspect that true Old Money, if they exist, would copy old European aristocracy. They wouldn’t be caught dead in something so vulgar as USA; instead they dwell somewhere in the Old World. Perhaps in a small chateau in French countryside. Nor would they own a golf course, unless they were of an actual Scott extraction. They might own a horse farm instead, or a vineyard.

  11. Lot says:
    @Steve Sailer

    That’s every multinational, no need to single out Ol’ Mister Softee.

    Ireland is magically where all the big multinationals make their money in Europe, not Germany and France.

    The biggest “trick” is to give all a company’s IP to a subsidiary in a low tax area. Then the rest of the company spends all its profits on “licensing” the IP.

    • Agree: Almost Missouri
    • Replies: @Hypnotoad666
  12. Art Deco says:
    @Daniel Williams

    When John D. Rockefeller died in 1937, his share of the country’s assets approximated the share currently held by Jeff Bezos, Bill Gates, and Warren Buffett in sum. Not too long ago, I saw a published guess that his descendants’ net worth sums to $11 bn, or < 4% of what is held by Messrs. Bezos, Gates, and Buffett right now. John D. Rockefeller has roughly 150 living descendants. None of them run anything of institutional importance, nor have they since David Rockefeller retired as president of the Chase Manhattan Bank.

    • Replies: @Dan Hayes
    , @Hypnotoad666
  13. ‘… So I looked up the owner of the Pistons. He’s an interesting first generation self-made man, a Greek-Lebanese Catholic born Tewfiq Georgious in Nazareth who grew up in Michigan, then made it big in business in Los Angeles.’

    That is to say, a Palestinian?

  14. Dave Pinsen says: • Website

    David Geffen doesn’t like golf. I wonder why?

    I’m imagining this being said in Donald Trump’s voice, for maximum effect.

    Piketty seems obviously wrong in this theory. The wealthiest people in the world have the bulk of their money in intangibles (such as Jeff Bezos’s Amazon shares), which are scrupulously accounted for. I’m sure there are some old money rich people who are worth more than common estimates for them, but no way any of them are as rich as a Bezos or a Bloomberg.

    • Replies: @Lot
    , @Pontius
    , @cynthia curran
  15. @Steve Sailer

    Hearst Castle, while awesomely cool looking and built in classical architectural style, had to be sold by William Randolph Hearst estate to the state of CA because the Hearst descendants could no longer maintain its operation on a daily basis. If Hearst Castle were to appear on the market for sale, wouldn’t that make it one of the most expensive private homes in CA, if not in the US? Google says it sits on 250k acres. Not sure if it has a golf course, but it does have the worlds largest private zoo.

    • Replies: @Mr McKenna
    , @slumber_j
  16. If he’s exactly right, we’ll never know. That’s the point, it’s hidden. It would exist mostly as numbers in a computer, or gold, art, jewels, etc. Maybe in accounts of dozens of fake identities. Land holdings that are vast but assessed very low because corruption. Or held in environmental trusts, etc. If these are people who have been rich for 400 years, they aren’t about to get caught by a guy who writes airport books.

    On topic of Bezos’ house. Crazy Days And Nights says that Geffen is one of the worst of the worst in the Hollywood pedo/rape/exploit network. So… I bet that house has a LOT of history since he bought it in 1990.

    I think he’s right, KIND OF, there is a lot more old-ish money hanging around that people would never suspect. I know for a fact there is a bunch of 1800s money floating around where I live. But its not completely unknown to authorities. There is not mega-Forbes List money that is totally secret.

    • Agree: Bostonvegas
    • Replies: @Mr McKenna
  17. @inertial

    The Buckley family relocated to Uruguay sometime after William F Buckley’s economic and cultural ideas became dominant here in America (seems like a weird time to leave, right after everything you advocated for came true, but, hey). According to some prepper video I watched in 2012 George W Bush and Dick Cheney own like 10 million acres of Paraguay each. If I had a fortune and didn’t want to be bothered, South America seems like the place to go.

  18. dvorak says:

    There’s one out in some canyons near Zuma Beach whose owner is unknown to me

    Give us the coordinates and we can all figure it out. It’ll be like HWNDU.

    • Agree: MikeatMikedotMike
  19. inertial says:

    Of all gold in private hands, who has the most?

    Gold is not all that valuable right now, as Western society has agreed to value Silicon Valley shares, government debt, and other such intangibles more. In the future? Who knows.

    • Replies: @anon
  20. Dan Hayes says:
    @Art Deco

    In December 2013 there was a major railroad accident in the Bronx. The operating engineer responsible for the accident was surnamed Rockefeller. Yes, a not particularly wealthy member of THAT family!

  21. MEH 0910 says:
    @the maharaja of pukapoor is banned by unz

    Steve likes golf.

    David Geffen doesn’t like golf. I wonder why?

  22. @Steve Sailer

    Yeah, yeah, Elizabeth Warren is an affirmative action grifter and a virago, but with stunts like Microsoft ascribing its profits to Puerto Rico, Bill Gates building that half-billion-dollar virtue-signalling yacht that runs on fuel cells, and Elon Musk funding his extravagent consumption by borrowing against his stock holdings rather than selling stock, where he would still have to pay the low Trump Tax Cut capital gains, maybe she has a point?

    Yeah, yeah, the billions held by multi-billionaires is not spent on champaign and caviar because there is only so much champaign a person can drink and so many fish eggs a person can choke down, with the bulk of the wealth only held on paper in the form of shares of companies benefiting all of us who benefit from the convenience of online shopping (Bezos) or get a paycheck from an institution that keeps its records in a computer database (Ellison). I get that. I get that a Wealth Tax won’t soak the Big Guys as it will anyone nearing retirement who has two red cents that they can rub together.

    But that half a billion for that stupid yacht comes out of someplace, maybe my salary where my employer forks over the bucks so I can use Microsoft Office to do my work rather than, gosh forbid, Libre Office.

    So in my head I know that Warren, Sanders and all the rest are Communists, but in my heart, do I feel they are on to something? That I would vote for one of them if they would really put the fear of the Lord into some plutocrats instead of closing down domestic hydrocarbon fuel production so I would have to take the bus to work and open borders to drive down my pay?

    Am I missing something?

  23. If you spend any time on Tik Tok, it’s clear most wealth is in the hands of Arabs, who are surely among the most conspicuous consumers on earth.

  24. Piketty’s notion sounds a lot like the idea that there were hidden pre-revolutionary Russian fortunes languishing in European banks after the owners had been murdered or their descendents had lost the the account numbers. In fact someone eventually figured out that the aristocrats had patriotically repatriated their money at the beginning of WWI and never saw it again, a fact which I suspect weighs on the minds of some oligarchs today when they send their money to live somewhere nice.

    • Replies: @PetrOldSack
  25. @inertial

    Spot on – American money is almost entirely new, compared to the old money of Western Europe. One of my French chums is from a banking family that predates the Rothschilds by a century, and he lives in a (relatively) modest bastide near Agen. Another lives in a place that used to owned by the guy who organised candles for Louis XVI (better believe that’s a contract everyone wanted at the time!).

    The three coolest things about the first guy’s place are
    (1) that the toilet in the main bedroom of the main guest wing looks out a full-length window, straight over a very tall falaise (roughly a 150ft sheer cliff; the only counter-viewers will be birds of prey, who nest there, or people on the autoroute 15km away); and

    (2) there is a Wall Of Honour that contains financial instruments that the family bank has funded, some of which go back to the Tulipmania days. To get on the wall, the value of the instrument must have gone to zero during the working life of the family member responsible for its purchase;

    (3) the ‘good’ dining room is in a vaulted cavern that is reached by a tunnel from the main house, and which gives directly (and al fresco) onto the face of the falaise. The great^4-grandfather had the house-to-cavern tunnel excavated: he was obsessed with the troglodyte houses of the poor around Montsoreau in the Loire Valley – some of which were inhabited until the mid-20th century. The chateau at Montsoreau was built by their direct patrilinear ancestor, Jean (a.k.a. Jean ‘de Chambes‘) who was Chamberlain to two Charleses: the Mad/Beloved, and the Victorious/Well-Served.

    The family is no longer worth billions, but they move in those circles if required – usually because there’s some Grand Lodge Alpina (or Grand Orient) robes-and-chanting esoteric nonsense in which their great-forebears involved them ‘in perpetuum’.

    Having loads of (largely ill-gotten) wealth in Western Europe is used by the wealthy as license to do whacky-but-interesting thing, with one eyed firmly fixed on not being vulgar: the same thing in the New World results in tasteless, vulgar, garish displays that imply a deep psychological need to impress … a need that would seem wrought if observed in a needy teenage schoolgirl.

    Trump and Bezos are is the perfect embodiment of New World New Money: lots of gold leaf, and zero class or taste (and I say this as one who would take 90% of Euro-‘aristos’ à la lanterne).

    • Replies: @JMcG
    , @Old Palo Altan
  26. Anonymous[427] • Disclaimer says:
    @inertial

    Europe, particularly France, Germany, Austria, Italy and of course Switzerland, probably has a lot more old-old-old money of the type you are talking about than the USA, since the USA isn’t old-old-old itself and the really wealthy families rarely permanently emigrated. Why should they?

    Most countries do not tax people on money that is earned outside the country and stays outside the country. The US does and taxes are how you fail to become exponentially wealthy. You could argue that the primary purpose of US tax law since the Monster from Jekyll Island was to keep new people from becoming wealthy enough to challenge the transnational extant elite.

    Most US wealth is relatively nouveau, key word being relatively. Three to five generations is probably typical.

    But there are probably a few under the radar chunks in the US that are not talked about, and they well may stay that way for various reasons. I would probably sniff the hardest amongst aristocratic families in the South, and maybe the Pacific Northwest, because that Alaska money has to go somewhere besides Alaska. Then again, some may hide in plain sight right in the very heart of it, old New York.

    • Replies: @The Anti-Gnostic
  27. Anon7 says:

    Maybe look for third-world estates with an airstrip for private jets, almost unreachable by any other means. Perhaps with a small village nearby for servants, gardeners and handlers for horses or elephants or falcons. That’s exclusivity.

    Otherwise, it’s the number of properties, and their location around the world, providing optimal lifestyles across seasons. Islands are always good, because oceans make good walls.

    Are there exclusive hotels in the world’s financial centers, that are not on any websites or apps, that simply can’t be accessed without multigenerational connections? Maybe all you’d see is a heavily guarded entrance for limousines with blacked out side windows. No walk-ins from off the street.

    Besides, the rich care more about assets, not so much observable wealth. And they don’t need to be close to a job or office.

    • Replies: @Steve Sailer
  28. On the other hand, Los Angeles has always had a bit of a rap as a nouveau riche kind of place. Paul Fussell, in Class (copyright 1983), tags all of Southern California “(except perhaps for Pasadena)” as “socially disastrous” among the Uppers. Amusingly, he attributes dismal L.A.’s standing to its having been owned by the Spanish for so long, in contrast to the sturdy Anglo-Saxon redoubts of Newport, RI, Haddam, CT and Bar Harbor, ME.

    Fussell muses:

    [T]he question arises, “Where then may a member of the top classes live in this country?” New York first of all, of course. Chicago. San Francisco. Philadelphia. Baltimore. Boston. Perhaps Cleveland. And deep in the countryside of Connecticut, New York State, Virginia, North Carolina, Pennsylvania, and Massachusetts. That’s about it. It’s not considered good form to live in New Jersey, except in Bernardsville and perhaps Princeton, but any place in New Jersey beats Sunnyvale, Cypress, and Compton, California; Canton, Ohio; Reno, Nevada; Cheyenne, Wyoming; Albuquerque, New Mexico; Columbus, Georgia, and similar army towns; and Parma, Ohio, a city of 100,000 without a daily newspaper, bus system, hotel, or map of itself. Impossible also are Evergreen, Colorado, because John Hinckley came from there, and Dallas, because–among many other good reasons–Lee Harvey Oswald lived there. It is said that experts on the subject regard Las Vegas as “the world capital of tacky,” and I suppose you could get some idea of the height of your social class by your lack of familiarity with it. And Acapulco, as well?

    A lot’s changed since 1983 (Baltimore? Cleveland?), but Fussell’s list probably holds up to a large extent, if by pure inertia alone. Not that you won’t find Old Money here in L.A.–you just won’t find much of it in the Hills. I suspect it’s mostly in La Canada and San Marino to the east, and in Pacific Palisades to the west. Possibly also in Palos Verdes to the south, because (a) it’s expensive and incredibly inconvenient to get to, and (b) I’ve never heard of a single person who lives there.

  29. @Anon7

    “Are there exclusive hotels in the world’s financial centers, that are not on any websites or apps, that simply can’t be accessed without multigenerational connections? Maybe all you’d see is a heavily guarded entrance for limousines with blacked out side windows. No walk-ins from off the street.”

    Now you’re talking.

    I see a Dan Brown style bestseller in the works. Think how much money the Knights Templar must have by now…

    • Replies: @Lot
    , @Anon7
  30. Art Deco says:
    @Not My Economy

    You’ve been consulting the work of fantasists.

  31. Lot says:
    @Dave Pinsen

    There’s only one person as rich as Bezos and very few as Bloomberg. But Forbes certainly misses many mere billionaires. They even admit it with occasional additions of people who did not have any sudden fortune.

    The S&P 500 alone is worth 30 trillion. A billion just isn’t that much anymore!

  32. anon[667] • Disclaimer says:
    @inertial

    Of all gold in private hands, who has the most?

    Is the gold controlled by the Saudi royal family in “private hands” or held by a “government”?

  33. @Mr McKenna

    They say you should conservatively spend about 30% of your annual income on your house payment. By that metric, and at current mortgage interest rates, Bezos should be buying a house worth approximately $240 billion. So I applaud his frugality.

    • Agree: Lot
    • Replies: @Mr McKenna
    , @Svevlad
  34. Lot says:
    @Steve Sailer

    London especially has its clubs.

    But a proper billionaire has a condo or townhouse in Manhattan and London and wouldn’t need to rent. Or he can just borrow a buddy’s townhouse who isn’t using it, which is most of the time.

    IME guys with expensive houses they don’t rent out in other cities are pretty free about offering you the keys if you want to crash for a week.

  35. @Lot

    The biggest “trick” is to give all a company’s IP to a subsidiary in a low tax area. Then the rest of the company spends all its profits on “licensing” the IP.

    It’s amazing how much money you can make when you do business only with yourself.

  36. @Art Deco

    Regression to the mean is a bitch, especially if you are stuck with a family name that is a constant reminder of your own relative mediocrity.

    • Replies: @Anonymous
  37. Anonymous[245] • Disclaimer says:

    Some say — because the Rothschilds never declared bankruptcy or suffered any known major wipeouts (like Lehman bros) — that this is proof that the old fortune is intact and hidden to this day.

    But why can’t it be a case like the Rockefeller’s where you end up with hundreds of descendants — most all of them possessing average financial skills — and that’s all it takes to turn a very large fortune into a small one.

    • Replies: @LondonBob
  38. Pontius says:
    @Dave Pinsen

    I wonder how much the Rothschilds really are worth?

  39. What sort of rich person, having the option to live in France, Switzerland, Italy, or even Greek Islands, would care about Los Angeles? Harry and Meghan wouldn’t bother with that shithole. Of course you don’t see old money there. Even among the new rich, it’s mostly people who grew up, or made money in that region, and don’t know anything else.

  40. @Yojimbo/Zatoichi

    Trouble is, location is everything in real estate and while the coast there is fairly pleasant and scenic, it’s simply not near anything that matters. Would you want to live there full-time? So it becomes a vacation house, somewhat forlorn, which for most of us isn’t the right vibe for vacations.

    • Replies: @Muggles
  41. J says:
    @Not My Economy

    Buying land in the Third World is very bad investment. Property rights there are uncertain and the land produces nothing of value.

  42. @Mr McKenna

    Yep. Bezos paying $130 million for a house is like me buying a nice bicycle.

  43. Sean says:

    A lot of these fortunes are actually in foundations where the Gates of this world keep them safe from tax, yet under their control for philanthropy, which authority over the distribution of such largesse is a luxury few can afford. Bezos owns the Washington Post so he is high profile anyway, Sir James Goldsmith retired to Mexico where he build a giant domed palace on a huge rainforest estate. Whether Bezos manages to cheat death is uncertain, but Trump complains that Amazon, doesn’t pay sales tax on what it sells and the U.S. Postal Service loses money on every delivery for Amazon. and its customers avoid paying sales tax. Jeff Bezos would pay $9 billion a year in taxes under Sanders, $6 billion a year in taxes under Warren. Piketty is tendentious in his book.

    http://www.martin-van-creveld.com/rich-man-poor-man/
    In the words of The Economist, which in its issue of 28 November 2019 devoted a long and quite detailed article to the question, this is done –

    By focusing on gross, instead of net, income; by omitting all kinds of subsidies available only to certain groups such as the poor, the old, and the young [in my own country, Israel, this includes free dental treatment for children, a system that tends to favor Orthodox Jewish and Arabs families, which often have numerous young offspring, at the expense of secular Jewish ones]; ignoring the fact that the young and the poor are less likely to be married, with the result that their income only supports a single person rather than two or more; and a whole host of similar miscalculations, deliberate or not.

    Other oft-used methods include placing the income of self-employed people under the rubric of capital rather than that of wages, thus exaggerating the share of the former in GDP; assuming that the wealthy are more adept at tax evasion while minimizing the role of “black” work which, though all but unknown among the rich, often plays a considerable role in lower-class family finances; in developing countries, ignoring the role of transfer payments made by foreign workers abroad to their kin back at home; or simply taking, as one’s starting point, 1998, or 1970, or 1945, rather than the times when Henry Ford and John D. Rockefeller each sat on more inflation-adjusted wealth than Jeff Bezos does today.[…]
    I therefore found it more interesting to take up another volume, Walter Scheidel’s The Great Leveler (Princeton University Press, 2017). True, on Google.scholar it got just 315 citations as opposed to over 15,000 for Piketty’s. However, in terms of academic quality it will stand comparison with the latter; proof, if proof were needed, that people tend to review and read and buy what they think will reinforce what they already believe rather than that which may throw a spanner into the conventional wisdom of the age in which they live. […].
    To put it in the broadest possible way, starting at least 30-40,000 years ago the “natural” human condition seems to have been inequality, not equality. On the other hand, attempts to change that condition often counted their victims in the millions, and led to general impoverishment; even so, hardly ever did they last for very long. […]

    The conclusion Scheidel draws from all this is worthy of an Edmund Burke. If, like Piketty and his followers, what you hope to achieve is equality, tread softly: or else the cure, for as long as it lasts, may very well be worse than the disease.

  44. Anonymous[245] • Disclaimer says:

    DOWN WITH JORGENSEN

    Why?

    1/ This guy Jorgensen is lowlife. Much of his fortune (and Amazon’s stock price) is built on Chinese counterfeit goods. He’s a co-conspirator to massive fraud and intellectual property theft. There are entire shopping categories on Amazon filled with China knockoffs. If you, an American, have invented any sort of new widget (or any sort of popular product whatsoever), you can rest assured that it will be sold as a knock off on Amazon by Chinese fraudsters immediately. They and Jorgensen will get paid. You, the real seller, will not get paid.

    2/ This guy is a disgusting beta. He posts dick pics. And the women on the receiving end are not even hot. WTF.

    3/ This guy is an ethnic fraud. He uses the name Bezos like the mayor of NYC uses De Blasio — it’s a dumb diversity hoax. “See how fucking ethnic I am?”

    4/ This guy treats his employees like shit.

    The list goes on.

    He’s also a juicer supposedly. How else does an old guy get jacked. Steroids warp your judgment. Steroids probably played a role in him blowing way too much cash on this property deal. The equity markets are in an absurd bubble. He could’ve waited a year and gotten a large discount. But guys on steroids are not known for their patience.

    With each passing decade this jerk morphs into an even more repellant cartoon villain.

    • Replies: @Muggles
    , @LondonBob
  45. @Not My Economy

    A wag on this page says if you want to hustle for the Velvet Mafia you have to endure wearing lettermen jackets and getting yelled at. Sounds legit.

    https://www.datalounge.com/thread/6232942-what-happens-to-geffen-ex-boytoys-nafter-the-hit-the-expiration-date

  46. Lagertha says:

    ….that he does not care. He is the ultimate Troll of all trolls. Rule for anyone: always get the 30-year fixed mortgage – no matter if you can buy the house outright. Next year it could be worth nothing due to the games the bankers of the world play. Even if the house is 10+ million!

  47. Ah, now you reveal your true colors. An article blatantly extolling billionaires and contending without proof that they do not have hidden wealth. We know which side your bread is buttered on.

    Of course Piketty’s right. Only he underestimates.

  48. @Hypnotoad666

    Larry Ellison owns the Hawaiian island of Lanai.

  49. Not Raul says:

    Isn’t the old money in places like Long Island, rather than parts of the country that were much less developed before the golden spike?

  50. Anonymous[427] • Disclaimer says:
    @Hypnotoad666

    If you have a name that you yourself are not completely comfortable with, changing it is actually one of the basic steps to independent success, I am told. Jews do that a lot, and it isn’t to disguide their Jewishness, it gives them a certain confidence. Of the three men I know that have earned several million off their own bat, two of them changed their last name or at least its spelling.

    • Replies: @Hypnotoad666
  51. Anonymous[213] • Disclaimer says:

    If there is hidden old-money wealth, a lot of it could be in agricultural land that has not changed hands since the 19th or even 18th century.
    A branch of my family tree began getting ahead working with the America Fur Company in the early 19th century and were homesteading in Oregon’s Willamette Valley in the 1840s, moved into California with the Gold Rush and had acquired significant holdings within about 20 years and were prosperous enough by 1881 to build a large ranch house in what was called the Butterfat Palace style, the sort of place that would give Boris Karloff the willies on a dark and stormy night.
    I visit the old place from time to time, now only maintained by a care-taker as ranch residents prefer more modern accommodations. What struck me was not only how ornate everything was, cut-glass chandeliers and stained glass everywhere — custom-made depicting ranch scenes — and all the original oil paintings of ranch scenes as well as portraiture by artists such as Anna Richards Brewster, Paul Cornoyer, William Trost Richards and Thomas P. Barnett, but also the quality and type of woodwork, ornate and beautiful. The bedroom I normally stay in has a floor made of one single board, probably 14- or 15-feet wide. All the furnishings in the room were custom-made by local craftsmen specifically for that room; something true of all the rooms, I gather. Nothing imported, all American.

    [MORE]

    This one ranch consists of thousands of acres of grazing, timber and mining land (the family owns others in four states). At one time there were the equivalent of small villages to accommodate ranch workers and their families, with general store, livery, cookhouse (a type of restaurant that served everybody the same thing — no menu ordering), school, church, barns and warehouses, etc. Each one was a “wagon-haul” apart — the distance a team of horses pulling a loaded wagon could travel in a day, the distance varied by terrain. These are all abandoned now, and only a few still have buildings standing, these being used by current ranch hands, at least on a seasonal basis.
    Before World War II, there were probably a hundred people living on the ranch (hands and their families) compared to every one today. The reason is that work that was done in a vertically integrated fashion (to borrow a phrase from manufacturing) with full-time employees is now contracted out. So, for example, when it’s time to bring in the hay crop, big harvesters and their crews swarm in and do in a day or two what took scores of men a week or more to do in the olden times.
    Anyway, I digress. But speaking of the hay crop, this one ranch alone exported last year $36 million worth of alfalfa to China, the largest buyer, barely exceeding purchases by Japan, which used to be the top buyer. Third is S. Korea, followed by Taiwan, probably all together around $100 million in annual exports of hay. Then there are the other agricultural exports, cattle exports, timber and mineral exports … at a guess, perhaps totally a billion dollars a year. Gross, of course.
    So combined with the exports of of the other family-owned ranches … well, a lot of loot. Where does it go? I imagine county, state and federal taxes take a big chunk, maybe the biggest. Other than that, I don’t know. Certainly not on ostentatious consumption.
    The old dowager, who reined over the ranch I described, who passed away in 2008, drove a 1992 Buick Park Avenue Ultra — drove, not driven in. It’s not a beat-up car. Even a dozen years after her passing, it looks like it just came off the showroom floor. In fact, all the mechanical equipment, whether motor vehicles, farm implements, airplanes (Luscombes, Ercoupes, Stinsons, etc.; nowadays their jobs are performed by contracted helos or drones) are all kept in tip-top condition, even if they no longer used except perhaps occasionally. As a family visitor, you can pick out whatever you want to use and it will fire up right away. The last time I was there, I drove a Willys Jeepster — totally cool car — and it turned over instantly and ran beautifully.
    Anyway, to wrap this up, these ranches, owned by privately-held corporations or solely in family hands, probably generate billions of dollars worth of annual revenue, but nobody really pays attention to them, and, maybe, those billions aren’t that much compared to the wealth generated by the tech giants and Wall Street.
    Perhaps one priceless thing the ranches do is keep the land pristine and provide a haven for those few who do truly love living far from the madding crowd.

    Grazing lands:

    Here you can see the remains of an old wagon-haul road, long disused, as well as a still-used cattle pond made 150 years ago by damming a small creek.

    • Thanks: Not my economy
    • Replies: @Yojimbo/Zatoichi
  52. But where does the Hidden Old Money congregate? And let’s see the aerial photos!

    A ‘gentleman’s farm’ with an agricultural tax assessment and copious hacking trails would not be as easy to spot from the air—those can easily blend with equally pastoral conservation and commercial concerns. Similarly, (summer) houses on sailing coasts need not always be grand; many fit organically with the saltwater towns that have been there forever.

    • Replies: @Foreign Expert
  53. Anon[137] • Disclaimer says:

    Although Geffen made a pretty penny on the sale (over 100 million profit on something he paid around 47 million for when he bought it from Jack Warner’s widow), the guy who really impresses me in making a real estate killing is Jay Maisel.

    Maisel, a photographer, bought the Germania Bank building in New York City for $102,000 when it was in a declining neighborhood. He sold it just a few years ago for 55 million. Now that’s smart buying and selling. He wasn’t looking to make an investment, either. He just wanted a place to live and a studio to work in. He rented out a floor to Roy Lichtenstein for a while. There’s even a film about Maisel and the bank called Jay Myself. When Maisel sold out and left, he then moved into has been called the most expensive house in Brooklyn. That $102,000 was one heck of an investment.

    https://www.imdb.com/title/tt8890074/?ref_=fn_al_tt_1

    Geffen was originally unhappy with the Warner property and wasn’t enthusiastic about it. He bought it solely as an investment opportunity. From the photos I’ve seen of it, I can see why he didn’t care for it that much. The photos indicate the taste in decoration was sort of meh.

  54. Anon[137] • Disclaimer says:

    Bezos is more interested in location than house, frankly. He’s trying to impress people, not find a nice place to live. As late as 2017, he could have bought Wentworth House for a mere 7 million. It’s the largest private house in England, and that’s a heck of lot of house for the money. Now a trust has snapped it up.

    https://en.wikipedia.org/wiki/Wentworth_Woodhouse

    • Replies: @Steve Sailer
  55. JMcG says:
    @Kratoklastes

    Interesting comment; thank you. I do have to say that that thing that Bezos holds hands with as he swans around is horrifying. I’d rather bang a shoebox full of broken glass.

    • Replies: @Mr. Anon
  56. Bezos liberated a lot of that hidden old wealth with the AMZN IPO because r was greater than g.

  57. @Lot

    Notice, comrade, we don’t have trust-busting politicians anymore?;)

  58. @Inquiring Mind

    YES. You’re missing the fact that if there was a reasonable chance of such legislation passing, they wouldn’t introduce it.

  59. Svevlad says:
    @Hypnotoad666

    Duh, that’s only if you live in a country where the property rates are fucked.

    Eternal reminder that accepting mortgages as something completely normal is 101% mental illness. Hell no it’s not normal, that means that the market is bloated and needs to be ran into the ground.

    Until that, enjoy low owner occupancy, a moral crime.

  60. @Anon

    Wentworth House was owned by the Marquess of Rockingham, the Whig prime minister who was Edmund Burke’s boss. The Marquess had George Stubbs paint his horse Whistlejacket in what Paul Johnson considers the greatest horse painting of all time:

    • Replies: @KL
  61. KL says:
    @Steve Sailer

    UCLA Finance Ph.D. candidate Geoffrey Zheng just wrote about this in his job market paper “Wealth Share in the Long-Run”. IIRC, half the wealth of the richest Americans comes from new money, mostly tech entrepreneurs.

  62. Gatsby says:

    There are certainly many old money billionaires who aren’t on the Forbes list. Look in hotspots from generations past as opposed to Hollywood which is hot today…the estates on the North Shore of Long Island or in Newport Rhode Island will likely still be owned by families who made their money during the Gilded Age.

    • Replies: @Yojimbo/Zatoichi
  63. George says:

    Google maps is the wrong tool. You need a database of property titles and see how many Beverly Hills, Malibu, NYC, Miami, London properties can be linked to actual people not anonymous holding companies.

    Prime Minister Gorden ‘Golden’ Brown sold Britain’s gold reserves to a mysterious buyer. Someone out there has $19B of liquid assets.

    Between 1999 and 2002 Brown sold 60% of the UK’s gold reserves shortly before gold entered a protracted bull market, since nicknamed by dealers as the Brown Bottom or Brown’s Bottom.

    https://en.wikipedia.org/wiki/Gordon_Brown

  64. slumber_j says:
    @Yojimbo/Zatoichi

    Hearst Castle, while awesomely cool looking and built in classical architectural style, had to be sold by William Randolph Hearst estate to the state of CA because the Hearst descendants could no longer maintain its operation on a daily basis.

    That was the claim anyway. The deal they got is amazing: they offloaded the ownership and maintenance on the State, but they still got to use it privately for some number of days a year–and it’s not a vanishingly small number.

    As I’ve written here before, the Hearst Corp. still owns and operates Wyntoon in far-northern CA, which is I think like 50,000 acres of gorgeousness with a fake Bavarian village and some other incredible houses, purely for the benefit of the family. If you should ever come to know a Hearst and get invited to go, you absolutely must do so at any cost:

    https://en.wikipedia.org/wiki/Wyntoon

    And here’s the Google Maps view of the Bavarian village, tucked in a bend of the McCloud River:

    https://www.google.com/maps/place/Wyntoon,+CA+96057/@41.1913225,-122.0639578,314m/data=!3m1!1e3!4m5!3m4!1s0x54cdc01546f92dbd:0x94eecf4db7c47f93!8m2!3d41.1915464!4d-122.0644459

    It’s pretty nice to fall asleep with the windows open in those rooms to the sound of the rushing water.

  65. There really isn’t any such thing as old “money,” because money does not age very well. As liquidity, its value is very much tied up in the present moment and its moods, which we catch a hint of in the word currency. A giant pile of cash must dissipate after a few generations if it is not successfully converted into refinement, prestige, and a sort of eudaimoniac-aristocratic independence from the rat race. The former outcome is by far the more common.

    It isn’t easy to make yourself a fortune, but it is not impossible, especially if you set your mind on nothing else. But it is extremely difficult to actually coin yourself and your descendents into a race of noble bearing. That is why class is such a mighty accomplishment. It is the treasured, inward possession of those who have left mere money quite far behind them. They have risen above the fray of money-making to soar in the clear, cool atmosphere of a fuller life.

    • Replies: @Jenner Ickham Errican
  66. @Inquiring Mind

    I don’t think you are. That’s why I’ve decided I’m an IP anarchist. Or just give them the country and tell them they have to run it.

  67. @slumber_j

    A friend once dated a Hearst heiress & got to go to Wyntoon on the weekend she had it (the extended Hearst family treats their storied properties like glorified time shares.) They watched Citizen Kane in the same room where Hearst himself had his one and only viewing of the film. I thought that was pretty cool.

  68. @Anonymous

    The only thing Old Money hates worse than New Money is New Old Money. So yes, the income tax isn’t a tax on being wealthy; it’s a tax on becoming wealthy. That’s why people making $150K a year are just spending to maintain lifestyles. We just print up bonds and sell them at this point, so why are the schleps still paying taxes? I digress.

    I think most of the South’s Old Money disappeared after the Civil War and you could get cotton cheaper elsewhere. Their descendants sold the land to tree farms and developers. And the South was HOT. People used to refuse job transfers before HVAC. Maybe there’s some TOOS money in the Carolinas.

  69. @Not My Economy

    According to some prepper video I watched in 2012 George W Bush and Dick Cheney own like 10 million acres of Paraguay each.

    Paraguay farmland is about $2K per acre. 10m acres each? That would imply they were each worth $20b. That’s a lot of scratch for anyone who’s not a McDonald’s or Walmart heir, Warren Buffett or some tech billionaire. It would also imply that they each own about 10% of Paraguay’s land area.

  70. “David Geffen doesn’t like golf. ”

    Surprising that a homosexual doesn’t like a game involving using a stick to put a ball into a hole.

  71. JimB says:

    Doesn’t playing on a personal golf course defeat the point of golf altogether: to demonstrate your social, political, and professional importance to the public by whom you pay golf with?

    I seem to recall a story from the seventies where Nixon gifted Leonid Brezhnev with a Lincoln town car, and the pair took it joy riding on a local golf course in New Jersey, tearing up the course and infuriating the greens keeper.

  72. But where does the Hidden Old Money congregate?

    That’s a good old question I used to pose to conspiracy-minded people who dissed Forbes & insisted that really, really rich people, hidden movers & shakers (usual candidates are Queen of England & the Rothschilds) have some fabulous wealth we don’t know about.

    So- where is this supposedly enormous, virtually unimaginable wealth?

  73. @slumber_j

    But Hearst Castle, is the jewel in the crown of their well known properties. Due to Citizen Kane, it’s seeped into popular culture and won’t ever likely fade away from collective memory. If it were to actually appear on the market for sale, the property would have to be close to 1 Billion dollars. Jack Warner’s estate has nothing on Hearst Castle.

    It has a quarter of a million acres. Also, keep in mind that Hearst imported from Europe most of the building materials for his “ranch”. Stone, marble, etc. wiki breaks some of the building cost down, and its well above $10-15 dollars in 1920’s-40’s money. That means the total building cost in 2020 dollars is well over $150-300 million dollars. Who builds a house, property, etc for over a quarter of a billion dollars in 2020? No one.

    Without irony, the one person who could get along fine in Hearst Castle is of course Donald Trump. You can just see the President touring Hearst Castle and immediately liking the property. “Yeah, it’s awesome. It’ll do. It can meet my needs just great!” It’s like, Trump would see Hearst Castle and want to outdo him in that area and go back and upbuild Mar-a-Lago even more.

  74. anon[414] • Disclaimer says:

    You’re out of your depth again, Steve.

  75. Don’t confuse possessions with wealth. True wealth is defined by sustainable income. Elon Musk is considered rich because he owns so much Tesla stock, but if he died tomorrow, his heirs wouldn’t be anywhere near as rich as him. Tesla stock is valuable only because Musk heads the company. He can’t sell his shares and retire wealthy, because no one would buy the shares knowing the he is no longer running the company.
    Bill Gates is wealthy because he can freely sell his shares without affecting the stock price because he no longer runs the company. Microsoft no longer relies on him and more importantly, pays a dividend. The dividends from the shares he owns can easily fund an extravagant lifestyle, this is true wealth.
    Think about the almost universal obsession with gold. The metal is dug from the ground, with a minuscule amount used for industry, some more used for decorative jewellery and the bulk stored in a highly protected warehouse. Spending enormous amounts of money to amass gold and then spending even more money to protect it is not the way to wealth. Gold doesn’t reproduce and cost of protection will eventually erode the value to zero.
    This is the essential difference between old money and new money. Old money consists of investments that generate sustainable income and if managed correctly will fund generations of heirs. New money is just an accumulation of stuff which may or may not provide a sustainable income in the future.

    • Replies: @Anonymous
  76. Mr. Anon says:
    @Not My Economy

    According to some prepper video I watched in 2012 George W Bush and Dick Cheney own like 10 million acres of Paraguay each.

    That claim was circulated by Alex Jones and crazy “conspiracist” websites such as Before It’s News and Godlike Productions. It’s probably BS. Almost everything Alex Jones says is BS.

  77. The easy way to critique tenured professors like Piketty who want a redistribution of wealth is to ask them how much of their wealth they themselves redistributed to exploited adjuncts. The answer is always the same: none of it.

    I will acknowledge that Piketty’s book had a helpful section explaining the financial aspects of Jane Austen’s novels, but that was the only good thing about it.

  78. Mr. Anon says:
    @JMcG

    Yikes! She really is hideous. You’d think a woman with a boyfriend as rich as hers could afford better plastic surgery.

  79. JMcG says:
    @slumber_j

    There’s a couple of places of this type in Pennsylvania with which I’m familiar. Ostensibly hunting lodges or shooting preserves. One in the north central part of the state is tens of thousands of acres.

  80. @rational actor

    The rich are getting poorer. They and they for themselves, by themselves, built these last thirty years a society of cardboard. No use owning it, first rain come, it will be soaked.

    As for “old” money, the theme of this thread, how can? Money has but relative value, but fixed numbers in some antiquated ledger, even brick and concrete, are subject to power and recent accounting by the billion. You can be rich, poor, very poor, as compared to other deplorables. You can only wield power, when inside the bulb. Either co-opted, out of need, certainly not a need for talent, having been born into it. There is no upward mobility as understood, dis-genics at work.

    Money is just an expression that still holds a spell on simple minds. Ice cream melts, the way of the Arctic . The “rich” are meaningless when adding the dimension of time. No Vatican this time around.

  81. To go back to the original question: there is no way that so-called invisible “old money” could exist anywhere. This is simply a delusion.

    Actually- all wealth is, one way or another, a social contract. Nothing is intrinsically valuable. Oil was worthless before industrial revolution, later stages.

    And cultural artifacts are even more in the “social constructs” category. One can sell a picture by Van Gogh or Matisse; yet, Mona Lisa or Sistine chapel are not salable. They transcend all accepted notions of worth & wealth.

  82. @Anonymous

    I see where you’re going. Eventually, descendants of these agricultural barons who are not into farming but want some actual cash could easily sell their acres to developers for billions. That land could easily become shopping malls, golf courses, and of course gated communities worth billions.

  83. @Gatsby

    Except many of those houses are now owned by the state and function as tourist places. Also, unlike today’s tech billionaires, back then many of these magnates had many, many, offspring. Thus the actual amount that the family once had is nowhere near as high as it was say, a century ago.

  84. Broglepup says:

    Don’t forget the hidden new money. I met a billionaire and he isn’t on the Forbes list. Everyone knows that he is rich, but not everyone knows that he is a billionaire.

  85. Don’t know what this tells us about Piketty’s theory. But it tells us Bezos is a wastrel.

    California will reach into your pocket if you own property and stay in the state anymore than 14 days. (At least that’s what i understand from friends.)

    Bezos could have a shell corporation own a hotel, take the penthouse suite whenever he wants to visit California … and save a packet on taxes.

    But … i’m sure the illegals are happy. Say he’s there 30 days: 30/365 x 11% x … that will feed, clothe, school and hospitalize thousands of Mexicans.

  86. Anonymous[337] • Disclaimer says:
    @J.Ross

    …is this golf related content?
    *flagged*

    Nice try geffen

  87. @Dave Pinsen

    Bloomberg does better against Trump in Alabama than Sanders. The average Joe is not bothered by rich people. Now for Bezos, he just followers what other people do. La has a few very rich places, but it poorer than San Diego since it has a lot of very poor places like Maywood and Huntington Park.

  88. @Inquiring Mind

    Hold the presses!

    Fake News!

    From the Guardian no less (the Brit “sensible-party” newspaper — sort of like their New York Times).

    https://hardware.slashdot.org/story/20/02/10/0337217/bill-gates-did-not-order-a-500m-hydrogen-powered-superyacht#comments

    The wacky news-for-nerds Slashdot is claiming that Bill Gates ordering a half-billion dollar fuel-cell hydrogen-powered yacht never happened.

  89. BB753 says:

    Rule of thumb: if your money and fortune can be tracked, you’re not a real multi-generational billionaire

  90. Muggles says:
    @Steve Sailer

    Yes, many big corps have tried to “move” profits from intellectual property “leasing” to subsidiaries to lower corp tax jurisdictions over the years. Puerto Rico has long had special tax rules though I think they are also tied to physical presence and employment there to qualify. Many pharmaceutical firms are sourced there tax-wise, though they do operate plants for the benefits.

    Until Trump’s 2019 tax cuts the US had one of the highest corporate tax rates in the world, so moving intercompany profits from high tax to lower taxed foreign jurisdictions was a legitimate tactic. However this also spurred a huge effort to audit international “transfer payments” between jurisdictions supposedly paid for IP or other “services” provided in lower tax jurisdictions. Ireland was popular for one.

    The increased and often successful transfer price auditing slowed this down. Also there was a rule about “foreign profits” needing to be offshore and not simply lent to US parents. Post 2001 9/11 there was a temporary provision limited to a few billion that US corps could move back from offshore and not pay higher US corp taxes. That ended after a couple of years. Trump’s new tax law made this more permanent. So the overall push to “source” profits in low corp tax jurisdictions has ended. US tax rates are now in the OECD average range, making off shoring less attractive.

    • Replies: @LondonBob
  91. Bruno says:

    I know at least of a French from a very ancien French aristocratic family with building property with a value of 450M euros . This person isn’t recorded in any list of French wealth (like Forbes correspondant report on wealth) wich starts around 50M.

    Another example is the ex of sex offender of Dominique Strauss Kahn. She has been selling paintings she recovered from « Nazi » (nobody asking how her grand father put his hands on it) at around 30m each time . She is believed to have between 200 and 300 of those in Tax heaven created by ans for Jewish people in Genova, Italy. She is nowhere in Forbes.

    So I have to credible examples of fortune wich aren’t included. She had no problem to pay the millions required by the surveillance of her husband in NY …

  92. Muggles says:
    @Mr McKenna

    >>Trouble is, location is everything in real estate and while the coast there is fairly pleasant and scenic, it’s simply not near anything that matters. Would you want to live there full-time? So it becomes a vacation house, somewhat forlorn, which for most of us isn’t the right vibe for vacations.<<

    Very true. Real estate is a dead loss for the owner unless it is rented or used commercially. So very rich people can own big estates, but few remain in family hands for generations. In places where the royalty wasn't killed off or taxed to death, such as the UK, most old estates are now tourist attractions or given/sold to the national historic trust. Same in Italy, France, etc for those who survived. Modern celebs or new rich buy places to vacation but if you pay attention, most are sold later for divorce, death, unpaid taxes, creditor debt, etc. They are "assets" only to the extent they aren't mortgaged and worth more than originally paid for, net of capital gains taxes. Ditto for large ranches/farms and vineyards. If they aren't cash flow positive they are liabilities. Like nearly all "historic homes" which do-gooders want to preserve, are expensive museums for the most part.

    Real wealth is now in investments of major companies (or wholly owned large private ones), or in commercial real estate (often in REIT form or partnerships). Much of European commercial downtown real estate is under 100-200 year lease, not "owned" by the users. The ground rents are income and while often hidden via Swiss banks or others, ownership is thought to be of very old but hidden money. 20th century warfare did a lot to destroy hidden European money and their real estate. Communism was also very effective.

  93. Muggles says:
    @Anonymous

    >>With each passing decade this jerk morphs into an even more repellant cartoon villain<<

    Yes, Jeff Bezos is stupid and you are (per your post with misspellings) a true genius.

    He's the richest man in the world and you are not. (Nor I.)

    Envy much?

    • Replies: @Intelligent Dasein
  94. The old rich of course would avoid Beverly Hills, which is the paradigmatic site of the arriviste. It may surprise you to know that golf is a social sport (or whatever it is). Private courses are therefore naturally rare.

  95. @tanabear

    Surely Steve is having fun with us – he must know that the secret rich do not splash out on vast estates and, heaven forbid, private golf courses.

    You are right about Italy, but the same is true of every country in Europe which was not devastated by Communism post-1945. These people are not Bezos rich, and would not wish to be. They have their hundreds of millions and are quite content with those, thank you very much. But the old aristocratic rich can’t help having beautiful palazzi and superb collections of works of art, like the Colonna and Doria Pamphilij in Rome, the dukes of Alba and Medina Sidonia in Seville, the Liechtenstein and Schwarzenberg in Austria, and the Thurn und Taxis and Schönborn in Germany. Palaces are difficult to hide.

    The truly hidden rich are the bankers of Switzerland and the Netherlands, who are often intermarried, and all of whom live modestly, even if sometimes in town houses built by the family as much as 500 years ago. They like controlling assets, not frittering them away. Which is perhaps why they still have them after half a millennium.

    There is old hidden wealth in Los Angeles, like the family which has owned 260 acres of land in and around Sunset Boulevard for 150 years. They are never in the papers, but no one makes a move in that part of the world without consulting them.

    Then there is a lady I know in the Napa wine country who is worth at least half a billion. Her house is modest, her car is at least ten years old, nothing about her way of life betrays the vastness of her fortune.

    They are there all right, but the last place you’d ever find them is tootling around their private gold course, or adding another wing to some titanic mansion in the hills.

  96. eD says:

    This is slightly off topic, but it will be of interest and fits in this thread better than the others;

    https://nymag.com/intelligencer/2020/02/why-democrats-should-not-nominate-bloomberg-sexual-harassment-plutocracy.html#comments

    Pretty much why the Donks should not let Bloomberg buy the party.

  97. One day Jeff Bezos will own all the houses.

  98. @Kratoklastes

    The aristos a la lanterne? Why? They generally lead blamless and often admirable lives.

    The necks fit for those nooses are owned by the politicians like … well I’m sure that each of us could name his favourites without any hesitation at all.

  99. I think a lot of it would be tough to tell.
    I have, as a family acquaintance, a mega-millionaire. Not a billionaire but over a hundred millionaire. He has a very specific type of rental property he “understands”. I have forgotten the specifics but it’s something like “duplexes within 200 feet of a McDonalds where the roads have no curbing and where rainfall is seasonal” or it’s equivalent. His (or rather, his “guy”s) understanding of that market is so good he is almost able to set prices.
    But how do you identify a guy like this? He owns a house in Dubuque, one in Des Moines, one in Portland etc. I know for a fact he owns over 1000 homes, which is positively baronial, but it’ll only be one or two per city So he’s not on anyone local’s Radar and there’s no National way to “capture” that.
    Really nice guy, btw, and made tons of public xc ski trials in northern New England

    • Replies: @Anonymous
  100. @Mr. Anon

    The specifics may be wrong, but even relatively poor rich people (ie yeah, they’re Capital “R” rich but w/in their cohort only average) Yves Choinard (founder of Patagonia) and his friend (founder of The North Face) nought a million acres in Argentinian and Chilean Patagonia. They eventually gave it as a national park but the point stands. 10K acres in S. America is chump change for the rich

    • Replies: @Yojimbo/Zatoichi
  101. Anon7 says:
    @Steve Sailer

    If you enjoy ideas in novels, you might like The Computer Connection, which was one of Alfie Bester’s near-misses, but still likable. In the novel, there are a very small number of people who live for hundreds or even thousands of years. Most are just regular guys and don’t care about money, but one has been running his investment plan for many centuries and owns about 14.917 percent of the world.

    In the real world, consider this plot to get rid of all the Western world’s second- (and nth-) generation billionaires. See The Giving Pledge; take a look at the faces and names on their website and see how few non-Westerners have signed up.

    • Replies: @Joe Stalin
  102. Stan Kroenke bought the 520,000 acre Waggoner Ranch in Texas for an undisclosed sum. The ranch had an asking price of $725 million.

    King Abdullah of Saudi Arabia holds title to 830,000 square miles or 531.2 million acres .

    Queen Elizabeth (the crown corporation) owns 6.6 billion acres or about 1/6 of the habitable land on earth.

    https://www.businessinsider.com/worlds-biggest-landowners-2011-3

  103. George says:

    Hey iSteve, the whole internet thing is very 20th century. The biggest thing in the 21st century is the Forever Wars ™, but where are the Forever War(tm) billionaires?

  104. @Intelligent Dasein

    Great comment.

    Your last line is reminiscent, in a literal sense, of Otherworld by Andrew Wyeth.

  105. @Anon7

    “The Giving Pledge”

    Really. Sounds like a nefarious plot for all the NGOs that whine and kvetch on public radio to control $$$$ when the wealth producers bite the dust.

  106. anon[139] • Disclaimer says:

    Rather like the Human Fund.

  107. Anonymous[427] • Disclaimer says:
    @Wealth Of Ignorance

    Gold has value because it is scarce, it is expensive to mine, and politicians can’t arbitrarily print the stuff. It can be reliably authenticated, and it is untraceable if you melt it down. It was the historic metallic currency, that and silver. Silver rapidly oxidizes though, gold doesn’t.

    Until someone invents a way to transmute other elements into gold at a cost many orders of magnitude cheaper than a particle accelerator, or someone figures out how to economically extract the gold from seawater, gold will be the, well, the gold standard of currencies.

    • Replies: @Hibernian
  108. @Oo-ee-oo-ah-ah-ting-tang-walla-walla-bing-bang

    Its chump change for the rich because South America is basically chump change. The continent isn’t all that.

    If they tried to buy 10k in the US, it would definitely be noticed and the price would be more costly.

    • Replies: @Anonymous
  109. @Adam Smith

    And to think that Prince Harry gave up his share in eventually owning 1/6 of the land on earth.

  110. We don’t have primogeniture, so great fortunes get broken up and devided among many heirs. There a are a couple hundred Dupont children grandchildren and great grandchildren living rather modest lives compared to bill gates

    • Replies: @Hibernian
  111. @Steve Sailer

    Microsoft can operate nearly tax free but no people can get that money from Microsoft be it salary or dividends per capital gain without paying the tax. Stock options are probably the least taxed but highly regulated

    Capital gains are taxed at a favorable rate but we tried taxing than like wages and it stopped the movement of capital. People would just stay locked in their investments rather than take 50 per cent hit.

  112. Anonymous[427] • Disclaimer says:
    @Oo-ee-oo-ah-ah-ting-tang-walla-walla-bing-bang

    I know of people who deal in very specific pieces of equipment or collectibles exclusively that make a very good living, though none of them are in this level of wealth, a couple of them have high six figure incomes and live very cheaply.

    The key is that they know a small market very well. They have more or less cornered the market, they know who wants them and why, they know where they are buyable at a price they can make money on.

    Usually there is some weird reason that these specific things have big value to specific people.

  113. Anonymous[427] • Disclaimer says:
    @Yojimbo/Zatoichi

    Its chump change for the rich because South America is basically chump change. The continent isn’t all that.

    Is it the continent or the people on the continent?

    • Replies: @Yojimbo/Zatoichi
  114. A lot of “hidden old money” lives in cities like New York where they own huge, expensive apartments that you can’t see from space. Lots of families have no media presence or association with large brands, but still a lot of inherited wealth. Maybe not Jeff Bezos money, but certainly in the $100-$500M range.

    If you really wanted to find it you would have to enroll a bunch of kids in elite private/boarding schools across the country in states like NY, Massachusetts, Connecticut, Texas (especially for old Mexican-American families), and California. Once you have access to the class lists, take a look at the surnames. There will be many names you don’t recognize. Then send those kids to all the birthday parties for the unknown surname kids, some of which I bet will be at grandma and grandpa’s estate. Bam, hidden old money.

    Instagram is a marvelous tool for exposing rich people as well. Look up country clubs, exclusive member clubs, expensive wineries, exclusive resorts, especially places that are not touristy or really off limits to the general public. More often than not people will have tagged themselves there in photos and you’ll be able to see others in those pictures as well. This happens a lot with the teenage members of those families, since kids these days love to document everything on Instagram. They’ll take a photo at some little known hyper exclusive country club, tag it with the location, because every 15 year old has been brainwashed into showing off these days, and they’ll include a photo with mom and dad, who have no idea that their location is being broadcast to the world. Also very useful for following what private schools they go to, clubs, restaurants, etc.

  115. @Anonymous

    The people create the continent, or rather the people create the continent’s overall financial health, GNP, etc. Perhaps some land is inherently worth more than other lands, but it’s the right people that can utilize it and improve its overall financial potential.

  116. @Muggles

    Go work for a month or two in one of his warehouses, and you’ll find out exactly where Bezos’ billions came from.

    This True Genius invented…the mail order catalog. His money is the result of exploitation and extraction.

  117. Hibernian says:
    @Anonymous

    Malleability for minting coinage is also an important feature.

  118. Hibernian says:
    @scrivener3

    Parents are free to give the oldest kid the bulk of the estate, and give the other kids the Buffet treatment, if they like. I’ve never heard of this happening, although bad kids are cut off without a penny for being bad.

  119. LondonBob says:
    @Anonymous

    Nat Rothschild got taken to the cleaners by the Indonesians.

    https://www.ft.com/content/1def1222-0dde-11e5-9a65-00144feabdc0

    Still the Rothschilds own all their old estates, the Rothschild’s Investment Trust, their banks. If you have experience of Russia then you know you can use all sorts of offshore trusts and front men to hide your wealth. Lord Rothschild inherited Mikhail Khordorkovsky stake in Yukos.

    https://www.thetimes.co.uk/article/rothschild-is-the-new-power-behind-yukos-9wtmr3d90n

    Marc Rich taught the oligarchs all the tricks they needed.

    Kenneth B. Dart lives in Belize, as does Lord Ashcroft. Richard and Christopher Chandler recently got outed as Kiwi billionaires, previously unheard of. Unless you get involved in something public quite easy to keep a low profile, but you do eventually come to the public’s attention. So Picketty isn’t completely wrong.

  120. LondonBob says:
    @Anonymous

    I have stopped buying from Amazon, so many counterfeit goods, just can’t tell anymore.

    https://www.which.co.uk/news/2019/10/amazon-tech-with-fake-reviews-rated-dont-buy-in-which-labs/

    • Agree: JMcG
  121. LondonBob says:
    @Muggles

    The Trump administration is trying to stop European countries taxing US tech giants on theirs sales. France seems to have backed down but Britain is still pushing ahead.

    https://www.bbc.co.uk/news/business-51192369

    https://www.dailymail.co.uk/news/article-7916413/Donald-Trump-pressure-Boris-Johnson-drop-proposed-tax-tech-giants.html

  122. Art Deco says:
    @Adam Smith

    They’re pulling your leg.

    • Replies: @Adam Smith
  123. @Anonymous

    If you have a name that you yourself are not completely comfortable with, changing it is actually one of the basic steps to independent success, I am told.

    That makes sense. Like how Jimmy Gatz changed his name to Jay Gatsby.

    I periodically am in court when Judges happen to be approving name change petitions. They invariably give the person a little congratulation and pep talk along the lines of : “congratulations and good look with your fresh start in life.”

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