By Frank-Jürgen Richter
A while ago I invited some friends to have dinner thinking that it would be nice to eat outside and have a good conversation in the garden afterwards… but the weather was fickle and there was a downpour just as my guests arrived.
I made a joke in poor taste saying they had a choice of sitting outside looking at the bare wet table and practicing austerity like the southern Europeans, or to venture inside and partake of my northern hospitality! Inside we continued chatting along these lines as dinner progressed noting how we all thought the southern nations’ people were somewhat profligate – yet also noting southern friends in common who were just like us, being frugal and quite sensible in not splashing money about as though it ‘grew on trees’.
How then did those nations get in such a mess? Of course, the conversation brought in the widespread issue of house buying and the cheap (too cheap?) mortgages sold to people who could not afford any repayment just because the seller was measured on the volume sold rather than questioning the security of returns from new clients… that marketing message seemed to spread from the US to Ireland, Spain and other nations where people thought a second home might be a worthwhile investment. What to do with the aftermath was a subject that took us though to coffee and the clearing up of the table.
My guests were a varied bunch – they had worked in many countries and had swapped employers a few times: sometimes by choice and sometimes because of a merger in which their position became redundant. In the latter case they did not fall back on the State demanding support for their lifestyle – they applied for jobs and became employed again, usually not in the same town and often not in the same country. We did not have much sympathy for the leeches of society yet we recognised that we were all well-educated with broad professional experience; characteristics that most unemployed do not have as the State in many countries over successive governments have relatively reduced their education budgets while forcing more to stay in school for longer.
We thought this dilution of education due to both overcrowding and through the lack of education infrastructure had contributed to the present situation of the thousands of Neets (people not in employment, education or training) who were at risk collectively of being radicalised by several forms of extremism. We knew that bankers must be protected and not fired by the various stakeholders or shareholders or their Boards. We presumed that these chiefs of commerce had been promoted in democratic world through merit and not by ‘connections’ – but perhaps in some cases there might be nepotism still.
However we had all noted through various sources of the research commissioned by the Tax Justice Network. Its chief author, James Henry, estimates conservatively that some $21 trillion of assets (maybe up to $32 trillion) is hidden way in tax havens managed by professional enablers in banks like UBS, Credit Suisse and Goldman Sachs: this sum is about the size of the American and Japanese economies combined, and if taxed at just 30 per cent would be about twice all overseas development assistance. Roughly about 100,000 people hold $10 trillion of offshore wealth. Now, we thought at the end of our evening – what if we could persuade all these people to release their wealth at a reasonable rate of return? We could free-up the global economy, nullify the austerity programmes and get ordinary people into work again. Why not employ these truly wealthy to manage our national economies?
Frank-Jurgen Richter is founder and chairman of Horasis, a global business community