THE BLOG

What Does Our Obsession With The Panama Papers Say About Us?

11/04/2016 14:53

When the Panama Papers were released we were all shocked. Headlines screamed this shock in 50 point text; newspapers set up 'live' rolling news pages and the broadcast media dragged in every tax expert and politico they could find from here to Belize, to articulate this shock.

But actually we weren't shocked were we? Not at all. Not even mildly surprised. I mean, why would we be? A certain type of high-net-worth individual puts their money in offshore accounts to avoid, or evade, tax. This isn't even a story is it? But in order to be part of the collective outrage, it's vital for many of us to be seen to be shocked; on Twitter; in newspaper columns; on TV and radio. Being outraged makes us feel important.

If it's other people's money, it's not hypocrisy

Back in 2007, just before the economic crash, countless thousands of ordinary people across the UK - not just in the South East of England - were become rich beyond their wildest dreams. And they were doing this by buying a house, painting the living room, waiting a year and then selling it for 70 per cent more than they paid for it. Rinse and repeat.

With this huge profit for doing very little, if nothing at all, they were opening online savings accounts that were advertised in the very newspapers that are so shocked by the Panama Papers today. These banks, notoriously Kaupthing and Landsbanki headquartered in Iceland, gave you up to 13 per cent return on your savings. No questions asked.

When Landsbanki collapsed it had more than 300,000 customers in the UK, with deposits of more than £4 billion. These customers were ordinary people: plumbers, civil servants, builders, teachers, factory workers and the self-employed. They were not wealthy. Not secretive. They were just looking to make their money grow faster than it would do in a UK savings account. Offshore was just fine and dandy back then.

If it's our money we're proud of It

In 2007, the high street banks in the UK could not chuck money at you fast enough. Anyone with even a marginal ability to pay off a proportion of their credit card each month was being offered more and more credit. It was not unusual for an average person to have immediate access, across all their credit cards and overdrafts, to funds in excess of £50k. And yes, people did cash all this in and run off to...Panama.

People put everything on their credit cards. Everyone else was doing it. And they'd worked damn hard for the money they didn't own. The high street bank TV adverts told them this constantly. Why wait when you can demonstrate to all your neighbours how hard you've worked by having a better car/house/set of garden furniture than them?

In 2007 we were proud of our money and our material possessions. We wanted to be rich and that made us feel good - there was no shame in that. The credit boom made everyone feel rich. We might just open another savings account based in the Isle of Man giving us 6.1 per cent, right? Johnny next door opened one last week.

Are we sure it's not just envy?

Roll on nine years and we have what's turning into a witch hunt. I'm the first to say that I'm not going to be convinced of the whole truth by anyone's tax return. But why do we want to know how wealthy a politician is? Or in fact, anyone is? Back in 2007, we didn't care - we just wanted more money for ourselves.

Yes, of course, times change and politicians who make the laws should play by them too. And transparency has its place, especially when trust levels for politicians are at an all-time low. But if we look deep down inside ourselves, is all this not just about envy, pure and simple? These days, we have no credit or housing boom. We are in a period of unprecedented austerity. We don't have any money - and they do.

So today, rather than focusing on our own money we obsess about the wealth of others. We love watching the rich; looking at their homes; analysing their clothes, holidays and parties. And even if you deny this - it's beneath you - I bet you still follow the careers of CEOs of big companies; watch what young tech entrepreneurs are up to; have an occasional glance at Spears magazine, and harbour a sneaking curiosity about those with inherited wealth. Can you really deny that you have no interest in being as rich and powerful as they are? And occasionally wonder what decisions you would make if you had their money?

Wealth deserves privacy too

I work with high- and ultra-high-net-worth individuals. I see and speak to them every day. They are just like you and me, with one important exception: they have very little, or no, interest in money. They don't talk about money and they rarely make decisions based on money. They focus on the next project; the next business they are going to create; the next social enterprise. And frankly, many of them you've never heard - and you never will; because that's just how they like it. And for me, this is precisely why they deserve their privacy.

The media is obsessed with money. It tells us that all rich people - without exception - island hop the world's great tax havens, feverishly throwing money into complicated illegal structures. In my experience, this could not be further from the truth. The people running around tax havens are not the real global high-net-worth individuals at all; they are not those people with quiet inherited wealth or shy entrepreneurs who have created multiple companies that are changing the lives of millions worldwide. They are, as shown by the Panama Papers, politicians with more money than they ever expected to have; criminals with a lot of dodgy cash and corrupt public officials trying to hide their overseas aid money.

Isn't it time we accepted that not all high-net-worth individuals are crooks? That not all wealthy people bother about hiding their money? That actually, the vast majority of high-net-worth individuals are much more concerned about philanthropy than having a trust in Bermuda? Isn't it time that we accept that we, the envious, have created a witch hunt and wealth deserves some privacy too?

Comments

CONVERSATIONS