Tuesday, December 10, 2019

FISA Report Reveals Clinton Meddled In 2016 Election

If Russia spending $100,000 on Facebook ads constitutes election interference, and Donald Trump asking Ukraine to investigate the Bidens is too - then Hillary Clinton takes the cake when it comes to influence campaigns designed to harm a political opponent.
Contained within Monday's FISA report by the DOJ Inspector General is the revelation that Fusion GPS, the firm paid by the Clinton campaign to produce the Steele dossier, "was paying Steele to discuss his reporting with the media.(P. 369 and elsewhere)
(h/t @wakeywakey16)
And when did Steele talk with the media (which got him fired as an FBI source)September of 2016, roughly six weeks before the election.
One of the more damaging articles to result from these meetings was authored by Yahoo News journalist Michael Isikoff, who said in an interview that he was invited by Fusion GPS to meet a "secret source" at a Washington restaurant.
That secret source was none other than Christopher Steele, a former MI-6 Russia expert who fed the Isikoff information for a September 23, 2016 article - which would have had far greater reach and impact coming from such a widely-read media outlet vs. $100,000 in Russian-bought Facebook ads.
Isikoff's article claimed that former Trump campaign aide Carter Page "has opened up private communications with senior Russian officials - including talks about the possible lifting of economic sanctions if the Republican nominee becomes president."
This allegaton was found by special counsel Robert Mueller report to be false. Moreover, the FBI knew about it in December, 2016, when DOJ #4 Bruce Ohr told the agency as much.
FISA report, P. 206
Put another way, Hillary Clinton paid Christopher Steele to feed information to the MSM in order to harm Donald Trump right before the 2016 election. Granted, there were intermediaries; the Clinton campaign paid law firm Perkins Coie, which paid Fusion GPS, which paid Steele. And if asked, we're guessing Clinton would claim she had no idea this happened - which, quite frankly, simply isn't plausible given the stakes.
Whatever the case - the act of Simpson paying Steele to peddle fiction to the media for the purpose of harming Trump, by itself, constitutes blatant election meddling by every standard set by the left over the past three years.

We're sure Hillary can explain that if and when she jumps into the 2020 race.

Monday, December 9, 2019

Wikipedia Fraud EXPOSED: Troll farms and the CIA have hijacked the once open platform

((DisruptiveFare.com)) - 12/9/2019 -- Somewhere, USA -- For those who value knowledge, this comes as a sad surprise.  Wikipedia once was a free and open source encyclopedia, where anyone could contribute.
It was never perfect, but it was usually pretty accurate, except about controversial topics, current events, conspiracies, and some other unique topics.  But starting in 2016 the quality started deteriorating rapidly across the board.  We wanted to know how, so we signed up.  What we learned was shocking.
We need to get into the weeds here a bit to understand how this scam operates.  Wikipedia was a system setup by Jimmy Wales a long time ago, and the rules have evolved over time but still maintain the same guidelines established in the beginning.  No one really owns Wikipedia which is perfect for the Elite because there's no one to point the finger at.  Best part for them - all the moderators called "SysOps" are anonymous.  There is a hierarchy that requires you make 500 edits before having more privileges.  At any point, if a SysOp doesn't like an edit or comment you make, the threats start, you can be blocked.  They can ban your IP.  You can always READ but you cannot EDIT.  Of course this can all be circumvented, but here's the point:  They are about form not essence.  
The good and honest Wikipedia editors that aren't trolls, they are sticklers for rules and are trying to build an open public document about everything which is a monumental task - FOR FREE.  Everything is volunteer so no one gets any sort of 'benefit' for editing.  Here are the basics of the rules (in summary):
Anyone can apply to be an editor, no credentials or experience or identity verification.  Could be a child, or it could be the CIA, could be Chinese Intelligence.  They only track your IP.  Number of edits works towards your 'rank' the more edits and the more time that elapses the higher up the ranks you go.  After 500 edits and 30 days you can be an "Extended Confirmed User" at which point you can apply to be an Administrator or "SysOp".  When you are a SysOp, you can do things like undo changes, block users, delete pages, and modify fully protected pages.  Some pages are so controversial, only SysOps can modify them - such as the page for Donald Trump.  Try for yourself, on any page click 'edit source' at the top - if it's protected it will say 'view source' and you'll see this:
trump12019 12 02 19h58 05
These policies all seem logical and reasonable for a system which is completely open to the public.  But any open system is also open to hackers and exploitation, as we shall shortly see.
What we noticed is that when editing unpopular topics or those not involving current events, there is little editorial oversight.  
But when we edit pages like Trump Impeachment, Anderson Cooper, or Zero Hedge - content that is not approved by the editors (based on their opinion) is removed in minutes.  Having some experience with intelligence gathering and operations, we noted a connection between all the pages where information is quickly sanitized: the CIA.   Most people take Wikipedia at face value - it must be true if it's in Wikipedia.  They are using this laziness to attempt to exploit reality, in a much more organized and methodical manner as compared to the TV exploitation.  Let's first look at some public examples of what's going on.
People using CIA and FBI computers have edited entries in the online encyclopedia Wikipedia on topics including the Iraq war and the Guantanamo prison, according to a new tracing program.  The changes may violate Wikipedia’s conflict-of-interest guidelines, a spokeswoman for the site said on Thursday.The program, WikiScanner, was developed by Virgil Griffith of the Santa Fe Institute in New Mexico and posted this month on a Web site that was quickly overwhelmed with searches.  The program allows users to track the source of computers used to make changes to the popular Internet encyclopedia where anyone can submit and edit entries.  WikiScanner revealed that CIA computers were used to edit an entry on the U.S.-led invasion of Iraq in 2003. A graphic on casualties was edited to add that many figures were estimated and were not broken down by class.  Another entry on former CIA chief William Colby was edited by CIA computers to expand his career history and discuss the merits of a Vietnam War rural pacification program that he headed.  Aerial and satellite images of the U.S. prison for terrorism suspects at Guantanamo Bay, Cuba, were removed using a computer traced to the FBI, WikiScanner showed.  CIA spokesman George Little said he could not confirm whether CIA computers were used in the changes, adding that “the agency always expects its computer systems to be used responsibly.”  The FBI did not have an immediate response.  Computers at numerous other organizations and companies were found to have been involved in editing articles related to them.
Right now, this very second, people are busily editing away on the website Wikipedia, at a rate of more than ten edits per second. There are over five million articles written in English on Wikipedia, with a thousand being added every day.
But there's a dark side to Wikipedia you probably don't know about. The promise of accurate, neutral articles and privacy for contributors is often just a mirage, according to two insiders. They say they've been left battle-scarred after troubling personal encounters with the world's most popular encyclopedia.
It's billed as "the encyclopedia anyone can edit." But for many, it's the opposite.
Greg Kohs is among the blocked. Banned, he says, for challenging Wikipedia policies.
Kohs: Just in the past four hours, 500 IP addresses and users have been blocked from editing Wikipedia.
In 2012, Kohs helped start an opposing website called, "Wikipediocracy," to expose what he calls Wikipedia's "misinformation, defamation and general nonsense."
Sharyl: So Wikipedia does censor users?
Kohs: Absolutely. In a given day, Wikipedia administrators typically are blocking about 1,000 different IP addresses.
Sharyl: 1,000 a day?
Kohs: 1,000 a day. Yes.
When Kohs ran afoul of Wikipedia, he was drawn into an unseen cyberworld. One where he says volunteer editors dole out punishment and retaliation, privacy is violated and special interests control information.
Is it fair to assume, that if they were doing it - they continue to do it?  Or to ask the question differently - if they have something to hide - why wouldn't they?
On November 17th, 2005, an anonymous Wikipedia user deleted 15 paragraphs from an article on e-voting machine-vendor Diebold, excising an entire section critical of the company's machines. While anonymous, such changes typically leave behind digital fingerprints offering hints about the contributor, such as the location of the computer used to make the edits.  In this case, the changes came from an IP address reserved for the corporate offices of Diebold itself. And it is far from an isolated case. A new data-mining service launched Monday traces millions of Wikipedia entries to their corporate sources, and for the first time puts comprehensive data behind longstanding suspicions of manipulation, which until now have surfaced only piecemeal in investigations of specific allegations....Wal-Mart has a series of relatively small changes in 2005 that that burnish the company's image on its own entry while often leaving criticism in, changing a line that its wages are less than other retail stores to a note that it pays nearly double the minimum wage, for example. Another leaves activist criticism on community impact intact, while citing a "definitive" study showing Wal-Mart raised the total number of jobs in a community.
It's not surprising that large organizations infiltrate open systems in order to defend their own existence.  But there's a huge difference between Wal-Mart (WMT) and the CIA: accountability.  The CIA is a publicly funded enterprise, who has the ultimate opaque mask to hide behind: it's classified.  In fact, if you ask any significant question to the CIA via the compliant FOIA request process, you'll get the standard:  "CIA cannot confirm or deny this fact, nor can CIA confirm or deny that there is knowledge of such fact".  What we need is another Church Committee.  

About the Mainstream Media

One conclusion of our analysis is that we should include Wikipedia as part of the Mainstream Media (MSM) as some call it.  Wikipedia is part of the Establishment by all means - it's no different from an information perspective than the CIA's very own CNN.  So a discussion about the MSM and CNN is appropriate here.  Wikipedia's main citation, the #1 'news' source and #1 most credible news organization is - you've guessed it - CNN.  Even though CNN was outed as a complete fraud lying and creating fake stories in an attempt to smear political enemies, Wikipedia is having none of it.  Editors even said that video recordings by project veritas were 'deep fakes' and videos were 'altered' - who do they think they are kidding?  Undercover whistleblowers risk their jobs and lives to expose dirty organizations like CNN and we are supposed to believe that it's all made up?  Of course they would say that, as it's CNN who makes up lies about people they want to smear, while parading as a legitimate news organization.  CNN is no different than the Russian Prava (which means in Russian "Truth") used during Soviet times to spread government propaganda and politically assassinate enemies of the state.  Project Veritas exposed how CNN is left leaning organization with a pro-Democrat bias, but we need to elaborate this point as this is another trick the Elite play on the populace.  This is not a political issue, CNN is pro-Establishment.  Republicans (for example the Bush clan) are no better than the Clinton Mafia.  Plunder, pillage, murder, graft, and an Imperial power grab - this is the new Mafia class in USA.  

Understanding the CIA and reporting it

The CIA is a clandestine organization and as such, they will never make any statements to verify any facts about them that are unpleasant for them (including most important facts that might the general public question their existence).  Remember that the CIA is funded with tax dollars so they work for US Citizens.  Any evidence of operations is destroyed, so it's very unlikely that anyone would ever find a document about their internal operations, with the exception of what they publicly release via their FOIA reading room.   What they release is obvioulsy uninteresting and unincriminating.  They even release humorous projects in order to send a message to the public's subconscious - we're the good guys and we do things.  One of the most kind and funny examples is the 1960's attempt to turn Kitties into spies.  Of course, when someone is confronted with some bad things, they have the subconscious association with kitties and spies.  How cute!
Legality - This is important.  All of what we are describing here, is legal (sort of).  For example, it's illegal for the CIA to operate domestically.  So officially, they don't.  Just like overseas, they use a web of shell companies and NGOs which serve as the 'front end' and these are called front companies. CNN's auditor isn't going to find "Central Intelligence Agency" in the books and records.  Some of these fronts are just shells but others are legitimate companies, owned and controlled by the Agency through InQTel, the Venture Capital arm.
So what we know about the CIA comes from leaks such as the famous Snowden leak, and many others via Wikileaks such as the Vault 7 release.  Another quality source is whistleblower testimony.  CIA whistleblowers are obviously discredited, harassed, and in many cases end up involved in strange deaths.  One whistleblower turned author wrote the classic bestseller Confessions of an Economic Hit Man - a must read to insights on how the CIA really operates.  What's compelling about this account in particular is the detailed descriptions of how it works.  According to the author the CIA is the agency tasked with building American Imperialism with the following method 1) First a group of economists are sent to emerging markets where they explain the only hope for growth are these exorbitant IMF loans (which they know they will never repay).  To entice them to accept they may 'pay' the leaders a bonus, such as $50 Million to you Swiss bank account.  2) If they don't accept the loans, then they send in the 'jackals' who basically try to overthrow the regime with force.  This has been achieved hundreds of times but doesn't always work.  When it doesn't, then we 3) Declare war, based on lies such as "Weapons of Mass Destruction" or any excuse or evidence that can be planted.

Problems with Logic

The majority of huddled masses and the majority of intelligentsia too, don't understand Logic & Rhetoric.  Knowing this, those spouting lies and creating deception very cleverly use tricks in order to obsfucate and mislead.  For example, in the beginning of the official Impeachment Hearing Report, a statement is made:
The Committees pursued the truth vigorously, but fairly,ensuring the full participation of both parties throughout the probe.
How can a committee who created a fake impeachment based on false and manufactured evidence against the defendant, make a statement like this?  Here's the issue - readers who are Democrats and anti-Trump will take it as axiomatic, or in other words, at face value.  Here's how the brain process works.  You read a statement, and you assume it to be true, because it justifies your existing bias (opinion) which in this case is "Orange Man Bad."  With a false premise, the conclusion is always true.  The schism between Democrats and Republicans is not political, it's intellectual.  It's similar to the difference between scholastic and stochastic, or the difference between religion and philosophy.  Stochastics are believers, Scholastics are students.  The difference is key to understanding what's going on in US politics.  Trump isn't a Republican.  In fact, he spent more money than Obama in his time as President by 13.5% (marginally more if you count for inflation - and the US Treasury is more profitable now).  He thrashed the EPA.  Where's the conservativism?  Trump is an anti-establishment candidate, not a Republican.  He's a capitalist with a Real Estate background with child-like understanding of markets - lower rates = asset inflation (stocks & real estate) = Happy People.  There are plenty of criticisms Democrats could make against Trump if they were intellectuals, if they were ethical, such as:
  • Trump's lack of monetary policy (bias towards lower rates and manipulating the Fed is not a monetary policy)
  • Destruction of the EPA causing harmful, toxic environmental consequences
  • Foreign Policy mishandling
There are others.  The point is to illustrate that Democrats and Trump's enemies chose an irrational and artificial "Witch Hunt" rather than a logical well organized campaign.  Their behavior is childish and alarming - the US has become similar to Soviet Russia in many ways:
  • Media (Press) 99% controlled by the Government
  • Open public debate is not allowed (Wikipedia being censored, for example)
  • "Party Members" support the party based on belief, as if infected by a virus - not by facts, or results that the party has achieved.  (this is the destabilizing component we need to be afraid of)
This article is about Wikipedia, the above example is used only as a means to explain the tools that are employed by the editors of Wikipedia.  It's not a stupid operation, after all it is called 'intelligence' - but it's not the kind you employ to take an IQ test.  Intelligence has a few basic agendas behind it:  protect the state, grow big business, and counterintelligence (which can be for a number of reasons).  Wikipedia is the 'fake source' just as CNN is 'fake news' as proven by fake stories they will publish without references as if they are true.  Wikipedia is the same.  Although they have 'rules' very often the SysOps do not follow their own rules.  If you call them out on not following their own rules, they will tell you that you are 'abusing them' and if you 'continue your abuse' you will be banned.  

Wikipedia was free and overrun by trolls

Sanger grew disillusioned with Wikipedia.[27] He has argued that by mid-2001, the Wikipedia community was being "overrun" by what he described as "trolls" and "anarchist-types", who were "opposed to the idea that anyone should have any kind of authority that others do not".[28] 
What 'trolls' may he have been referring to?  Let's also be clear - the CIA isn't the only troll on Wikipedia, there are many.  Where there is big money involved, such as Pharmaceuticals, there are trolls.  Let's take a look at some of the findings of this author in a piece aptly titled "Wikipedia: Rotten to the core" -
In 2013, a British Petroleum representative was found to be supplying Wikipedia editors with company-approved text that eventually comprised 44% of BP’s page. The editing took place while a civil trial was underway which could have resulted in BP paying out billions of dollars to victims of the 2010 Deepwater Horizon oil spill. The process itself — PR flack supplies biased “info” to an unaffiliated editor, who then inserts it without disclosing its origins — is common on Wikipedia and does not actually violate the rules, as BP was quick to point out.⁷ Indeed, multiple editors jumped to the defense of the editor working for BP, suggesting they were also being paid or merely wanted to keep their options open.  Roger Bamkin, a trustee of the Wikimedia Foundation UK and a PR consultant, used his Wiki position to place his PR client, the country of Gibraltar, on Wikipedia’s “did you know” front page feature 17 times during August 2012. As a “Wikipedian in Residence,” Bamkin was not permitted to operate with a conflict of interest or to edit the pages of the organization he worked with, but nothing in the rules prevented him from promoting that page. Wikipedia co-founder Jimmy Wales called Bamkin’s behavior “wildly inappropriate” and denounced it in a double-speaking editorial. Basically, he told future emulators to be more circumspect in their behavior, because the “disaster for our reputation” would be immense if it got out that Wikipedia editors were “paid shills” instead of “free and independent scribes.”⁸ Wales understands the importance of one’s online reputation, which makes it even more unconscionable that his site has been weaponized to destroy the reputations of so many people.
BP lawyers noted correctly that there are ways to engage in biased editing that do not violate the rules.  In fact, the whole model of Wikipedia sort of invites trolls who are willing to spend the time, without being paid.  
Big Pharma’s fingerprints are all over Wikipedia. Editors linked to AstraZeneca were caught posting negative material to competitors’ pages and adding promotional material to their own.³⁹ Wikiscanner caught Abbott Labs removing information from its entry about possible side effects of two of its most popular drugs, the weight loss pill Meridia and the arthritis pill Humira.⁴⁰ An analysis of the entry for Purdue Pharmaceuticals shows it has been through several editing cycles in which information on the addictive potential of the company’s infamous opiate Oxycontin was added, then removed, then added again, though any editors working for Purdue seem to have slunk away in the aftermath of their employer’s settlement with the state of Kentucky for $24 million in damages from widespread Oxycontin abuse in the state.⁴¹
Basically, Wikipedia is a legal time bomb waiting to explode.  It has sort of 'creeped' into culture in a manner so subtle you wouldn't know it, like the frog being boiled alive in the pot by slowly turning up the heat.
Until recently I haven’t been closely following the controversy between Wikipedia and popular anti-imperialist activists like John Pilger, George Galloway, Craig Murray, Neil Clark, Media Lens, Tim Hayward and Piers Robinson. Wikipedia has always been biased in favor of mainstream CNN/CIA narratives, but until recently I hadn’t seen much evidence that this was due to anything other than the fact that Wikipedia is a crowdsourced project and most people believe establishment-friendly narratives. That all changed when I read this article by Craig Murray, which is primarily what I’m interested in directing people’s attention to here.  The article, and this one which prompted it by Five Filters, are definitely worth reading in their entirety, because their contents are jaw-dropping. In short there is an account which has been making edits to Wikipedia entries for many years called Philip Cross. In the last five years this account’s operator has not taken a single day off–no weekends, holidays, nothing–and according to their time log they work extremely long hours adhering to a very strict, clockwork schedule of edits throughout the day as an ostensibly unpaid volunteer.
Wikipedia is the authority - Facebook is the operation.  That means that since the invention of the 'internets' (Bush, 2002) they have been working hard to create a disinformation system so intelligent it is disguised as a 'free open sourced encyclopedia' that anyone can edit.  Nothing can be further from the truth.  Wikipedia is a tool of the Establishment to suppress free speech and defame political opponents.  It is a tool for big business to control information on controversial products, such as drugs that can have fatal side effects.   

The rise of Zero Hedge by the Right

Wikipedia is not a blog (their statement) - although the SysOps run it like one.  An encyclo-blog.  Zero Hedge is.  Zero Hedge is a mix of self-written content on topics including the markets, economics, politics, and trading.  Focus is on unconventional views and sources.  Zero Hedge is not and never will be a Russian asset as some would claim.  Zero Hedge is not political and is not a conservative outlet.  It's fact-based, if you read articles like this one you'll see that key sentences have links to references.  This style of writing by journalists, analysts, and other writers in the alt-media can only be described as fact-based reporting, or evidence based writing.  It's not about opinions it's about references and links to documents.  The conclusions are the opinions of the writer, however there is always a link to fact-based evidence.  The defamation against Zero Hedge is because it publishes things which the mainstream media doesn't like, especially since 2015 (when the entire media, including Fox, is anti-Trump).  So they call it a Russian troll site or right wing conspiracy site.  It's neither.  It is a fact-based site so they have to label it as a conspiracy site.  Truth is lies and lies are truth.  They have brainwashed people into believing that CNN is 'fair and balanced' and Zero Hedge publishes opinionated hit jobs.  In fact, CNN has a history of publishing fake news, and is the subject to a $400 Million defamation lawsuit (the complaint is a good read for anyone interested in how CNN/CIA Fake News operates).  When we tried posting this on CNN's Wikipedia page, and even the page about "CNN Controversies" they wouldn't allow it.  First reason is that zerohedge.com was not a credible source.  So we used WashingtonPost.com and they said it wasn't allowed because it's not controversy, it's just a competitor to CNN trying to get viewers.  Then we tried a 3rd time with CNN.com as the source (which is biased and doesn't disclose material info about the case) and even that was declined, with no comment on deletion this time.
Zero Hedge is not the only fact-based site out there, there are many.  Here's a good list from a good site ActivistPost.com "Top 10 influential people in alt-media"
But here's the point.  Any site that posts facts that are contrary to the mainstream narrative filled with lies, that site needs to be discredited.  Defamation is much more powerful than assassination especially in the internet world.  BS "FactCheck" sites have been popping up like weeds in an abandoned shopping mall since 2015 and Snopes.com is out trolling factual information out there to deceive the gullible and unenlightened.  But going back to the thesis of this article, Snopes.com and friends by themselves are not credible, without Wikipedia.  Wikipedia is something that can change someone's opinion.  If it's in Wikipedia, it must be true.

Conclusion

What we have learned, there are thousands of paid-trolls editing Wikipedia for a purpose.  The purpose varies from business interests including large multi-nationals in industries such as Finance, Pharmaceuticals, Defense, Law, and others.  Politics is obviously a hot topic.  But so is Game of Thrones, Michael Jackson, and Acupuncture.  
The conclusion is that Wikipedia is a good reference of global opinions that reinforce the mainstream narrative whatever it may be.  You aren't going to find any dissent or alternative views on Wikipedia.  

Take Away

So what can one do about it?  One thing is stop using Wikipedia as a reference.  Two is look in the view history of pages to see if it is being edited or not.  One advantage of Wikipedia is that they do save old edits.  So if a Troll changed a real fact to a lie the history with the fact is still there.  The interface is a little weird but anyone with basic computer skills can get used to it.
Another point for authors - get editing!  Anyone can sign up for Wikipedia and after 500 edits and 90 days you too can become a SysOp - perhaps you will be an anti-Troll or 'disruptive editor' that will continually publish facts upon facts.  There would be one way to save Wikipedia - overwhelm the trolls.  If more people wrote fact based evidence there wouldn't be time for all the trolls to delete it.  
Finally - seek other sites such as RationalWiki, or try these 30+ alternatives.  Or if you are the victim of an attack, you can always hire the experts at wikiprofessionalsinc.com 

Reference Articles

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Sunday, December 8, 2019

Using history to understand hidden wealth in the UK

The 20th century’s ‘Great Equalisation’ of wealth in Europe and the US was the result of the decline of top wealth shares. In England, the wealth share of the top 1% transformed from over 75% in 1900 to less than 20% by 1970. Economists believe that new wealth created by the post-war ‘Golden Age’ of economic growth grew faster than old wealth, accumulating at the net-of-taxes rate of return (Piketty 2014). 
This stylised fact is based primarily upon declared wealth. But the incentive to hide wealth exploded over the 20th century. In 1950s Great Britain, the top marginal rate of estate tax was almost 80%. 
Is the ‘Great Equalisation’ of wealth illusory? A simple misreading of the true wealth distribution, a result of an increased tendency of elites to hide their riches?
Declared wealth-at-death data are the primary source for our understanding of the 20th century wealth distribution in England (Atkinson and Harrison 1978, Atkinson et al. 1989, Atkinson 2018, Alvaredo et al. 2018). Since 1858, the individual details of wealth at death have been centrally recorded in the Principal Probate Registry calendars. This source records all decedents in England and Wales with wealth above the threshold (currently £5,000). Name, address, date of death, the name of the executor and an estimate of estate value were consistently recorded. I digitised the original printed volumes and algorithmically parsed and formed them into a database suitable for economic analysis, in a process which I describe in Cummins (2019a).
Using this 100% sample over the period 1892-1992, my new analysis (Cummins 2019b) presents a method to estimate hidden wealth. I define ‘hidden’ wealth as wealth missing from the perspective of the probate calendars, and therefore of the tax authorities. A portion of this will be legal portfolio re-arrangement to tax-exempt trusts, inter-vivos bequests, charitable donations, gifts to non-family members, and a portion will potentially be illegal tax evasion. 
The method is a simple accounting exercise that exploits the nominal, individual-level data. The key identifying assumption is that wealth declared before 1920 was a more accurate measure of the ‘true’ wealth of a dynasty than wealth declared after 1920. The incentives suggest that this is reasonable – taxes on wealth before 1920 were a tiny fraction of taxes after 1920. 
Figure 1 The concept
During the low-tax era of 1892-1920, I sum declared wealth at death, by dynasty. I then calculate an expected flow of inherited wealth that should show up in those same dynasties after 1920. For most, wealth after 1920 is in excess of that predicted by the inheritance flow from 1892-1920. This is newly created wealth. However, for certain dynasties, declared wealth is systematically below expected wealth from inheritance. This is hidden wealth.
For the analysis, I select only rare surnames of English origin which have fewer than 100 people observed in the 1881 census, and track these rare surname dynasties in the probate calendars from 1892 to 1992. Within this group, I define a ‘Victorian elite’ as the top 1,500 richest wealth-holding surnames from 1892 to 1920. 
Formally, I compare estimated wealth calculated using the net-of-taxes rate of return on capital on observed dynastic capital during the low-tax pre-war years with that actually observed in the later high-tax post-war era. I incorporate wartime destruction and all death taxes paid into this estimate of ‘true’ inherited-wealth. Figure 1 illustrates the concept for calculating hidden inherited wealth.
At the aggregate, this estimate is lower than observed wealth as new wealth is being created by non-inheriting surname dynasties. However, for the richest English dynasties, the Victorian elite of 1892-1920, it is clear that at least 20-32% of all elite wealth is hidden by their descendants in the period 1950-1992. This is shown in Figure 2.
Figure 2 The missing wealth of Victorian elite lineages
At the individual surname level, this hidden wealth estimate, and the proportion of hidden wealth, strongly predict the appearance of a surname in the recent Offshore Leaks Database (International Consortium of Investigative Journalists 2019). This suggest that a proportion of inheritance taxation is potentially being evaded. Further, the richer the dynasty, the greater the proportion of hidden wealth. 
Using the locations of 31 million UK voters from the electoral roll of 1999, and data on the complete price paid for house sales in 2017-8, I show that hidden wealth is associated with more expensive postcodes. Hidden wealth boosts contemporary consumption and the living standards of hiding dynasties. Further, I show that the children of those with hidden wealth are more likely to attend the elite universities of Oxford and Cambridge, over the period 1990-2016.
Figure 3 The top 50 hiding dynasties, hidden and declared wealth
Incorporating this elite hidden wealth into a recalculation of the top decile wealth share shows that the decline of the ‘true’ wealth share is significantly more muted than that for observed wealth. The richest decile holds an extra 10% of the ‘true’ wealth distribution, equivalent to a 33% reversal of the observed decline. 
Figure 4 Top 10% shares, observed and ‘true’
In Cummins (2019b), I present a simple method, combining historical and contemporary data, to estimate hidden wealth at the surname level. This method produces a set of surnames that are potentially hiding a large amount of wealth. Tax authorities could use this information to investigate potential evasion. 
Internationally, the pattern of a low-tax pre-war era followed by a high-tax post-war period is almost universal. Applying the method presented in this column to other historical wealth data from other countries could lead to the uncovering of vast sums of hidden wealth. 
The implications of incorporating hidden wealth into the top wealth shares are of profound importance. Changes in wealth inequality were the largest equalising force in the 20th century. My paper shows that the true top-wealth share did indeed decline, but not by as much as that observed in the reported data. This finding is important for our empirical understanding of the true evolution of inequality over the last century and is crucial for attempts to understand the causal forces behind the ‘Great Equalisation’. It also highlights the need for further research on hidden wealth, both contemporary and historical, in the UK and elsewhere. 

References

Alvaredo, F, A B Atkinson and S Morelli (2018), “Top wealth shares in the UK over more than a century”, Journal of Public Economics, issue in honor of Sir Tony Atkinson (1944-2017), 162: 26-47.
Atkinson, A B (2018), “Wealth and inheritance in Britain from 1896 to the present”, Journal of Economic Inequality 16(2): 137-169..
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Monday, December 2, 2019

Rabobank: "The Global Institutional Architecture Is Collapsing"

It’s December, and the start of the season of good will to all and peace on earth. Not much of that about, of course.
In the UK, the election has been interrupted by the terrorist attack at London Bridge, which both sides are naturally playing politics with in different ways (The Left is soft on terrorists vs. police underfunding and foreign policy, etc.); the latest opinion polls suggest Labour continues to make up some ground but remains well behind, but London Bridge may perhaps see that impetus stalled. Let’s see if the imminent arrival of US President Trump tips the scales, as President Obama did on Brexit, or if he can hold off on commenting as protocol dictates.
In Germany, Angela Merkel’s coalition partners the SPD have just elected new leadership, and they have veered to the left, hardly a surprise against this global backdrop, but likely accelerating the eventual collapse of the current government and opening up questions about what any new one could look like. Instability, or at least uncertainty, at the heart of the Eurozone is certainly not going to be welcome to investors – yet could it herald an imminent fiscal shift?  
Tomorrow and Wednesday will also see the 2019 NATO summit, again in London, where the world’s largest military alliance will get together and try to decide what it is for and if it still has a purpose. Trump continues to put pressure on all members to spend the pledged 2% of GDP to keep it a fighting force vs. Russia, and perhaps China(?): relatively few do or show they even want to (e.g., Germany). He’s is also going to bring up Huawei and 5G to discuss. President Macron of France has called NATO “Brain dead” due to the absence of US leadership--I thought it was leading?--and has suggested it should shift from seeing Russia or China as potential enemies and refocus on terrorism: does France keep its nuclear deterrent to deal with events like London Bridge? President Erdogan of Turkey, the second-largest contributor militarily after the US, has no problems making friends with Russia and China--he is buying Russian weapons now--but has publicly called Macron “Brain dead” too. And Jeremy Corbyn, who would of course be the UK PM in under two weeks if the polls are wrong or misleading, has stated that NATO should be used to fight inequality: bomb the rich? Or spend as much on defence as he is pledging on everything else to rebuild British (defence) industry and provide quality jobs? It should make for a remarkable meeting one way or another: at the very least, it will be a world-class exercise in papering-over-cracks.
Does this actually matter for markets? Well, it depends. If the markets in question are only looking at things like the bounce in Chinese PMI data (the headline PMI rose to 50.2 from 49.3 in October, and the private Caixin index edged up to 51.8 from 51.7), or at US Black Friday spending (brick and mortar sales were up 4.2% y/y according to First Data, and on-line shopping pulled in USD7.2bn, up 14% y/y), then perhaps not – all is well with the world! Or the same markets might instead focus on China’s Global Times reporting that Beijing is insisting on the US rolling back tariffs for a trade deal, NOT just the delay of the looming 15 December tariffs, as the price of any ‘phase one’ – in which case all is decidedly not well. Expect USD/CNY and USD/CNH to continue to hover around the Lucky Seven level until this is resolved, of course. (But underlying our CNY bearishness, the data the market isn’t talking about this morning is that China is apparently set to see just 11m births in 2019 in a population of 1.4 billion. That’s down from 15.2m in 2018 and 17.2m in 2017. If true, its demographics are vastly worse than the already-poor projections: it is going to be very old long before it is rich enough to retire, and growth will suffer without automation, innovation, or immigration.)  
Yet from data to the bigger picture: consider it was the likes of NATO that built the post-Cold War (1?) world within which these global markets now operate. As Polanyi pointed out back in The Great Transformation, though not in so many words, ‘free markets aren’t free’ – they are carved out of the political jungle with force, and require constant tending to stop them from being over-run. In that respect, we can posit that the problems in NATO are symptomatic of a broader collapse of the global institutional architecture in the face of populism.
But does that matter in a world which, as Branko Milanovic argues in his new book, and as markets continue to price for, capitalism is actually triumphant and there is no genuine alternative being offered by NATO’s enemies? Perhaps not, which of course fully supports our house view that on rates, “lower for longer” is now “lower forever”. China’s (and Russia’s) state-capitalist models certainly imply lower forever as the cost of capital is suppressed for national/geostrategic goals; in the West, markets are as utterly reliant on central-bank largesse, which hasn’t had any geostrategic goals up to now, but which may be about to get some.
Yet this does not mean there won’t be major financial market volatility if the architecture crumbles. You cannot think of a world dominated by multi-polar state-capitalism vs. a retreating more-free-market US-dominated system without seeing: 1) huge shifts in the USD and all resultant markets – either up, as its rivals falter, or down as its rivals combine to topple it (with what exactly?!); and 2) uncomfortable parallels with the pre-WW1 period. Like I said, not much peace on earth, sadly.
Another sign of the end of institutional architecture. The Apostrophe Society has closed down after admitting defeat in its quest to get Brits to understand when and how this simple but crucial grammar point is used (where tired eyes mean even The Global Daily occasionally falls short). So thats it for its members hopes for its vs. its; and a full societal circle from cave painting to Renaissance men-of-letters back to emojis beckons with a thumbs up. Perhaps current fuzzy market pricing fits perfectly in age where nobody can communicate properly anymore.
And another sign of crumbling related to architecture: Aussie building approvals slumped 8.1% in October, more than reversing the surprise 7.2% surge seen in September and vs. a consensus -1.0% figure. That puts them down -23.6% y/y. Likewise, Q3 Aussie company operating profits were -0.8% q/q vs. an expected 1.0% gain, and inventories -0.4% not the -0.2% consensus. Somehow Aussie yields are still up on the day despite those clear recession warnings: perhaps the apostrophe was in the wrong place.