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Virtual realty: can a computer game turn you into an evil property developer?

Delaying repairs to save money and dehumanising your tenants … Adam Forrest becomes a virtual landlord and learns some interesting and depressing lessons

Building my first high-rise tower wasnt too difficult. I threw up some studio apartments, hooked them up with power and phone lines, arranged for a rubbish collection, and welcomed my first tenants. I packed the people in, stacked the units, and the profits soon began to pile up nicely.

Its fun being a virtual landlord. Ive been playing Project Highrise, a PC and Mac real estate management simulation, since the games release in September. It gives cash-strapped renters like me a chance to indulge the wild fantasy of owning property. It also offers members of Generation Rent some insight into how real-world landlords and larger developers actually do business.

Despite its cutesy appearance, the game is surprisingly detailed and utterly unsentimental. You begin the game by managing the costs of building infrastructure, and trying to avoid taking on too much bank debt before your tenants can provide a steady revenue stream. Before too long, youre hiring consultants to lobby city hall for a metro station and wondering whether prestige artwork in the hallway might attract higher-paying residents.

In becoming a digital Donald Trump, I learned some interesting, if slightly depressing lessons. For one thing, its costly to lose tenants. You dont want a day to go by without any rent; and you dont want to have to reach into your pocket to refurbish an empty flat to make it rentable again. So its best to keep all current tenants happy, if you can. But fixing up occupied flats that have turned grimy is also expensive, so its worth trying to hold out as long as possible without doing repairs.

Project Highrise Before too long, after filling six or seven floors, I forgot about them as individuals. Photograph: SomaSim

I also learned how easy it is to dehumanise your tenants. At first, each new tower resident was an intriguing little person I cared about. I customised their names so I could remember their characteristics. Phyllis, who didnt seem to go out much, became Phyllis the Quiet One. Mildred, who always complained about the smell of the rubbish bins on her floor, became Smell-sensitive Mildred. Dave was simply Tank Top Dave.

But before too long, after filling six or seven floors, I forgot about them as individuals. They were simply rent payers; inhabitants of my units. And if they werent happy about something, they became a profit-draining pain.

We did a lot of research about how real-world things function, says Matthew Viglione, designer of Project Highrise, which is made by Chicago-based SomaSim. We talked to building developers and owners in Chicago about how much they plan for, how much they react, how needy certain tenants are, and how much you want residential [tenants] versus commercial [tenants]. We did walking tours of various skyscrapers, and said, Yes, we want that element in the game.

Project Highrise runs a series of urban development challenges in which the player is put in charge of buildings in crisis, based loosely on repurposed and rejuvenated downtown Chicago skyscrapers like the Marquette Building.

I tried one challenge called neighbourhood revitalisation, which tests your ability to revive a particularly run-down building and restore it to profit-making glory. Shamefully, I found it cost effective to evict low paying cafes and cheap liquor stores and bring in some higher paying creatives graphic design studios, architectural practices and talent agencies. Perhaps I was only following the gentrification model Ive absorbed from real-life London.

A screengrab of game play from Project Highrise. Photograph: SomaSim

Project Highrises programmer, Robert Zubek, says the game was not based on any one model of change and it is possible to adopt a number of different strategies to find reliable, long-term profit.

If you imagine a game where your tower is grimy and run down, you dont actually have to fix it, Zubek explains. You can just lower the rent just enough for people to be less unhappy, so that they dont move out. So you can play this slumlord kind of game. It is still dehumanising, because ultimately youre having to treat your tenants as financial resources.

In this respect, the game reflects life all too well. If continually watching the bottom line seems a little grim, there is at least the consolation of playing with the form of your fantasy tower. Would-be architects can tinker with the shape of construction, although SomaSims designers admit to being strongly influenced by the simple, clean modernism of Chicagos Mies van der Rohe for the games basic structural elements.

Its a style that travels well, explains Viglione. And the interior design, the colour palette and furniture were borrowed from the 1960s. Theres something very simple, international and appealing about it. I think the optimism of that era was fantastic.

Intriguingly, some of SomaSims early ideas were too awkward to incorporate into the finished game. One concept the team considered, before it was finally deemed too complex, was offering virtual tenants the chance to sign up to long-term tenancy contracts.

We did consider introducing leases where residents could agree to be locked into long-term leases, says Zubek. But we had a hard time making that easy for the player to understand it just made it harder to enjoy the game. You want to give the player a lot of power so they have the agency to do things.

After six weeks of playing Project Highrise, squeezing tiny tenants living in my laptop tower, I found myself envisioning a different kind of video game: a fantasy world which flipped everything on its head, and put the tenant in control.

In this alternative game (Project Housing Crisis?) wealthy property magnates would be able to vicariously experience the life of an impoverished renter, attempting to dodge rent hikes and the threat of eviction while saving up for a deposit. You never know, it might even make our cities kinder, more human places.

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Airbnb faces worldwide opposition. It plans a movement to rise up in its defence

The room-rental website, now worth $30bn, faces a critical year as city authorities clamp down

In the back room of a pub in Kentish Town, a group of middle-class Londoners are perched on velvet-covered stools, eating hummus and talking about property. On the wall, above a pile of empty beer kegs, a slide presentation is in progress. A video of Airbnbs recent advert shows smiling hosts opening their front doors and declaring their support for Sadiq Khans post-Brexit London is open campaign.

The audience of Airbnb hosts are there after receiving individual invitations from the company to a home sharers meet-up a concept largely unfamiliar to the slightly bemused crowd. Jonathan, an enthusiastic Californian Airbnb employee, who was recently seconded to London to set up the clubs, is happy to explain: Homesharing clubs are simply a way of organising this into something that has a unified voice then actually takes actions as a collective, he says, in a less than clear answer.

More simply, homesharing clubs are advocacy groups made up of Airbnb hosts loose, informal lobbying groups that push the companys agenda to politicians. The clubs are part of a what is fast becoming a concerted fightback by Airbnb, the website founded in 2008 when three college friends rented out air mattresses in their San Francisco flat as a way of making money, to become one of the biggest online travel brands in the world.

But its phenomenal growth is proving to be its greatest liability. Authorities in cities around the world fear the impact it is having on their communities and are now seeking to arrest Airbnbs near unfettered expansion.

The latest in a series of attempts around the world to curb its growth came earlier this month when New York governor Andrew Cuomo signed a bill that will fine tenants or landlords who let out unoccupied flatsfor less than 30 days.

Meanwhile, in Dublin, the owners of one flat have recently been prohibited from using it as an Airbnb let without planning permission, raising the prospect of copycat actions elsewhere.

In Berlin, people who let more than half of their flat short-term without obtaining permission from the city council now risk a fine of 100,000. And in London, a 90-day rule was introduced last year under which no property can be rented out on Airbnb, or any similar service, for more than three months a year without planning permission.

So how is Airbnb responding? In New York the company has filed a lawsuit in the US federal court. But at a wider level the company is now supporting efforts to prevent these types of actions from taking place in the first place. And the best way to do this, Airbnb thinks, is to get its millions of hosts to rise up on its behalf.

Last year the company announced plans for 2016 to create homesharing clubs in 100 cities around the world. The aim, it said, was to form a powerful people-to-people based political advocacy bloc.

The bulk of the clubs are in North America, with a couple in Australia, South America and Asia, and an increasing number in Europe. In Britain, however, the number of clubs is negligible, even though there are more than 40,000 listings on Airbnb. The company is concentrating its efforts on building this UK base. Meetings, such as the one at the Abbey Tavern in Kentish Town, have been happening all over London as Airbnb seeks to build a grassroots campaign to fight the threat of greater regulation and more restrictive policies.

The hosts at the Kentish Town meeting are told that, earlier this year in Berlin, Airbnb dropped the ball after the citys ruling on short-term lets the suggestion being that it did not want this to happen again elsewhere. As a result of that ruling, the Berlin Home Sharers Club was created and started lobbying to try to change what it saw to be an unfair policy. In London, the 90-day rule may itself not be onerous compared to other cities, but there are growing calls for further regulations .

Airbnbs Jonathan steers clear of telling the group that they should lobby for change. On the one hand, would Airbnb like to see homesharing groups set up all over Europe? Absolutely, he says. Would it share in their interests? Absolutely. But whether those sharing clubs decide that their only interest is to share electricians and plumbers or to take political action is completely up to them, he says.

The next slide focuses on Barcelona, a city where, in 2014, Airbnb was fined 30,000 for breaching tourism laws. Later, another slide listing write to your MP as a suggested activity is shown. Writing letters to local newspapers and selected officials is obviously something that we would want to see concerned hosts do, but only if it applies to them and if theyre motivated to do so, Jonathan says.

Chris Lehane, Airbnbs head of global policy and communications, said the clubs act as a voice against the powerful.

These folks absolutely should have the capacity to go out there and represent themselves, and weve been clear that we want to provide that support and provide some of the infrastructure, he said. This can be an incredibly effective advocacy tool. I think weve been pretty transparent and open about that.

The networks of host groups, which in effect lobby on behalf of the company, are an illustration of how far Airbnb has grown since its inception in 2007. Back then, founders Brian Chesky and Joe Gebbia could not afford the rent on their San Francisco flat and so put three airbeds on the floor and charged $80 a piece for their first guests.

Even by the rapid standards of growth in the tech industry, the company has expanded very quickly. It is now valued at $30bn, and claims two million property listings in 191 countries. That valuation puts the worth of the Californian firm at more than Hilton Hotels.

Wouter Geerts, an analyst for Euromonitor International, says this rapid growth has led to the corporatisation of Airbnb, with more listings from other hospitality companies and people with multiple properties. That might be hotels or estate agents, serviced apartment providers. They all look at Airbnb and think actually what is stopping us putting these properties on Airbnb as well and making extra money?. And of course there are more and more stories about landlords that push out long-term tenants because they can make more money through Airbnb, he said.

One of the most frequent criticisms of Airbnb has come from the hospitality industry, which has complained of the differences in regulation that hoteliers have to operate under, compared to Airbnb. But the organisation that acts as the voice of this industry in the UK says it is not just about them. Many councils in London have expressed their concerns recently, says Ufi Ibrahim, chief executive of the British Hospitality Association. Much of that is because the sharing economy and in particular we are talking about the unlawful professional landlords, the pseudo-landlords operating illegally has put a huge strain on rental prices.

Increasing levels of hostility to Airbnb have also started to come from the neighbours of those who let their homes through the website. Last month a property court in London ruled that homeowners whose leases say that their homes can be used only as a private residence cannot rent out their properties as short-term lets. The case came after the neighbours of Slovakian interior designer Iveta Nemcova informed the freeholder of the building that she was listing her flat in north London on Airbnb. As a result, Airbnb hosts have been warned that they could be in breach of the terms of their mortgages and building insurance policies.

One homeowner who spoke to the Observer said that the ground-floor flat in her building had been rented out on Airbnb by a tenant without the knowledge of the owner. As a result, the house insurance of the whole building was potentially invalidated.

In London, Westminster City Council is investigating 1,200 properties alleged to be let in excess of the 90-night limit. Enforcement notices have so far only been issued against two. In practical terms it is a real challenge for us to gather evidence to prove that individuals are letting properties for over 90 nights, a council spokesman said.

The scrutiny that Airbnb faces from both users and policymakers around the world comes after the sites runaway growth. John ONeill, director of the Centre for Hospitality Real Estate Strategy at Pennsylvania State University, estimates that the number of hosts has doubled in the last year with revenue up 60%. With that growth has come an ecosystem of support companies, typically property management firms that submit the advert for the property onto the website and then may manage guests arriving and leaving, dropping off and collecting keys, for example.

The exact effects of this growth on the hotel industry are unclear. The British Hospitality Association said it would be unfair to say there had been an impact on the demand for its members services as a result of Airbnb and instead the association focuses its criticism on the effect on housing. Airbnb says that its growth has been a reflection of how people live, and describes the attacks from the hotel industry as disappointing but not surprising, rejecting claims that it has a negative effect on the housing market.

Homesharing puts money into the pockets of regular people and spreads guests and benefits to more communities and businesses, the company said in a statement. Countless cities around the world have introduced clear home-sharing rules, and we will continue to be good partners to policymakers and work together on progressive measures to promote responsible homesharing. The vast majority of hosts follow the rules, it said.

Where the Airbnb debate goes next, after such a period of rapid growth, is unclear. Some hotel companies, instead of continuing to fight Airbnb, have chosen to join it. The larger hotel chains are moving away from trying to combat Airbnb. Initially there were some kneejerk reactions of we have to lobby against this, we dont exactly know whats happening, they are not regulated well. Most of the companies have moved on from that now and they have started to realise certain potentials that it brings, said Geerts. There is this movement of looking at short-term rentals not as a negative, but more as a positive, and seeing the changing demands of consumers.

This was illustrated in April when French hotels group Accor, said to be Europes largest hotelier by room numbers, paid 118m to acquire Onefinestay, which offers short-term lets on expensive homes.

ONeill estimates that there are 70 lobbyists working for Airbnb in the US, trying to get favourable legislation passed to benefit the company. Most hoteliers I speak with have accepted Airbnbs existence and growth. Their concerns have more to do with levelling the playing field between hotels and Airbnb operators, because Airbnb has so many unfair competitive advantages relative to hotels, he said.

Others have said that regulators need to be fair in how they set out the rules that Airbnb and other similar companies must adhere to. Robert Vaughan, an economist with accountancy firm PwC, said there was a huge variation in those affected from someone renting out their sofa, to landlords with multiple properties and there is a difficulty in applying the same rules to all of them.

ONeill says that while Airbnb may continue to grow, it will not have the free rein it had previously. I dont think there will be a free-for-all of unregulated growth as there has been in the past, he said.

Back at the meeting in Kentish Town, the night ends with a positive response to the homesharing clubs idea. We need to write a letter, suggests one host. We should meet every three months, suggests another. As the meeting draws to a close, nearly everyone agrees on the need for a club. Jonathan jumps in again: I do want to stress that there are other sorts of flavours to home-sharing clubs, he says, launching into a description of a collective bedsheet-washing initiative, but few are listening. As the meeting ends, the group are asked to put their hands up if they want a local club. Nearly every hand goes up.

The Observer reporter who attended the Kentish Town meeting is an Airbnb host

Growing concern around the world


Authorities in the Catalan capital recently stepped up their campaign against homes illegally rented out to tourists using homesharing websites. Hundreds of listings were ordered to be removed, and Airbnb and another online rental firm, Homeaway, faced fines of 60,000 each.

Homeowners who want to rent out properties to tourists must apply for a licence, and a team of 20 inspectors has been set up to find those who do not adhere to the rules. The citys mayor, Ada Colau, who took office in 2015, stopped the granting of new tourist licences for homes and hotels. She has blamed the rise in Airbnb popularity for growing tensions between residents and rowdy tourists.

The number of people using Airbnb in Barcelona tripled to 900,000 in the three years to 2015.


The 1,600 short-term property lets in Icelands capital have to operate under strict rules introduced in June. The legislation allows residents to let their property for 90 days a year before they must pay business tax. The move comes as Icelands population of 332,000 is set to welcome 1.6 million visitors this year a 29% increase on last year drawn by the glaciers, fjords, lava fields, hot springs, hiking trails and midnight sun.

The move is one of a series aimed at controlling the rapid rise in visitor numbers, including Game of Thrones fans travelling to the filming locations of the television drama. One report estimated there was a 124% increase in Airbnb rentals in one year as residents cashed in on the popularity of the country, with more than 100 flats available on the capitals main street alone.


Airbnb said last year that the Russian capital was one of its fastest-growing markets, fuelled by high inflation and low incomes. Activity doubled in one year, driven by an increase of single rooms in apartments, which were being listed for short-terms lets in an attempt by many homeowners to make ends meet, given the countrys economic problems.

The growing interest in Moscow on Airbnb brought it into the top 10 most popular cities by bookings on the website at a time when there was no sign of legislative regulation to restrict use of the service. The sharp increase came at the same time as falling wages, which were down 8.8% in the first half of last year. The average price of a private room for a night in the city is 27, and 45 for an entire home, according to the site.


The city has bucked the trend of some of its European neighbours, and instead worked to make it easier for short-term rentals to operate. Hosts are required to register their properties as short-term rentals but there is no limit on the number of nights per year that they can operate.

Mayor Fernando Medina has said people should not be scared of the new tourism dynamic and wants the city to be able to take in more tourists, in turn reducing the number of empty buildings in Lisbon. Tourism is seen as an important part of Portugals economic recovery. Airbnb listings in the greater Lisbon area have almost tripled in the past three years.


Although the city is home to Airbnbs HQ, it also operates strict rules for hosts, who have to register with authorities. If Airbnb advertises an unregistered property it can be fined $1,000 a day for each listing. One action group has posted wanted flyers. The crime? Airbnbing our community and destroying affordable housing for immigrant, minority, and low-income families. Resident groups have campaigned against Airbnb and there have been reports of tenants being evicted so landlords can list on the site. Last year Airbnb successfully campaigned against Proposition F, or the Airbnb initiative, planned legislation that would have reduced the number of days owners can rent their properties. Airbnbs victory was helped by its grassroots homesharing club, which voted in large numbers against the law.

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The cult of the expert and how it collapsed | Sebastian Mallaby

The Long Read: Led by a class of omnipotent central bankers, experts have gained extraordinary political power. Will a populist backlash shatter their technocratic dream?

On Tuesday 16 September 2008, early in the afternoon, a self-effacing professor with a neatly clipped beard sat with the president in the Roosevelt Room of the White House. Flanked by a square-shouldered banker who had recently run Goldman Sachs, the professor was there to tell the elected leader of the worlds most powerful country how to rescue its economy. Following the bankruptcy of one of the nations storied investment banks, a global insurance company was now on the brink, but drawing on a lifetime of scholarly research, the professor had resolved to commit $85bn of public funds to stabilising it.

The sum involved was extraordinary: $85bn was more than the US Congress spent annually on transportation, and nearly three times as much as it spent on fighting Aids, a particular priority of the presidents. But the professor encountered no resistance. Sometimes you have to make the tough decisions, the president reflected. If you think this has to be done, you have my blessing.

Later that same afternoon, Federal Reserve chairman Ben Bernanke, the bearded hero of this tale, showed up on Capitol Hill, at the other end of Pennsylvania Avenue. At the White House, he had at least been on familiar ground: he had spent eight months working there. But now Bernanke appeared in the Senate majority leaders conference room, where he and his ex-Wall Street comrade, Treasury secretary Hank Paulson, would meet the senior leaders of both chambers of Congress. A quiet, balding, unassuming technocrat confronted the lions of the legislative branch, armed with nothing but his expertise in monetary plumbing.

Bernanke repeated his plan to commit $85bn of public money to the takeover of an insurance company.

Do you have 85bn? one sceptical lawmaker demanded.

I have 800bn, Bernanke replied evenly a central bank could conjure as much money as it deemed necessary.

But did the Federal Reserve have the legal right to take this sort of action unilaterally, another lawmaker inquired?

Yes, Bernanke answered: as Fed chairman, he wielded the largest chequebook in the world and the only counter-signatures required would come from other Fed experts, who were no more elected or accountable than he was. Somehow Americas famous apparatus of democratic checks and balances did not apply to the monetary priesthood. Their authority derived from technocratic virtuosity.

When the history is written of the revolt against experts, September 2008 will be seen as a milestone. The $85bn rescue of the American International Group (AIG) dramatised the power of monetary gurus in all its anti-democratic majesty. The president and Congress could decide to borrow money, or raise it from taxpayers; the Fed could simply create it. And once the AIG rescue had legitimised the broadest possible use of this privilege, the Fed exploited it unflinchingly. Over the course of 2009, it injected a trillion dollars into the economy a sum equivalent to nearly 30% of the federal budget via its newly improvised policy of quantitative easing. Time magazine anointed Bernanke its person of the year. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world, the magazine declared admiringly.

The Feds swashbuckling example galvanized central bankers in all the big economies. Soon Europe saw the rise of its own path-shaping monetary chieftain, when Mario Draghi, president of the European Central Bank, defused panic in the eurozone in July 2012 with two magical sentences. Within our mandate, the ECB is ready to do whatever it takes to preserve the euro, he vowed, adding, with a twist of Clint Eastwood menace, And believe me, it will be enough. For months, Europes elected leaders had waffled ineffectually, inviting hedge-fund speculators to test the cohesion of the eurozone. But now Draghi was announcing that he was badder than the baddest hedge-fund goon. Whatever it takes.Believe me.

In the summer of 2013, when Hollywood rolled out its latest Superman film, cartoonists quickly seized upon a gag that would soon become obvious. Caricatures depicted central-bank chieftains decked out in Superman outfits. One showed Bernanke ripping off his bankers shirt and tie, exposing that thrilling S emblazoned on his vest. Another showed the bearded hero hurtling through space, red cape fluttering, right arm stretched forward, a powerful fist punching at the void in front of him. Superman and Federal Reserve chairman Ben Bernanke are both mild-mannered, a financial columnist deadpanned. They are both calm, even in the face of global disasters. They are both sometimes said to be from other planets.

At some point towards the middle of the decade, shortly before the cult of the expert smashed into the populist backlash, the shocking power of central banks came to feel normal. Nobody blinked an eye when Haruhiko Kuroda, the head of Japans central bank, created money at a rate that made his western counterparts seem timid. Nobody thought it strange when Britains government, perhaps emulating the style of the national football team, conducted a worldwide talent search for the new Bank of England chief. Nobody was surprised when the winner of that contest, the telegenic Canadian Mark Carney, quickly appeared in newspaper cartoons in his own superman outfit. And nobody missed a beat when Indias breathless journalists described Raghuram Rajan, the new head of the Reserve Bank of India, as a rock star, or when he was pictured as James Bond in the countrys biggest business newspaper. Clearly I am not a superman,Rajan modestly responded.

If Bernankes laconic I have 800bn moment signalled a new era of central-banking power, Rajans I am not a superman wisecrack marked its apotheosis. And it was a high watermark for a wider phenomenon as well, for the cult of the central banker was only the most pronounced example of a broader cult that had taken shape over the previous quarter of a century: the cult of the expert. Even before Bernanke rescued the global economy, technocrats of all stripes business leaders, scientists, foreign and domestic policy wonks were enthralled by the notion that politicians might defer to the authority of experts armed with facts and rational analysis. Those moments when Bernanke faced down Congress, or when Draghi succeeded where bickering politicians had failed, made it seem possible that this technocratic vision, with its apolitical ideal of government, might actually be realised.

The key to the power of the central bankers and the envy of all the other experts lay precisely in their ability to escape political interference. Democratically elected leaders had given them a mission to vanquish inflation and then let them get on with it. To public-health experts, climate scientists and other members of the knowledge elite, this was the model of how things should be done. Experts had built Microsoft. Experts were sequencing the genome. Experts were laying fibre-optic cable beneath the great oceans. No senator would have his childs surgery performed by an amateur. So why would he not entrust experts with the economy?

In 1997, the economist Alan Blinder published an essay in Foreign Affairs, the house journal of the American foreign policy establishment. His title posed a curious question: Is government too political?

Four years earlier, Blinder had left Princeton University, his academic home for two decades, to do battle in the public square as a member of President Bill Clintons Council of Economic Advisors. The way Blinder saw things, this was a responsibility more than a pleasure: experts had a duty to engage in public debates otherwise, the quacks would continue to dominate the pond, as he had once written. Earnest, idealistic, but with a self-deprecating wit, Blinder was out to save the world from returning to that dark period in the Reagan era when supply-side ideologues ruled the roost and nonsense was worshipped as gospel. After two years at the White House and another two as vice chairman of the Fed, Blinders essay was a reflection on his years of service.

His argument reflected the contrast between his two jobs in Washington. At the White House, he had advised a brainy president on budget policy and much else, but turning policy wisdom into law had often proved impossible. Even when experts from both parties agreed what should be done, vested interests in Congress conspired to frustrate enlightened progress. At the Fed, by contrast, experts were gloriously empowered. They could debate the minutiae of the economy among themselves, then manoeuvre the growth rate this way or that, without deferring to anyone.

To Blinder, it was self-evident that the Fed model was superior not only for the experts, but also in the eyes of the public. The voters did not want their members of Congress micromanaging technical affairs polls showed declining trust in politicians, and it was only a small stretch to suggest that citizens wanted their political leaders to delegate as much as possible to experts. Americans increasingly believe that their elected officials are playing games rather than solving problems, Blinder wrote. Political debate has too much spin and too little straight talk. In sum, too much meddling by elected politicians was a turn-off for the voters who elected them. It was a paradoxical contention.

Disaffection with the political mainstream in the America of the 1990s had created a yearning for white-hatted outsiders as potential presidential candidates: the billionaire businessman Ross Perot, who ran in 1992 and 1996; the anti-politician, Steve Forbes, whose signature proposal was to radically simplify Americas byzantine tax code. But rather than replace politicians with populist outsiders, whose grasp of public policy was suspect, Blinder advanced an alternative idea: the central-bank model of expert empowerment should be extended to other spheres of governance.

Blinders proposal was most clearly illustrated by tax policy. Experts from both political parties agreed that the tax system should be stripped of perverse incentives and loopholes. There was no compelling reason, for example, to encourage companies to finance themselves with debt rather than equity, yet the tax code allowed companies to make interest payments to their creditors tax-free, whereas dividend payments to shareholders were taxed twice over. The nation would be better off if Congress left the experts to fix such glitches rather than allowing politics to frustrate progress. Likewise, environmental targets, which balanced economic growth on the one hand and planetary preservation on the other, were surely best left to the scholars who understood how best to reconcile these duelling imperatives. Politicians who spent more of their time dialing for dollars than thinking carefully about policy were not up to these tasks. Better to hand them off to the technicians in white coats who knew what they were doing.

The call to empower experts, and to keep politics to a minimum, failed to trigger a clear shift in how Washington did business. But it did crystallise the assumptions of the late 1990s and early 2000s a time when sharp criticisms of gridlock and lobbying were broadly accepted, and technocratic work-arounds to political paralysis were frequently proposed, even if seldom adopted. President Barack Obamas (unsuccessful) attempt to remove the task of tackling long-term budget challenges from Congress by handing them off to the bipartisan Simpson-Bowles commission was emblematic of this same mood. Equally, elected leaders at least paid lip service to the authority of experts in the governments various regulatory agencies the Food and Drug Administration, the Securities and Exchange Commission, and so on. If they nonetheless overruled them for political reasons, it was in the dead of night and with a guilty conscience.

And so, by the turn of the 21st century, a new elite consensus had emerged: democracy had to be managed. The will of the people had its place, but that place had to be defined, and not in an expansive fashion. After all, Bill Clinton and Tony Blair, the two most successful political leaders of the time, had proclaimed their allegiance to a third way, which proposed that the grand ideological disputes of the cold war had come to an end. If the clashes of abstractions communism, socialism, capitalism and so on were finished, all that remained were practical questions, which were less subjects of political choice and more objects of expert analysis. Indeed, at some tacit, unarticulated level, a dark question lurked in educated minds. If all the isms were wasms, if history was over, what good were politicians?

Federal Reserve chairman Ben Bernanke testifies before Congress in October 2011. Photograph: Jim Lo Scalzo/EPA

For Blinder and many of his contemporaries,the ultimate embodiment of empowered gurudom was Alan Greenspan, the lugubrious figure with a meandering syntax who presided over the Federal Reserve for almost two decades. Greenspan was a technocrats technocrat, a walking, talking cauldron of statistics and factoids, and even though his ideological roots were in the libertarian right, his happy collaboration with Democratic experts in the Clinton administration fitted the end-of-history template perfectly. At Greenspans retirement in 2006, Blinder and a co-author summed up his extraordinary standing. They proclaimed him a living legend. On Wall Street, financial markets now view Chairman Greenspans infallibility more or less as the Chinese once viewed Chairman Maos.

Greenspan was raised during the Great Depression, and for much of his career, such adulation would have been inconceivable for him or any central banker. Through most of the 20th century, the men who acted as bankers to the bankers were deliberately low-key. They spurned public attention and doubted their own influence. They fully expected that politicians would bully them into trying to stimulate the economy, even at the risk of inflation. In 1964, in a successful effort to get the central bank to cut interest rates, Lyndon Johnson summoned the Fed chairman William McChesney Martinto his Texas ranch and pushed him around the living room, yelling in his face, Boys are dying in Vietnam, and Bill Martin doesnt care! In democracies, evidently, technocratic power had limits.

Through the 1970s and into the 1980s, central-bank experts continued to be tormented. Richard Nixon and his henchmen once smeared Arthur Burns, the Fed chairman, by planting a fictitious story in the press, insinuating that Burns was simultaneously demanding a huge pay rise for himself and a pay freeze for other Americans. Following in this tradition, the Reagan administration frequently denounced the Fed chief, Paul Volcker, and packed the Feds board with pro-Reagan loyalists, who ganged up against their chairman.

When Greenspan replaced Volcker in 1987, the same pattern continued at first. The George HW Bush administration tried everything it could to force Greenspan to cut interest rates, to the point that a White House official put it about that the unmarried, 65-year-old Fed chairman reminded him of Norman Bates, the mother-fixated loner in Hitchcocks Psycho.

And yet, starting with the advent of the Clinton administration, Greenspan effected a magical shift in the prestige of monetary experts. For the last 13 years of his tenure, running from 1993 to 2006, he attained the legendary status that Blinder recognised and celebrated. There were Alan Greenspan postcards, Alan Greenspan cartoons, Alan Greenspan T-shirts, even an Alan Greenspan doll. How many central bankers does it take to screw in a lightbulb? asked a joke of the time. One, the answer went: Greenspan holds the bulb and the world revolves around him. Through quiet force of intellect, Greenspan seemed to control the American economy with the finesse of a master conductor. He was the Maestro, one biographer suggested. The New Yorkers John Cassidy wrotethat Greenspans oracular pronouncements became as familiar and as comforting to ordinary Americans as Prozac and The Simpsons, both of which debuted in 1987, the same year President Reagan appointed him to office.

Greenspans sway in Washington stretched far beyond the Feds core responsibility, which was to set interest rates. When the Clinton administration wanted to know how much deficit reduction was necessary, it asked Greenspan for a number, at which point that number assumed a talismanic importance, for no other reason than that Greenspan had endorsed it. When Congress wanted to understand how far deficit reduction would bring bond yields down, it demanded an answer from Greenspan, and his answer duly became a key plank of the case for moving towards budget balance. The Clinton adviser Dick Morris summed up economic policy in this period: You figure out what Greenspan wants, and then you get it to him.

Greenspan loomed equally large in the US governments management of a series of emerging market meltdowns in the 1990s. Formally, the responsibility for responding to foreign crises fell mainly to the Treasury, but the Clinton team relied on Greenspan for ideas and for political backing. With the Republicans controlling Congress, a Democratic president needed a Republican economist to vouch for his plans to the press, Congress, and even the conservative talk radio host Rush Limbaugh. Officials at the notoriously reticent Federal Reserve say they have seldom seen anything like it, the New York Times reported in January 1995, remarking on the Fed chairmans metamorphosis from monetary technocrat into rescue salesman. In 1999, anticipating the moment when it anointed Ben Bernanke its man of the year, Time put Greenspan on its cover, with smaller images of the Treasury secretary and deputy Treasury secretary flanking him. Greenspan and his sidemen were economist heroes, Time lectured its readers. They had outgrown ideology.

By the last years of his tenure, Greenspans reputation had risen so high that even fellow experts were afraid of him. When he held forth at the regular gatherings of central bank chiefs in Basel, the distinguished figures at the table, titans in their own fields, took notes with the eagerness of undergraduates. So great was Greenspans status that he started to seem irreplaceable. As vice-president Al Gore prepared his run for the White House, he pronounced himself Greenspans biggest fan and rated the chairmans performance as outstanding A-plus-plus. Not to be outdone, the Republican senator John McCain wished the chairman could stay at his post into the afterlife. I would do like we did in the movie Weekend at Bernies, McCain joked during a Republican presidential primary debate. Id prop him up and put a pair of dark glasses on him and keep him as long as we could.

How did Greenspan achieve this legendary status, creating the template for expert empowerment on which a generation of technocrats sought to build a new philosophy of anti-politics? The question is not merely of historical interest. With experts now in retreat, in the United States, Britain and elsewhere, the story of their rise may hold lessons for the future.

Part of the answer lies in the circumstances that Greenspan inherited. In the United States and elsewhere, central bankers were given space to determine interest rates without political meddling because the existing model had failed. The bullying of central banks by Johnson and Nixon produced the disastrous inflation of the 1970s, with the result that later politicians wanted to be saved from themselves they stopped harassing central banks, understanding that doing so damaged economic performance and therefore their own reputations. Paul Volcker was a partial beneficiary of this switch: even though some Reagan officials attacked him, others recognised that he must be given the space to drive down inflation. Following Volckers tenure, a series of countries, starting with New Zealand, granted formal independence to their central banks. Britain crossed this Rubicon in 1997. In the United States, the Feds independence has never been formal. But the climate of opinion on monetary issues offered a measure of protection.

Healthy economic growth was another factor underpinning Greenspans exalted status. Globalisation, coupled with the surge of productivity that followed the personal computer revolution, made the 1990s a boom time. The pro-market policies that Greenspan and his fellow experts had long advocated seemed to be delivering the goods, not only in terms of growth but also in falling inequality, lower rates of crime, and lower unemployment for disadvantaged minorities. The legitimacy of experts relies on their presumed ability to deliver progress. In Greenspans heyday, experts over-delivered.

Yet these fortunate circumstances are not the whole story. Greenspan amassed more influence and reputation than anyone else because there was something special about him. He was not the sort of expert who wanted to confine politics to its box. To the contrary, he embraced politics, and loved the game. He understood power, and was not afraid to wield it.

Greenspan is regarded as the ultimate geek: obsessed with obscure numbers, convoluted in his speech, awkward in social settings. Yet he was far more worldly than his technocratic manner suggested. He entered public life when he worked for Nixons 1968 campaign not just as an economic adviser, but as a polling analyst. In Nixons war room, he allied himself with the future populist presidential candidate Patrick Buchanan, and his memos to Nixon were peppered with ideas on campaign spin and messaging. In 1971, when Nixon went after the Fed chairman, Arthur Burns, Greenspan was recruited to coax Burns into supporting the president. In the mid-1970s, when Greenspan worked in the Gerald Ford administration, he once sneaked into the White House on a weekend to help rewrite a presidential speech, burying an earlier draft penned by a bureaucratic opponent. At the Republican convention in 1980, Greenspan tried to manoeuvre Ford on to Ronald Reagans ticket an outlandish project to get an ex-president to serve as vice president.

Greenspans genius was to combine high-calibre expert analysis with raw political methods. He had more muscle than a mere expert and more influence than a mere politician. The combination was especially potent because the first could be a cover for the second: his political influence depended on the perception that he was an expert, and therefore above the fray, and therefore not really political. Unlike politician-politicians, Greenspans advice had the ring of objectivity: he was the man who knew the details of the federal budget, the outlook for Wall Street, the political tides as they revealed themselves through polling data. The more complex the problems confronting the president, the more indispensable Greenspans expertise became. He has the best bedside manner Ive ever seen, a jealous Ford administration colleague recalled, remarking on Greenspans hypnotic effect on his boss. Extraordinary. That was his favourite word. Hed go in to see Ford and say, Mr President, this is an extraordinarily complex problem. And Fords eyes would get big and round and start to go around in circles.

By the time Greenspan became Fed chairman, he was a master of the dark arts of Washington. He went to extraordinary lengths to cultivate allies, fighting through his natural shyness to attend A-list parties, playing tennis with potentially troublesome financial lobbyists, maintaining his contacts on Wall Street, building up his capital by giving valuable counsel to anyone who mattered. Drawing on the advantage of his dual persona, Greenspan offered economic advice to politicians and political advice to economists. When Laura Tyson, an exuberant Berkeley economist, was appointed to chair Bill Clintons Council of Economic Advisers, she was flattered to find that the Fed chairman had tips on her speaking style. Too many hand gestures and facial expressions could undermine her credibility, Greenspan observed. The CEA chairwoman should simply present facts, with as little visual commentary as possible.

Greenspans critics frequently complained that he was undermining the independence of the Fed by cosying up to politicians. But the critics were 180 degrees wrong: only by building political capital could Greenspan protect the Feds prerogatives. Clinton had no natural love for Greenspan: he would sometimes entertain his advisers with a cruel imitation of him a cheerless old man droning on about inflation. But after a landmark 1993 budget deal and a 1995 bailout of Mexico, Clinton became a firm supporter of the Fed. Greenspan had proved that he had clout. Clinton wanted to be on the right side of him.

The contrast with Greenspans predecessor, the rumpled, egg-headed Paul Volcker, is revealing. Volcker lacked Greenspans political skills, which is why the Reagan administration succeeded in packing his board with governors who were ready to outvote him. When Greenspan faced a similar prospect, he had the muscle to fight back: in at least one instance, he let his allies in the Senate know that they should block the presidents candidate. Volcker also lacked Greenspans facility in dealing with the press he refused to court public approval and sometimes pretended not to notice a journalist who had been shown into his office to interview him. Greenspan inhabited the opposite extreme: he courted journalists assiduously, opening presents each Christmas at the home of the Wall Street Journals Washington bureau chief, Al Hunt, flattering reporters with private interviews even as he berated other Fed governors for leaking to them. It was only fitting that, halfway through his tenure, Greenspan married a journalist whose source he had once been.

The upshot was that Greenspan maximised a form of power that is invaluable to experts. Because journalists admired him, it was dangerous for politicians to pick a fight with the Fed: in any public dispute, the newspaper columnists and talking heads would take Greenspans side of the argument. As a result, the long tradition of Fed-bashing ceased almost completely. Every Washington insider understood that Greenspan was too powerful to touch. People who got on the wrong side of him would find their career prospects dim. They would see their intellectual shortcomings exposed. They would find themselves diminished.

Mark Carney, the governor of the Bank of England, in 2015. Photograph: Jonathan Brady/AFP/Getty Images

Of course, the triumph of the expertwas bound to be fragile. In democracies, the will of the people can be sidelined only for so long, and 2016 has brought the whirlwind. The Brexit referendum featured Michael Goves infamous assertion that the British people have had enough of experts. Since the vote, Mark Carney, the Bank of England governor once pictured as superman, has been accused by the government of running dubious monetary experiments that exacerbate inequality an attack picked up by William Hague, who this week threatened the central bank with the loss of its independence unless it raised interest rates. In the United States, Donald Trump has ripped into intellectuals of all stripes, charging Fed chair Janet Yellen with maintaining a dangerously loose monetary policy in order to help Obamas poll ratings.

Both Gove and Trump sensed, correctly, that experts were primed for a fall. The inflationary catastrophe sparked by 1970s populism has faded from the public memory, and no longer serves as a cautionary tale.Economies have recovered disappointingly from the 2008 crash a crash, incidentally, for which Greenspan must share the blame, since he presided over the inflation of the subprime mortgage bubble. What little growth there has been has also passed most people by, since the spoils have been so unequally distributed. If the experts legitimacy depends on delivering results, it is hardly surprising that they are on the defensive.

And yet the history of the rise of the experts should remind us of three things. First, the pendulum will swing back, just as it did after the 1970s. The saving grace of anti-expert populists is that they do discredit themselves, simply because policies originating from the gut tend to be lousy. If Donald Trump were to be elected, he would almost certainly cure voters of populism for decades, though the price in the meantime could be frightening. In Britain, which is sliding towards a wreck of a divorce with its most important trading partners, the delusions and confusions of the Brexit camp will probably exact an economic price that will be remembered for a generation.

Second,Alan Blinder had a point: democratic politics is prone to errors and gridlock, and there is much to be said for empowering technocrats. The right balance between democratic accountability and expert input is not impossible to strike: the model of an independent central bank does provide a template. Popularly elected politicians have a mandate to determine the priorities and ambitions of the state, which in turn determine the goals for expert bodies whether these are central banks, environmental agencies, or the armed forces. But then it behooves the politicians to step back. Democracy is strengthened, not weakened, when it harnesses experts.

Thirdly, however, if the experts want to hasten their comeback, they must study the example of Greenspans politicking. It is no use thinking that, in a democracy, facts and analysis are enough to win the day. As the advertising entrepreneur John Kearon has argued, the public has to feel you are correct; the truth has to be sold as well as told; you have to capture the high ground with a brand that is more emotionally compelling than that of your opponents. In this process, as Greenspans career demonstrates, the media must be wooed. Enemies must be undermined. And, if you succeed, your face might just appear on a T-shirt.

Two decades ago, in his final and posthumous book, the American cultural critic Christopher Lasch went after contemporary experts. Elites, who define the issues, have lost touch with the people, he wrote. There has always been a privileged class, even in America, but it has never been so dangerously isolated from its surroundings. These criticisms presciently anticipated the rise of Davos Man the rootless cosmopolitan elite, unburdened by any sense of obligation to a place of origin, its arrogance enhanced by the conviction that its privilege reflects brains and accomplishment, not luck and inheritance. To survive these inevitable resentments, elites will have to understand that they are not beyond politics and they will have to demonstrate the skill to earn the public trust, and preserve it by deserving it. Given the alternative, we had better hope that they are up to it.

The Man Who Knew: The Life and Times of Alan Greenspan by Sebastian Mallaby is out now. To order a copy for 20.50, go to or call 0330 333 6846

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‘I feel used and betrayed’: readers affected by the recession on who they’ll vote for

Eight years after the economic collapse, are Americans better off? As the election nears, readers share their experiences and how it will affect their vote

Eight years ago, the US economy went to hell. Lehman Brothers bank collapsed, the first of many. As a financial crisis swept the globe, unemployment soared, house prices and stock markets collapsed. Today, stock markets are at record highs, house prices have bounced back, the unemployment rate is 5%, half its peak during the recession. And yet …

Earlier this month we told the stories of five people who lived through the recession, many of whom said the recovery feels hollow. Below readers who responded to the story share their experiences and how it will impact their vote.

Craig from Jacksonville, Florida

Are you better off today than you were in 2008? I am about the same. In 2008 I was just two years out from finishing my undergraduate degree. I had the option to graduate early but when things began to turn dark, every intelligent person I knew told me to hold off. I remained in school for another year thinking I could wait it out. Boy, was I wrong. I ended up going to graduate school hoping to wait out the storm again. Turns out, that didnt help much either. After graduating as a highly skilled student, finding full-time employment was about as easy as finding affordable living in Manhattan.

Since then, I worked just about everywhere. I have done consultant research, bussed tables, worked in an emergency room and even spent a year working at a Florida beach bar all while applying for applicable jobs in my field that came with benefits. I finally have a job, but the amount of debt I have acquired and the amount of job insecurity I still feel has me on edge about as bad as 2008.

Who will you vote for? I am absolutely terrified of what is to come November 8. I am still a Florida registered voter so maybe my vote counts (if it does not end up on a beach somewhere). I plan to close my eyes and vote for Clinton. My biggest fear is that an economic bubble worse than 2008 is coming and that I will go back to bussing tables and serving drinks again.

Lori from Denver, Colorado

Are you better off today than you were in 2008? I am better off than I was in 2008. In 2008, I just started working after an awful divorce. My ex-husband was a homebuilder and laid off in the crash and there went my maintenance and child support. Today, Im an executive assistant for a CEO. Im better off because my first job after being a stay-at-home mom for 13 years paid $50,000 and I was thrilled. In 2016, Im now at $75,000 so Ive taken some job risks but its paid off.

But everything else my cost of living seems to have absolutely skyrocketed. I literally live paycheck to paycheck. I have two kids in college and I pay their auto, health insurance and cellphones. Its crazy and Im a tad frightened for the world theyll enter soon. Not sure theyll ever be able to buy a home, at least here in Colorado.

Who will you be voting for? I literally despise the Clintons so I cant vote for HRC. I always wanted to vote for the first woman, too. Theyre too sleazy for me. Trump scares the shit out of me. I was leaning toward him in the beginning because I do think a business person might bring a fresh perspective but, Jesus, not now.

I think Ill write in Bernies name. I dont know what else to do.

A supporter of Bernie Sanders carries a placard during a rally outside the Democratic national convention in July. Photograph: Dominick Reuter/Reuters

Kurt Johnson from Woodstock, Georgia

Are you better off today than you were in 2008? I am better off than I was in 2008. The economy was in a total nosedive. Obama wasted no time approving large measures to stop the bleeding. I work in real estate investing. Real estate where I live has returned to 2007 prices and as a result, we have enjoyed a good ride of appreciation of homes we have bought over the last eight years.

Who will you be voting for? I cant vote for the current Republican candidate under any circumstances. He is not fit to be a CEO, much less a president. I would be fine with things staying as they are so Hillary doesnt concern me that much. The Senate and House will keep her from making any changes for better or worse so I can stomach another four years until a respectable Republican runs in 2020.

Willard from San Jose, California

Are you better off today than you were in 2008? I am better off than I was in 2008.
The economy is in far better condition. Housing has recovered.

Who will you be voting for? The economy will play a role with how Ill vote. Both parties make big promises which I dont expect to be fulfilled. But at least Trump does discuss trade, jobs and manufacturing. If Congress agreed with a fraction of his bluster it might improve the economy.
But Ill NOT be voting for HRC because she is corrosive, divisive and corrupt to the core. On account of her, and with the current administrations help our trust in the Department of Justice has been destroyed.
Ill be voting Trump.

Donald Trump in Greensboro, North Carolina, last week. Photograph: Evan Vucci/AP

Eric from Framingham, Massachusetts

Are you better off today than you were in 2008? I am worse off than I was in 2008. I have not had a steady income since I left teaching in 2012. I lost my home to Wells Fargo and now live with a friend. I dont have health insurance.

I have a masters degree in education, a BA, speak three languages, and I am a veteran with combat experience, yet dont have a full-time job or meaningful part-time work. I dont make more than $15,000 a year. Its unlikely that at 53 I will ever work full-time again. So what, another 20-plus years of this meaningless existence?
When people do that horrible thank you for your service [thing], I want to scream and tell them that serving my country as a soldier and my community as a teacher were the worst mistakes of my life. I should have gone into business, gone for my self and not the greater good, and been selfish and greedy instead.
Left behind, no. Forgotten.

Who will you be voting for? Not voting, dont care.

Leslie from Wilmington, North Carolina

Are you better off today than you were in 2008? I am worse off than I was in 2008.

Why? I had to close the company. I went from earning $70,000 a year to now working two jobs, one full time for $37,000 a year and one part time (evenings and weekends) to bring my salary to $41,000. My health insurance costs have skyrocketed. Food is more expensive. I have a home that I cannot sell as I am still underwater. I had to use all my savings to help pay for my daughters education so she is not lumbered with loans when she graduates.

Who will you be voting for? I hate them both. I do feel that if Clinton is elected it will be the same, no change in the housing market, no change in income, no change in healthcare costs just more of the same. It is appalling and tragic that we have two awful people to choose from. It just shows the level of corruption and dysfunction in this country.

Jacob Lutz from Portland, Oregon

Are you better off today than you were in 2008? I am about the same.

Why? In 2008, I was a student and a cashier at Kmart. I was transitioning from foster care to adulthood while balancing a part-time job with my first and last attempt at higher education. I was overwhelmed with the responsibility of college and surviving on $6.75 an hour but managed to survive thanks to my home states support system for foster children and lack of financial burden.

Today, I am a motorcycle technician and make around $30,000 a year and owe $20,000 in student loans. I also pay $200 a month for health insurance and bills on top of barely supporting myself. The stress is still the same but Ive gotten better at handling it. Lowering my hopes and expectations significantly has helped too.

Who will you be voting for? I had more faith in Bernie than Hillary regarding the economy but since hes not an option, Im with her. I still believe Hillary knows how to listen to what people are wanting and has the clout in Washington to get more done.

Hillary Clinton greets the crowd after speaking at a fundraiser in San Francisco earlier this month. Photograph: Lucy Nicholson/Reuters

Peter Berry from Seattle, Washington

Are you better off today than you were in 2008? I am worse off than I was in 2008. I no longer have a good, well-paying job and benefits. I was forced by circumstances to use up a good portion of my retirement savings to relocate and survive. I also used a lot of my savings to pay off my sons college law school loans as he has been unable to find even an entry-level job in the law profession.

I had a successful, lifelong, professional career that disappeared overnight, and was unable to find comparable work because of my age and the terrible state of the economy.

I think my efforts to navigate my way through the economic downturn likely mirror those of so many others. It isnt just the loss of decent paying jobs that has been an issue. Its also the erosion of savings meant for retirement. Also the enormous debts that have been run up for financial bailouts and the cheap money used to inflate the stock market will have to be faced eventually.
I believe the entire political establishment has been complicit in what has happened. I worked on Obamas first election campaign and contributed quite a bit of my own money believing the hope and change message. I felt optimistic that it was a possibility. Now I just feel used and betrayed.

Who will you be voting for? I will be voting for Jill Stein because she represents the only real choice that exists. The Democrats and Republicans are the same in virtually every meaningful respect and do not represent the interests of the average person at all. The definition of a wasted vote is voting for either of them.

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The Guardian view on the US presidency: the time is right for a female leader | Editorial

Editorial: Hillary Clinton failed to take account of the populist anger and lost ground to the rightwing demagoguery of Donald Trump. But in belatedly recognising widespread frustration with elites she deserves to win

The final presidential debate, thankfully the last set piece in a wretched campaign, revealed what is admirable and loathsome in American politics. Hillary Clinton displayed a razor-sharp intelligence and a quick wit. Her facility with facts trumped Donald Trumps lack of them. Americans finally saw on Wednesday why Secretary Clinton had got rich from giving lectures after leaving office. Her fluency with words, which has earned her $22m in speaking fees, appeared to silence her opponent. Mr Trump, a boastful, thin-skinned billionaire who trades in racism and misogyny, was left squawking on the sidelines of the debate. His jibes revealed aman out of his depth. His answer was to plunge down deeper. By disgracefully refusing to rule out calling this a rigged election he gave up a fight he had by then lost.

Americans should vote for Secretary Clinton as an able and proven politician. A Trump presidency would be bad for America and dangerous for the world, so a vote for Secretary Clinton is the most effective way of preventing it. Mr Trump has been exposed for questionable tax arrangements, outrageous business practices and irregularities at his charity. The billionaire is a grabber and kisser of women who he presumed gave consent because he was famous. There are numerous allegations of sexual assault by Mr Trump. He has demonstrated that he has neither the conscience, training nor sense of history and the desire to be judged well by it to occupy the White House. Secretary Clinton possesses such attributes. She has a serious and sustained commitment on issues like education, healthcare and equality, and she has stood consistently for the rights of women, ethnic minorities, children and the disabled through her long career.

However, there are fewer reasons to vote for Secretary Clinton than one would have hoped. For more than two decades she has been part of a political establishment that shaped a dysfunctional country. She has been unable to escape being tarnished by the most damaging policies notably around criminal justice ofher husbands administration. There are well-founded concerns, highlighted by transcripts of her speeches, that she is too close to Wall Street to be an effective check onits excesses ifelected.

The mood for change

Even so, as the first female president she would represent a symbolic transformative change in American politics. In some ways what Secretary Clinton has had to deal with are ingrained cultural attitudes about what success and leadership look like. These were exposed by the finding that Mr Trump would win if only men voted and Secretary Clinton would win if only women voted. That most men favor MrTrump over Secretary Clinton demonstrates at some level a more insidious sexism than the one Mr Trump peddles: that centred on the mind, not the body. It is a hostility deeply embedded but rarely conceded against seeing women as genuinely equal.

There is little doubt that the 2016 presidential campaign has been one of the most confrontational contests of the modern era. The mood for change has been more pervasive and volatile, and has been supercharged by Mr Trump, a braggart with tyrannical instincts. The backdrop to this election has been genuine and understandable public anger about economic insecurity, growing inequality and frustration with elites. Mr Trump on the right and Bernie Sanders on the left have reflected that mood in their very different ways. That is not going to disappear after 8 November. The election has also raised real questions about the crisis of American democracy. Mr Trump encouraged violence against opponents and threatened to jail Secretary Clinton if he took office.

The civility that has marked out US democracy as ordered and restrained appears dead. The next president will have to resurrect it. The political topography of a polarized and resentful nation has been obscured by the preternatural equanimity of Barack Obama. Mr Trump has in some ways skilfully exploited these divisions. On social security he has moved to the left on the campaign trail, telling jobless Americans that he would not touch their benefits. Mr Trump also wants to repeal the Affordable Care Act, the landmark measure that increases health coverage for low-wage workers and benefits large numbers of immigrants and minorities. This contrasts with the real estate magnates offer to expand the US health programme for the elderly Medicare which benefits overwhelmingly older, whiter voters.

These dog whistles have been part of American politics for decades. But they come at a time when there is a sense that there are too many losers from economic growth in the country. Driving discontent in the US is a system that no longer defuses high levels of inequality with opportunities for all. Themiddle classes are poorer today than in 2000. Since the Great Recession the top 1% of families in the US have captured 52% of the income growth. Theres understandable anger that the wealthy were bailed out while ordinary Americans were hollowed out. Voters rage that, in the current incarnation of globalization, jobs that disappeared when the US decided to import rather than manufacture did not come back they simply popped up elsewhere, usually in China.

The Sanders effect

Nowhere has this fury been more keenly felt than in the countrys former manufacturing heartlands, tapping into Americas long history of resistance to free trade and making protectionism a potent political force once again. The politician who has shaped the politics of the country and accounted for populist anger is Senator Sanders. The man from Vermont understood, earlier than most, that voters see the economy as rigged against them by a political system that has been corrupted by big money. His campaign was backed three to one by millennials in the Democratic primaries. This month his favorability ratings in opinion polls are only bettered by MichelleObama.

Senator Sanders insurgent campaign has transformed Democratic politics forcing Secretary Clinton to adopt, albeit sotto voce, key planks of his program such as a federal minimum wage of $15 an hour, tuition-free public college and opposition to the Trans-Pacific Partnership President Obamas big trade deal. Until this week, Secretary Clinton failed to outline enough of a bold reform program. Tellingly, she offered signs of one in the final televised debate, making unprompted promises to push immigration reforms, a key Sanders point, within the first 100 days of her presidency.

Although domestic politics has framed the campaign, Secretary Clintons election would be greeted with relief and optimism in most world capitals other than Moscow and Damascus. Despite her hawkish outlook, she will have no alternative but to recognize that the 21st century no longer always looks to the United States as an indispensable hegemon, whether benign or threatening. Secretary Clinton should focus on US soft, not hard, power dealing with climate change and working out fairer global trade arrangements.

If Secretary Clinton is elected she must recognize the mood without pandering to its demons. She needs to bring the bold ambition about the role of government to this era that Theodore and Franklin Roosevelt each did in earlier times. She has the intelligence, the seriousness and the experience to do this. TheUS presidency is hugely powerful: 10% of all posts in federal government are allocated on the basis of political patronage. Secretary Clinton offers the best chance of ensuring those jobs go to competent people. Her choice of Treasury secretary in the aftermath of the banking crisis will be watched with special care, as will an olive branch appointment to Senator Sanders of the kind that president Obama made to her in 2008. She offers the greatest hope that the supreme court defends abortion rights and looks again at issues like campaign finance as well as background checks on gun owners. Yet America will soon find itself weakened at home and abroad if the new president is as badly served by congress as Mr Obama has been for most of his tenure.

There is a danger, if Mrs Clinton wins, thatthe Republicans will relapse into the Hillary-hatred that has marked them for a quarter century. The tragedy of this election isthat, to become president, Secretary Clinton has had to talk more radically than she actually felt; to be an effective president she may be compelled to act more conservatively than shenow says she wants to do.

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Be So Stupid They Cant Ignore You

I had an idea for a business. This was 1993. I was going to take videos of houses for sale.

I would charge a real estate agency per house I videotaped. I was going to get rich. Rich!

Customers of the agency would no longer have to go to the house. They could just go to the agency and watch the video.

I went to six real estate agencies and they actually laughed at me and said no thanks. That was the end of that business idea.

Heres what I didnt have:

  • A video camera
  • Any video skills whatsoever. I never had taken a video before.
  • Zero sales ability. I had never tried to sell anything before.
  • Zero money. I had no idea how I would buy a video camera.
  • Zero knowledge. Did the real estate agency have VCRs?
  • I didnt have a car. How was I going to drive miles around to every house?

I didnt know anything. I didnt have anything. I had no resources.

I gave up.

Today Im meeting with a company that does virtual reality tours of houses. Theyve signed up one of the largest real estate agencies in the world.

Does this mean I should have been persistent?

Of course not.

Ready. Fire. Aim.

Thats the ONLY way you can learn, not waste time, move on to the next experience.

Stupidity is the rungs on the ladder to success.

So then I applied for a job at a comic book store. I loved comics.

We dont really have enough business to hire people, the guy at the comic book store told me.

I wrote four or five novels (I honestly forget) that never got published.

I had them printed up and I saved them for over 20 years. You never know!

Recently I threw them all out. Gone forever. Should I have been persistent?

Of course not! They were horrible.

After I left graduate school, I wanted to have an interesting experience. I tried to move into a homeless shelter.

To be honest, I was so down on myself I thought the best way to meet women would be in a homeless shelter.

It would be like a college dormitory, I thought. Only everyone would be homeless. And lovable.

The manager at the homeless shelter thought I was too crazy to live in a homeless shelter. He said, No.

Persistence is overrated.

If they had said, yes, to me working at the comic book store then I probably wouldnt today be about to interview one of my favorite all time singers.

If the gatekeepers had published any of my novels Id be a struggling and unhappy writer.

If I stayed in graduate school, I dont know. Id have spent nine years working on a useless Phd thesis instead of interviewing prostitutes at 3 in the morning for HBO.

If they said yes to me living in the homeless shelter then maybe today Id be homeless. Come to think of itI do have no home right now. I just stay in short-term AirBnBs.

I could have tried harder. I could have resisted all the Nos. I could have resisted and struggled and fought. But why?

Resistance is the opposite of persistence.

It blocks you into thinking there is only one thing that will make you happy. This is the worst disease and its chronic.

So many people I talk with are unhappy because someone, at some point, blocked some thing they were working on. Like a blockage in the artery that prevented the heart of success.

They get obsessed with this blockage. They cant stop thinking about it. They get angry. They cant forgive. They cant forget.

They get stuck. The No they got ended up defining them.

Persistence in having many experiences is more important than having persistence in one experience.

The other day I saw a guy playing a piano in the middle of the street. I asked him what he was doing there.

Living the dream, he told me. Living the dream.

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How a power trip could doom the agency that took down Wells Fargo

Consumer Financial Protection Bureaus critics want to shut the agency down and claim its structure is unconstitutional and unaccountable to the public

The resignation last week of the chief executive of Wells Fargo should have been a high point for the Consumer Financial Protection Bureau (CFPB).

The CFPB announced in early September that it would receive the lions share of a $185m fine levied on Wells Fargo as punishment for encouraging employees to open millions of savings and credit accounts for customers without their knowledge or consent. The rest went to Los Angeles regulators and the Office of the Comptroller of the Currency.

Then came congressional hearings, at which Stumpf one of those rare individuals whom Democrats and Republicans could agree was a villain embarrassed himself by fumbling the questions and passing the buck up to his board of directors and down to the rank-and-file employees who actually opened the accounts.

Nor was that the only highlight for the CFPB of late. The agency has issued new rules governing prepaid cards, an alternative to checking accounts used by large numbers of unbanked Americans who cant afford the rising fees traditional banks levy on checking accounts, or for whom banks decline to open accounts.

As the wealth gap has widened, the prepaid industry has soared, from being worth $1bn in 2003 to $65bn by 2012. Users tend to be among the more vulnerable members of society: making less than $50,000, renters rather than homeowners, minorities and women, according to research by the Pew Charitable Trusts.

In other words, they tend to be vulnerable to abuse or simple misunderstanding. The CPFBs new rules will require clear disclosure about what fees the card issuer will charge to check a balance, for instance, and ensure that losses will be limited to what a conventional debit card holder would face if their card was lost or stolen.

So far, so good for the CPFB. A US appeals court, however, rained on the agencys parade, while members of Congress and others raised questions about whether the CFPB has embarked on some kind of power trip.

The court was considering an appeal in a case involving whether the CFPB had the right to impose a $103m fine on mortgage service PHH, for allegedly taking kickbacks for directing customers to a particular insurance company. The case reached the US court of appeals for the District of Columbia, where a three-judge panel headed by Brett Kavanaugh, a George W Bush appointee, handed down its ruling last Tuesday.

Unconstitutional, Kavanaugh thundered. Not the CFPB itself, but its structure, which is headed by a single individual, Richard Cordray, who serves for a fixed term. Typically, heads of such agencies serve either at the presidents pleasure or as part of a group, such as the five-member Securities and Exchange Commission.

So much for the brief, fleeting moment of bipartisanship as Democrats and Republicans joined in bashing Stumpf.

If you believe Republicans, the CFPB part of the Dodd-Frank reforms that followed the financial crisis of 2008 is, in the words of Kavanaugh, a grave threat to individual liberty, a phrase he used once every three pages or so in his 98-page decision.

Investors Business Daily agrees. The CFPB is an out-of-control and dangerous entity, it wrote the Frankensteins Monster of federal regulatory agencies that is almost entirely unaccountable to the public.

Translation: the CFPBs critics want to shut the agency down lest it become even more effective, and are taking a weird and sometimes mutually contradictory variety of approaches to doing so.

When the CFPB has been slower than it might have been to act, as in the case of Wells Fargo, Republicans have taken delight in accusing it of being asleep at the switch, in the words of Texas representative Jeb Hensarling, the CFPBs chief critic in the House.

When the CFPB has been proactive in its core areas mortgage lending, credit cards and student loans this has also attracted criticism. For instance, while its mission didnt include looking at for-profit colleges, the agencys emphasis on student loans led it realize that a disproportionate number of problems were tied to entities such as Corinthian colleges and ITT Technical Institute, which took advantage of the student loan system while at the same time misrepresenting graduation rates. It sued both schools for predatory lending, prompting their collapses.

Still, in at least one case, a federal judge (another George W Bush appointee) denied the agency access to information about how an accreditor signed off on programs offered by these colleges.

Although it is understandable that new agencies like the CFPB will struggle to establish the exact parameters of their authority, they must be especially prudent before choosing to plow headlong into fields not clearly ceded to them by Congress, tsk-tsked US district judge Richard J Leon.

Last weeks ruling could have been a lot worse, and Hensarling is probably gnashing his teeth in fury, wishing that the DC court had gone further. Cordray will now serve at the presidents pleasure, rather than for a fixed five-year term unless the agency appeals and the decision is overturned.

This isnt impossible: its hard to argue how the presence of a single individual at the helm of an agency offers a threat to liberty, unless the agency under that individual restricted the ability of those it regulated to access the court system to complain about its judgments. The fact that PHH did precisely that in this instance is evidence that theres no tyranny at work.

What Hensarling and his buddies are really irate about is that the CFPB gets its funding independently thats the lack of accountability that Investors Business Daily was getting huffy about. In other words, its not politicized: the CFPB doesnt have to grovel to Congress annually to keep its budget.

The agency has reason to be concerned. Even as Dodd-Frank expanded the list of SEC responsibilities, Congress, perhaps under pressure from the financial services industry, actually cut the amount of money it had to work with.

The SECs 2017 budget will be unchanged, it now seems. But yet again, that entity only narrowly escaped a cut.

In contrast, the CFPB is financially independent of Congress, being funded directly by the Federal Reserve (and collecting its fines, as other agencies do) and that drives Hensarling and other opponents crazy.

They may characterize that as being unaccountable to ordinary Americans, but I think it actually enables the agency to listen to ordinary Americans rather than to the Very Loud Voices of the lobbyists who have a disproportionate impact on Congress.

So far, at least the CFPB doesnt seem to be using any superpowers it might have to threaten my life, liberty or pursuit of happiness.

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Ex-Wells Fargo CEO John Stumpf deserves jail not a plush retirement | Nomi Prins

If the Department of Justice lived up to its name, it would move forward with John Stumpfs criminal investigation

For former Wells Fargo CEO John Stumpf, this will be his first weekend as a wealthy retiree. So it goes in a world where big banks can screw over customers and the public, and the CEO who presided over these practices can slink off into the sunset unencumbered by the kind of real retribution that plagues small-time drug users and petty thieves. They go free. We pay the price.

Two days before the banks quarterly earnings announcement, Stumpf announced his immediate resignation. That decision came about a month after the firm was slapped with a $185m settlement for a fee-stealing scam that resulted in the axing of 5,300 low-level employees. He did not resign after settlements for any of the prior wrongdoing that took place under his purview for which the firm paid about $10bn in fines.

Make no mistake. Stumpf was the captain and commander of this $1.9tn empire. Its culture, as in all Wall Street culture, was defined from the top down, not the other way around. For his penance, all Stumpf had to do was forfeit $41m in restricted stock awards (stock he didnt even fully own yet).

The figure for Stumps exit hoard is currently valued around $134m, a pretty plush parachute. That includes his vested stock and other retirement plans. But that figure can rise. The firms stock took a beating due to this latest scandal (its still down 11%). With Stumpf out and this cross-selling or sales practice scrubbed in the wake of his departure, rising share prices to pre-scandal levels could place his take closer to $160m or above. So Stumps departure holds monetary value for him. In bankster terms, its a slam dunk trade.

Massachusetts senator Elizabeth Warren and other senators have called for his resignation, a return of every nickel he made during the scam and a Department of Justice and US Securities and Exchange Commission investigation. So far, Warren pointed out in a tweet, only one of those things has happened. He shouldnt be afforded impunity (like other big bank CEOs) for running Wells during an effective crime spree.

Her request for DoJ criminal investigations into Stumpfs role, in just this scandal, has not been honored. Even if it were to be, would it get very far? There have been zero criminal indictments for any mega-bank CEO, regardless of the breadth, depth and cost of the crimes committed by their institutions under their stewardships. Stumpfs chances look pretty damn good.

Stumpfs number two man, 29-year Wells veteran Timothy Sloan, is being touted as the anti-Stumpf; clean, not of the retail unit that swindled the banks average customers. Only it wasnt just the retail unit implicated in settlements. Wellss fines included $1.4bn for allegations of misleading investors in securities auctions, $5bn for loan services and foreclosure abuses, and $1.2bn for defrauding the US government regarding mortgages eligible for federal insurance.

Sloans roles spanned wholesale and commercial banking operations (areas implicated by these settlements.) Plus, as chief operating officer since November 2015, Sloan was responsible for ensuring good practices for that retail unit. Clean is relative. And meaningless.

The new board chairman, Stephen Sanger, said Stumpf believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward. Current challenges. Thats the kind of terminology that whitewashes the gravity of what he did. If the Department of Justice had the balls, it would move forward with Stumpfs criminal investigation and minimally slap him with an indictment. So far, it has not shown such aptitude.

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Wells Fargo announces profit drop after CEO exits in fake accounts scandal

The bank said on Friday, days after John Stumpf announced his retirement, that earnings slipped in the third quarter, though the results beat expectations

Wells Fargo profits dropped by 2.6% as earnings slipped in the third quarter, the bank said on Friday, days after its chief executive and chairman, John Stumpf, announced his retirement in the wake of a scandal over sales practices.

In early September, Wells Fargo reached a $185m settlement with regulators following allegations that employees opened up to 2m bank and credit card accounts without customers authorization, in order to meet sales goals.

In the quarter ending on 30 September, the banksaid, it earned $5.6bn or $1.03 per share, compared with $5.8bn or $1.05 per share in the same period a year earlier. The results beat analysts expectations, of $1.01 per share.

Under pressure from politicians and investors, Stumpf retired on Wednesday. John will not receive any severance payment. His retirement benefits are disclosed in our proxy statement, a spokeswoman told the Guardian.

Stumpf could however leave with as much as $130m, according to CNN Money analysis. Stumpf owns 2.4m shares of stock, worth $107m.

If Wells Fargos John Stumpf is leaving with all of his ill-gotten millions, thats still not real accountability, Massachusetts senator Elizabeth Warren tweeted after Stumpf announced his retirement.

Warren, a leading voice for accountability and reform in the financial sector, previously called on Stumpf to resign, return every nickel he made during the scam and submit to inquiry from Securities and Exchange Commission and the US Department of Justice.

A bank teller would face criminal charges and a prison sentence for stealing a handful of twenties from the cash drawer, she said.

Elizabeth Warren (@SenWarren)

A bank CEO should not be able to oversee a massive fraud & simply walk away to enjoy his millions in retirement.

October 12, 2016

Stumpf has forfeited stock awards worth $41m; had he stayed on, he was to forgo any salary while an independent investigation into sales practices was ongoing.

Carrie Tolstedt, who oversaw the retail banking business when the unauthorized accounts were created, retired earlier this year. According to Wells Fargo, Tolstedt will not receive severance and has waived about $19m in unvested stocks.

However, she is still to walk away with about $77m. In mid-September, the bank told US lawmakers Tolstedt owned 960,017 shares, then worth about $43.6m, and $34.1m worth of vested stock options.

Chief operating officer Tim Sloan was named to replace Stumpf as chief executive. In a statement, he said: I am deeply committed to restoring the trust of all of our stakeholders, including our customers, shareholders, and community partners.

We know that it will take time and a lot of hard work to earn back our reputation, but I am confident because of the incredible caliber of our team members. We will work tirelessly to build a stronger and better Wells Fargo for generations to come.

Asked in a call with investors on Friday if Wells Fargo should consider bringing in someone new to lead the bank, Sloan said that was a fair question but said the board was comfortable with and supportive of the current management team.

Sloan also said it was disturbing to hear claims of retaliation against staff members who tried to flag the practice of opening unauthorized accounts. Wells Fargo, he said, had reached out to staff members who were let go for not meeting their sales quotas and might be eligible for rehire. As of 1 October, the bank has eliminated sales quotas in its retail banking business.

Employees are the banks most important asset, Sloan said.

From 2011, more than 5,300 such employees were fired for creating unauthorized accounts. Stumpf said those firings were not part of an orchestrated effort.

Matt Moscardi, head of financial sector research at MSCI, said scapegoating former employees and firing those who did not meet quotas could hurt Wells Fargo. A significant drop in productivity, he said, would lead to a drop in revenue.

Fridays results do not reveal the long-term impact of the sales-practice scandal, which broke in mid-September, when the quarter was nearly over. The bank had noticeably higher non-interest expenses in the quarter, due partly to the $185m settlement.

In a presentation to investors released on Friday, Wells Fargoreported a drop in what it called banker and teller interactions in September, from both a year previously and from August, before the scandal broke.

Consumer checking account openings dropped by 25% from September 2015 and 30% from August 2016. Applications for Wells Fargo credit cards also fell sharply in September.

The bank said referrals for mortgages from retail branches were down 24% from August. Retail branch referrals account for 10% of all mortgage originations at what is the nations largest mortgage lender.

Wells Fargo revenue in the quarter was $22.33bn, up 2% from a year earlier.

  • The Associated Press contributed to this report

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Donald Trump’s net worth is down $800m, according to Forbes

The Republican nominee for president is down 35 spots on the Forbes 400 to a four-way tie for 156th place

Its turning out to be an awful week for Donald Trump. The Republican nominee for president is worth some $800m less this year than he was last year, according to the Forbes 400, an annual ranking of the worlds wealthiest people.

Trumps net worth fell from $4.5bn to $3.7bn between the 2015 and 2016 ranking. He is now tied for 156th place in the magazines annual wealth competition with fellow real estate developers Jerry Speyer and Igor Olenicoff, FedEx founder Frederick Smith, and Steven Spielberg, who saw his own net worth rise by about $100m. Trump is down 35 places from 2015.

His fall came as the rich got even richer. The countrys 400 richest were worth $2.4tn this year and had an average net worth of $6bn, both record highs. For the 23rd straight year, the wealthiest person on the list was Microsoft founder Bill Gates. Gates gained $5bn in the last year his net worth has increased from $76bn to $81bn.

Amazons Jeff Bezos, too, gained ground: an additional $20bn makes him the second-richest person on Earth, up from the fourth-richest last year. Entrepreneur Warren Buffetts ranking dropped second to third, though his net worth went up from $62 to $65.5bn. Mark Zuckerberg also had a good 2015: the Facebook CEO made $15.2bn between this list and the last, placing him in fourth place and knocking Oracle CEO Larry Ellison down to No 5. Former New York mayor Michael Bloombergs $6.4bn increase to $45bn put him up at sixth place from eighth last year. Republican financiers the Koch brothers are tied for No 7: their personal fortunes grew by only $1bn this year. Meanwhile, Pierre Omidyar, founder of the Intercept, was up $100m to $8.1bn, rising three places from #57 to #54.

Notable absences from the list included Elizabeth Holmes, the founder of the biotech startup Theranos, which is being investigated for fraud. Forbes revised Holmess net worth to zero from $4.5bn after investigations into Theranoss proprietary technologies suggested the company had falsely claimed a number of scientific breakthroughs.

Holmes isnt the only one with money troubles this year: among Trumps woes are uncertainties in the New York City real estate market, where demand for retail and office space has become less urgent, according to the magazine.

Trumps net worth has been a subject of much debate over the course of his presidential campaign, as his steadfast refusal to release his tax returns has kept most details of his financial dealings out of the public eye. The New York Times revealed last week that Trump had declared a $916m loss on his 1995 state tax returns; the partial returns provided to the Times by an anonymous source are the largest single disclosure of Trumps financial dealings.

Fortunes research into Trumps wealth has the advantage of 35 years of research on the man the first time Forbes published an estimate of Trumps wealth was on its first-ever Forbes 400 in 1982, when he was worth a mere $100m. Nowadays, young Trump wouldnt even make the list the poorest person on the 400 is car dealership magnate Gail Miller, with $1.7bn. Even adjusted for inflation, Trumps $100m in 1982 is only $249m.

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