Expatriation: not what it used to be

After the American Century

A century ago being an expatriate had a certain cachet. Some major American writers once lived primarily in Britain, notably Henry James and T. S. Elliot. In the 1920s a raft of famous authors resided in Paris, as chronicled in Malcolm Cowley's Exile's Return. Central works of American literature were written while the authors were living in Europe, and they often take place there as well, notably Ernest Hemingway's The Sun Also Rises or F. Scott Fitzgerald's Tender is the Night. A sojourn in Europe was once thought essential for every sculptor, painter, musician, and writer. The American artist abroad then lived well due to a strong dollar. In that era, the terms commonly used for such people included "emigrant," "émigré," "expatriate," and "exile." These did not usually have a negative connotation.

Today, the image of the foreigner who lives abroad is somewhat different. Many terms referring to them do not have positive connotations, including "illegal immigrant," "refugee," "alien," "deportee," "evacuee," "migrant," "foreign national," "itinerant," "displaced person," and "gypsy." The term "expatriate" is not much used, and I do not recall being called that by anyone, at least not recently. These days, the dollar is strong but not as strong as in 1920. 

Stokholm, June, 2013

For many reasons it is getting more difficult to be an American expatriate (the older term) or foreign national. This is an unintended product of many factors, including greater mobility, the tightening of security in the face of terrorism, and the digitization of information. The long lines at airports are one obvious example, where on arrival the non-citizen must wait in the slower queue. 

Banking offers a second example. The Economist writes that "Worried about being hit by massive fines for unwittingly aiding money-laundering, sanctions-evasion or financing terrorism, banks have over the past few years dropped customers in countries or sectors deemed high-risk." Even in countries where risks are low, it is now far more difficult to open a banking account. I know this from personal experience. When abroad for more than a few months, it used to be routine to open a local bank account. This has become more difficult, and one is forced to use ATMs and the bank in one's home country, with all the currency exchange charges that come with it. Yet a foreign account cannot deal with every contingency, as local services often are based on having a local bank and credit card. Digital payment systems, for example in the London tube system, do not always work with foreign accounts.

Pensions are a third example. Work in several counties during your lifetime, and each will give only a partial pension on retirement. Nor is there much logic to how much one receives. A nation where one worked only two years may pay half as much as another country where one worked more than 25 years. Saving privately can compensate for this problem, but saving for a pension in one country may not be accepted as a tax deduction in another. These matters vary from one nation to another, and generalization is impossible beyond the fact that sorting it out takes time. A lot of time.

A fourth example is taxation. A decade ago I was temporarily in Britain for a semester, and agreed to give a lecture in Norway. I made the mistake of accepting a modest honorarium for this work. As a result, the honorarium was taxed in Norway, in Denmark (my permanent residence), in the UK (my temporary residence), and in the US (my citizenship). Taken together, these taxes amounted to more than 100% of the honorarium. Perhaps there was a way to avoid paying so much. If so, the rules are hard to make out, and the time demanded to find and fill out various forms made it impractical to contest it.  Since then, I have been far less interested in being paid for lecturing abroad, unless it is in Denmark or the US, which limits the taxes to "just" two countries. Double taxation demands time and produces anxiety.

The difficulties of being an American expatriate have measurable consequences. An increasing number of long-term residents abroad are renouncing their US citizenship. I am not considering this option, but I know people who have turned in their passports. Fortune magazine noted that more people are giving up American citizenship, with a 26% increase in 2016 alone. That was before Donald Trump became president.

Both political parties have long ignored the plight of expatriates, and it was the Democrats who in 2010 passed tax laws for Americans abroad that are more draconian and punitive. As at the airports, the targets of this legislation were smugglers and terrorists, and the intentions were laudable.  The absolute numbers renouncing citizenship are still small, but the trend is troubling. The increase in the last decade has been more than 100%.

We are continually told that the world is becoming more international. Were Hemingway to return, he might disagree. At times, it seems to be more nationalistic and xenophobic.

Proposed Museum to Symbolize the Bush Banking Era

I propose that a museum be built to the Bush Banking Era. Such a monument would best be placed underground and lit only by broken skylights. It will be cheap to operate, as no guards will be needed since nothing of value will be there. The space would be very deconstructive and postmodern.

On the walls should be an electric sign carrying text messages commenting on the site. Visitors could add to these messages using their cell phones. There should be no admission to a museum of financial mismanagement and fraud, of course, but visitors would be encouraged to make donations to charities for the homeless.

This concrete and plastic bunker could be located somewhere between 9/11 and Wall Street. The exhibits should include valueless commercial paper from failed banks, copies of auditor's reports from Lehman Brothers, and expensive, repossessed furniture from executive offices.

There should be a place, too, for framed copies of some of the millions of dollars in bonus checks issued to the MBAs who masterminded the mortgage market. Indeed, why not inscribe the names of all who received these infamous checks on walls, in alphabetical order, together with the size of their bonuses, so that every American can come and see who they were. It seems only fair, as the American people bailed them out. And in the place of honor, with spotlights on a text written in gold, appropriate words from the Chicago School of economics. I suggest the following:


"The most important single central fact about a free market is that no exchange takes place unless both parties benefit."  Milton Freidman


Proposed inaugural speakers: Naomi Klein and Al Gore.

One can only assume that public interest in this museum will be short-lived, Therefore, it should be designed in such a way that it can easily be converted to a public toilet,

Bankruptcy Not Needed: Greece can lease islands to banks

After the American Century

At first I thought of this as a joke, but it is beginning to look reasonable. The choice for Greece is not either go bankrupt or borrow more money. There is a third choice, a typical capitalist choice, the choice to lease parts of the country for 50 to 100 years. China leased away Hong Kong and got it back, with considerable improvements. Greece could lease a large island like Crete to the German banks, in exchange for wiping out their debts to those banks. The French banks could get Lesbos. I want my bank to lease Corfu.

Even more radically, Greece could sell off some of its smaller islands, with the proviso that the buyer could not sell to anyone else without Greek government permission, and reserving the right to purchase the island back at the market price.

Such plans would make it official. The banks already call the shots in Greece.

I know this sounds a bit strange, but it is somewhat like a corporation selling off some of its divisions in order to survive. No doubt offense to patriots, but surely this is better than bankruptcy.

Don't like that solution? How about this one? All European countries could copy Greece, spending way over budget, and then the Euro zone could devalue by, say 35%. The idea being, if the train is going off the cliff, let's get into first class and enjoy the ride while it lasts.

Obama After 18 Months

After the American Century

It has only been eighteen months since George Bush left the White House, but already the American public seems to be suffering from amnesia. The American economy is not recovering quickly from its near collapse under Bush, and this weakness is nevertheless laid at Obama’s door. His popularity has fallen below 50% for some time now. The great bank bailout has been reasonably successful, with much of the money being paid back, yet many Americans talk about the bailout as though it was not a loan but a permanent part of the national debt. The re-regulation of Wall Street has gone through Congress, yet Republicans proclaim that Obama has now hobbled the capitalist horse. (For a reality check, consider the Canadian banks which did not need a bailout because they were restrained by sensible legislation.)

And then there is the endlessly repeated, and endlessly stupid, claim that the health care bill is socialistic. This would be silly if so many did not believe it. If Obama really had created a socialistic health care system then (1) he would have  given free medical care to all citizens and permanent residents, in exchange for higher taxes, (2) he would have put all doctors and nurses in public hospitals on the government payroll, and (3) prescription medicine would be free or heavily subsidized.  This is pretty much what the health care system looks like in Denmark, England, or Germany. But the Obama plan did not do any of these things. It made health care available to all, in exchange for payment to private insurers. It left hospitals under the same management as before, and so forth. The Obama plan is an improvement, but it is not much like a European plan.

My American readers might recall that they do have socialistic elements in their government, notably the fire departments which are paid for by everyone and put out all fires regardless of where they are or whose property it is. The theory seems to be that minimizing conflagrations is a good thing for the neighborhood. Free public libraries are also rather socialistic, though this did not stop that famous capitalist Andrew Carnegie from building quite a few of them. Then there are those terribly socialistic institutions, the free public schools, and so on.

Today’s column clearly has only that most general of subjects, the instability of American public opinion, which so often is based not on logic but pavlovian  responses to key words and silly phrases. The circus entrepreneur P. T. Barnum  once said that no one ever went broke because he underestimated the American public. By November all too many Americans will be convinced that not Bush but Obama undermined the economy by over-spending the budget, letting the banks get out of control, and imposing a “socialistic health” care system. But it was Bush who cut taxes, especially for the wealthy and then overspent the budget by billions in the unfinanced wars in Iraq and Afghanistan. And it was the Bush Administration that failed to keep a watchful eye on the banks and Wall Street, until the economy was near collapse before the 2008 election even took place.

In American political culture, eighteen months is a long time, and some seem to have trouble seeing cause and effect, or separating substance form allegation. It is not easy to be President in the best of times, and far harder than in the present. On the whole, Obama has done a good job. But Americans are an impatient people, and in the off year elections the party that lost the last time usually makes at least a partial comeback. We shall see.