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La La Land - Still from the motion picture
Last updated January 2017

La La Land

As Brexit and the Trump era loom large, Dominic Fox examines wealth and philanthropy in the new world order.

Politicians kicked off the New Year staking out their ideological ground. In quite a few cases this has had the effect of moving markets, currencies and the share prices of individual companies. The last six months have seen a historical shift in direction. Everyone wants to know what is going on. Nobody knows.

Brexiteers promise a “new, bold, confident, global Britain” open for business, amid favourable trade deals and extra money for the NHS. With Boris Johnson in charge what could possibly go wrong?

It used to be political orthodoxy that you couldn’t buck the market or even challenge its freedom to operate. That is changing fast. The new President of the United States is by universal agreement, a deal maker. The markets are generally hoping for the best on promises of massive spending on highways and bridges. He promises inward investment and jobs for the workers.

It all sounds like La La Land to me. As well as being a splendid film, the phrase is a euphemism for a state of being out of touch with reality, having a fantasy-prone personality. It is also a nickname for the celebrity-obsessed city of Los Angeles.

British exporters welcome the plummeting pound and are made up of companies mainly earning their income in dollars as the FTSE 100 hits new highs. Your pension and investments might have taken a boost. If your pay is frozen and you do a lot of driving and eating and drinking it may be time to tighten that fan belt as UK energy and food costs are set to soar this year. These developments alone will push up the UK consumer price index by 1 to 2 percentage points.

A credit boom at levels not seen since the 2008 financial crash is picking up pace, debt charities have warned. The latest figures from the Bank of England show unsecured consumer credit, which includes credit cards, car loans and second mortgages, grew by 10.8% in the past year to £192.2bn.

News emerges that eight men, not the previously thought 64 people, now hold the same wealth as the poorest half of world population, around 3.6 billion people according to international aid charity Oxfam.

BlackRock, the world’s largest asset manager, is threatening to unleash a wave of shareholder rebellions in the UK unless Britain’s largest companies rein in excessive boardroom pay. BlackRock is demanding cuts to director pension entitlements and an end to huge pay rises as UK companies prepare to put their latest pay deals to shareholders.

The UK’s top bosses made more money by lunchtime four days into 2017 than the typical UK worker will earn all year, according to an analysis by the High Pay Centre. It is thought that the average FTSE 100 boss now earns more than £1,000 an hour, meaning they passed the UK average salary of £28,200 by around midday on Wednesday 4th January. The thinktank said that after enjoying rapid earnings growth in recent years, leading bosses now typically earn 129 times more than their employees.

This year’s gloom fest, Blue Monday, could have been the most depressing ever because of celebrity deaths, anxiety over Brexit, and fears about a Donald Trump presidency, the expert who coined the phrase warned. In 2005 Dr Cliff Arnall, came up with a light-hearted formula for predicting the gloomiest day of the year based on factors including weather, debts, time since Christmas and motivation.

Jeremy Corbyn recently got into a muddle about income inequality by proposing to introduce a maximum wage. There is absolutely no point in going into the details of what he said. Jeremy just doesn’t do detail. He did clarify it didn’t include Premiership footballers, but that might be his immigration policy. Research for The Independent suggested that the government encouraging companies to introduce a wage cap for bosses earning more than 20 times that of their lowest paid worker is supported by 57 per cent of the public. Just 30 per cent of those surveyed disagreed.

Serving as a model to Bill Gates among others, Chuck Feeney is “what Donald Trump would be if he lived his entire existence backwards” commented one of his many admirers. Originally from New Jersey, Chuck Feeney co-founded Duty Free Shoppers in 1965. Two decades later he was a billionaire.

In its 35-year lifetime, Atlantic Philanthropies has invested $8 billion in philanthropy, much of it to construct university and hospital buildings and medical research facilities around the world, especially in the US, Ireland, Vietnam, Australia and South Africa.

At a small ceremony in New York last month, Chuck Feeney approved a final grant of $7 million to Cornell University in upstate New York, which was the recipient of his first donation in 1982.

The reclusive 85-year-old philanthropist, an indefatigable world traveller, always in economy class and carrying his papers in a plastic bag, has settled down with his wife Helga to a modest existence in a rented apartment in San Francisco.

Not far, but oh so far from La La Land.

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