Wednesday, June 7, 2017

Shave the Billionaire or Life Has Its Ups and Downs

From The Baffler:
Strange things are happening in Brazil: billionaires are going to jail. This includes Eike Batista, once the eighth-richest person in the world, who was arrested in January. Accused of paying $16.5 million in bribes, he was placed in a 160-square-foot cell with six other prisoners who shared a single fan and a single squat toilet and a single tap where the water turned on just a few times a day. His head was shaved—a standard procedure in Rio de Janeiro’s prison system, but one that came as a shock to those who remembered how he had once bragged on TV about his $30,000 wig. People used to call Eike the Donald Trump of Brazil. He kept a silver SLR McLaren in his living room.

In the past couple of years, two other Brazilians from the Forbes list have ended up behind bars: the construction tycoon Marcelo Odebrecht (convicted of corruption) and the investment banker André Esteves (still awaiting trial). Along with dozens of other executives, lobbyists, and politicians, they were ensnared in a federal police investigation known as Operation Car Wash, which has exposed a multibillion-dollar kickback scheme that doubled as a kind of parallel campaign-finance system. Even the patrician president, Michel Temer, has been implicated. This is a big deal given that, for most of Brazil’s history, the rich routinely bought or bullied judges and only the poor faced the full extent of the law. The crimes uncovered, though, are not unique to Brazil. The fall of Eike Batista is actually a story about the ethics of the business class, whatever its nationality.

First you should know how Eike came about his wealth. In a country that runs on crony capitalism, he pitched himself as a new kind of businessman: a risk-taking entrepreneur making his fortune on good ideas, not through government connections—though he is the son of a former minister of mines and energy. Promising to create some of the world’s largest companies from scratch, he sold a series of startups to money managers made thirsty by the Brazilian natural-resources boom. By 2012, just six years after his first IPO, he was worth $34 billion. Already the country’s richest person, he claimed he would soon be the world’s richest person. The problem was that he didn’t have the resources he claimed. And worse: he owed untold billions to banks and bondholders. When it became clear that his business plans amounted to little more than wishful thinking, the investor class abandoned him. By 2014 he was bankrupt....MORE 
Medieval Europeans were firm believers in the Wheel of Fortune:

E027044 Royal 18 D. ii f. 30v
Detail of a miniature of the Wheel of Fortune with a crowned king at the top, from John Lydgate's Troy Book and Siege of Thebes
with verses by William Cornish, John Skelton, William Peeris and others, England, c. 1457 (with later additions), Royal 18D. ii, f. 30v.
-from the British Library Medieval manuscripts blog

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