Team --
Welcome to week five of Benny For My Thoughts (BFMT)!
Tensions are high and the U.S. is at a standstill so I’m going to give everyone a pleasant reprieve from politics by not touching on the election at all. Instead, I'm going to share a family favorite story of THEFT…
As some of you may know my mom’s side of the family hails from Europe with strong roots in Paris. My Grandmother Blanche and my mother Vivian used to own and run an art gallery on Rue Bonaparte. Magritte, Matisse, and other iconic artists used to line the walls of Galerie 22. As a result of our family business, my mom has remained a connoisseur of all things art (although she’s a therapist by trade now).
One of my mom’s most loved possessions was a Roy Lichtenstein lithograph that always occupied a prominent position within our home on Normandy Lane. Until one fateful night...
Back in 2001 my brother Steve, who is ten years older than me (I was not a mistake!), did what most high schoolers do and threw a massive house party when my mom was out of town. Natural Light flowed, ping pong balls were tossed, and little Benny got relegated to hanging out alone in his room. The party raged without a hitch and afterwards my brother cleaned so impeccably that not a shred of party evidence remained. But, unbeknownst to Steve, our home had fallen victim to a heist of grandiose proportions as one of these sauced-up high schoolers had surreptitiously left the party with the Lichtenstein in tow. Shame!
My mom came home to a spotless house but a naked wall. My brother, realizing there was no denying it, quickly admitted to the party and the inescapable conclusion that one of the revelers had absconded with the painting. My mom, obviously livid, told my brother to get the painting back in 24 hours or she would call the police.
As legend has it, the next day at school my brother stood on the lunch table and declared to the cafeteria that whoever had the painting needed to return it to our home within the day or the cops would investigate. Over night, the painting mysteriously appeared leaning against our trash cans. By the grace of sweet baby Moses, my other brother spotted the painting early the next morning and brought it inside before the garbage collector had the chance to toss it in the pack of the dump truck. And thus the Lichtenstein Heist came to a benign end.
All this is to say, art is precious. Art is a store of value, a channel for creativity, and most relevantly, a target of theft! The stories behind specific works of art drive value as it is the scarcity and authenticity behind them that determine worth. But like many things, art is susceptible to change and there are new technologies that seek to disrupt the industry as a whole (as you’ll see below).
Sidenote: in an ironic and cruel twist of fate, my mom gifted my brother the party-thrower ownership of the painting to hang on his living room wall in Brooklyn Heights. In my mind bequeathing this painting to my brother is complete BS and I demand a recount (had to throw in an election joke)!
Once again, thanks for reading BFMT and please subscribe and share this newsletter.
Now onto what’s been on my mind this week.
The Dawn of Digital Art
As mentioned in the introduction, stories, scarcity, and authenticity drive the perceived value of art. The Mona Lisa is priceless and a world treasure because it was painted by the hands of Leonardo Da Vinci. It’s been stolen multiple times, and there is only one original. But ensuring authenticity has always been a problem as talented forgers are more than capable of creating near exact replicas of famous works. Enter Blockchain.
Blockchain, by way of NFTs (nonfungible tokens) enables artists to create an immutable and public record of the authenticity of their art. The artist can determine how many real copies are available for distribution and, as a result, the market can more accurately work its way towards a purchasing price by way of supply/demand. Furthermore, most artists don’t reap the value of their works as it is often only through the passage of time and resales that value is multiplied. With NFTs, the artist earns a commission off every sale as part of a royalty program thus earning a monetary reward for his/her creative labor.
Digital Art is novel and is being pioneered by Nifty Gateway, a marketplace where artists can upload their art and buyers can purchase it. Don’t worry, I understand that the point of art is to display it. So of course there are new technologies that allow you to do so.
Below is the most valuable piece of digital art yet. Picasso’s Bull by Trevor Jones sold for $55,555.55 this summer. Check it out below and watch the video with audio!
3-6 Banana Mafia (s/o to Tayluh B!)
Most long-standing corporations have skeletons in the closet. But who would have thought that one of the most historically grisly and imperialistic U.S. companies was the United Fruit Company or what is modernly known as Chiquita Banana? In the 20th century, the United Fruit Company wielded unprecedented multi-national influence over Central America. But perhaps it was most renowned for its history of colluding with corrupt dictators to abuse workers in search of massive profits; hence the term “Banana Republic”.
There are many twists and turns in the history of the United Fruit Company, but what stuck out to me was its rebranding. Word of the company’s many wrongdoings had spread around the world, so in 1941 the company hired Edward Bernays, to revamp its image. Bernays, now known as the “Father of Public Relations,” happened to be the nephew of Sigmund Freud. As one of his first acts, Bernays launched an appealing advertising campaign featuring an exuberant cartoon character named Señorita Chiquita Banana.
I can just imagine Bernays’ pitch in the corporate boardroom: “Ok gents. So obviously we’re out there exploiting, bribing, and cheating in Central America but we’re raking in cash. How do we distract the U.S. public to keep this good thing going? I know! An innocuous yet sexy banana woman”!
“Putting lipstick on a pig” is a common phrase used to describe corporations trying to cover up bad behavior with clever PR campaigns. I, however, am coining and hereby trademarking a new and improved phrase “putting a banana in heels”.
Act 20 and Act 22
We all know that remote work is the future. Paying exorbitant state and local taxes for access to the top jobs is a thing of the past. With that in mind, many people will hunt for highly livable cities with favorable tax rates. A U.S. territory that might benefit from the reshuffling of our population, if it ever gets a reprieve from blistering hurricanes, is Puerto Rico (cue the Big Pun music). Puerto Rico features some of the most favorable tax laws around, which were designed by the U.S. government to economically incentivize people and companies to invest in the territory. Act 20 & Act 22 are the most well known.
Act 20: If you move your business and yourself to Puerto Rico and spend more than half the year there, your business pays a flat 4% corporate tax rate, total. No state tax, no federal tax.
Act 22: 0% tax on dividend and Interest Income, short-and-Long Term Capital Gains for New Puerto Rico Residents, and on Federal Taxes on Puerto Rico Sourced Income.
If I ever go missing, there is a high likelihood you can find me in Old San Juan a few Piña Coladas deep. Refreshing.
Good Boy TeleHealth
In last week’s BFMT I asked readers to send me their ideas around what the next company would be that would capitalize and profit from our new COVID reality. One of my wisest readers told me Chewy, the pet eCommerce company, was poised for success. While its main business line has historically been online retail, the company recently launched "Connect With a Vet," a service that connects pet owners with veterinarians through a proprietary tele-health platform.
As anyone with a pet can tell you, vet bills are expensive. And as your dog will tell you “the vet is a demonic worshipper of satan”. For both man, dog, and Chewy, telehealth for pets is a win all around and a non-obvious trend that COVID clearly catalyzed.
Visualize Value
Jack Butcher is an up and coming designer with an aptitude for distillation. Jack has built a design business around taking complex idioms, theories, or topics and distilling them into visual graphics.
Jack got me thinking: “How can I distill Benny For My Thoughts into one graphic”. Then it hit me…
Thanks for reading this week’s Benny For My Thoughts. If you like what you read, please share!
Stay Easy,
Benny