The Panama Papers revealed hundreds of thousands of offshore shell companies in 200 countries. There was more info than Snowden's intelligence leak. While it is not shocking that dictators and wealthy individuals hide money in untraceable account, the enormity uncovered from the records of one law firm in Panama is amazing. The prime minister of Iceland has already lost his job over this. Although people like Putin and the king of Saudi Arabia are not going to lose their jobs, I think there are going to be world wide consequences. One of which is the confidence in the capitalist system which allow this.
This is not just a problem in third world and communist countries. I read where Switzerland and Hong Kong are one and two in hiding accounts. But surprisingly, the U.S. is number three. Lots of companies are set up in states such as Delaware and Nevada where the real head of the company is not on record. The LA Times reported that gambling tycoon Sheldon Adelson bought the Las Vegas Review-Journal with a shell company registered in Delaware so that people would not know that he owned the paper. I think we have to stop this type of dealings. Otherwise there will be more anger over the system. There may actually more call for socialism. Bernie Sanders has already tap into this. But if more revelation of tax cheating from the wealthy 1% come out, candidates like Sanders will be more successful in the future. I believe that capitalism is the best economic system in history. But I always said that capitalism without regulation is just chaos. So lets try to have stricter regulations before the confidence in the system diminish significantly.
Sunday, April 10, 2016
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I guess the question for me is if these accounts are illegal. I understand that there is some dishonesty about it since they're being hidden, but we've known for a long time that this is what rich people and people with power are able to do. It's a way to protect their money from government. I don't know if there's much the government can do, is there?
ReplyDeleteAs far as the shell companies, that's almost a different story since all the dealings are being done in the country. Maybe the government should look into banning these practices in Delaware and Nevada.
What is your view on Edward Lin who is accused of spying for China? I thought for sure you'd blog about that.
-LBOAYM
I am sure there are many legal reasons for these accounts. But the problem is that they are ways of evading taxes and laundering money from illegal means such as drug trafficking. Maybe it is difficult for the government to pass laws to restrict these activities. But I have to wonder the fact that most politicians are rich people and lots of lobbying in Washington make it impossible to pass any laws restricting this. By the way, did you notice that most cruise ships are registered in places like Panama even though they are companies run by Americans or Europeans? I am sure that is for tax purposes and there is no government action to change the law on this.
ReplyDeleteI had not known about Edward Lin until LBOAYM called it to my attention. From what I read today, I don't have enough info to comment much. Obviously if he is guilty he should be punished severely. I read that he may have spied for China and Taiwan which makes no sense to me. In any case, if he is guilty it would be unlikely due to allegiance to a foreign country or ideology. I notice that the last charge was for adultery. As in most spy cases, the criminal did it because of money, power or sex, not ideology. So illicit sex leading to blackmail maybe the cause. But will need to get more detail before I can comment further.