Wednesday Morning: Whip It Good
When a problem comes along you must whip it
Before the cream sits out too long you must whip it
When something’s going wrong you must whip it
— excerpt, Whip It by Devo
Can’t tell you how many times I’ve thought of this song in the last couple of days.
Panama Papers fallout
Still not as much reporting showing up in global media as one might expect from a collaborative effort the size of that mustered by the International Consortium of Investigative Journalists (ICIJ) and German news outlet Süddeutsche Zeitung (SZ) around the leaked Panama Papers. But there is a slowly building debris field accumulating in the leak’s wake.
- Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned after ~7.5% of the population showed up at a protest rally (Channel NewsAsia) — But you probably know this much already, right? Icelanders don’t mess around with even so much as the appearance of conflict. Hope somebody will tell us if bananas are a thing at protests in addition to eggs, yogurt, and tissue paper. (see photo).
- Chair of Transparency International’s Chile chapter resigned (Transparency.org) — Oops. But kudos to Transparency for the prompt and direct reaction after the leak revealed the Chilean chair had been involved with
- China squelched reporting ties to leadership and revelations in Panama Papers (SCMP) — The suppression includes redirecting search engine queries to stories about sports figures involved in the scandal.
- Amazon’s cloud now home to the Panama Papers source documents (Forbes) — And tiny Australian software firm Nuix has been helping with sifting through the documents.
What will today bring?
Related? Pfizer and Allergan nix their merger
Proposed changes to Treasury Department rules are blamed for the breakup of this corporate marriage, in which Pfizer would have moved its headquarters to Allergan’s location in Ireland to avoid U.S. tax rates. Public sentiment about offshoring after the Panama Papers leak may have clinched this split.
- Heat pump technology could reduce energy use in clothing dryers by 40% (Phys.org) — Here’s a great use of our tax dollars, this research by U.S. Department of Energy’s Oak Ridge National Laboratories. Dryers are the largest consumer of electricity in households equipped with them. As much of U.S. energy is produced by fossil fuel, this could have a dramatic impact on CO2 output. Let’s hope Congress encourages more of this kind of research as well as tax credits for related corporate R&D and consumer purchases.
- Orbeus, a photo-recognition software company, has been acquired by Amazon (Business Insider) — Imagine getting this message the next time you upload your personal photos to your Amazon Prime Photo account: “People who purchased your spouse’s belt on Amazon also purchased this underwear/lubricant/sex toy.” Just, no.
- STARZ premium cable channel will now offer a direct streaming service for cord cutters (Ars Technica) — The offering will work much like HBO Direct. But will ISPs that offer STARZ (like Comcast and Charter) attempt to throttle this service as it cuts into their bundled sales? Net neutrality is going to get a work out as more cable channels offer their content straight to consumers.
The Guardian provides an explanation for why so few Americans appear in the Panama document release: Forget Panama: it’s easier to hide your money in the US than almost anywhere.
I think the problem with The Guardian’s suggested answer as to “where did the American’s go?” lies in an earlier set of figures than the 2016 “hackings” of a Panama law firm which is an “incorporation company” whose clients are actually fellow attorney’s & CPA’s with large & small public accounting firms all over the world who are charged a fee for using the Panama law firm’s specialized skills–& markup such fees to their clients.
In the Feb 16 2013 edition of The ECONOMIST weekly magazine [edited in London, England with a circulation then of almost 1.5m of which 50% is in Anglophone North America] published a Special Report covering the world’s Offshore Private Finance centers often referred to as Tax Haven’s.
They described the strange world of Tax Havens thus:
“The world has 50-60 active tax havens, mostly clustered in the Caribbean, parts of the United States (such as Delaware), Europe, South-East Asia and the Indian and Pacific oceans. They serve as domicile for more than 2m paper companies, thousands of banks, funds and insurers and at least half of all registered ships above 100 tonnes. The amount of money booked in those havens is unknowable, and so is the proportion that is illicit. The data gaps are “daunting”, says Gian Maria Milesi-Ferretti of the IMF. The Boston Consulting Group reckons that on paper roughly $8 trillion of private financial wealth out of a global total of $123 trillion sits offshore, but this excludes property, yachts and other fixed assets. James Henry, a former chief economist with McKinsey who advises the Tax Justice Network, a pressure group, believes the amount invested virtually tax-free offshore tops $21 trillion. His methodology is reasonably sophisticated but he admits his calculation is still “an exercise in night vision”.
Using the Boston Consulting Group’s lower estimate of $8 trillion of “private financial wealth” they produced a graphic which showed that North Americans had placed about:
$400bn of Private Financial Wealth under jurisdictions in the “Caribbean & Panama” and also placed about $200bn under jurisdictions in “Britain, Channel Islands & Ireland”.
The “Caribbean & Panama” portion assigned to North American owners was about 40% of the total, & a further 20% of the “Britain, Channel Islands & Ireland” total was assigned to unknown North American owners.
The argument that by 2016 almost ALL of the 40% of the “Caribbean & Panama” Personal Financial Wealth had transferred into the US States of Nevada [which has NO Information Sharing Agreement with the (Federal) IRS] or into Delaware [which DOES have an Information Sharing Agreement with the IRS & when you file the paperwork into the [Delaware] Secretary of State’s Office you WILL have to show your (earlier applied for) Federal Tax ID # —-similar to a human’s Social Security # but for legal person’s not human persons—-without anyone noticing in the hundred’s of thousands of documents hacked from the email server—-or without anyone in Washington DC noticing and complaining about/taking credit for it —is politely referred to as “unlikely”.
If you want to see the original Special Report the links are:
The Editorial: The missing $20 trillion</a
The graphic & the quotation: The 40% of North Americans graphic
How the 2013 Special Report explains the rise of Tax Havens: A brief history of tax havens
During 2016 both Bloomberg News & The Economist(again) referred to how the US States had become a very obvious Tax Haven center:
Bloomberg’ s link is: Bloomberg’s view of the USA being part of the problem rather than part of the solution
The Economist looks at the USA’s standing in the world being reduced by always being hypocritical—saying one thing while taking great care to do another is at:
The USA [in 2016 rather than 2011] has become a big part of the problem & NOT part of the solution
More Panama Papers fallout: FIFA’s chief ethics counsel resigns in the wake of his name being in there.
In that Guardian article that Alan kindly provides, Jana
Kasperkevic says the US is under-represented in the
PP data b/c US itself is a tax haven. And so the Guardian –
a major player here – seems to suggest that the data
release is complete. I dunno’ how we’ll know for sure
when it is.
Kasperkevic quotes Shruti Shah, VP of Transparency Int’l,
as claiming that it is easier to set up an LLC in any US state
than it is to get a library card. Shah is in Virginia. I have set
up multiple LLCs in Virginia and obtained multiple library
cards there and in other states, and I can tell you this
statement is hyperbolical bullshit, which is the second-worst
kind. However, I agree that LLCs are easy to set up and
that is one of the reasons they exist and why they are so
valuable. I mean . . . that’s the whole point in them. But
being easy to set up has nothing to do with the issue.
Neither does library cards.
Over at RT they’re taking a different view: The US is
under-represented in the PP data b/c this whole PP thing is a
US dark-op. [I believe this is what Craig Murray was implying.]
Quoting Wikileaks, the assertion is that USAID and Soros are
behind the PP disclosure as a way of: 1) smearing Putin, and
2) driving dark money into the US when the global economy
tanks in the near future.
So, in terms of showing up in the PP data, you’re damned if
you do, damned if you don’t, at least if you are the US. Seems
to me a little patience is in order; why don’t these folks wait
until the data dump is complete before bitching about who’s
not included, and then let the conspiracy theories begin.
Also, if you look at that bubble graphic in the Guardian article,
the UK and Switzerland are, by far, the largest players of all in
the dark-money game, on a per capita basis. For instance,
China’s population is about 22x the size of UK and Switzerland.
Russia’s pop is about 2x larger. If those bubbles were adjusted
accordingly, UK and Switzerland bubbles would look like
Final point and I’ll shut-up. As far as Gunnlaugsson goes,
all I can say is that if I had an Icelandic wife with looks like hers,
she could put her millions anywhere she freakin’-well pleases
and I would be good with it. Remember Maverick? “My daddy
used to say, sometimes you just have to rise above principle.”
I wonder what pillow-talk with a gorgeous multi-millionaire
sounds like. . .just dreamin’ .
Two things strike me about this story.
The first is that this is a prime example of the use of NGOs and (incredibly) organisations like USAID to engage in politics. Most of these NGOs enjoy special tax status which effectively turns them into vehicle for tax avoidance. The same is true of Soros whose stock in trade is not paying taxes and whose corporations pay very little (i’m guessing) in taxes.
The second is that, no evidence being proffered for the attack on Putin as a tax evader or a hoarder of ill gotten gains, the ‘revelations’ simply highlight the fact that both Russia and China, like the other formerly ‘communist’ states are riven with corruption.
We knew that: its called capitalism. The probability is that both these countries are well on the way to becoming as corrupt as the USA and UK, Canada and France, it will just take a generation or two for inheritance to sanitise the fortunes that have arisen out of the great crimes of purloining the publicly owned assets of the inhabitants of these countries.
Looking at the long list of formerly criminal families (Ford, Rockefeller etc) who finance the consortium of ‘journalists’ it is clear that the objection of Soros et al is not that Russia is corrupt but that Soros was not cut into the spoils when ex KGB and Communist party types were distributing them.
And, whether or not Putin is corrupt, one thing about him is certain: he has begun to insist on the oligarchs paying taxes. In the case of Khodorkovsky, for example, this was depicted in our media as something close to a crucifixion, and the tax dodging criminal is now held, in Open Society and State Department circles to be a democrat and a dissident.
Here’s a good use of technology: MLB’s playing rules committee approved two devices for use during games this season. One is the Motus Baseball Sleeve that measures stress on elbows. The technology provides the potential for earlier detection of habits that could lead to injuries. New York Mets medical director Dr David Altchek, an adviser to Motus, hopes the device can be used to help pitchers avoid Tommy John surgery and rehabilitate from the career-interrupting operation by monitoring valgus torque stress on the elbow.
How long before some enterprising trainer figures out how to set it up on the sly to “lubricate” the elbow joint electrically during a game, or to urge those muscles to twitch just a bit faster?
It’s important to keep some of the concepts involved in PP carefully separate – privacy, liability, tax avoidance, and tax evasion. Tax evasion is hiding income on which you are legally obligated to pay taxes—bad. Tax avoidance is taking steps to avoid incurring a tax liability in the first place—acceptable to some, not to others—but the vast bulk of us would do it. Privacy is, basically, keeping your name and your activities out of the limelight—often good for literally everyone, sometimes used by some for tax avoidance, sometimes used by some for tax evasion or other nefarious purposes. Corporate shells are often used for privacy. And the basic corporate structures whose primary point is avoiding liability for their owners are old as the hills and will never be gotten rid of, because they are valuable to society—many truly good businesses and activities would not exist if the principals behind them had to worry about putting up their personal assets when something goes wrong. So don’t castigate Nevada or Panama or whoever just because they create lots of shell companies; look (if you can) into what’s behind them.
I would love to find a good history of the rise of the oligarchs during the Yeltsin era and Putin’s role, if any, in that cluster-f–k. Yeltsin’s voucher-privatization plan on its face was not an unreasonable way to get ownership of state owned assets into the hands of the people, but, man, talk about screwed implementation — it was as bad as Obamacare.
One never sees Putin listed in that crowd of Yeltsin kleptocrats (aka oligarchs) who bought up/stole vouchers from the peasants and others too stupid to hold on to them or redeem them for stock. And I don’t think Putin himself is considered to be either a neo-oligarch or anti-oligarch, although, as you point out, he has been at war with some of them who have crossed the political line.
The United States is a “tax-haven” if your home location is a foreign nation where high-incomes are highly taxed.
The United States is not a “tax-haven” if you live in the United States (though your tax rates will be lower than in high-tax on high-incomes nations). For this, U.S. nationals need off-shore havens, too. And the U.S. IRS and Justice Department do attempt to track at least the unfavored of these down (it is what the Justice Department was doing scouring FIFA records of Americas located fútbol enterprises for actionable scandal).
As Rothschilds is noted to have noted, the U.S. pays little attention to foreign tax laws, or to foreign tax dodging. Thus, the official unofficial policy of the United States can be identified: Get as much tax as you can from U.S. nationals, wherever they are; get as much money investment into the U. S. from foreign nationals (by not cooperating with their governments and providing their investments in the U.S. tax-haven. In the U.S. it is all about getting money into the country to off-set the trillions of national debt (or buy it in zero-interest reasuries).
Note the prime example of “Democracy” in action that Iceland is providing: Iceland has about the highest scores for education of any nation, or that are possible. They have more higher educated per capita than anywhere.
Yet, when a “scandal” is broached in media, those highly educated go off like the lowest grade, least educated pitchforks-and-torches mob in Transylvania, or anywhere else, in this world or in fantasy. Even when the “scandal” is an obvious dud-scandal, when it is only a verneer of scandal, a painted-up-like-a scandal, or, as in the ‘panama-paper’ case, no scandal at all, but only an accusation of ‘scandal-like appearance’, which was recognized, and reported, not scandalous by the information-releasers. There was only an off-shore set up per financial advice, with the politician involved for wrong advice, for which he was not really involved because his being involved was void for being incorrect, mooted by being inappropriate for the set-up, which off-shore was a legal and not nefarious of-shoring.
Nevertheless a mob mobbed, demonstrators eager for something to demonstrate about went a-demonstrating, a howl and an outcry was raised, and a political lynching was demanded, and carried forward. No one in the mob bothered about, paid any heed to, slowed down for, or took any notice of the facts of the matter. The mob was aroused to lynch, they mobbed to lynch, they lynched.
What they demonstrated was “Democracy”, and “Democracy in action”. And “Democracy manipulable” amd “Democracy manipulated”: Stir up the “majority”, demand instant action, make instant action imperative, force forward while the mob is hot, before any of the sheep think to stop to think, and force your way.
Not only in Iceland, around the world. Elected governments are being attacked and overthrown, elected officials run out of offices, being replaced by unelected administratively-selected appointees.
All done “democratically”. Including in highly educated Iceland.
Qui bono education? Qui bono educating ignoramuses? Like the population of Iceland? Yes, Icelanders are ignoramuses, they are human beings, just like their like everywhere else. They are only better educated.
The case does not say anything about Icelanders, except that they are human. What it says it says about education. It says that education does not arm anyone against manipulation. Or against being stupid. Or being manipulable, and manipulated.
Something positive, for dessert: Something from science: The primary radiation thrown off by nuclear-wastes, such as the waste-product from nuclear power production, is heat. Radiated heat is not harmful in moderate quantities. Nuclear wastes can be vitrified, encased in glass, th stabilize them (so they don’t flow into ground-water, etc.). Encased in lead and glass, or leaded glass, the harmful radiations, the nuclear decay radiations, can be blocked, so they don’t escape. The product is a lump of vitrified nuclear waste, stabilized, radiating only heat.
If you want something to produce heat to dry your clothes, install a lump of lead-shrouded vitrified nuclear waste in your dryer. Save the power producing, generating, etc. costs of running heat-pump refrigeration cycles, which are not that efficient anyway (they are only efficient relative to oil, gas, electric resistance, etc. forms of heating). When not drying clothes, vent the nuclear-waste lump out, instead of through the dryer, or to your house heating-ducts in winter, and to an ammonia-cycle air-conditioning system (instead of an electric-motor powered refrigerant pump system) in summer.
What is the downside? Heh, heh, the fossil-fuel industry would lose market if waste heat from nuclear wastes, currently being stored in caves with the heat radiation being blown off by banks of giant fans, began to be used instead of the products they refine and sell.
Nice catch about Chinese leaders not wanting any ties to offshore tax havens exposed. Corruption at the top is endemic, as is involvement of the Chinese military (and its top brass) in all lucrative parts of the Chinese economy.
I imagine Pfizer and Allergan have only temporarily “called off” their merger. Fleet-footed PR flacks more likely persuaded them to delay it. Like the poltergeist and governator, tax dodgers, with record profits to hide, may be lying low, but they will be back.