Thursday, April 7, 2016

Is the Panama Papers Release and Indictment of "Global Capitalism"?

Megan McArdle writes at Bloomberg:
A libertarian of my acquaintance wrote to inquire whether this is going to sour people on global capitalism.

It shouldn’t. What we’ve seen from the papers so far is not so much an indictment of global capitalism as an indictment of countries that have weak institutions and a lot of corruption. And for all the outrage in the United States, so far the message for us is pretty reassuring: We aren’t one of those countries.

Consider the big names that have shown up so far on the list. With the notable exception of Iceland, these are not countries I would describe as “capitalist”: Russia, Pakistan, Iraq, Ukraine, Egypt.  They’re countries where kleptocratic government officials amass money not through commerce, but through quasi-legal extortion, or siphoning off the till.
McArdle is correct this isn't an indictment of "global capitalism." It's about global crony capitalism. What the Panama Papers reflect is that crony capitalism is alive and well across the planet.

The leak shows mostly politicians hiding ill-gotten crony payoffs. It doesn't show much in terms of corporate businesses hiding revenue to escape taxes though I see many commentators jumping to the conclusion that the leaks expose mostly tax dodges.

One point McArdle is weak on though is the lack of US individuals named. It is unlikely that this is because US government officials are lily white, It is probably because the US government (CIA?) is behind the leak and protecting its own.

It is noteworthy that the Soros-funded crony evaluators of the leaked documents didn't even trust the New York Times with the raw documents.

From NYT:
The “Panama Papers” are being called the largest ever leak of secret data. Articles based on those documents — developed by a global consortium of journalists — began appearing Sunday afternoon. Exposing the offshore bank accounts of bigwigs worldwide, the articles burst into the Sunday afternoon news lull, getting huge play in media outlets around the world and in the United States.

By Monday, I had heard from many Times readers who wanted to know why The Times didn’t seem to be giving the news a big ride....

I asked Matt Purdy, a deputy executive editor, to respond. He told me by phone that The Times is very interested in the data leak, and the articles produced from it. But he said Times editors believe that they owe it to their readers to do their own evaluation of the material. And that, he said, is happening now.

Because The Times was not a part of the global consortium and was not aware that the story was coming, it needed some time to get its own story going. “We didn’t know these documents were out there and being worked on,” he said.

“We didn’t have access to the documents, and that is a very big issue,” he said.

Got that? The George Soros-funded International Consortium of Investigative Journalists that spearheaded the investigation of the documents brought in over 100 outside news organizations, but didn't bring in The New York Times.



  1. Hopefully Wikileaks can get their hands on the file. I would love to see the other foot come down.

  2. With friends like McArdle, who needs enemies? I once heard her give a sophomoric defense of the bank bailouts at a beltway-libertarian confab. Here's a taste from one of her articles in The Atlantic:

    "The public doesn't quite grasp what's at stake, and there's no reason they should. But the representatives do. The true believers--well, I forgive them their zealotry, and hope that they're right and I'm wrong. But anyone who tanks a bank bailout they think might be needed, in order to get a cut in the capital gains tax, deserves to be tried for treason."

    Her 'defense' of capitalism on the Panama Papers reads to me as glowing support for a strong State complete with its tax laws and gun-toting collection agencies. Why would anyone favor a strong state if its laws are repressive and violate principles of liberty?

    Global capitalism, she says, didn't cause weak States. But in her articles defending the bank bailouts, she recognizes the moral hazard and "corrupting" influence banksters have over the Fed and Treasury.

    I mean, come on, Megan. Does global capitalism corrupt politicians and institutions or doesn't it? Is the issue at hand capitalism or is it corporatism? Can corporatism survive in systems where people are free from taxation and defended by a libertarian-constitution that specifies that no law or regulation shall be enacted that violates the NAP?

    Why bother defending a corrupt system? Instead of saying, "look guys American rich people and politicians are clean, the IRS is the nuts, the US law is the nuts!" someone should point out these problems would not be problems if there were no taxation and if politicians didn't have the authority or means to bestow favors and privilege. In such a system, why would anyone bother offshoring money?

    And who put forward the notion of invading countries based on these leaks? We already know dictators take bribes. We know USAID enriches dictators. Why would dictators hiding money offshore lead to war? Why does she even bring up such a bizarre idea?