The Panama Papers Could Lead to Capitalism’s Great Crisis
The Panama Papers Could Lead to Capitalisms Great Crisis
Rana Foroohar @RanaForoohar
April 4, 2016
Leak shows what much of the world's 99% believes
Its hard to know where to start in tallying up the explosive revelations in the Panama Papers, an analysis of leaked documents from global law firm Mossack Fonseca revealed by the International Consortium of Investigative Journalists (ICIJ). Yes, weve known for a while now that the shadow financial system was growing. But its another thing to take in 11.5 million documents showing the way in which Mossack Fonseca was working with big name financial groups like UBS, HSBC, Société Générale, and many others to help elites from the Communist Party leadership of China, to soccer star Lionel Messi, to global financiers hide cash in offshore havens around the world.
Its just the tip of a much bigger iceberg. The size of the leak is unprecedented, but the tricks Mossack Fonseca has allegedly used for its clients are neither new nor surprising. Anonymous shell companies and the failure of governments to require lawyers, corporate service companies, or banks to collect beneficial ownership information on clients leave the door wide open for dirty money to flow around the globe virtually unhindered, says Heather Lowe, the Director of Government Affairs for Global Financial Integrity, a Washington DC-based consultancy.
To me, this is one of the key issues at work in the U.S. presidential election. Voters know at a gut level that our system of global capitalism is working mainly for the 1 %, not the 99 %. Thats a large part of why both Sanders and Trump have done well, because they tap into that truth, albeit in different ways. The Panama Papers illuminate a key aspect of why the system isnt workingbecause globalization has allowed the capital and assets of the 1 % (be they individuals or corporations) to travel freely, while those of the 99 % cannot. Globalization is supposed to be about the free movement of people, goods, and capital. But in fact, the system is set up to enable that mobility mainly for the rich (or for large corporations). The result is global tax evasion, the offshoring of labor, and an elite that flies 35,000 feet over the problems of nation states and the tax payers within them.
Where do we go from here? I think were heading towards a root to branch re-evaluation of how our market system worksand doesnt work. The debate over free trade is part of that re-evaluation. The calls for a global campaign against tax evasion are, too. I think there will also be intense scrutiny about the ease with which financial capital can move around the world weve already seen that with the hoopla over tax inversions, but well see a lot more backlash, in new areas.
More:
http://time.com/4280864/panama-papers-capitalism/
MisterP
(23,730 posts)either it breaks its own rules constantly, or it has to come running to the state to bail it out or simply to maintain the human and natural resources capital would destroy in its blind quest to make more of itself
Hydra
(14,459 posts)Last edited Wed Apr 6, 2016, 12:37 AM - Edit history (1)
There's a lot of faith and voodoo involved in how Capitalism is "supposed" to work, ie: "It works for everyone."
This shows how people with large amounts of capital are basically allowed to do anything they want...which is the entire point. Capitalism never talks about fairness, only about how competition keeps everyone on their toes.
MisterP
(23,730 posts)to her the new system was liberatory and would correct each and every problem it had created so far, with benefits to spare; it took commission after commission, Dickens and Engels moving between puddles of human urine in the industrial slums
BillZBubb
(10,650 posts)The two leaders in the presidential contest for each party are both solid members and backers of the 1%.
What happened after a real failure of capitalism in 2007? Nothing. Neither of our major parties did a damn thing to change it. No higher ups went to jail and all the main players got bailed out by the taxpayers who didn't get bailed out. The 99% got shafted and stuck with the bill. The 1% continued their privileged existence.
If Sanders was way ahead for the Democratic nomination, I'd feel differently. But with Hillary, nothing will change. Nothing.
Baobab
(4,667 posts)which was caused by the w*to