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Nederlog

 April 6, 2016

Crisis: Iceland, Panama Papers, Clinton's Corruptions, (Partial) Explanations
Sections                                                                     crisis index
Introduction

1.
Iceland’s Prime Minister Resigns, First Casualty of
     #PanamaPapers

2. Panama Papers: World Leaders from Iceland to
     Argentina Exposed in Massive Tax Evasion Scheme

3.
The DNC and 33 States Used Loopholes to Funnel
     Millions Into the 'Hillary Victory Fund'

4. Why Don’t We Feel as Burned by the Panama Papers as
     We Do by Donald Trump?

Introduction:

This is a Nederlog of Wednesday, April 6, 2016.


This is a crisis blog. There are 4 items with 4 dotted links today: Item 1 gives a first result of the Panama Papers: Iceland's prime minister had to resign (because of corruption); item 2 is a good interview by Amy Goodman with several of the important persons in the Panama Papers; item 3 does not relate to the Panama Papers but is about the corruptions of Hillary Clinton (or at least: of her campaign team); and item 4 is about an article of mixed qualities, that allowed me to straighten out a few things.

1. Iceland’s Prime Minister Resigns, First Casualty of #PanamaPapers

The first item is by Robert Mackey on The Intercept:

This starts as follows, and gives the first head of state forced out of office:

ICELAND’S PRIME MINISTER, Sigmundur Davíð Gunnlaugsson, resigned on Tuesday, becoming the first leader to be forced from office over the secret financial dealings revealed by the Panama Papers leak.

The prime minister, who was elected to parliament as a reformer in 2009, promising transparency following the ruinous collapse of three Icelandic banks the year before, failed to disclose that his family secretly held bonds worth millions of dollars in the same banks, through a shell company in the British Virgin Islands.
(...)
Gunnlaugsson plans to remain as the party leader and wants to keep his seat in parliament.

I say. I'd say Mr Gunnlaugsson is a lying, egoistic and greedy fat traitor of his own people (and no, I am not a journalist). Here is something I wrote yesterday, which few people (except George Carlin (<- Wikipedia)) readily understand:

(3) I have never voted since I did not have to anymore, in 1971 (sorry, I am not going to associate with the best liars in the country), and if I were asked what is the single proposal I could make to radically improve the world it would be to forbid anyone of making more than 20 times as much as the poorest in his or her society: You may excel, but not by getting hundreds or thousands or millions of times as rich as others, for that defrauds and degrades everybody who is poorer than you, and gives you - whoever you are - far too much power.

Mr Gunnlaugsson seems one of the best liars in Iceland, and he might be a proud contestant amongst the best Dutch liars. But I do have - a sort of - "excuse" for him and his fellow politicians (who are nearly all liars):

As long as anybody is allowed "to earn" as much as he pleases; as long as there are radical differences in economic inequalities; as long as most of the people are poor and only a tiny few percents or promilles are rich or extremely rich, the biggest liars will want to be politicians, and will want to defraud everybody as long as they profit.

But Mr Gunnlaugsson indeed did not go without being objected to:

As The Intercept reported on Monday, more than 20,000 protesters massed outside Iceland’s parliament, the Althing, on Monday to demand new elections. (Reykjavik Media shared
remarkable
aerial video of that crowd on Facebook.)

The ruling coalition, however, is trying to avoid fresh elections at all costs, no doubt because it already trailed the insurgent Pirate Party in opinion polls before the revelation that the prime minister, and other senior members of his government, held secret offshore accounts.

I very probably do not like the Pirate Party (based on the fact that I have regularly followed for over two years someone from the Swedish Pirate Party, which I gave up over a year ago, because there was a lot I did not like, around
a few points I did like), but what is the point of keeping a government of proven liars? Who lie to enrich themselves? What is the point of keeping a thoroughly corrupt givernment: "
the prime minister, and other senior members of his government, held secret offshore accounts"? I do think new elections are needed, for you cannot have a known financially corrupt government and keep it without it doing more harm.

But Iceland is a very small country, and many more heads of state are implicated in the Panama Papers:

Gunnlaugsson is far from the only world leader tied to secret offshore companies by the documents. As The Guardian reports, on Tuesday, British Prime Minister David Cameron “ducked a question about whether his family stands to benefit from offshore assets linked to his late father,” telling Faisal Islam of Sky News that he, personally, has no such accounts.

“I own no shares, no offshore trusts, no offshore funds, nothing like that,” Cameron said. But he failed to respond to the part of the question in which he was asked if he or his family stood to benefit “in the future” from his father’s offshore fund, set up in the Bahamas to avoid paying tax in Britain.

Cameron doesn't need to own these himself: He is already a millionair in pounds, and his father does the dirty but very remunerating jobs Cameron can't do himself as a prime minister. And of course "he or his family" will "benefit “in the future”" from his father's profits: That is what they are for, at least in part, I would guess.

I think Cameron has to go as well, but I do not know whether he will, nor indeed whether he can be forced to go. And as I said yesterday: It is very early days for the Panama Papers.

Here is some more:

2. Panama Papers: World Leaders from Iceland to Argentina Exposed in Massive Tax Evasion Scheme

The second item is
by Amy Goodman on Democracy Now!:

This starts as follows:
"The biggest leak in the history of data journalism just went live, and it’s about corruption." That is what NSA whistleblower Edward Snowden tweeted about the Panama Papers, which were released Sunday and reveal how the rich and powerful in numerous countries use tax havens to hide their wealth. Some 11.5 million files were leaked from one of the world’s most secretive offshore companies, Mossack Fonseca, a law firm based in Panama, and passed to the German newspaper Süddeutsche Zeitung and then pored over by the International Consortium of Investigative Journalists. The revelations implicate 12 heads of state and a number of other politicians, their family members and close associates, including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.
And also several members of the Chinese government, which seems to have decided to forbid even mentioning the Panama Papers in the Chinese press.

Besides, there may be a lot more to come (and personally I am quite interested
in knowing more about the 20 billions of euros a year due to illegal drugs sales that the Dutch politicians "personally permit" now for over 30 years, while keeping drugs illegal [1], without any Dutch paper writing anything realistic about these enormous fortunes).

Here is some more information about the source of the Panama Papers:

BASTIAN OBERMAYER: [translated] A small Panamanian law firm that almost no one has heard of is at the center of the research: Mossack Fonseca. Mossack Fonseca guarded the data of the world’s most powerful and dangerous people—until our source passed it on to us. That was about a year ago. I’ve never seen the source in person. We’ve been talking to each other via an encrypted chat. I’ve very openly asked him why he’s doing this. He says he thinks they have to stop what they’re doing, and he thinks they’re doing rotten business. He wants to stop it.
This doesn't reveal much. Here is some more on the very honest Mr Gunnlaugsson:
FREDERIK OBERMAIER: We learned that the Icelandic prime minister was the co-owner of an offshore company called Wintris, and he owned this with his later wife—yeah, his later wife. But he didn’t declare it to public. And this offshore company, Wintris, was in the possession of bonds of the major three Icelandic banks. That was the bank that corrupted during the financial crisis. And, I mean, this would have been something which he should have declared to the public, that, "Hey, I’m—as a politician, I have to deal with what has happened during the financial crisis, but I do have bonds and had bonds in these banks via my offshore company." But he didn’t declare it to public.
And he did not do this - as indeed he evidently should have - because he is one of the many dishonest and lying personalities who go into politics to profit as much as they personally can by their lies, deceptions and dishonesty.

Then there is this about the ICIJ:

MICHAEL HUDSON: ICIJ is a U.S.-based nonprofit news organization. We have a small number of full-time staffers, about 11 or 12 folks, here in the U.S., Costa Rica, Spain, Venezuela. But we also have 190 members around the world who work at places like The Guardian, the BBC and other newspapers and broadcast organizations around the world. And, you know, we have an extraordinary group of people who work with us who really embrace something that a lot of journalists don’t embrace—a couple things: teamwork and patience, this idea that you’re going to share information with people that normally you would consider your competitors, but the key is, is we all agree to do so, and we all agree to publish at the same time, which is really a win-win. We’re able to sort of, in a sense, do sort of journalistic crowdsourcing on these giant data sets, like the Panama Papers, and when there’s a—and when everyone publishes, you’re not posting by yourself.
I do not know anything about the ICIJ, and Michael Hudson speaks for them. And while I think the information he gives is sensible, it seems that the journalistic policies he describes are mostly meant for safety (which may be
wise: I do not know).

What I would like to know is how much of the Panama Papers will be made public. For the moment it seems only journalists have access to them, although this is a guess of mine. (I do not think all should be made public, but some should certainly be.)

Finally, there is this about
Xi Jinping (<- Wikipedia) ("China's top leader")

MICHAEL HUDSON: Right. You know, we’ve seen quite a few world leaders who have spoke out against corruption, including Ukrainian President Petro Poroshenko, China’s top leader. Those folks have been connected to offshore entities. Poroshenko was shown during the armed conflict with Russia—his representatives were setting up an offshore company for him at that time. You know—

AMY GOODMAN: Information now being blocked in China around what’s been discovered.

MICHAEL HUDSON: Absolutely. And that’s sort of a pattern. In previous investigations, when we’ve written about the offshore holdings of China’s elite, China has shut us down.

The Chinese are certainly blocking information about the Panama Papers, and the main reasons to do so seem to be that quite a few of the communist leaders seem to be corrupt, while Xi Jinping is more authoritarian than his recent predecessors.

And again I say it is very early days with the Panama Papers. And this is a long interview with quite a few points not covered here: Recommended.

3. The DNC and 33 States Used Loopholes to Funnel Millions Into the 'Hillary Victory Fund'

The third item is by Alexandra Rosenmann on AlterNet:

This starts as follows:

According to Counterpunch and Cenk Uygur, the host of Young Turks, the DNC and different states' Democratic parties have long been funneling money into Hillary Clinton’s campaign, otherwise known as "laundering by the millions."
First a needed disambiguation: I think "DNC" stands for "Democratic National Committee". Next, although this item is also about corruption, the present corruption does not depend on the Panama Papers.

Here is some background:

The DNC was so positive Hillary was going to be the nominee that it began a process of actively funneling money to her campaign. At the same time, it convinced 33 Democratic state parties to go along with the plan. Counterpunch states:

The idea was to increase how much one could personally donate to Hillary by taking advantage of the Supreme Court ruling 2014, McCutcheon v FEC, that knocked down a cap on aggregate limits as to how much a donor could give to a federal campaign in a year. It thus eliminated the ceiling on amounts spent by a single donor to a presidential candidate.

“McCutcheon was a terrible decision," Uygur explained, adding that, "it put Citizens United on steroids, and said, ‘you can give even more money as long as you give it to the party, and then in this case they figured, ‘I got it, there’s still caps on how much an individual can give to Hillary Clinton directly but what if we funnel it through the party. And we funnel it through the state democratic parties.' Bingo."

Well... Citizens United was a possibly corrupt and certainly corrupting decision, and McCutcheon made this worse. So yes, this was a corrupt decision, but here is some mitigation:

Using this system to arm the party against Republicans in a general election makes it slighly more understandable, Uygur opined. But shouldn't voters in the Democratic Party at least have a say? 

"With this scheme, the Hillary Victory Fund raised over $26 million for the Clinton campaign by the end of 2015. [And] not only did Hillary’s multi-millionaire and billionaire supporters get to bypass individual campaign donation limits to state parties by using several state parties apparatus, but the Clinton campaign got the added bonus of buying that state’s superdelegates with the promise of contributions to that Democratic organization’s re-election fund," Counterpunch concluded, eliminating any doubt as to where the DNC stands.

The mitigation - which (I think) holds, up to a point - is that the Republicans are corrupt as well (or so it seems). Then again, there also is a third level of corruption: money can be given to persons (for later remuneration); more money can be given to parties (for later remuneration); and now many of the states' superdelegates are bought with the promise of money for their re-elections, that was gathered as money given to the party.

But this seems again major corruption, precisely because it is corrupt money
that is being used to corrupt the anyway quite undemocratic superdelegates (and I do not refer to their persons, but to their roles).

We turn to the last item of today, that is again on the Panama Papers:

4. Why Don’t We Feel as Burned by the Panama Papers as We Do by Donald Trump?

The fourth and last item iby Joe Brewer on Common Dreams:

This starts as follows:

The internet is exploding with conversations about the Panama Papers  — the largest data dump in history of secret files about rich people hiding and hoarding money. And yet the biggest story of all is hardly getting any attention.

That story, of course, is how this widespread systemic corruption has been able to grow its tendrils across the entire planet without anyone stopping it.
Hm. I don't think so: First, the Panama Papers are only known for three days.

And second, while I agree more should be written about systemic corruption, I also take it that the root causes of systemic corruption (unlike its ramifications and the proofs that actual politicians are corrupt) seem to be fairly simple, and may be summarized like so:
  • many persons are corrupt or easily corruptible (which may be restated in quite a few forms like so: everyone knows all men are sinful [2])
  • many politicians have been working for decades to deregulate the laws that protected the many from the depredations of the rich few [3]
  • many politicians have been working for decades to make the things they do, and the things that governments do, ever more secret [4]
  • many politicians have been working for decades to use the deregulations and the secrecies to get as much power and as much money as they could get (and few knew, at least until the Panama Papers) [5]
I am not saying this is a full or a precise explanation (but check the notes); I do say that in principle these four points explain quite a lot.

But Joe Brewer seems to see it differently:
People have known for decades that something feels a little off about the way our political and economic systems function. And yet most of us continue to go about our daily lives as if none of it were happening.

How is it possible that people can get so riled up by the hate-mongering of Donald Trump, for example? And yet barely a peep is made that tax havens, trade agreements, tax policies, and more (and entire architecture of wealth extraction at the planetary scale) are operating invisibly all around us to make societies more unequal and hoard wealth among a shrinking elite with unprecedented political power.

This seems mistaken, for at least three reasons:

First "people" may 'have known for decades" that things were other than they were presented, but as long as you don't give any indication about how many "people" knew, you say little or nothing. Second, "people" get riled up by - concrete, visible - people far easier than by abstract schemes, and this is also natural for human animals. And third, if - as truly stated, I think - the taxhavens, trade agreements, and the whole architecture of wealth extraction are for the most part "operating invisibly all around us" (and they are for the most part, and are kept invisible to keep them secret) then it is not much of a miracle that most "people" do "barely" make "a peep".

But Joe Brewer has another explanation, which seems due to his teacher or leadsman, George Lakoff. I mention it here, but leave it undiscussed, because
I am not impressed by Lakoff (and in case you are interested, see the Nederlog of 26 november 2013).

Then there is this:

Offshore accounts (and the shell game of anonymously owned companies) are used to hide billions (even trillions) of dollars from the societies from which they were taken. But there’s a deeper question we need to explore if we want to understand the full depth of the crisis we are looking at in all of these reports. Yes, there is vast fraud by the global elite. The corruption is on a staggering scale. The real problem isn’t that people aren’t being thrown in jail for illegal activities, it’s that most of these activities are legal.

Yes - but these activities are legal (it seems to me) because they have been legalized by taking away the regulations that forbade them ("deregulation"),
and these deregulations started under Reagan, and have been continued ever since.

That is, deregulations - stopping laws, often on bullshit ideological grounds - have been religiously practised by most politicians, both Republicans and Democrats, for over 35 years now.

This is seen by Joe Brewer as well:

Strip off the superficial differences between most political parties and you’ll find that — on economic matters at least— they function as if they were one party. Democrats and Republicans, for example, are both in support of TPP and deregulation of financial markets. And neither has any interest in bringing the tax haven system to an end or jailing bankers who orchestrated the 2008 financial collapse.

A few politicians do, but most indeed don't.

Next, here is a selection of (I quote) "the DEEP RULES that govern our planetary civilization right now" (and the boldings are in the original):

So what are the deep patterns — what we might call the DEEP RULES that govern our planetary civilization right now? First and foremost, is the modus operandi that economies must grow no matter what the cost. (..)

Accompanying this logic is another one that is more subtle and less talked about. That is the rule saying all value must be measured in monetary terms. (..)

Another key rule is that money is debt that must always be repaid with interest. (...)

Then there is the nefarious rule declaring that rich people are morally superior to poor people. (..)
Actually, I don't think so. First, the rules are mostly ideological. Second, they are not very deep. Third, if you want some of the rules by which many politicians - Democrats and Republicans - have played the past 35 years, look above.

The article ends as follows:

Our hope is that the Panama Papers will open up a conversation about why we have let this Ponzi Scheme go on so long and what we collectively would like to replace it with. Getting at the deep rules that give rise to pattern-level behavior of the whole system is going to be necessary before we can make the change.
As I have pointed out (see above), the "Ponzi Scheme" could go on as long as it did because it was kept secret. Next, I don't think it makes much sense to consider "what we collectively would like to replace it with": there are too many different and opposed opinions and values. (In other words, it must be done by voting.)

And third, I am not impressed by the deep rules Joe Brewer stated, and "we" also don't need to understand the "
behavior of the whole system" to change it:

Clearly, a secretive politics that is secret because it
deregulates and gives lots of power and money to the few is something that should go (if you care for the many rather than the few rich), indeed also quite regardless of whether you are a conservative, a liberal or a progressive, as long as you are mostly honest and are for mostly honest politicians.
--------------------------
Notes
[1] I have lately seen rather a lot of Bill Maher's "Politically Incorrect", that was on American TV from 1993 till 2002. I have seen quite a few of his guests
with - what they claimed sometimes as - "personal experiences" in getting soft drugs in Amsterdam, where I've lived 60 of my 65 years.

So let me correct one of many American misunderstandings about Amsterdam:

Soft drugs are NOT legal in Holland, and neither are hard drugs. The reasons you can buy them as if they are legalized is - it seems - that Holland's mayors and Holland's judges have made a deal (already in the 1980ies) which allows Holland's mayors to give friends of theirs the opportunity to get very rich by trading illegal soft drugs.

Since only in soft drugs, in Holland some 10 to 20 billion euros are made in this way each year, this involves a large amount of money (and indeed a considerable part of this is exported, but it is exported by Dutch dealers).

I do not know how much the mayors, the judges, and - perhaps - the district attorneys get paid for this. Some say that the Dutch mayors are so honest and so loving and such good men that they do not get paid one cent. However that may be, I do know that if the mayors got 1 cent on every 1000 cents turned over on Dutch soft drugs, they would get 10 to 20 million euros every year (since about 1986).

And I am curious whether anything will be found out about the integrity and loving care of the Dutch mayors by way of the Panama Papers, because I have given up all hope that the Dutch will clarify this - thoroughly corrupt - situation.

[2] As an atheist, I do not believe all men are born in sin in any religious sense, but (i) the great majority of all Americans do believe in some Christian conception of sin, and (ii) I do not believe that all men are born good myself.

[3]
I do think that the very many deregulations are the main reason for the enormous corruptions we now see, and these deregulations were a quite conscious, quite deliberate, decades long attack on the rules that protected the many from the depradations of the rich few, and I think that the great majority of American well-known politicians of the last 30 years willingly participated in it, in part because they hoped to make more money for themselves, and in part because much of this done in partial or full secrecy.

As to the secrecy, see the next note:

[4] The
deregulations and the (full and partial) secrecies, including the ever less transparent government, are like hand and glove (the deregulations did it; the gloves hid it), since many of the deregulations that were passed would have been more difficult or impossible to enact if it were not for the fact that what they deregulated or how they deregulated or even that they deregulated was often hardly discussed or mentioned - see the TTP, TTIP, TiSA and CETA! - and perhaps not fully or at all known to the senators and congressmen who enacted them (nevertheless).

[5] This last point summarizes the point of the deregulations + secrecies:

This enabled the powerful to get more power and the rich to get far more riches, and these effects and/or their extents were hardly known by the ordinary population because most of this happened in full or partial secrecy.

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