What the Panama Papers Tells Us About Global Capitalism

the screwed news British Prime Minister David Cameron profited off his father's offshore accounts he admitted as much today in an interview with ITV News saying that he had 30,000 British pounds invested in the tax haven fund exposed by the Panama papers leak the Prime Minister insisted however that he had sold his investments before taking his post as head of her matters Her Majesty's Government I did own stocks and shares in the past quite naturally as my father was a stockbroker I sold them all in 2010 because I wanted if I was going to become Prime Minister you know I want anyone to say you've got other agendas or vested interests or all the rest of it and I did some after and I had a joint account and we owned 5,000 units in Blair more investment trusts which we sold in January 2010 and that was worth something like 30,000 pounds was there a profit on it I paid income tax on the dividends but there was a profit on it but it was less than the capital gains tax allowed so I didn't pay capital gains tax but it was subject to all the UK taxes in all the normal ways this is a bit of an about-face for this prime minister who had remained silent on his connection to his father's offshore fund for days but now it appears that his father is just another name on a list of world leaders who have been connected in some way or another to the attached tax dodging schemes outlined in the Panama papers leak which raises the question just what should the Panama papers tell us about the finances of the rich and powerful and what do they say about the global capitalist system that made them possible joining me now is dr. Richard wolf professor of economics emeritus at the University of Massachusetts Amherst visiting professor at the new school and author of the book democracy at work a cure for capitalism Richard Wolff welcome back thank you Tom glad to be here thank you it's always great having you with us sir the Panama papers are the largest leak ever involves something like two hundred fourteen thousand shell companies a what is a shell company and B is this just the tip of the iceberg the answer the second question is absolutely and let me expand on it for I answer your first one there are various estimates but at least somewhere between fifty and a hundred countries that offer one or another kind of service from lawyers or accountants to prepare shell companies which are basically devices to hide wealth for a variety of reasons we do that here in the United States to the most famous three states are Delaware North Dakota and Nevada which provide very nice arrangements for hiding your money but it is a global phenomena it is only coming to light in Panama because those documents were leaked but it has come to light elsewhere and it no doubt will again in the future a shell company is a company devised to hide your money it's not a company that produces a good or a service the way other companies do that's not its function its function is to provide a series of barriers in which one company that is doing something normal puts its money into another one that is just there to put it into yet another one and then yet another one with the people owning each of these companies more and more hidden more and more obscure so in the end you can be sure that no one can really trace you or for example David Cameron's father to the particular value that the ultimate company has because too many shells have been interspersed between the actual owner and the company that does real business the shell companies are a kind of disguise mechanism so I've seen estimates from as low as four to seven trillion dollars and as high as fifteen to fifty trillion dollars that is stashed offshore around the world hey you know what what kind of numbers me are meaningful to you what do you think it probably is and be forgive all these a/b questions but I together what kind of impact economic impact does it have that all this money is basically taken out of circulation well we're very lucky that we have a very first-class researcher a professor gabriel zucman zu cma and who's a professor of economics at the University of California in Berkeley and he recently published a book called the hidden wealth of nations and he made the most sophisticated estimates that we now have and that gives you the seven to eight trillion dollar number as at least a first pass at what we're talking about so the numbers are extraordinary I mean vast amounts of wealth that are basically hidden so why is it economically important well the answer lies in the reason why a wealthy man a wealthy woman a big rich corporation would want to hide money we have some of the obvious explanations if you're involved in a criminal activity you don't want your wealth publicly visible in a bank account or in another form like that because the authorities that might be looking at you will know where to get you because you can't account for why you have that money so you pass it through several shell companies so your connection to the money is no longer discernible another reason and the one that I'm most interested in is it's a way to avoid paying taxes you can hide that you're the owner and if there's no owner that can be found of record then the tax can't be applied you don't have to put it down on the tax forms you fill out as a company or an individual because there's no way for the government to actually prove that you have it because it can't go through all of those shelves without an extraordinary effort of course it could have been done if there were the political will in Washington in London in Paris in Tokyo if the wealthy didn't control those governments and those governments really wanted to go get it it's a child's play to see that Panama is not going to be in a position to refuse nor Switzerland nor the Cayman Islands nor the Bahamas nor any of the other places that are famous for this kind of behavior so if there were the political will you could force these law firms these countries to pass the laws and to do the inspections that would make it impossible for wealthy for individuals and companies to hide what they have it's the old joke if you have nothing to hide why are you busy hiding and the rest of us are required whether we have a bank account or a stock brokerage account though that's all kept records that the government can access if it has reason to do it we don't have the money we don't have the connections to hire these shadowy expensive law firms to work with the big banks and by the way I should remind everyone the HSBC UBS some of the biggest banks in the world fresh off being caught doing money laundering and the LIBOR scandal are now being caught as one of the biggest customers using law firms like the one exposed in Panama to help their rich clients create this network of shell companies to disguise their wealth and to save them from paying their fair share of taxes and the final point we are being told by governments around the world that we have to have austerity they have to lay off public employees they have to cut back to public services we need now in this depressed capitalism more than ever and the explanation given there's no money we can't pay for it here's the sad joke the politician who uses that excuse is the same politician who's unwilling alone or together with others to do anything to go after this well-known store of wealth that could and should be taxed wow you and I have talked many times in the past about how economies work how injections of money at the bottom in the economy in the form of wages typically but also other kinds of benefits are the most direct stimulus to an economy whereas money floating to the very top of the economy has very little stimulative effect if money floats to the very top and the economy the the the 40 or 50 people on the fortune 500 or 400 or whatever it is that the to that own more wealth than half of Americans it from what Bernie Sanders tells us if that money is stashed in way in places where it's completely invisible does that have a net depressive effect on the health and vibrancy of an economy of course what we've been doing in the last 40 years is a massive wealth redistribution as Warren Buffett liked to say he's involved in the class war and he's winning because everybody else is losing their wealth and he's gathering it into his own hands as you make wealth more and more concentrated in fewer and fewer hands you're creating the demand and the clientele for the very services that are being exposed in Panama you're removing purchasing power from the mass of people concentrating it upwards into the hands of a few they're not gonna spend it on goods and services they already consumed more than they can literally and physically absorb so they engage in elaborate subterfuges to hide the extraordinary wealth they have because of the correct fear that sooner or later the obscenity of great wealth at the top and massive difficulty for everybody else is not politically or socially sustainable so that it builds the very waste of resources the very depressed economy that will in the end make this kind of shenanigan this kind of quasi legal manipulation an embarrassment and a danger for the very people that are now benefiting from it I'm assuming the way to blow these things up is to change the American tax code and and the laws that that that you know are around this how confident are you that any of the current Republican frontrunner or on the Democratic side senator Sanders or Secretary Clinton would actually pursue efforts to shut down these tax havens or at least make Americans make it much more difficult for Americans to use them I'm not very hopeful perhaps mr. Sanders he certainly the one that one might imagine could go in that direction these kinds of revelations the sort that we're having now with the Panama papers we've had that before and typically they result in a lot of hand-wringing and lots of gestures and a law or two that's passed but never the kinds of concerted determination that we're not going to do business with Panama if it performs in this way if its services wealthy people in ways that damage the United States we're not gonna permit the Nevada and South Dakota and Delaware to flaunt this kind of behavior as well if you had a concerted political commitment to do it I'm sure it could be done but so far the folks at the top who aren't stupid have understood that if they're gathering all the wealth into their hands they need to make sure that the political system doesn't undo the gambits they've developed such as shell companies in various places around the world we have to face a fundamental fact if you allow a tiny number of people to have an enormous amount of wealth which is how capitalism has performed particularly in the last half century then you're going to get all of these manifestations of that system rather than running after the rich each time they come up with a new way to hide to dissemble to evade taxes rather than keeping up this endless chase wouldn't it be wiser and smarter not to distribute the wealth and income in this country so unequally in the first place then we wouldn't have to worry about this the way we are required now to do absolutely brilliant analysis as always professor Richard well thank you so much for being with us tonight thank you Tom I appreciate the opportunity

  1. Prof Richard is by far clear and easy to understand he use no main stream economic jargons to confuse his audience. We love you sir

  2. Why is this program funded by the Russian government? I like Thom Hartman and R. Wolff and nothing against Russia but the fact that they have a dictator

  3. Presumably all these tax haven shenanigans are legal since the culprits continue to do it without any serious repercussions. But it is certainly not JUST or ETHICAL. Which should be the basis of all laws. So what is legal is not always what is moral in this case. Very informative interview.

  4. Love to see how much "tax dodging" Putin and his cronies get up to. RT is no different to CNN, NBC, Fox, or all the other lying assholes.

  5. I love Dr. Woolf & Tom Hartmann. I really do. But it's always the
    same 2 choices.

    Us or them. Government or No Government. Worker People locked in an
    endless negative duality with Employer People.

    Let's walk away from this locked down argument that never ends well for
    those without the guns.

    Us worker people need to get healthy, get energy, and get going — AWAY
    from this sad little argument that has dominated our lives for so long.

    There are endless possibilities – but most require a team effort, trust,
    honesty and forethought. We may be rusty at living like this because
    we've been pitted against each other for so long.

    Worker Co-Operatives, Non-Profits, Crowd and Grant Funding, leveraging
    books and training opportunities, Living By Example, clearing out
    negative energy that drags us down.


  6. My or the main problem with the direction we're heading is the human suffering. It seems like the super wealthy or people in public leadership are focused on profits and control of markets over everything else including human life. The safe guard to protect the population against the wealthy ruling everything is the public.
    "The People". The wealthy have corrupted all forms of "so called" education and now the general population is so brain washed or brain dead mixed with complacency and apathy we hardly stand a chance. War has evolved from the battle field to the brain. It is very easy to brainwash people if you get them young. You can shape people how ever you please if you get to them early enough. Same goes for a proper education system. If you teach kids the correct way the grow up to be amazing people. All in all this is a war. I wish it wasn't but it is. The wealthy started it (like always) but as history shows "we the people ALWAYS come out on top". Stay awesome!

  7. DemoCRIPS and ReBLOODlicans: No More Gangs in Government Paperback – May 28, 2013
    by Jesse Ventura (Author), Dick Russell (Contributor)

  8. FACT: 1 tenth (1/10) of the top 1% has more money in the US then 90% of the entire population.  That should be illegal. Talk about inequality. How can we let such a small group of people have so much of our nations wealth. That 1/10 of 1 % literally control all large companies. They control what we pay..not only for products but gas, rent, the list goes on. They will over charge and under pay us until they control 100% of our nations wealth. What do the rest of us do THEN? It will only take 3 YEARS until the own 99% of the US wealth. Fucking scary times man……How did the population become so ignorant and weak? Think about it????

  9. Dr. Wolff is certainly well intentioned, just not strategically logical. If he thinks these matters are important to the society then he has a duty to get legal help to rectify this problem. There is a legal reward for his class action lawsuit which would compensate him handsomely should he be able to successfully explain to a judge why these shell holdings are illegal and belong to the US working class. He might even be able to sell shares in a Closed Corporation to share the expense and the risk of the specific endeavor.

  10. Who in November forgot about the Panama Papers? It's funny how the largest leak of financial corruption just seeped away from the public memory faster than roaches scattering away from the kitchen light.

  11. Its to bad this didn't come out of the Cayman Islands!  That's where most American businesses and businessmen like to hide all their wealth!  The fucked up thing is, it's not illegal!

  12. What? The Rothschilds, the Soros and the other retards are not paying taxes? That is not true. Those creatures are Angels. All the countries are paying the taxes for them. They just needs to place their people in charge in those countries. Like Brazil, Iraq and so on.

  13. the panama papers tells me to trust noone. we all are humans struggling to survive at best possible after all.

  14. Hunest Kapitalisem has been historically the best way for any nation who want to develop. THE THING WE HAVE TODAY IS NOT HUNEST AND IT IS NOT KAPITALISEM. THIS IS CALLED ULTRA CAPITALISEM

  15. What the internet tells us about the Panama Papers is that nobody in America has got an off-shore tax haven or is actively secreting their cash in a way that some might call illegal. Strange don't you think? A cynical man, not I, could almost come to the conclusion that this shocking 'expose' was nothing more than a dastardly CIA operation designed to damage humiliate and de-stabilise certain interested parties.

  16. This guy is a dreamer. A more equitable distribution of money won't stop rich people from hiding their wealth.

  17. Of course, there's "no money." The plutocratic upper class prints it and keeps 99% of it for themselves.

  18. Both Trump and Clinton have their wealth in a Delaware tax haven, and when questioned refused to answer. Clinton: when I become president I'll close tax loop holes." How does one spell hypocrite, boys and girls?

  19. David Cameron ,is not fit for office ,period!The first sniff of revolution, Cameron will be off,quicker than you can say"Offshore accounts".

  20. Some guy I over heard said! What happened to Cameron's 5.2 million that his Daddy had tucked away surely he wants to inherit this tidy sum! As thirty thousand pounds is just a small petty cash account in a high street bank to many, even within the lower middle classes! Can any one throw any more light upon this figure that this guy seemed very clear about?

  21. whats new, cameron said he put his dick into a pigs mouth too, just to join the skull and bonners club of jewmerica.. anything for a buck.

  22. isn't the threat of bank bail in's and people having their money stolen by banks, driving rich people to use these shell companies ? rich people would be crazy to leave their money in a bank ?

  23. The reason I never get tired of listening to Richard Wolff speak, is because his disdain is obvious. You can tell that he is just as raging mad about the corruption as most world citizens are nowadays. I also love how he wears his Socialist sympathies on his sleeve (much like myself). I am sure there are wealthy people out there that have convinced themselves that the reason everyone else is poor, is because they are lazy or degenerate. I live in Seattle and I know some brilliant hard working people, who cannot afford a home, let alone a vacation home. There are people out there that are so rich, they don't even half to ask how much things are anymore. These people could give a flying fuck about the everyday human being and our struggle. If you want a good representation of how they feel about us, look at how human resources treats employees at every company. It does not matter if you have been there 5 minutes or 20 years, your worthless. They will break your mind, heart and soul and then fire the shambling mess that lays where you used to stand. In other countries, working your employees 70 hours a week is illegal.

  24. What is says, I don't know, What we say (people of Democracy Spring) corruption must be examined, and our House of Representatives must be corruption free and in the peoples hands.

  25. America is no longer a free country, we have become a private corporation bought and paid for by the 1%. America is now America Inc.

  26. It is just stupid to think that Hillary and Bill Clinton are not corrupt. Years before more than a hundred media outlets around the world released stories Sunday exposing a massive network of global tax evasion detailed in the Panama Papers, U.S. President Barack Obama and then-Secretary of State Hillary Clinton pushed for a Bush administration-negotiated free trade agreement that watchdogs warned would only make the situation worse.
    Soon after taking office in 2009, Obama and Hillary Clinton, his secretary of state — who is currently the Democratic presidential front-runner — began pushing for the passage of stalled free trade agreements (FTAs) with Panama, Colombia and South Korea that opponents said would make it more difficult to crack down on Panama’s very low income tax rate, banking secrecy laws and history of noncooperation with foreign partners.
    Even while Obama championed his commitment to raise taxes on the wealthy, he pursued and eventually signed the Panama agreement in 2011. Upon Congress ratifying the pact, Clinton issued a statement lauding the agreement, saying it and other deals with Colombia and South Korea "will make it easier for American companies to sell their products." She added: "The Obama administration is constantly working to deepen our economic engagement throughout the world, and these agreements are an example of that commitment."
    Critics, however, said the pact would make it easier for rich Americans and corporations to set up offshore corporations and bank accounts and avoid paying many taxes altogether.
    While the democratic party’s golden girl, Hillary Clinton was doing her best to push through the Panama Free Trade Deal Bernie Sanders vocally opposed it, citing research warning that it would strictly limit the government’s ability to clamp down on questionable or even illegal activity. Even if the Clintons remain unmentioned in future tax bombshells, Sanders can continue to exploit the narrative that Clinton is part of the populous responsible, and has assisted in flagrant abuses of the system through disastrous trade deals. For many Americans Hillary Clinton is the embodiment of a “global elite”, while Bernie Sanders is the opposite.

    The revelations are relevant to the 2016 presidential election because they once again illustrate the stark contrast in judgement between Bernie Sanders and Hillary Clinton. The transgressions documented in the Panama Papers were directly facilitated by the Panama-United States Trade Promotion Agreement, which Congress ratified in 2012. In 2011, Sanders took to the floor of the senate to strongly denounce the trade deal:

    “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes by stashing their cash in offshore tax havens. The Panama free trade agreement will make this bad situation much worse. Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries.”

    Hillary Clinton, on the other hand, completely ignored the tax haven issue, and instead, regurgitated the same job-creation platitude she used to peddle NAFTA, which has decimated American manufacturing jobs and led to an economic refugee crisis in Mexico.
    Beyond just exposing her unwillingness to understand how modern free trade agreements benefit the rich and punish impoverished countries, Clinton may have a more odious connection to the Panama Papers.
    Of interest and almost lost among the many revelations is the fact that Russia’s biggest bank uses The Podesta Group as its lobbyist in Washington, D.C. This firm is well known inside the Beltway, not least because its CEO is Tony Podesta, one of the best-connected Democrats in the country. He founded the firm in 1998 with his brother John, formerly chief of staff to …you guessed it President Bill Clinton, then counselor to President Barack Obama, Mr. Podesta is the very definition of a Democratic insider. Outsiders engage the Podestas and their well-connected lobbying firm to improve their image and get access to Democratic bigwigs.
    The Podesta Group registered with the U.S. Government as a lobbyist for Sberbank, Russia’s biggest bank, as required by law, naming three Podesta Group staffers: Tony Podesta plus Stephen Rademaker and David Adams, the last two former assistant secretaries of state. It should be noted that Tony Podesta is a big-money bundler for the Hillary Clinton presidential campaign while his brother John is the chairman’s of that campaign, the chief architect of her plans to take the White House this November.

    John and Tony Podesta aren’t fooling anyone. They are lobbyists for Vladimir Putin’s personal bank of choice, an arm of his Kremlin and its intelligence services. Since the brothers Podesta are presumably destined for very high-level White House jobs next January if the Democrats triumph in November at the polls, their relationship with Sberbank is something they—and Hillary Clinton—need to explain to the public.
    That’s the kind of thing that’s all over the Panama Papers, and it’s what Hillary Clinton has been doing forever. It’s how the Clintons suddenly made $100 million in the first few years after leaving the White House, with nothing to offer the business world but their political connections. It’s why the Clinton Foundation got massive donations from Russian businessmen with deals that required State Department approval.

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