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Tuesday, April 5, 2016
The Panama Papers. But what are we going to do with it?
by Richard Mellor
Afscme Local 444, retired
The fallout from the leaked Panama Papers has barely begun and thousands have taken to the streets in Iceland demanding the country's Prime Minister resign. It's hard to imagine that there's anyone who hasn't read about the Panama Papers, what are being referred to in the mass media as an "..unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca."
Iceland's Prime Minister Sigmundur Davíð Gunnlaugsson has refused to resign and is facing increased pressure to do so including more demonstrations today (Tuesday). The document's reveal that Gunnlaugsson wife owned a secretive offshore investment company with multi-million pound claims on Iceland’s failed banks.
Also implicated so far is Vladimir Putin, Pakistan's Prime Minister Nawaz Sharif, member's of British Prime Minister David Cameron's family are also implicated. Cameron is presently waging a vicious war on British workers, immigrants and at present the disabled, whose meager benefits he has on the chopping block. It will be interesting to see how this will influence politics in Britain, in particular the present struggle between the right wing of the Labor Party, the Blairites and Corbyn and his supporters. Also implicated so far is a relative of deposed Egyptian dictator and US proxy, Hosni Mubarak, an individual Hillary Clinton said was "like family. "
Others are wealthy Arab investors who have bought significant properties in London. I was there recently and attended a protest against a housing bill that is intended to drive working class and poor people out of the city so private landlords can snap up this valuable public land in one of the most expensive cities ion the world. We have here the vilest of the vile, the kings and queens of global thuggery.
It is so much data the tip of the iceberg has barely emerged and from what I read this morning, famous Americans are to come. The revelations shook stock markets along with other curbs the US treasury department has placed on what are called "inversions". Here's an official description of an inversion: "In an inversion, a U.S. company takes a foreign address, typically through a merger with a smaller firm. The combined company can then lower its tax rates through internal borrowing and can more easily move non-U.S. profits around the world and back to shareholders while avoiding U.S. taxes."
The class that does no work is up in arms. Investors are crying foul at having such a lucrative game assaulted by "big government" and these curbs could halt an inversion about to take place between the giant Pfizer Inc, a sickness industry profiteer, and the smaller Allergen PFC. The merged company would have been based in Ireland which has much lower taxes than the US
Lawyers advising companies involved in inversions have made millions in fees on top of the taxes saved on profits by the companies themselves. These measures which will not solve the crisis of inequality in society have caused concern among investors.
"It's going to be a major impediment. They're pretty much taking all of the juice out of inversions," says one Wall Street tax analyst.
"Not only does it attack the ability to invert, but puts the single greatest benefit of doing so -- earnings stripping -- on the chopping block," he adds.
What a shame, but no worries, they'll find a way around it.
This curb on inversions is a result of the increased anger that lies beneath the surface of society. Throughout the world and the advanced capitalist countries in particular, opposition to austerity has been increasing and the mood tapped in to by populists in the US from Trump on the right to Sanders on the left. Even Hillary Clinton, as laughable as it appears, makes attacks on Wall Street excesses. This presents a problem as US puppet regimes, right wing jihadists, terrorists and all sorts of unsavory characters like the Saudi's are used to squash revolt from below that threatens a climate that provides cheap labor power, and the plundering of a region's natural wealth. US and western capital does not need a revolt at home but cannot avoid heading down this road driven by the laws of capitalism.
This information released by a whistleblower is not the first that deals with massive amounts of wealth being stashed in safe havens by the world's wealthy. A study a few year ago revealed that as much as $32 trillion was stashed in such havens, equal to the Japanese and US economies combined.
No doubt this latest release of what are supposed to be secret files will have a huge affect on the anti-austerity movement and increase anger at the traditional parties of governance and the wealthy in general. As I mention above, I cannot imagine it not being a positive for Corbyn and co in the British LP.
I think that we have to be clear about a number of points. One is that as we have written many times on this blog, it is almost impossible in this age of technology and the Internet that secret documents and activities can be kept secret. We had the collateral damage video released by Wikileaks thanks to the heroic actions of Chelsea Manning for which she is serving 35 years. We have Edwards Snowden living in exile in Russia and we should consider that if the present Icelandic government falls, the left in Iceland has offered Snowden asylum from what I udnerstand.
Another point is that this revelation will not alter the fact that capitalists will always find ways to hide profits and avoid taxes. As I wrote some time ago on this blog: There are, as Donald Barlett and James Steele point out in their excellent book, America: Who Really Pays the Taxes, two tax codes, one for the rich and one for the rest of us. And the rich will benefit not only from lower rates as a swap for eliminating tax breaks, but will still have their politicians leave plenty of loopholes for them. and anyway, they have the money and access to lawyers and all sorts of other connections the rest of us don’t have to find these loopholes. (Not Another Tax Reform Act).
This doesn't mean it isn't a positive thing that individuals like Snowden, Manning and the person(s) who leaked the Panama Papers did so. It's what we learn from it that matters. It could be just as likely that despair and demoralization can result from such revelations as people simply say that "Human beings are just greedy, there's nothing we can do."
When they cannot suppress such things, the owners of the mass media, the same culprits hiding their wealth, will explain it away as human greed in the abstract. It's just "bad apples" like racist cops. It's never the system, the way society is organized that produces such things. It's never capitalism. It can be "crony capitalism" a term the global bourgeois uses to describe a minor (rogue) state dominated by the imperialist countries and and ruled by an out of control flunky of Wall Street. If we don't reject these arguments we are doomed to failure.
As long as capital is in private hands and the labor process, (the production of society's and I mean global society's needs) what we might call the workplace, is in private hands, we will never be free of crisis after crisis, and as we have said before on this blog, in the not so distant future it will lead to the end of life as we know it on this planet.
The financial industry, the means of holding and also allocating capital------the wealth of labor power past-----must be taken under public ownership and management by workers as workers and as consumers. The US government did this with the auto and banking industry after the crash and called it "conservatorship" as opposed to the dreaded "N" word (Nationalization). The owners retained ownershi and the taxpayer provided the capital just as we did in the Savings and Loan scandal.
This must occur with all the dominant sectors of production in society. Transportation, housing, health care, education, energy, communication, finance (not people's bank accounts but the financial structures) agriculture, all the major aspects of economic life (not small community business who are also being strangled by corporate power) must be collectively owned an managed.
These necessary actions cannot occur without workers and the middle class having a political party of our own (one whose program aims to end capitalism, not consuming itself with the impossible task of making it human and eco-friendly) and the building of a direct action mass movement, nationally and globally, that can bring the economic power of workers to bear on the 1% and stop their destructive economic system from functioning, or dysfunctioning.
Time is not on our side. The best insurance we have against despotism and environmental destruction is our own intervention on the stage of history, learning from out past, learning from our failures. The failures of revolutions past, of experiments in worker self governments of the past, from small localized attempts like the Seattle General Strike to failures like the Soviet Union etc.
For North Americans, familiarizing ourselves with the Seattle General Strike is useful knowledge. That's why the vast majority of us are not familiar with it. If it wasn't a threat it would be all over the media.
Instead the NCAA final was on every TV screen last night and the events leading up to it last a month or more. It's better that we spend our time glued to that. Another sport will pick up the slack now, if we let it.