My offshore empire was built at my kitchen table with just a few thousand pounds and Emily for help. I can only imagine what kinds of opaque and impenetrable structures could be created by those with the financial means large enough to be employing companies such as Mossack Fonseca.
The GoDaddies of tax-havens :
When we asked Nancy and Stephen about whether they are responsible for monitoring shady clients, they told us they wouldn’t necessarily know if their clients were acting outside the law. “We don’t get involved at all. We just serve as the registered agent,” said Stephen. Stephen did say, however, that if for some reason their client was acting suspiciously, he would cut ties immediately.
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Blast from the past :
Today, he says, “Panama is essentially an extension of the U.S. economy.” It harkens back to the early 20th century, when canal workers were paid in American dollars. In the roaring, free-market friendly 1920s, Panama adopted U.S.-style corporate laws. Some U.S. ships, seeking to avoid Prohibition restrictions against serving alcohol onboard, registered in Panama instead. Franklin D. Roosevelt’s administration was alarmed to find out that, as the U.S. worked to dig itself out of the Great Depression, wealthy Americans were using Panama as a tax haven.
Jurgen Mossack’s family landed here in the 1960s. During World War II, his father had served in the Nazi Party’s Waffen-SS, according to U.S. Army intelligence files obtained by the ICIJ. Once in Panama, the elder Mossack offered to spy on communists in Cuba for the CIA.
Let’s start with an important fact that Apple elides in its statement: Apple engineered this problem and it did so intentionally. In the wake of the Snowden leaks, Apple specifically decided to encrypt material end-to-end and at rest by default on the devices it manufactures and to not maintain any ability to decrypt material unless users specifically gave it the power to recover that material. It boasted about this decision and used it as a marketing weapon against its competitors. Reasonable people can argue about whether or not Apple did so for good reasons and whether or not doing so was the optimal way for the company to enhance the cybersecurity of its users. But the simple fact remains that Apple used to have the capacity to comply with warrants, and now it cannot without a certain amount of reengineering. And that was a matter of its own choosing made despite repeated warnings from the government that this choice would cause substantial problems for law enforcement, national security investigators, and public safety.
FBI and Justice Department officials, we think, can be forgiven if they’re a touch cynical about all of Apple’s elaborate legal argumentation and suspect that this all just masks what appears to be Apple’s genuine litigating posture towards the government: You can’t make us do anything, because we are immensely politically powerful, our CEO is on the phone with the President regularly, we are too big and way too cool to fail, and people around the world like us more than they like you. So what about that dead woman in Louisiana? Sorry, but bringing her killer to justice—and preventing his or her future violence—just isn’t as important as the data security of our devices. And about protecting people from ISIS? We’ll help out if it’s not too much trouble, but don’t ask us—ever—to do something that will make us look bad to the ACLU, even if there’s a very good legal argument that you can.
Martin Wolf :
I ask him whether he is confident that the improvement in the resilience of the banks is adequate. “It’s a fool’s game to predict that everything is going to be fine, because either it is fine, in which case nobody remembers your prediction, or something happens, and then … ” They remember your prediction, I interject.
Bernanke continues: “My mentor, Dale Jorgenson [of Harvard], used to say — and Larry Summers used to say this, too — that, ‘If you never miss a plane, you’re spending too much time in airports.’ If you absolutely rule out any possibility of any kind of financial crisis, then probably you’re reducing risk too much, in terms of the growth and innovation in the economy.”
Follow-up on macro-microprudential policies :
Industrial quantities of research, analysis, and debate have been devoted to the causes of the 2008 crisis and its consequences; so it seems odd that senior central bankers are still so sharply divided on the central issue of financial stability. All those days spent in secret conclave in Basel, drinking through the BIS’s legendary wine cellar, have apparently led to no consensus.