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Exploiting loopholes to do something that's technically speaking not precisely quite illegal is still illegal under most legal doctrines.

See, for instance, transfer pricing scams and how competent and assertive tax authorities deal with them.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 7th, 2009 at 04:31:23 PM EST
[ Parent ]
Exploiting loopholes to do something that's technically speaking not precisely quite illegal is still illegal under most legal doctrines.
But they still need to be prosecuted for that to have any effect.  Given that the Obama Administration appears to be reluctant to aggressively discredit the absurd policies recommended by the Republicans and the whole noxious set of assumptions on which they are based, I doubt that this will happen until and unless Obama is backed into a corner.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 7th, 2009 at 10:24:47 PM EST
[ Parent ]
Indeed, the problem has always been one of political will, not of a lack of legal framework. For that matter, most of these oligarchs could probably be nailed on something as simple as tax evasion and money laundering, conflicts of interest and taking illegal campaign contributions. If the political will were there.

And while there would be a certain moral satisfaction in nailing them for the specific behaviour that lead to the current calamities, anything that has a reasonable chance of putting a couple of billionaires behind bars for a very long time is perfectly fine with me. No need to get fancy at all.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 7th, 2009 at 11:34:15 PM EST
[ Parent ]
The lack of will goes back to campaign finance.  One of the dire consequences of which Paulson warned Congress back in the confidential briefing he and Bernanke gave them in the fall is rumored to have been that campaign contributions would fall off a cliff without the bailout.  The solution to that is the extremely radical step of generous public financing of campaigns, as I have suggested before.  That is so improbable that I would really like to hear an equally good alternative.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 8th, 2009 at 10:56:06 AM EST
[ Parent ]
Torches and pitchforks.

If you have systemic corruption, you can either deal with the corruption, or you can deal with the corrupt people. The former involves separating the corrupt people from "their" money, the latter involves separating them from the levers of power.

For a variety of reasons, the former is preferable - for one thing, it leaves a more or less intact and functioning government in place to do the reconstruction. But ultimately, if the agenda of elected officials becomes sufficiently divorced from what has poetically been called the Will of the People, the electoral process ceases to confer legitimacy upon the incumbents.

I don't think the US is quite there (yet?). If the American People really wanted change we can believe in, they could still get it, at least in congressional elections, where the districts are smaller and genuine grass roots campaigns have historically been capable of overcoming even lavishly funded opposition.

But as long as most Americans think that institutional corruption is a problem with government, rather than a problem with American government... well, in a democracy, even the dumbasses get to vote, and the people get the politicians that the majority (or at least plurality) deserves.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 8th, 2009 at 01:29:09 PM EST
[ Parent ]
[System.Is.Broken Alert]

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Sun Feb 8th, 2009 at 06:12:06 PM EST
[ Parent ]
If you have systemic corruption, you can either deal with the corruption, or you can deal with the corrupt people.
Or you can change a system that encourages corruption.  The problem with prosecuting corrupt individuals is that most will never be caught and that there is an inexhaustible supply of corrupt replacements.  Even if a replacement is not corrupt to begin with, when placed in a system that favors the corrupt, they have strong incentives to learn to "go along to get along," as former House Speaker Carl Albert once put it.

As for seperating corrupt people from their money, I give you Michael Milken, famous former junk bond tout and king.  After being tried and convicted for his corrupt deeds and spending a relatively brief time in a white collar lock up, he emerged with >$700 million which he used to create the Milkin Family Foundation and to recreate himself as a philanthropist.  But then I suppose that $700 million was the part he earned honestly, don't you think?

But ultimately, if the agenda of elected officials becomes sufficiently divorced from what has poetically been called the Will of the People, the electoral process ceases to confer legitimacy upon the incumbents.

I don't think the US is quite there (yet?).

While it is true that there is the possibility of electing different representatives, given the power of wealth exercised through lobbies and donations and given the challenges of presenting a picture of the existing situation that significantly corresponds to reality via the mainstream media, that possibility is rather hollow.  

Far too many senators and representatives, for purposes of financing their re-election campaigns, must rely in some significant part on money from special interest lobbies.  This makes it impractical for them to be able to act and vote independently, at least if they want to survive the next election.  Take on these vested interests and find yourself facing an attractive, well funded opponent while you are out trying to collect $20--$100 dollar donations from your supporters.

I do not think it an exaggeration to maintain that, for most elected officials, most of the time, these interest groups have figured out how to control events to such an extent that the voters can choose who ever they want and that elected official will still be strongly influenced by the lobbies.  At a minimum, this gives those interests, mostly conservative, a veto over legislation.  The icing on the cake is that when things go spectacularly badly, these interests can, through their most loyal congressional representatives or through their rented talking heads on TV, essentially blame the public for having elected such representatives.

I say we, (the electorate,) are to blame for having taken the devil's bargain of allowing self interested wealthy individuals to finance elections in the first place.  

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 8th, 2009 at 10:06:34 PM EST
[ Parent ]
As for seperating corrupt people from their money, I give you Michael Milken, famous former junk bond tout and king.  After being tried and convicted for his corrupt deeds and spending a relatively brief time in a white collar lock up, he emerged with >$700 million which he used to create the Milkin Family Foundation and to recreate himself as a philanthropist.  But then I suppose that $700 million was the part he earned honestly, don't you think?

See, that's the problem with corruption laws as exist today. When a driver abuses his privilege of driving an automobile by driving it drunk or speeding, we take away his driver's license - that is, his access to the privilege of driving an automobile. This has the twin effect of deterrence and preventing re-offending, by taking the means to repeat the crime out of his hands.

Corruption, I think, can best be viewed as an abuse of the privilege of private property: You use the privilege of private property to do something illegal that you would not have been able to do without the privilege of private property. The solution, along the lines of the speeding automobile driver, is not to take away his liberty. It is to take away the privilege that he abused in order to commit his crime. That is, his money. All his money. Simply prohibit him from owning, managing, being owed, owing or otherwise handling anything exceeding a specified amount (the magnitude of which is determined by the judge within certain guidelines and depends on the seriousness of the case) for a number of years (likewise determined). So if he takes out a wad of cash and starts setting up belief tanks, it's prima facie evidence that he's in violation of the law, and you take away that money.

That would be separating the corrupt from their money. The show trials you get today appear to be more for the benefit of the public and the talking heads than justice.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 9th, 2009 at 03:49:52 AM EST
[ Parent ]
Simply prohibit him from owning, managing, being owed, owing or otherwise handling anything exceeding a specified amount (the magnitude of which is determined by the judge within certain guidelines and depends on the seriousness of the case) for a number of years (likewise determined). So if he takes out a wad of cash and starts setting up belief tanks, it's prima facie evidence that he's in violation of the law, and you take away that money.
Agreed!  I have advocated similar solutions myself.  As to the amount of income allowed to such criminals, I have suggested that they be precluded from ANY paid work and given 2X the local rate of welfare.  But I would accept a limit pegged to the 40th percentile of family income.  But it is the preponderant influence they have in campaign finance that prevents such laws from being enaacted.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 9th, 2009 at 01:09:19 PM EST
[ Parent ]
So you can't do meaningful anti-corruption initiatives, because the people who're supposed to enforce them are on the take. Sounds like a Gordian knot.

And we all know how to untie those...

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 9th, 2009 at 01:28:21 PM EST
[ Parent ]
Thanks for the reference.  I have always liked Alexander's solution, myself.  To which section of the linked reference did you refer?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Feb 12th, 2009 at 12:23:59 AM EST
[ Parent ]
Most of it is worth a read. Some of it for laughs, some of it for thought-provoking political arguments (although sorting the policy from the jargon can be a chore sometimes) and some for advice.

The two I'd specifically highlight are the introductions to Black Blocs and the first section on how to fire your boss.

If you're organising demonstrations, the sections on black blocs are an absolute must-read: I've seen black-bloc'ing work at keeping hostile police away from 'soft' demonstrators (mom, pop and granny), who might otherwise be intimidated by heavy police presence. It should be noted that black blocs can be both offencive and defencive, and personally I have serious qualms about the offencive variant, for both ideological and practical reasons.

The fire your boss section is a very handy guide on organising unions in a hostile work environment. I don't have personal experience with it, because the last time we had that "discussion" in Denmark was over a hundred years ago. But what they write sounds reasonable. They also have a section on sabotage ranging from the legal across the shady to the patently illegal. My own favourite is a "work to rule" action: No organisation can survive everybody following all the rules all the time. Everybody cuts corners, makes professional judgements and falls back on experience. That's what makes an organisation work in practise. Bosses forget this at their peril.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 12th, 2009 at 01:47:40 PM EST
[ Parent ]
In his defense, strangely enough, coming from me, the Milken Family Foundation has been a net positive influence, especially in Southern California, IMO.  It is certainly not a "belief tank" along the lines of The Heritage Foundation, The Hoover Institute or the American Enterprise Institute.  But the punishment recieved, given the crimes committed and the damage done, was, IMO, far from adequate.  

For another even more egregious example I give you Charles Keating, Lincoln Savings and Loan, Continental Can and the Savings and Loan Fiasco.  Sadly, the response to the Savings and Loan blow-up now looks like a golden age of regulatory effectiveness.  But then the Republicans had only had less than a decade to pump their intellectual anesthesia into the body politic.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 9th, 2009 at 01:20:20 PM EST
[ Parent ]

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