While I usually have a lot to say, I find myself struggling to get my thoughts around the release of the Panama Papers. It is such a huge story with long-term implications that it is difficult to know where to begin. Like everyone else in the world I have been doing my best to follow the stories but at some point my brain just shut down. The list of politicians who have secret off-shore dealings continues to grow and with more than 11 million documents I think this is only the start.
I want to be happy that all of this has come to light and optimistic that it will lead to major changes in the global financial system. But I can’t. There is a little voice in the back of my head that keeps telling me: “So what.” I am worried that the politicians will be able to talk themselves out of this because this topic is just too massive.
I think the one key take away from me is that this is further evidence that the system is broken and needs a major reset. We as a society have relied too long on the “trickle-down effect.” Giving corporations and billionaires break after break in hopes that they will create jobs and eventually the wealth that they have amassed will spread through the entire society.
However the Panama Papers show that this just isn’t the case. In the last 10 years, which includes the global financial crisis, instead of contributing to society, the super-rich have tried to find way to circumvent the system, to hide their wealth. Instead of paying taxes and contributing to the development of the country -- like regular people do -- they higher teams of lawyers and accounts to find loopholes and “havens.”
It is no wonder that the income gap has grown to pandemic proportions. Making the biggest headlines so far is The Prime Minister of Iceland Sigmundur David Gunnlaugsson as it was revealed that he or at least his wife held corporate bonds of three of the nation’s biggest banks as they collapsed because of the financial crisis. While this is not a crime in itself, there is a major conflict because Gunnlaugsson was heavily involved in the negotiation settlement between the banks and the government. Was Gunnlaugsson negotiating on behalf of his wife or on behalf of his country? That I don’t think is a question we will ever get an answer to. Another example can be found in the U.K. As David Cameron, the Prime Minister of Britain was establishing strict austerity measures in the country, his father was avoiding paying taxes on his investment fund worth millions of dollars. While everyone in the country was worrying about their financial situation, Cameron’s friends and family were enjoying the highlife. The list goes on. Russia has been on the brink of a recession and many regular workers have been left wondering when they were going to get paid. But that isn’t a concern for Vladimir Putin’s best friend and godfather to his oldest daughter who shuffled $2 billion in loans through a network of tax havens. Finally, amid China’s massive crackdown on corruption, we find out that the President’s brother-in law was the sole shareholder of two Caribbean shell companies. Of course for all the information that has been released it is also surprising to see what is not there. No one U.S. citizen has been named in the links. Apparently the U.S. is the bastion of honesty as no American corporation or billionaire has ever tried to avoid paying taxes. Thank god for small (well in this case probably a large) miracle. So with the system broken it is time to hold politicians, billionaires and corporation to a higher standard to effect really change on society so people aren’t left wondering if will be able to buy groceries at the end of the week
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