Results for “panama” 61 found
Was it wrong to hack and leak the Panama Papers?
Let’s say a group of criminal defense lawyers kept a database of their confidential conversations with their clients. That would include clients charged with murder, robbery, DUI, drug abuse, and so on. In turn, a hacker would break into that database and post the information from those conversations on Wikileaks. Of course a lot of those conversations would appear to be incriminating because — let’s face it — most of the people who require defense attorneys on criminal charges are in fact guilty. When asked why the hack was committed, the hacker would say “Most of those people are guilty. I want to make sure they do not escape punishment.”
How many of us would approve of that behavior? Keep in mind the hacker is spreading the information not only to prosecutors but to the entire world, and outside of any process sanctioned by the rule of law. The hacker is not backed by the serving of any criminal charges or judge-served warrants.
Yet somehow many of us approve when the victims are wealthy and higher status, as is the case with the Panama Papers. Furthermore most of those individuals probably did nothing illegal, but rather they were trying to minimize their tax burden through (mostly) legal shell corporations. Admittedly, very often the underlying tax laws should be changed, just as we should repeal the deduction for mortgage interest too. But in the meantime we are not justified in stealing information about those people, even if some of them are evil and powerful, as is indeed the case for homeowners too.
Once again, politics isn’t about policy, it is about which groups should rise and fall in relative status. And many people believe the wealthy should fall in status, and so they will entertain the morality of all crimes and threats against them. These revelations will of course lead to some subsequent cases of blackmail, against Chinese officials for one group.
I had tweeted “Are your views on privacy and #PanamaPapers consistent? Just asking…” and my goodness what a response, positive and negative. Most interesting of all, many people had never pondered the question before. Somehow “good things” such as “privacy” and “transparency” cannot stand in such conflict because all good things, like all bad things, must come together.
Here is a good Kaddim Shubber discussion on FT Alphaville.
Here is Veronique de Rugy on the Panama Papers.
Here is Ray Lopez on the same:
1. There’s a tension between US and foreign law firms and FATCA (United States Foreign Account Tax Compliance Act (FATCA) has the objective of reducing tax evasion by American taxpayers with foreign accounts). This is because law firms are exempt from reporting on clients past crimes, not future crimes, however, money laundering is considered a future crime. When a known criminal is setting up an offshore account with the help of a law firm, is the law firm an accessory to money laundering or not? The better view is they are not: it’s up to the client to report any offshore account to the government, and not the law firm’s responsibility. That’s the better view, but see point #2, which rebuts this.
2. There’s a tension between client confidentiality and tax treaties. Check this out: https://www.lawsociety.org.nz/practice-resources/practice-briefings/FATCA-and-New-Zealand-Law-Firms.pdf In New Zealand, which is probably representative of others, a passive non-financial foreign entity–which almost always will be a law firm trust account holding money from a client–has a duty under FATCA to report on the client to the US government (“know your customer” is the buzz phrase banks use, which as you know already are required to ‘spy’ on their customers).
Both points 1, 2 are relevant for the conduct of the law firm of Mossack Fonseca. Except for the alleged destruction of evidence by them, I don’t see them doing anything that bad (by law firm standards; remember, any law firm of decent size has former crooks as clients, and for a firm in Panama I would say that’s not the exception but the rule!)
From the comments, here is Kai:
I practice law in cross-border banking and finance in China. I am puzzled by how non-professionals in this field view offshore jurisdictions as categorically related to criminal activity, embezzlement and corruption, etc.
Almost all cross-border transactions involve offshore jurisdictions at some level. For instance most companies listed on the HK stock exchange are incorporated in the Cayman Islands. Anything to do with Bermuda, Cayman, BVI, etc. in cross border transactions is very, very mundane.
According to the papers, Xi Jinping has relatives who are owners of offshore companies. How is that any sort of evidence of wrongdoing by them (much less of Xi Jinping)? I doubt anyone can provide an intelligent answer.
Maybe yes, maybe no, but I don’t see that the people rendering judgment know more about it than he does.
Panama Papers observations
Buttonwood presents a trilemma:
The issue may be another example of that common political problem; the trilemma, under which three options are available, but only two at most can be selected. In this case, it is a simple tax system; independent national tax policies; and the existence of multinational companies and investors.
Here is Megan McArdle:
What we’ve seen from the papers so far is not so much an indictment of global capitalism as an indictment of countries that have weak institutions and a lot of corruption. And for all the outrage in the United States, so far the message for us is pretty reassuring: We aren’t one of those countries.
Consider the big names that have shown up so far on the list. With the notable exception of Iceland, these are not countries I would describe as “capitalist”: Russia, Pakistan, Iraq, Ukraine, Egypt. They’re countries where kleptocratic government officials amass money not through commerce, but through quasi-legal extortion, or siphoning off the till. This is an activity that has gone on long before capitalism, and probably before there was money.
From a Ray Lopez email:
5. Panama Papers fallout will be: (1) a drive to reduce large denomination bills, (2) a drive to make a ‘paperless’ payment system, (3) a drive to eliminate tax loopholes, (4) a drive towards negative interest rates once paper is abolished
6. Xi of China is the biggest loser. He ran on an ‘anti-corruption’ ticket and his Politburo members will be pissed if they see he is corrupt, unless he winks and tells them they are immune from his anti-corruption offensive. In which case, to pay them off, Xi, needs to appropriate the assets of his enemies to give to his friends. So possibly it’s a “double down bet” for Xi: he either folds or has to double down, redoubling his anti-corruption campaign, so he can seize assets to pay off his cronies keeping him in power. We live in interesting times.
7. The net effect of Panama Papers, along with the FATCA issues above, is that criminals no longer will use law firms, and decent people hiding money as well, which means these services will be offered by more informal channels like from a single proprietor “fixer”. “Nick the Greek money launderer” will profit, big law firm will suffer.
Here is China in the Panama Papers.
Facts about Panama
…from 2005 to 2010 its economy expanded by more than 8% a year, the fastest rate in the Americas. The IMF expects it to grow by over 6% a year during the next five years. Panama will soon overtake Costa Rica and Venezuela in GDP per head. Accounting for purchasing power, it is one of the five richest countries in mainland Latin America.
Here is more.
Should old people move to Panama?
Panama has started a bidding war for retirees:
To attract more investment, the central American nation has eased
immigration laws and set up a discount bonanza for expatriate
pensioners that includes 20 percent off professional services such as
those provided by lawyers, architects and physical therapists; no
property tax for 20 years; no income tax on income earned outside
Panama; and a 50 percent discount on real estate closing costs.And
that’s only the beginning. The list of discounts goes on and on,
including price breaks on telephone service, surgery and domestic
airfares and a one-time waiver of duties on imported household goods up
to $10,000.All it takes to qualify is pension income of $500 or more per month — at any age and from any source.
Here is the story.
I can think of four relevant models here. 1. The Panamanian government is simply stupid. 2. In Panama most prices are well above marginal cost, making this a good deal for the nation as a whole. 3. The Panamanian government has a preference for sources of wealth which will not get involved in politics. 4. The Panamanian government believes that the greater number of residents will result in a more efficient spreading of fixed costs. I put my money on #2 and #3, and do visit Panama if you have never been; it is far more interesting than the now overtouristed Costa Rica.
Panama Canal facts
1. 14,000 ships go through the Canal each year; 2/3 of these are headed to or from the United States.
2. A crossing takes eight to ten hours.
3. The Canal is currently financed by tolls; one luxury cruise ship paid $226,194 for passage, an all-time record.
4. New ships are often forty feet wider than the current Panama locks. Within ten years most new container ships won’t fit through the locks.
5. Any rebuilding would involve considerable flooding of territory and the relocation of Panamanian citizens.
6. The Panamanian economy is relatively healthy, but heavily reliant on canal revenue.
7. Many Panamanians are reluctant to have their country take on the full cost of reconstruction.
Here is one account of how the Canal might be rebuilt.
The bottom line: We have a classic bargaining game here. Building a broader Canal is profitable, but who should pay? The longer the Panamanians hold out, the more likely the U.S. will sweeten the pot for improvements. Since the Canal is an object of national pride, they won’t just sell equity in the project. In the meantime they might give the Chinese a larger hand in the project, just to make us nervous. My prediction? The improvements will take at least five to ten years longer than they ought to.
By the way, if you’ve never seen the Canal, I recommend a trip to Panama. For me it is one of the world’s great wonders and the country is lovely.
My notes/outline on the rise of Scottish economic thought
1650s, wars with England, invasions, Cromwell repels the Scots
1690s – Darien Scheme in Panama, Scots more generally grow interested in empire
1707 – Union with England
Scotland keeps its Presbyterian church and laws
Scotland never settled by Rome, for a long time closer to France
Post Glorious Revolution, many Scots still loyal to the Stuart monarchy, recurring theme
Jacobites – loyal to James, who was expelled by the Glorious Revolution
Glasgow – tobacco and sugar trade
Edinburgh – Intellectual, educational, and administrative center
Overall good educational system at multiple levels
Frances Hutcheson – born in Ireland to Scots family, key works in the 1720s, beauty, approbation, ethics, 1729 starts professorship in Glasgow
1739-40 – David Hume, Treatise on Human Nature
1745 – Major Jacobite uprising
Post-1745: The Highlanders and the clan system starts its true decline
Linen, cotton, wool, jute industries
Good schools, good universities, competitive, English-language, no class system
1748 – David Hume, Enquiry Concerning Human Understanding
1750s – David Hume’s essays on economics
1755 – 1.3 million people in Scotland
1759 – Adam Smith, Theory of Moral Sentiments
1762 – Ossian [James Macpherson], beginnings of Scottish romanticism
1767 — Adam Ferguson – Essay on Civil Society, progress, commercial society, militarism
1776 – David Hume dies
1776 – Wealth of Nations
The sciences: the physician and chemist William Cullen, the agriculturalist James Anderson, chemist and physician Joseph Black, natural historian John Walker, and James Hutton, the first modern geologist.
Late 18th century – onset of Scot inventors/tinkerers, most of all James Watt and the steam engine
The Latin American option
Estimates for the number of Palestinians, Syrians, and Lebanese in Brazil range from 10 to 12 million, with a reasonable degree of uncertainty. Most of them came over before those were distinct countries, for one thing. Other Latin American countries also have migrants from that region, Panama in particular, and as you may know Bukele of El Salvador is of Palestinian origin.
I don’t know of any formal statistics, but by repute those individuals have done quite well in Latin America. And it is hard to argue they have increased rates of violence or political disorder.
I would gladly see Brazil and other Latin polities open their immigration to current Palestinians in the Middle East.
The major Latin economies have very low fertility rates, about 1.55 for Brazil. They will need more people, and more young people, in any case. Now seems like a good time to act.
Wednesday assorted links
1. Jeff Holmes of Mercatus explains in detail “How we built econgoat.” In this case “we” means he!
2. China Foreign Direct Investment fact of the day.
3. The first full-time Taylor Swift reporter what would Adam Smith say?
4. Why protests in Panama right now?
5. Which journals are cited the most by central banks?
6. Iran is now decoupling from Hamas (FT).
Sunday assorted links
1. Prior Probability nominates Coase as GOAT, here and here. And more here.
2. The forthcoming Biden executive order on AI (file under: “Lina Khan, accelerationist”).
5. New research paper on UK regional disparities.
6. That was then, this is now (Salem witch edition, WSJ).
7. The Guna [Kuna] people are starting to have to relocate to the Panamanian mainland.
8. Arnold Kling discusses GOAT (the book, not any nominated economist): “From now on, every book should be like this.”
The Dominican Republic is underrated
Despite being one of Latin America’s poorest countries in the mid-1960s, the Dominican Republic has made remarkable progress in terms of income convergence…
What is remarkable about the Dominican Republic’s progress is not just the level of convergence but also its speed compared to other countries in the region. By examining the average convergence velocity, or the rate of change in income convergence per decade, it is evident that the Dominican Republic has exhibited the highest average convergence velocity, or “blue shift,” in Latin America over the past 50 years. Panama and Chile have achieved equally meaningful but still lower positive convergence velocities, while the majority of countries in the region have experienced either very low (“green shift”) or negative (“red shift”) convergence velocities.
Here is the full IMF brief, retweeted by Matt Yglesias. There is much more at the link. I have been there twice, including as recently as last year (albeit briefly), and this accords with my intuitions.
Saturday assorted links
2. Chat with historical figures, 20,000 of them. When will they do economists? And using GPT for therapy, how do you think it did? People preferred the GPT, until they found out they were speaking with a machine.
3. What some top chess players won in prize money.
4. Claims about quantum computing.
5. Rasheed Griffith on where to eat in Panama.
6. “The use of a longitudinal database of Famine immigrants who initially settled in New York and Brooklyn indicates that the Famine Irish had far more occupational mobility than previously recognized. Only 25 percent of men ended their working careers in low-wage, unskilled labor; 44 percent ended up in white-collar occupations of one kind or another—primarily running saloons, groceries, and other small businesses.” Link here.
How well will Colombia end up doing?
That is the topic of my latest Bloomberg column. I am ultimately optimistic, but let me present the case for the negative:
Yet those positives have been in place for a while, and the results are less than earth-shattering. By World Bank estimates, Colombia has a per capita income of slightly more than $16,000, using purchasing power parity standards. For purposes of comparison, Mexico comes in at slightly over $20,000. Argentina is considered to have been an economic failure since the Peronist years, but still has a per capita income exceeding $22,000.
Also troubling is the country’s export profile. After fossil fuels, which have a limited future, the country’s leading exports are coffee, gems and precious metals. None of these is large enough or sophisticated enough or training enough quality labor to push the nation over the top. When it comes to complex manufacturing, the country is lagging well behind Mexico and Brazil, much less South Korea.
A pessimistic view of Colombia would cite the country’s very different geographic regions that have never seen full economic or even political unification. The lack of a fully developed nation-state has been reflected in the country’s ongoing troubles with guerrillas and drug lords. The major urban centers of Bogotá and Medellín are both deep in the interior, surrounded by mountains, and unable to take advantage of major navigable rivers. There is no world-class port or harbor, and except for its connection to the US, the country is inward-looking and has attracted relatively few immigrants, recent Venezuelan refugees aside. The Amazon cuts off Colombia from much of the rest of South America. De facto Colombia has no richer neighbor to pull it up by its bootstraps, Panama being much too small and most of Brazil being too distant. Colombia’s problems also include a recent uptick in troubles with former guerrillas.
I look forward to my next visit to the country…
Sunday assorted links
1. MIE: “For $995, Love Cloud will fly you and a partner in a private airplane for 45 minutes so that you can have sex.” (NYT)
3. Is the hotel minibar disappearing?
4. Nasal vaccines (NYT).
5. Tim Harford’s ten best books for thinking about numbers and statistics.
6. The debate at the time as to whether Ukraine should have given up nuclear weapons (NYT).
7. MIE: First Norwegian salmon vending machine.
8. Claims about Ottawa, also reflecting “context is that which is scarce.”
Sunday assorted links
1. “As of Wednesday, women and men in Panama are under different quarantine schedules.”
2. Banerjee and Duflo give their take.
3. On the decline of “Bridge Over Troubled Water.” (I myself prefer “Cloudy,” among many other S&G songs.)
4. Does financial stress spur entrepreneurship?
5. “We find that firms that had more connections on the eve of the 1929 financial market crash have higher 10-year survival rates during the Great Depression. Consistent with a financing channel, we find that the results are particularly strong for small firms, private firms, cash-poor firms, and firms located in counties with high bank suspension rates during the crisis. Moreover, connections to cash-rich firms are stronger predictors of survival, overall and among financially constrained firms.” Link here.
6. Is classical music becoming culturally more central under the lockdown?
7. 1957 flu memories, that was then this is now.
8. Roger Congleton model of the pandemic, the link downloads it rather than opening it up.
9. Maybe shaky as evidence, but this paper argues that thinking about coronavirus makes people more right-wing.
10. New site/model on estimating the number of infections.
A new charter city effort, Pronomos Capital, with venture capital
Pronomos Capital, which [Patri] Friedman incorporated in August, is supposed to bankroll the construction of experimental cities on vacant tracts of land in developing countries. Pronomos is set up like a venture fund, making investments in local organizations that do the work of securing government approvals, finding tenants, and hiring retired U.K. judges to enforce the new legal framework, to be based on British common law. The firm says it’s discussing semi-autonomous cities of varying sizes with foreign and local businesspeople in countries where officials have seemed receptive to exempting them from area laws, including Ghana, Honduras, the Marshall Islands, Nigeria, and Panama. A given community could start as small as an industrial park, Friedman says. Most will be aimed at foreign businesses seeking friendlier tax treatment…
The venture firm has raised about $9 million so far (more than half from Thiel), well short of Friedman’s initial goal. He says that’s only enough to cover basic fact-finding expenses for his local partners, and he’ll raise more to buy and develop land once governments approve the plans.
Here is more from Lizette Chapman at Bloomberg, interesting throughout.