Category Archives: Justice

The Panama Papers

713a3bf3b4f11189c343857ff640f697There is much to be learned from the famous “Panama Papers,” both in their content and in the manner of their disclosure.  The superficial reading, widely published, is that lots of bad people used a certain Panamanian law firm to help hide their ill-gotten wealth.

Naturally, we presume that everyone with a foreign bank account is at least engaging in criminal tax evasion, and probably stole the money to begin with.  The presumed criminals in this case include, not Russian President Putin himself, but his “close associates.”

One theory is that the attempt to smear Mr. Putin was so amateurish that it must have been planned, counterintuitively, by Russian intelligence.

Bank accounts not readily available for confiscation (remember Cyprus) are always in “offshore tax havens,” which has that wonderful Pirates of the Caribbean ring to it.  The mere fact of Mitt Romney owning a blind trust in the Caymans was enough to smear him as a tax dodging fat cat.  A blind trust, hello!  Does anybody on CNN even know what that is?

Here is an editorial in the Wall Street Journal reminding us that, for many of the nationalities featured in los papeles, honest people move their money offshore because their government is corrupt.  Simon Black takes this a step further, warning ordinary Americans to take their money offshore.

Last year, the US government stole more money and private property from its citizens through civil asset forfeiture than all the thieves and felons in the country combined.

The legal issue in each case is whether any tax laws were broken.  The more interesting issue, especially for public figures, is where they obtained the money in the first place.  This may also involve illegal, or at least suspicious, activity.

Oddly, few Western politicians have been implicated.  This could be the result of Western media controlling the disclosures, or our own crooks could simply be using a different law firm.

Some have suggested that this firm was targeted specifically because of its client list.  It is a referral business, after all.  One theory is that the attempt to smear Mr. Putin was so amateurish that it must have been planned, counterintuitively, by Russian intelligence – a “false flag leak,” if you will.

The one indisputable victim here is Panama itself.  The EU and the IMF have long wanted to crack down on Panama as a “tax haven,” as they have previously cracked down on Switzerland.  Financier George Soros supports global tax regulation, and he also supports the agency that broke the story, the ICIJ.

You know this was the motive because the first thing printed in The Economist was a call for – get this – a global registry of beneficial owners.  Do you really think the global tax police will be looking for their own masters’ money?  No, no, no, querido.  They will be looking for your money.

See also:  New World Currency

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American Gulag

There is some scary stuff going on with law enforcement in America. Last week, we reported on civil asset forfeiture, and now the leading practitioner of this nefarious program has been nominated for Attorney General. We have been following the trend of police militarization and, today, we bring dispatches from America’s carceral state. Meanwhile, habeas corpus looks like it’s gone forever.

Now, in our outsourced, corporate gulag, you can be locked up and never see your family again – at least not live. The new thing is prison visits on low-def video, for which your loved ones will pay a premium. That means more revenue and lower costs for the prison industrial complex. If you have ever had the experience of a prison telephone visit, you know what a cruel scam it is. Video calls will certainly be worse and, no – they are not allowed to visit in person.

America has about 5% of the world’s population but almost 25% of its prisoners, with the world’s largest number of inmates and highest per capita rate of incarceration

Law and order types say that prison is intended to be punishment. We refer them to the Constitution’s prohibition of “cruel and unusual” punishment, and the Supreme Court’s ruling against California. Ironically, while California is generally a liberal state, it is also broke. The Supreme Court found that extreme overcrowding in Californian prisons amounted to something like torture. Prisoners are left to die from agonizing diseases. If you’re one of these law and order types, go ahead and read the judgment.

The answer to overcrowding is not simply to build more prisons. We incarcerate more people, per capita, than any other civilized country – by a wide margin. See chart below, and this wonderful infographic from Pew. There are 2.5 million Americans behind bars. If the “carceral state” were actually a state, it would be our 36th largest, just behind Nevada. In his book, Jonathon Simon makes the case that mass incarceration is fundamentally at odds with the Eighth Amendment.

Prison Chart

The answer, in terms of policy choices, is blindingly obvious. As judge Morris Hoffman writes, “there is a large body of criminological research that shows that just a handful of criminal law doctrines — including three-strikes laws and mandatory minima for simple drug possession — drive sentences substantially higher than the average citizen believes is just.” The ACLU should be campaigning hard against these doctrines.

Just a handful of criminal law doctrines — including three-strikes laws and mandatory minimums for simple drug possession — drive sentences substantially higher than the average citizen believes is just.

Behind the doctrines is a sinister convergence of interests between “law and order” politicians and commercial interests. Politicians can reduce crime by budgeting more money for law enforcement or, more cheaply, by passing tough sentencing laws. Like pension commitments, these laws create unfunded liabilities that come due after the politician is gone and the prisons are full. Yes, in America people really do serve life in prison for marijuana.

[Supreme Court Justice] Kennedy… called it “sick” that the state’s prison-guards union had sponsored a notorious ballot measure that … now keeps far too many Californians locked up.

The commercial interests include private prison operators, subcontractors, and – for public prisons – the prison guards’ union. These are groups who profit from a large prison population. They lobby very effectively for long sentences, and against rehabilitation. Corrections Corp. has annual revenue of $1.6 billion, and is currently rated a strong buy. See stock chart, below.

CXW Chart

This is not to say that private prisons are bad, operationally, but it does mean that we have a system of perverse incentives. Instead of rehabilitating people, we have incentives to warehouse them cheaply for as long as possible. As with much else in government, this boils down to cost accounting. We do not hold our leaders to account for the economic and social costs of their decisions.

It was nice to see the Supreme Court rule on this, but it took an extreme case. We, the voters, should be taking action. Otherwise, we can add the Eighth Amendment to the growing list of “rights we used to have.”

See also: End Mass Incarceration Now

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K.O. Katsuyama

The poll at CNBC showed public opinion strongly favoring Brad Katsuyama over HFT whore Bill O’Brien. Now, it turns out that O’Brien actually lied about how his BATS exchange works. New York’s Attorney General has required him to print a retraction in the Wall Street Journal. In the video, you see Katsuyama catch him out, while the crowd cheers – literally, a cheering crowd on the floor of the New York Stock Exchange.

“You want to do this? Let’s do this,” Katsuyama said in response to O’Brien’s prodding.

The beauty of Katsuyama’s idea is that, since the SEC won’t act, he will provide a market solution. Katsuyama has invented an HFT free exchange, called IEX. If you are tired of getting scammed, you can switch. Already, two leading brokers have switched to his exchange – and the book only came out on Monday. One, Interactive Brokers, is the ne plus ultra of trading platforms. We expect investors to flee BATS like the fall of Saigon.

Update:  July 22, 2014, O’Brien gets the sack.  See Bloomberg.

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America in the Dock

There is a school of history which blames America for most of the world’s ills.  Jeremiah once saw an interviewer ask Charles Manson how he justified his crimes.  “Well, you killed the Indians,” was his glib reply, as if the young reporter had just come from Wounded Knee.

  • America persecuted the Indians, so I chopped up a pregnant woman.

Manson is not alone in judging America harshly.  There are many who feel we must answer for the Indians, for slavery, for propping up dictators, interning the Japanese, and damming the Columbia.  The defendant is two hundred years old, and it’s a long rap sheet.

If America were in the dock, Jeremiah would offer as defense that we also rescued Muslims from genocide in Bosnia, and Jews from genocide in Germany.  We liberated an entire continent from the Nazis, and we liberated Russia from communism.

When the U.N. talks about sending troops – to Libya, Kuwait, or Liberia – they mean American troops.  When a typhoon strikes Thailand, Haiti, or the Philippines, it is America’s armed forces that pitch in.  Call it “community service.”

AyersMugshotYou may be baffled by these accusations, but others have passed judgment.  Bill Ayers brought up the Amerindian genocide just last week.  So, what does it mean to judge an entire nation?  Was the carnage of the Civil War not enough to atone for slavery?  Shall we give the continent back to the Indians?

Nazism, for example, was a national sin, and the Germans accept responsibility for it.  Theirs is a homogeneous culture, and the perpetrators’ grandchildren still live there.  America’s case is a little different.

Bob Dylan says he can “smell the slave owner” on white Americans.  Sorry, Bob.  Most white European immigrants came over in the twentieth century, many of them refugees like Dylan’s own family.  Besides, white Americans are hardly even a majority anymore.  Bitching about America because of nineteenth century white people seems hopelessly out of date.

America was also not a colonial power.  Surprise!  America was oppressed by the British empire, just like everyone else.  The American revolution, arguably, marked the beginning of the end of the colonial period.

When you hear this “America is evil” theory, you have to wonder what remedy is proposed.  Listen carefully, and it turns out be a rhetorical trick.  The speaker makes this indictment, and then you are supposed to believe whatever comes next.  Take Ayers, for example.

  • America persecuted the Indians, so what we need now is communism.

From a policy perspective, that’s hardly compelling.  It sounds more like a punishment than a recommendation.  Logically, it’s the same non sequitur as Manson’s – except Ayers is better at rhetoric.  That’s why one criminal is in jail, and the other isn’t.

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Iraqi Police Hero

Here is a touching story you might have missed in the mainstream media.  Iraqi policeman Ayyub Khalaf shielded bystanders by tackling a suicide bomber.  Khalaf, 34, leaves a widow and two young children.  God bless him.

GoodGuyHasM16The bomber’s target was Shia pilgrims making their way to Karbala for a religious observance.  To an outsider, this inter Islam violence is just incomprehensible, like Catholics killing Protestants – not that any kind of terrorism makes sense.

Such terrorist acts are particularly despicable and unjustifiable, all the more so since practising religious duties is revered in all various faiths. – UN Statement

Public reaction shows that ordinary Iraqis are sick of al-Qaeda fighting its war in their country.  They’re calling Khalaf a martyr.  Attention jihadis – a real martyr is someone who dies protecting the helpless.  The other lot are just murderers.

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Tragic Shooting in Detroit

KymWorthyOh, joy.  Another racially charged shooting.  The facts in brief are – drunk girl wrecks car, staggers off to the wrong house and bangs on the door, gets shot by homeowner.  The prosecutor says that race is not relevant.

County Prosecutor Kym Worthy (pictured) can probably obtain a conviction without playing the race card.  The legal standard for self defense is that you reasonably believe your life is in danger.  That will be tough to defend, with no evidence of a break in.

“In this case, the charging decision has nothing whatever to do with the race of the parties,” she said. “Whether it becomes relevant later on in the case, I don’t know. I’m not clairvoyant.”

Ms. Worthy has been doing this a long time, and she has been doing it in Detroit.  We sympathize with a prosecutor who just wants to do her job without a media circus.  As usual, this tragedy is “racially charged” because that’s what sells newspapers.

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Bow Down, Peasants

KingJoffreySen. Rand Paul (R-KY) has proposed a Constitutional amendment that Congress must be bound by its own laws.  Critics say this is all about Obamacare, and their exemption therefrom.  Opinions are divided on that, but – this is not the only special privilege Congress has.

Critics also say that the language of Paul’s amendment is vague and could backfire.  That’s probably true, in its rough draft – but we hope that our nation’s lawmakers can clean that up.  The only reason this language is not already in the Constitution is that no one ever imagined Congress would be handing down laws for the rest of us to obey.

No one ever imagined Congress would be handing down laws for the rest of us to obey.

Finally, critics say Paul’s idea is quixotic, because Congress will never vote to curtail its own privilege.  Can this be true?  Are we serfs now?  A better question is – who are these critics?  The logic of Paul’s proposal, if not the details, is unassailable.  So, why assail it?

As usual, it’s the partisan charade.  Because Sen. Paul is a Republican, the left reads this as an insult to Obamacare.  If he were a Democrat, it would somehow be a threat to national security – or baseball, or some damned thing.  Like domestic surveillance (which Sen. Paul also opposes) this is another case of partisans willing to be ruled.

See also: No One Is Above The Law But Congress

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