I like the Real News Network with Paul Jay. It presents the insights of knowledgeable people about stuff that is real news. Real news? What is that? News is something new, something of value (for what its is worth) that was not known before by anybody. History is news to a student to whom it is taught in school. To everyone else it is history therefore it is not news. If there was something new to be known about history, new to everyone then it would be news. Much of what is in the news is not news. Bankers are crooks that have bought off politicians who are also crooks. That is not news.
Paul Jay's interview with "James Henry of the
Tax
Justice Network covers his newly released report “The Price of Offshore
Revisited” in which he estimates the size of the “offshore” market as
somewhere between $21 and $32 trillion as of December 2010. Note that
this total includes only financial assets, and thus omits real assets
(real estate, gold, artwork, yachts) that are held via trusts or
corporate entities in tax havens.
That is a big boat load of money! What is this money? What kind of money is this? It looks like money in the bank since it is in off-shore bank accounts. I get just one point for that no brainer! Money. What kind of money? Money money in the currency of the geographic location of the specific bank that accounts for it? Can a bank or bank office in a certain geographic nation location be only an accounting location for the existence of money in a different nation? Since money and information management is an exercise is separating the conceptual logic management from the physical management of the associated thing why not account for it in one place but have it be used in another place?
20 to 30 trillion dollars in Pirate Bank off-shore accounts. The big issue is that it is hidden from taxing by a country that otherwise has some right but no ability to tax it. The concept of a sovereign country is something that the information age has not yet managed to separate the physical management from the logical management. Countries physical and logical identities and management. are tightly bound. They all have a flag, a national song and can have an olympic team if they are a country. There is a finite number of countries in the world and they all have a unique name.
People are associated with a country. Call it citizenship. The country in which they claim citizenship normally claims rights to tax them. Their wealth or income, whatever might be the basis of choice for the tax. If the citizens money is in an offshore bank the right of the country claiming the citizen or claimed by the citizen gets muddled. The country in which the money resides in an off shore bank has an interest in taxing the money held in their country, if it is taxed at all, or, more likely the economic benefit, whatever that may be and to whomever that might be in the country where the money resides that is the asset of a citizen of a different country.
Maybe it is like having kids that live in a different house with a different family. Wait...wait....there was an idea here that at first seemed to present a strangely confusing example of a direct natural parental relationship to something that has a physical relationship to a non-biological parental relationship in another household. Not a good example, not so unusual. On the other hand maybe it is a good example????
Back to the interview: That is a lot of money. Money like we think of money in a bank account. One that we can write a check on when we want to spend it. If I have money in the Cayman Islands and buy a billion dollar yacht do I just write a check for it in Cayman dollars and then let the bank take care of converting Cayman dollars to the national currency of choice of the payee? Or do I pay in bonds or other non-hard money national currency that are held in my bank account as an investment instrument. There seems to be little separation between bank saving and investing functions in the USA and probably true of all banks. Just saying I have money in the bank does not necessarily mean savings anymore, it could be investments. Like saying I have money in the stock market. I really, have no actual money in the stock market I only have a stock in my stock account that I payed money for and is a liquid asset that I could convert back into money. The way be use the term money has certain ambiguity. There is real money and then there are liquid assets. How liquid they may be on any given day is variable.
Trillions of dollars in off-shore accounts. Some of it is the money of national governments, some is private money. Corporations or individuals. If it is real money then it is debt money since all money is debt money created by some national central bank or the World Bank.
The World Bank: Now there is a whole new can of worms in the money business that could be the focus of thought for a long time regarding what money is. Maybe it would be more of a focus of what money does after determining what money is? Deferred thought on that one for now.
If all this off-shore money is debt money then it is "parked savings". Savings that while in the bank of nationality where it resides (or is accounted for) is loaned or is the basis for fractional reserve banking financing loans.
My head is spinning and I am getting dizzy thinking about all this complexity related to off-shore accounts. It is difficult enough to simply get a handle on money in the USA. The USA is an off-shore account to someone not having citizenship and residency in the USA. The USA offers a tax haven to off-shore entities and the USA may or may not report off- shore holdings to the country with rights to tax a citizen of that country having the off-shore account in the USA.
A broad conclusion so I can wrap this up and get on with the day is that this is a complex situation. The only way to deal with complexity is to reduce it to simplicity. The approach to that reduction is to organize the things, the conceptual objects in the problem domain as the ultimate goal. Then present the object oriented conceptual model relationships. Understanding the functions manifested by these object relationships serves to discover the relationships. That is the only way to understand the complexity. Any attempt to understand it with the focus on creating a purely functional model of how things work rather that what the things are is unproductive. It is also the method of choice (functional top down deconstruction or bottom up functional assembly) that anyone wishing to hide the object relationships or obscure uses to protect any complex system from being understood and consequently change. Changed by changing what the system is (the objects it is built on) rather than changing what the system does (the functions of the object relationships.
Enough.
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