The Wall Street Journal has run an Op Ed by Holman W. Jenkins, Jr., a member of its editorial board. Published under the title “Does the World Still Need the Swiss? : UBS's sin was marketing secrecy too broadly.” I am struggling to work out whether it is mad, bad or just plain stupid.
The hypothesis is this: that in the World War 2, more by luck than judgement the bank secrecy that the Swiss created to assist tax evaders in France helped the Jews. Of course, it also helped the Nazis: the Swiss were entirely amoral on the issue. Jenkins doesn’t see it like that though. he says:
That's the paradoxical virtue of Swiss banking secrecy, which has protected both greedy tax scofflaws and those merely trying to save something for the next generation when politicians are burning down the economy back home.
This he calls the Swiss contribution to global culture and he mourns the fact that “Swiss secrecy in the future may be a privilege only for those with nothing to hide.”
Why does he say that? He says:
In 1934 … the Swiss looked out and saw a world gone mad: bank failures, depression, militarism, fascism, communism. The new law was meant to buttress the world's confidence in the privacy and security of a Swiss bank account.
He goes on:
Today, the world is at least slightly deranged, with the possibility of getting very much worse. Democrats in Congress, in the face of every economic lesson, want to push marginal tax rates back up to confiscatory levels. AIG employees have been threatened with political lynching unless they "voluntarily" surrender income they were legally entitled to. Congressman Henry Waxman now wants to collect salary data on CEOs who don't support ObamaCare.
On the macro level, meanwhile, the Swiss have always done a good business when residents of other countries see their governments making more commitments than they can possibly afford—exactly the situation in Washington today, as all the antecedents of an inflationary blowout are in place with only Obama man Ben Bernanke standing in the way.
That is the mad bit. Does Jenkins really think supplying universal healthcare is the same as escaping the Nazis? Or that having to bail out banks justifies tax evasion through those self same banks? Is such comment really being published in the WSJ?
And is he really saying people should tax evade to bring down the elected government? If it is, that’s the bad bit. Bad in the sense of being fundamentally undemocratic.
What’s the stupid bit? Continuing to endorse Swiss banking secrecy is that part. Jenkins says:
No wonder UBS chief Oswald Grubel, even as he cleans up after his bank's reckless marketing (under prior management) of tax evasion to American citizens, still sees a bright future. Wealthy investors, he says, are on the hunt for havens of political and economic stability. On that score, he told the Journal, "Switzerland looks a lot better than the U.S., the U.K. or any other country."
But as he notes, that can only be true if the Swiss stay beyond the reach of US law:
The Swiss bank to trust in the future will be one whose assets and personnel are safely tucked behind Swiss mountains and a Swiss government adept at playing on the self-interest of other nations. UBS's sin was trying to market Swiss secrecy cheaply and widely—too cheaply and widely for others to tolerate. Let's hope we never need them again as we have in the past. But just in case, let's also hope the Swiss have learned to manage the franchise better.
Think about that for a moment and what he’s saying is that bank secrecy should survive beyond the reach of international law to protect a privileged few with enormous wealth and a complete disregard for the democratic process from the requirements of of US law that they pay their tax on their world wide income to support the state in which they live and in which they, no doubt, earn their incomes.
Blatantly this is the Wall Street Journal promoting the merits of tax evasion and the role of tax havens in undermining the democratic rule of law. And note, this is not an op-ed from an outsider: this is in-house WSJ material. This is the paper’s view.
Think about it US readers. And wonder whether this man can be prosecuted for inciting wire fraud. Because what he’s doing is seeking to undermine your state.
Maybe it’s not just mad, bad and stupid. Maybe it’s all of them and treason. In which case, what to do about it?
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Richard,
You laugh at someone comparing the current climate to the 1930s and then at the same time suggest that a journalist should be prosecuted for treason for putting forward an argument you disagree with. A tactic usually associated with totalitarian regimes.
We live in frightening times. The more the rhetoric is raised, the more those with mobile capital want to put it out of reach of the mob.
So you suggest Hitler should not have been prosecuted before he undermined the state?
This man is proposing people break the law to deny revenue to an elected government.
Are you saying that’s OK?
Are you saying the totalitarian alternative is better?
Is that the view from the Channel Islands?
Me, I’ll fight for democracy
Now, which do you say is a better cause?
Richard,
I simply make the point that when you seriously suggest a member of the editorial board of a leading newspaper should be charged with treason, it sets the alarm bells ringing. If press freedom is the price to pay, perhaps the cure is worse than the disease.
Get real
We do not allow a great deal of comment in our press – we deny the right to be racist, to promote crime, and more.
He is promoting crime
That’s not a press freedom
That’s abuse
Stop making excuses fro lining your own pockets
And answer my question
I also think in general, the degree of freedom that the press has is a good barometer of the strength of a democracy. So I would hesitate before arguing that because you want to charge journalists with treason you are “fighting” for democracry.
I’m fighting crime
And answer my question
would it be morally justified not to pay taxes in the coutry such as Hitler’s Germany?
No
Kant, St Paul and Jesus would all say no
Good enough for me
However, even given my strong Quaker leanings I would have gone to war against Hitler
The comments are consistent
but if you were a citizen of this country? would you switch sides or desert the army?
thank you for your answers.
Richard, are you really surprised at the editorial tone when you consider who the boss is?
Richard,
You may think tha Jesus would say that it is morally justifiable to pay taxes to Hitler. The other interpretation of rendering unto God what is God’s and unto Caeser what is Caeser’s is that everything thing you do should be in service unto God and there is noting left for Caeser.
Kant also believed that if people suffer it is because they deserve it due to their sins in a previous life. Because that’s the only way he could conceptualise why the world is unjust.
Mad
Neither of which interpretation do I recognise
You missed St Paul
Richard
And you still have not answered my question.
“Are you saying the totalitarian alternative is better?
Is that the view from the Channel Islands?
Me, I’ll fight for democracy
Now, which do you say is a better cause?”
Carol
No!
Richard
Richard,
My answer is that I do not recognising charging journalists with treason as “fighting for democracy”.
Totalitarianism has been defined as:
“A dictatorial form of centralized government that regulates every aspect of state and private behaviour.”
I will let others form a view as to whether it is my philosophy or yours that ends in totalitarianism.
Is incitement to defraud a fair compromise on the charge then?
It just happens he is doing it to a state
I leave it to others to decide whether, if done to your own state this is treason
Now, is that fair?
And is he inciting fraud?
Richard,
I don’t defend what the guy is trying to say. I just think that charging journalists with treason is a line that I won’t cross and that I don’t think many would cross, and I wouldn’t say it was ever in the interests of democracy to start locking up journalists.
Now I get your bizarre logic
Journalists can’t commit crime
They can’t be done for murder, traffic offences or anything else because they’re journalists
Nor incitement to defraud either
I wasn’t suggesting he be charged as a journalist
I was suggesting he be charged for inciting a crime – tax evasion
Now stop wasting my time
Richard,
That’s not what I am saying. The article doesn’t say people should evade taxes.
It says banking secrecy comes into its own as a form of balance to prevent governments raising taxes to levels that people are not willing to pay.
It says banking secrecy has a role to play in times where people feel social unrest and want to place their wealth somewhere far away and secure.
It says the Swiss should not go out and market their offering.
It does not say – I recommend people evade their taxes by doing this.
In other words, it is someone giving an opinion on a matter of interest.
You may as well say that a journalist arguing for changing the laws on illegal drugs be charged with inciting drug use, or that a journalist opposing a war be charged with treason, or a journalist commenting that he won’t be paying the BBC licence fee be charged with inciting others to do the same. And let’s bang up people holding protests for any change in the law while we’re at it. And the next step will be getting rid of opposition politicians, because by definition, they oppose the elected will of the people and must be anti-democratic.
What you are proposing, and do not evade this, is that people who disagree with your view cannot be tolerated and should be imprisoned. And the frightening thing is that you make that argument in the belief that it is democratic and anti-totalitarianism.
You chose the name Mad appropriately
You are mad, bad and plain stupid
None of the things you list are possible without tax evasion
But like all in the CI financial services sector you choose to ignore that
And the rest of your argument is nonsensical – he is not asking to change the law – he is saying people should break it
I am opposing criminality
But of course you have a problem with that. You make your living from the proceeds of crime
And you knowing undermine democratic states in the process. that’s what secrecy jurisdictions do. Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
So of course you disagree. You have no choice
But it does not make you right
In fact it makes you plain wrong
Richard,
Where does he say people should break the law?
How can it be tax evasion to do something that is legal because you are fearful that the laws may change in future?
What is this criminality you are blathering about – it’s a journalist expressing an opinion.
And what is this veil of secrecy – Jersey follows UK caselaw on banking secrecy and the rights of information relating to a trust.
Try to argue from facts and not mere prejudice. We know you want to silence and imprison dissenters and to depopulate small nations. We know you support the views of unelected “Lords”. Good stuff, all very democratic.
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