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We Are the World
Dan Mitchell and Richard Rahn write on the federal government's continuing efforts to assert U.S. jurisdiction all over the world.
The feds have moved beyond gambling to now pressuring Swiss bankers in Switzerland to break Swiss law in order to comply with U.S. law. Federal officials charge that the Swiss' famous secrecy is helping U.S. citizens skirt federal taxes.
Apparently, U.S. law now applies everywhere in the world except Guantanamo Bay.
Taktix®|7.3.08 @ 9:08AM|#
Hate to drop the Godwin hammer this early, but even Hitler
didn't invade Switzerland.
Where's the modern-day Aaron Burr when we need him...
JMR|7.3.08 @ 9:11AM|#
In this case, the Godwin-hammer is justified. Republicans still
don't-get the fact that attaching control freak 'net gambling regs
to a port security bill with 0 debate looks fishy when you're
getting loads of loot from traditional gambling monopolies
threatened by the internet.
JMR
Guy Montag|7.3.08 @ 9:17AM|#
Swiss bankers in Switzerland
Good thing they did not go after the ones in Manhattan.
Apparently, U.S. law now applies everywhere in the world except
Guantanamo Bay.
Dang Radley, aren't you keeping up? SCOTUS extended US law to the
whole world, including Club G'tmo about a week ago. Thought that
was one you liked?
|7.3.08 @ 9:17AM|#
It's all part of the "humbler" foreign policy we were promised
in '00.
Is it just me or do others perceive that the Bush II administration
attracts arrogant pricks like shit attracts flies?
|7.3.08 @ 9:18AM|#
Apparently, U.S. law now applies everywhere in the world
except Guantanamo Bay.
Thread won before thread scoring started!
Thats gotta be some sort of record!
Episiarch|7.3.08 @ 9:22AM|#
Why does this surprise anyone? Our government is out of control
and very, very powerful. This is just he next logical step in using
that power. They can push smaller countries around know it.
So they do.
|7.3.08 @ 9:24AM|#
Once again it would appear that the FEDs have WAY too much spare
time on their hands. this seems to be commonplace.
JT
http://www.Ultimate-Anonymity.com
anarcho-capitalist-type libert|7.3.08 @ 9:25AM|#
Sorry, Bingo's the winner. (Voting's for tyrannies.)
robc|7.3.08 @ 9:30AM|#
Having lived in Switzerland in the early 90s...I have nothing to add. I really feel like I should, what with some tiny amount of first hand knowledge, but I dont.
|7.3.08 @ 9:33AM|#
Guy Montag said:
Dang Radley, aren't you keeping up? SCOTUS extended US law to the whole world, including Club G'tmo about a week ago. Thought that was one you liked?
Dang Guy, isn't it obvious that Radley was referring to the
Administration's perspective on US law?
Jerry|7.3.08 @ 9:34AM|#
The Treasure Department already has access to the SWIFT network, so what are they complaining about?
TallDave|7.3.08 @ 9:37AM|#
the federal government's continuing efforts to assert U.S.
jurisdiction all over the world.
Well, that only makes sense now that everyone in the world has our
Constitutional rights.
Taktix®|7.3.08 @ 9:38AM|#
Hey TallDave, on a scale of 1 to 10, how angry would you be if someone mistook you for a Muslim?
Episiarch|7.3.08 @ 9:46AM|#
Well, that only makes sense now that everyone in the world
has our Constitutional rights.
Yes, that's exactly what the ruling said. Distort much?
Guy Montag|7.3.08 @ 9:50AM|#
Dang Guy, isn't it obvious that Radley was referring to the
Administration's perspective on US law?
Ah, I get it. It is okay, sometimes.
|7.3.08 @ 9:53AM|#
Well, that only makes sense now that everyone in the world
has our Constitutional rights.
What the fuck is that suppose to mean? How do the people of Burma
have our Constitutional rights?
|7.3.08 @ 9:56AM|#
But America is special!
American exceptionalism demands that we teach those poor, dumb,
Swiss how a banking system should be run!
And how will Colombian farmers know what to plant if we don't tell
them?
|7.3.08 @ 9:57AM|#
Longtime poster here, I am having to use a pseudonym because I
work for a Swiss bank. This shit is getting intense, it's been on
the front page of all the papers here, even the normally staid Neue
Zurcher Zeitung. You know things are weird when you can't catch
your tram on the Paradeplatz because the SF camera crews are
hogging the sidewalk for their evening news reports (this is where
I change trains).
I'm glad that Cato and the WSJ have covered this, as it has serious
implications for global liberty. Whatever you may think of money
laundering, KYC regs, the IRS's QI program that basically bribes
the banks with the offer of skimming the withholding tax, or the
fine line between tax evasion and tax fraud as defined in Swiss
law, the ability for capital to move freely around the world is
critical to keeping governments honest.
If you can't vote at the precinct (or feel the two-party system is
stacked against you), you can always vote with your feet or with
your dollar.
If I ever go back to grad school I would like my thesis to be on
the role of offshore banking in comparative economic development --
there is so much hooey and snake oil salesmen out there on the
internet. Just look at the Amazon prices of the offshore banking
books to see what I mean.
|7.3.08 @ 9:58AM|#
I hereby declare the United States of the Earth and welcome the Pax Americana. Greetings to our new fellow citizens! Please turn over all of your drugs and be sure to visit your soon-to-be-local IRS office.
Guy Montag|7.3.08 @ 10:03AM|#
Does this mean that all of the rest of the world will begin using real money, rather than the ~70% of the volume done in $USAian now?
|7.3.08 @ 10:04AM|#
So Auslander, are there any major Swiss leaders loudly and openly decrying the U.S. actions?
|7.3.08 @ 10:11AM|#
I also love the Eliot Spitzer playbook in use here -- they are
hitting UBS just at the right time. Now that the SNB is making
noises about increased capital requirements, the swiss banks (okay,
only two of them) are being divided and conquered by their own
government. The myriad of smaller private banks won't have to meet
these standards, so of course they're happy to sell out UBS &
CS. In the latest turn of events even the SVP party has started to
make noise about not letting UBS fall into foreign hands -- the
same "too big and/or important to fail" argument that was made when
Swissair went belly up.
About the only good thing I can say about this episode is that at
least one central bank has admitted that the Basel II reforms are a
freaking joke. How'd that work out for Bear Sterns? Lehman is next
-- even a colossus such as Citi has a leverage of ratio of 0.2
(compared to 4.7 for Credit Suisse).
|7.3.08 @ 10:11AM|#
The Germans were the big bad guys of the first half of the 20th
Century, and the Russians the big bad guys for the latter
half.
Looks like for the first half of the 21st Century... it's us.
Goddammit.
Guy Montag|7.3.08 @ 10:18AM|#
From the Wash. Times article, the only real clue as to what
happened is this:
The U.S. Justice Department is now also trying to force UBS to reveal the names of 20,000 of its clients, which could put UBS in violation of Swiss bank secrecy laws.
Not sure what the authors and editors mean by "force" here. Just
asking does not sound like "force" to me, but if they did something
beyond just asking, can't the Washington Times folks tell us what
the feds did?
Also, they make mention of UBS bankers being detained for suspicion
of US tax violations.* I suspect that there are US Tax Code
violations that could be done if certain transactions are not
properly reported, even by people outside of the USA.
*Anbody who wants to read that as my being some sort of US Tax Code
liker have not paid any attention or seen any comment I have made
about the US Tax Code, or really need to seek professional mental
counseling.
|7.3.08 @ 10:20AM|#
So Auslander, are there any major Swiss leaders loudly and
openly decrying the U.S. actions?
Not really, although I confess that my german is perhaps not good
enough to get the finer points on the editorial page. Nobody wants
to offend the big bad wolf (USA).
As to the bankers, they have simply established offices in
Singapore, where the secrecy laws are even tougher than in CH. So
far we have been reluctant to advise our clients to move their
assets there, though I predict we will "get the memo" any day
now.
As to Liechtenstein, they can run but they can't hide. LGT has
already had their customer data stolen by the German government,
and LLB has had a similar breach. The third and last bank in Vaduz
(VP Bank) has so far dodged this bullet, but the barroom talk
suggests they simply haven't been caught yet. When a foreign
government offers you millions of dollars to spy on your employer,
the threat of swiss prosecution can't compete (e.g., the LGT case)
-- especially when Germany will turn around and resell the same
data to the Netherlands!
robc|7.3.08 @ 10:20AM|#
Actually, natural rights are endowed by the creator. So they do exist for everyone. Most of the "constitutional rights" are also natural rights, so they are granted to everyone. (The right to a jury trial in civil matters exceeding $20 probably isnt a natural right, but I could probably make an argument that it is [ignoring the $20 part])
Guy Montag|7.3.08 @ 10:21AM|#
Auslander,
SO the real story here is that the Swisse government is the real
culprit and the USAian feds are just a sideshow?
TallDave|7.3.08 @ 10:24AM|#
Tak,
Somewhere between 0 and negative 5 (amusement).
How do the people of Burma have our Constitutional
rights?
They have a right to habeus corpus. By the way, I've noticed their
rights are being violated.
TallDave|7.3.08 @ 10:28AM|#
The Germans were the big bad guys of the first half of the
20th Century, and the Russians the big bad guys for the latter
half. Looks like for the first half of the 21st Century... it's
us.
Yeah? Let me know when start the concentration camps and forced
famines. I want some pictures for the grandkids to condemn.
Guy Montag|7.3.08 @ 10:37AM|#
Yeah? Let me know when start the concentration camps and
forced famines. I want some pictures for the grandkids to
condemn.
We replaced them with gas lines and Japanese relocation
camps.
Oh, sorry, that was last century under Nixon/Ford/Carter and
FDR.
Fluffy|7.3.08 @ 10:46AM|#
I suspect that there are US Tax Code violations that could
be done if certain transactions are not properly reported, even by
people outside of the USA.
If I'm a banker in a foreign country and an American comes to me to
make deposits, I should not have to give a shit if he's hiding
income from the American government or not.
The fact that someone writes the words in the US tax code "Yes you
do have to care" means absolutely nothing to me.
If the Iranian government started arresting US citizens overseas
for actions they took in the United States that were legal by US
law and then said, "Hey, it says here in our laws that we can do
this" I don't think anyone here in the US would be very impressed
by that argument.
|7.3.08 @ 10:48AM|#
Yeah? Let me know when start the concentration camps and
forced famines. I want some pictures for the grandkids to
condemn.
Good point, TallDave. I guess everything we do is A-OK, so long as
we're not committing genocide!
|7.3.08 @ 10:56AM|#
Jake,
It's the difference between doing wrong and being Sauron.
I don't like what has been correctly identified as the Spitzeresque
long arms of the U.S. government in this situation. Want
cooperation from other governments or private actors within other
countries' jurisdiction? Then negotiate one of those treaty
thingees.
|7.3.08 @ 11:01AM|#
Yes, I think America falls somewhere short of Nazi Germany
and Soviet Russia.
Well, just because we aren't up to Chapter 36 in the Bumper
Correspondence Course of Totalitarian Atrocities doesn't mean we
aren't quickly working our way through the course. We've done the
exercises at the end of Lesson 3 ("Civil Rights Violations"),
Lesson 5 ("Propaganda"), Lesson 9 ("Invasions"), and Lesson 12
("Torture"); now we're working on the initial exercises in Lesson
14 ("Declaring Dominion Over Other Nations").
I'm not saying we're as far along as the Germans or the Russians.
I'm just saying we're at the head of the class this year.
|7.3.08 @ 11:05AM|#
It's the difference between doing wrong and being
Sauron.
I get what you're saying. I just think we really ought to stop
trying on all his hats and prancing about Mordor, because we've
already gone way too far.
|7.3.08 @ 11:13AM|#
Tuesday's WSJ had an interview with Grigory Yavlinsky, founder
of the liberal Yabloko party in Russia, which has nearly been
hounded out of existance by the Putin regime. He mentioned the
decline of the U.S. as a role model for movements such as his,
which made me sad.
I'm afraid our moral stock has fallen mightily since the heady days
of the late 80s and early 90s.
|7.3.08 @ 11:21AM|#
We're more Saruman-like, before he went bad. Prideful and powerful and tempted to make people do what we think is right.
Guy Montag|7.3.08 @ 11:23AM|#
I'm afraid our moral stock has fallen mightily since the
heady days of the late 80s and early 90s.
The good old days, when Reagan was Hitler . . .
|7.3.08 @ 11:25AM|#
Citizen Nothing,
I agree. Even as a global power, most of the last sixty years we've
served as an inspiration rather than as something to fear. It's a
little schlocky, but I really buy into that shining light on the
hill crap. We have the power to be on top and be the good
guys. You know, the Gandalf of the world ☺
Bingo|7.3.08 @ 11:41AM|#
We need access to those funds owned by US citizens in foreign countries or the terrorists have already won.
TallDave|7.3.08 @ 11:47AM|#
Do the forced, ethanol-derived, famines have to be in this
country, TallDave?
No, they can be in Zimbabwe. But it's hard to see how that's our
fault.
Free markets don't cause famines.
TallDave|7.3.08 @ 11:49AM|#
The good old days, when Reagan was Hitler...
And the Soviet Union's "economic freedom" was just as good as our
"political freedom," and was going to be around for centuries so we
better try to get along with them.
TallDave|7.3.08 @ 11:52AM|#
You know, the Gandalf of the world ☺
Gandalf was a warmonger. He never even tried diplomacy.
|7.3.08 @ 12:02PM|#
"Free markets don't cause famines."
BINGBINGBING!
TallDave finally scores a point in this round.
|7.3.08 @ 12:47PM|#
I'd like to echo Auslander's point and correct Guy Montag of the
misperception that the swiss government is to blame (I am also a
foreign banker).
The US is to blame, clearly, but Auslander's point is that ten
years ago UBS could have just said "fuck off" without having their
ambassador called on the carpet of the State Dept. There are two
problems here:
1) the Bern crowd is not willing to stick their necks out the way
they used to (witness the SNB kerfluffle -- it is VERY rare for a
private banking executive to criticize the central bank).
2) UBS bought PaineWebber and is beholden to the IRS, DoJ, and (to
a much lesser extent) Bernanke for their continued good graces. In
a worst case scenario, the US would simply revoke UBS's license to
do business in the US. One of the second tier swiss banks such as
Julius Bar might not care so much -- they have only a sales office
in the US -- but a global firm such as UBS/PaineWebber has a lot of
mom-and-pop business that they can't afford to lose. (In this
context, mom-and-pop means clients with $250K-$1M in liquid
assets.)
BakedPenguin|7.3.08 @ 12:52PM|#
Pro Lib - but how are we going to get back to what we should be when every one of our politicians wants to get hold of the ring - for the "right cause", of course.
|7.3.08 @ 1:01PM|#
BP,
Well, we obviously need to give the Ring to a hobbit. I guess we
should've voted for Kucinich, after all!
|7.3.08 @ 2:49PM|#
Pro Lib:
We have one of them treaty thingees: it's called the Qualfied
Intermediary procedure. This was agreed by the swiss and the
'mericans shortly after 9/11.
Basically, as a swiss banker you have to follow the KYC routine
(get a copy of their american passport) and give the customer an
IRS W-9 (request to verify their SSN/TIN). This varies by bank, but
all of the big ones are signatory to the agreement. You even get a
special EIN for use as a QI (never mind the fact that you're not
actually an "employer", as if you needed more evidence that the
taxation of unearned income is immoral).
You get an agreement from the customer that he will file an OFAC
form with the IRS by 30 June of each year (listing all foreign bank
accounts worth more than $10K). Whether or not he actually *does*
this is not really any of your business (wink, wink), but at least
you have covered your own ass by warning him. The swiss banking
laws still apply -- an order from a US court means nothing -- but
if the swiss court agrees then banking secrecy can be broken.
The weird thing is that even if UBS comes to a voluntary agreement
with the feds, they can still be prosecuted under swiss law if they
divulge certain info. As usual, the lawyers will hash it out. UBS
has so far tried a number of dodges in an attempt to make this
problem go away:
1) the tax treaty signed by CH does not apply in Liechtenstein --
while FL is a protectorate it is still a sovereign nation. Not sure
if they'll make any headway -- allegedly the accounts were opened
in Zurich rather than in Vaduz (and I think some were even opened
over the telephone from New York).
2) if we agree to turn over our customer list it will list only
"natural persons" of american citizenship, and not accounts held in
trust. Needless to say, some of the overseas trusts can be rather
opaque. They'll probably win on this front.
3) if the customer opened his account before 2002 then our hands
are clean because back then we didn't ask for social security
numbers. This one is a tossup -- on the one hand the bank knows
that their customer is an american citizen, but most customers have
their mail held at the bank. In the case of UBS, american customers
are prohibited from executing transactions (or even getting account
info) if they are calling from a telephone in the US. They closed
the park ave. private banking office back in 1999, I think, and
have always advised clients to come to CH if you'd like to review
your account.
So I could see an argument where the banks would say "sorry, we
tried to call the telephone number given us by the client back in
1985, but it was disconnected". Rest assured that whatever they
agree with the IRS will be fought tooth and nail when it comes to
carrying out the agreement.
In short, swiss banking secrecy is over for americans (just like it
ended for EU citizens a few years ago). Take your money to
Singapore, which is rapidly stealing market share from the
swiss.
|7.3.08 @ 4:31PM|#
I think the saddest thing is that we have fallen so far that we
need to re-define fascism as "committing genocide".
So long as we don't have the ovens, we're still good guys, right?
It doesn't matter if we killing people all over the world, claiming
the right to force our will anywhere, at anytime, and if you don't
agree, you're an enemy of the state. That one group of people in
the world have rights against being abused by our government, but
that another group, based solely upon characteristics they can't
control, are sub-human and entitled to no rights as against our
government. Hey, but we have only the improvement of the world at
heart, right?
People need to read a little bit and find out what it was like in
the late days of the Weimar Republic. If you do, the parallels will
(or at least should) be a little chilling. Remember - by the time
they were implementing the Final Solution, it was too late.
|7.3.08 @ 4:34PM|#
Ask "pineapple face" how that worked out for him. Panama does in
fact have a strong banking secrecy law, and the advantage of being
a lot closer for US residents. It's a double edged sword, however.
Ask yourself if you would be comfortable knowing the US was about
to invade the country where the bank is holding your funds (i.e.,
the worst case scenario).
Switzerland? Can't see it happening. Singapore? Unlikely -- while
they don't have a military comparable to the swiss, you'd have to
imagine China getting involved (i.e., they would serve as a
counterweight to US pressure to open their books). Not to mention
the huge islamic population next door, and the possibility of the
british retaining some interest in the fate or their former
colony.
Panama? The world would barely blink an eye.
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