home Commentary, Feature, Politics What the Panama Papers will do to the presidential election

What the Panama Papers will do to the presidential election

The internet’s impact on greater society is one of intense transparency. A lot of things we knew were a part of life but didn’t encounter on a daily basis — from hardcore pornography to the release of classified government documents with unprecedented regularity — acquaints us with reality in a way that we once previously had a much greater freedom to avoid.

And so it is with the Panama Papers, a massive act of data breach that revealed the hiding of wealth offshore in foreign accounts by figures ranging from Iceland to Argentina. The Panama Papers reveal what has been popularly known — there once was a Simpsons episode where Krusty the Clown faked his own death after being arrested for embezzling large degrees of wealth in foreign accounts — but never fully documented.

For those who need an explanation of what the Panama Papers indicates, imagine a young child gets an allowance from his parents, but his parents require him to report how he spends it and if he gets money elsewhere. He then lies about what he spends, and keeps the money he has hoarded in the home of his friends, along with all their money. That’s what a great number of the world’s wealthiest have been doing — all while preaching to us about the virtues of free market capitalism and austerity. As Martin Luther King Jr. once put it, we have been living under an ideology of “rugged individualism for the poor and socialism for the rich.”

The scandal has already had a profound impact, including the almost immediate resignation of Iceland’s prime minister Sigmundr Gunnlaugson, who maintained an undeclared interest in his wife’s wealth.

The Panama Papers put capitalism under the microscope

By revealing that the super rich are avoiding their tax responsibilities on so massive of a scale, very uncomfortable truths about global capitalism are being revealed. Such acts indicate that the greater burden of the very limited welfare and regulation state in countries like the United States and much of Europe is largely on the shoulders of the middle class and poor. The notion that such services are a burden of the greater masses who “earned it” is not just wrong but horribly wrong. That’s not the world we live in at all — instead, we live in a world in which reportedly $7.6 trillion, eight percent of the world’s collective wealth, is “missing” and unreported.

Such a revelation is now concrete thanks to the Panama papers, but the rise of both proto-fascist and socialist political movements throughout the world speaks to the possibility that this revelation was realized by a greater mass that may once have actually believed that the economic system actually had a place for them in it.

While, as of this writing, Donald Trump’s proto-fascist presidential campaign seems to be on the decline — the result of horrendously tone deaf sexist comments and attacks on women ranging from Fox News anchor Megyn Kelly to the wife of his rival Ted Cruz — his campaign got as far as it did by coupling bigotry and hate with working class populism. One of his many vague campaign promises was to “go after hedge fund guys” who are “making a tremendous amount of money,” adding that “they have to pay taxes.”

Likewise, the ascent of figures like Bernie Sanders to a major presidential contender or Jorge Bergoglio to the papacy of the Catholic church signal a recognition of this awareness in institutions of power in the western world. Bergoglio, better known as Pope Francis, tackled income inequality and free market economics so hard after becoming pope that he was labeled a “communist” by many. His proclamation that man is gone and money rules him is pretty hard to refute when such huge masses of it are being hidden in order to not “trickle down” (pun intended).

The world’s elite are losing out, but Bernie Sanders is winning big

Meanwhile, Bernie Sanders spoke explicitly of this problem back in 2011, saying of a prospective free trade agreement with Panama, “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in offshore tax havens. And the Panama free trade agreement will make this bad situation much worse.”

With Sanders’ ascent in the polls, this issue could open up anew if Sanders becomes Democratic presidential nominee (and even if he doesn’t — as the success of his campaign means he will surely have an impactful role in US politics even if he isn’t nominated). His initial statement, released on his campaign website, essentially said “I told you so.”

The Panama Free Trade Agreement put a stamp of approval on Panama, a world leader when it comes to allowing the wealthy and the powerful to avoid taxes. I was opposed to the Panama Free Trade Agreement from day one. I predicted that the passage of this disastrous trade deal would make it easier, not harder, for the wealthy and large corporations to evade taxes by sheltering billions of dollars offshore. I wish I had been proven wrong about this, but it has now come to light that the extent of Panama’s tax avoidance scams is even worse than I had feared.

My opponent, on the other hand, opposed this trade agreement when she was running against Barack Obama for president in 2008. But when it really mattered she quickly reversed course and helped push the Panama Free Trade Agreement through Congress as Secretary of State. The results have been a disaster.

His juxtaposition bore a blunt distinction with Hillary Clinton, his opponent for the presidency and a formidable opponent at that who surely doesn’t want the history of 2008 to repeat for her. One publication, the Independent, went even as far as to say the Panama Papers alone could hand the keys to the White House over to Sanders.

All eyes on Putin

Many media reports implicated Russian President Vladimir Putin, as many documents did implicate Russia and figures within the country. Putin himself rebuked any involvement and sharply retorted that the documents were part of a “Western effort to weaken Russia.” Despite the unprecedented openness that the internet provides and that allows leaks such as this, the twentieth century has seen the ascent of a variety of new authoritarian regimes — from ISIS to Erdogan’s Turkey to Putin’s Russia. A collision with freedom of information could be one of the defining battles between Putin’s regime and the west.

The age of neoliberalism we’ve had since the 1990s came about as communism was discredited as a governing system after the dissolution of the Soviet Union. Market economics isn’t about to go away but the consensus against socialism that kept us from expanding necessary social services and social welfare programs may finally be disrupted.

Photo: Phil Roeder/Flickr