A completely unexpected bipartisan win for civilization? This matters, a lot!

How on Earth did this slip past Mitch McConnell?

 By a vote of 81 to 13, the Senate on New Year's Day joined the House in overriding Trump’s veto of the National Defense Authorization Act. It was the first (and last) veto override of Trump’s presidency. Among the shifting reasons Trump gave for that veto were its requirement that military bases named after (incompetent) Confederate generals be renamed, and his demand for the repeal of protections from liability for online sites hosting the content of third parties. But I suspect the real reason was the inclusion in the bill of the Corporate Transparency Act. 

Years ago, it occurred to me that perhaps the single biggest progressive reform Congress could enact would be to eliminate the anonymity of shell corporations, requiring the disclosure of their ultimate beneficial ownership. It would go a long way toward solving a whole range of corrupt practices, from tax evasion to money laundering, and all manner of other illegality. 

Rep. Carolyn B. Maloney (D-N.Y.) had introduced a version of this legislation in the House every year since 2009. I had no real hope that such a fundamental reform would ever be achieved. So I’m a bit stunned that it actually passed Congress. This is huge. 

In addition to requiring disclosure for most new corporations, it also requires it from existing corporations over a two year period. It’s not perfect. It only requires that this information be given to the US Treasury Department, rather than being made public. But that’s the nature of legislative compromise. That doesn’t seriously detract from its virtue. 

Of course, Trump has been a notorious, corrupt user and beneficiary of shell corporations.  (Among other things, he was virtually the only developer of high-end residential properties in NYC to allow purchases of units by anonymous shell companies, making them havens for money laundering by Russian mobsters and all manner of other disreputable people. This is likely at the core of his love of all things Russian.) So it’s no wonder he vetoed the bill. It’s ultimate passage is an achievement that should be celebrated.  (Thanks to Russ Daggatt)

== An implied next step... one simple act that would save the world ==

Naturally, this long-needed reform is consistent with everything I said in The Transparent Society about the core health metric of any society is light and reciprocal accountability. But all the more so in this case, because it is a clear step toward the one act that I think could save the world, especially Western Civilization, in a single shot. That reform would be a World Ownership Treaty with one simple provision:

 If you own something, you must say, publicly, "I own that." 

Here's my earlier missive about this concept, back in 2010, and more generally in The Transparent Society.

For most humans, this would be a small and temporary inconvenience. A few ambiguous property lines might abruptly come into conflict and each nation must offer its own conflict-resolution systems, ideally with plenty of Solomonic incentives for out-of-court mediation. And as I suggested in 2010, this could be phased in, starting at the top.

 Despite all those palliations, sure, such a worldwide edict would open a decade-long golden age for lawyers. So? we need new jobs for humans anyway. But that's an almost trivial side-effect.

Imagine if all property - from ocean-going tankers to great tracts of land - can be attributed either to a state, to named people, or to accountable foundations. Then the tax base will expand, enormously, allowing a rate CUT for almost all honest taxpayers. 

But that, too, is a secondary effect.  

So is enabling markets to work better, by empowering consumers and buyers and sellers to know better who owns what. It is where Adam Smith and Hayek overlap in agreement! No 'defender of free enterprise' should oppose that -- though many hypocrites will. 

But no, even that is secondary!

The primary outcome of such a worldwide accounting of ownership would be the abandonment off truly vast amounts of land and riches that are now ambiguously 'owned' by mafias, cartels, drug lords, and countless other kinds of scoundrels. All that vast wealth would devolve to states who would first use it erase crushing debt burdens and then - very likely - be able to declare a year-long tax holiday for honest folks. 

And yes, there's likely that much illicit wealth, out there. (Developing nations would better be able to retrieve trillions stolen from them by former kleptocrat despots, and present day ones would likely topple.)

Oh, there'd be clever tricks and cheats. Picture a drug lord, knowing that he cannot declare ownership of an entire valley without prompting too many questions, simply handing out parcel deeds to every man, woman and child living on the estate... with the assumption that they will then 'sell' their parcels back to him at a very low price. Yes. Though to avoid scrutiny he'd have to leave them with some of the land and some profits. Call it a form of redistribution, even if you are cynical. (This bears some relationship to the methods of Hernando de Soto, that bore such excellent fruit for poor farmers in Peru, empowering them to participate better in market economics.) 

Point is that vast amounts of criminality and evil in this world are built on a house of cards, relying on shadows and obscurity. (e.g. Vladimir Putin might spend sleepless nights worrying if the Russian populace will find out how much of their wealth he and 100 other former commissars now own.)

== Specifics ==

Want the biggest reason for this reform? Bigger than erasing most governmental debt and giving honest citizens lower rates and a tax holiday? 

Bigger than disempowering drug lords and despots around the globe? Bigger than basing policies and market decisions on greater participant knowledge, the very thing enthusiasts claim healthy markets require?

Okay, how about saving the world?

On 16 March 1978, the oil tanker Amoco Cadiz ran aground on Portsall Rocks, 2 km from the coast of Brittany (France). NOAA estimates that the total oil spill amounted to 220,880 metric tonnes of oil resulting in the largest oil spill of its kind in history to that date.  While Amoco wound up paying reparations to France, the actual owner of the tanker itself was so thoroughly masked under shell companies that investigators could never find or hold them accountable. This sort of thing happens all the time... and defenders of capitalism are utter hypocrites when they say public exposure in the open marketplace will take care of most such problems.  No, not when 'public exposure' is a mockery and light never shines upon the skulldugerous mighty.

https://en.wikipedia.org/wiki/Amoco_Cadiz_oil_spill

Hence, an aggressively radical idea... actually serves to save moderate, even capitalist processes from the very contradictions and lethal cheats that act -- as both Adam Smith and Karl Marx described -- to detroy market societies from within, turning consumers, citizens and the young against them.

No anonymous ownership of anything. You want the state to uphold and defend your property rights? Declare them! If no one claims ownership of a corporation, it dissolves and loses all its assets. 

Do I expect any of this to actually happen, short of the "Helvetian War" that I described in EARTH? 

Of course not. The powers of the world come in all varieties and many of them are generally in favor of enlightenment civilization that's been very good to them.  Still, the "good" or "sensible" zillionaires are twitchy, nervous types with obsessions distracting them from helping us overcome the well-focused and tightly collaborating cabals who are busy bringing back feudalism. And yet...

...oh, well, if Rep. Carolyn B. Maloney can plug away at this for 12 years, I suppose I can, for 30. Thank you, Rep. Maloney. I lay my sword at your feet.

== Oh but glance at this jpeg ... to see what we're up against ==

I've long held that THE central issue before us is the war on all fact based professions. No other matter compares, for one simple reason... all our other fights - e.g. to advance justice, fight racism/sexism, save the planet and all the rest - will go far better if the power of FACT is restored, because in those battles, facts are on the side of justice!

Which is why the all-out war on facts must be fought above all else. 

Our enemies of civilization know this. As exemplified in this graphic from 'Medal of Freedom recipient' Rush Limbaugh. It summarizes the all-out, Kremlin/Foxite-funded war vs. all nerdy professions perfectly: our major sources of objective fact are all part of the “universe of lies”:

Which is why the new administration needs to make this Job#1.  

Perhaps starting with my proposed FACT ACT.

State power must be supervised. And non-state ownership must be transparent

I've repeated: 2013 was the best year for U.S. Civil Liberties in decades... and almost no one in the media would report on it.  That was the year when the Obama Administration and several federal courts declared it to be "settled law" that citizens have a near-universal right to record their interactions with police in public spaces. 

Some did comment on how this phenomenon was forecast in The Transparent Society (e.g. p.160). Including my predictions that (1)  this would empower minority rights activists to finally be believed, and (2) the fight over details would go on for years.

Sure enough, the battle renewed when U.S. District Judge Mark Kearney ruled against two Philadelphia residents suing city police for using excessive force against them. According to Kearney’s February 19 ruling: "We find there is no First Amendment right under our governing law to observe and record police officers absent some other expressive conduct. …We have not found... citizens have a First Amendment right to record police conduct without any stated purpose of being critical of the government."

In other words, if you openly declare that your intent is to use the footage to publicly denounce cops, then filming them is fine and protected under the First Amendment.  But if you are merely observing and witnessing, or taping in order to have a record, in case you wind up being abused... then that camera can be seized and recording stopped. "This means that only photos and videos of police taken in the spirt of protest or meant to express some other message of disapproval are protected."

And yes, that is as stupid as it sounds.  Especially since the First Amendment is not the only basis for this essential citizen right.  

To my mind, the Sixth Amendment is vastly more pertinent! That is where the Constitution plainly gives any accused citizen a clear right to confront his or her accusers, to demand access to exculpatory evidence, and to compel witnesses on her own behalf. 

The Sixth makes it clear: state interventions must not reduce a citizen's access to exculpatory evidence that might refute state allegations of wrongdoing.  At-minimum any such state efforts bear a steep burden of proof.

Fundamental: Amid the huge imbalance in coercive power, between citizen and state, what other recourse has a citizen, than the truth?  Denying citizens the right and power to collect validating information, to back up their own accounts, is not just a violation of rights in some arcane sense, it is a direct assault upon the fundamental logic and power of citizenry, itself. 

This is an issue about which we have no choice but to be utterly militant.  I have a reputation for proposing many pragmatic compromises, and for having some sympathy for our professional protector caste.  But this is the core issue of our time. Forget encryption wars and/or "right to be forgotten" and any of that other stuff.

This is the citizenship test of our time.

== Tell us what you own ==

Having assailed one kind of governmental power creep, let me turn and blare a warning about the potentially disastrous consolidation of secretive economic power in a few, private hands.

The U.S. Treasury Department says it wants to know if some of the current crop of luxury buyers are laundering money through their purchases. They seek to pierce the confidentiality often sought by luxury buyers who rely on shell companies or limited liability companies to shield their identity.  

For example, the incoming flood of foreign real estate purchasers has many causes, e.g. rich folks in the developing world seeking to safeguard assets and to establish residency, as insurance in case citizens back home get fed-up, or in case even higher homeland muckities decide suddenly to change the rules. This flood has severely affected the ability of Americans to buy property. Cash purchases of real estate hit a peak of 33 percent in late 2013. Think about that. Many of them masked by shell agents and companies. And even larger fractions in New York and Miami (as well as Seattle, Vancouver, Toronto, London...)

Indeed, according to economics guru John Mauldin: “a Bank of America Merrill Lynch analyst noted that if the top 3% of wealth holders in China moved just 7% of their money out of the country, it would add up to $1.5 trillion. 

I am so rooting for Treasury on this, hoping it will set a precedent for going after all shell masking of ownership, everywhere in the world. 

See my posting where I propose a Transparent Ownership Treaty: If you own something, you must openly avow and say that you own it.  That is only logical and reasonable. So many problems in the world can be attributed to murky title. Indeed, the Peruvian reforms of the great economist Hernando de Soto Polar won overwhelming plaudits from both socialists and libertarians, by giving poor farmers clear title to the land they had farmed for generations. 

No act could ever more spectacularly benefit stockholders and true market capitalism, than for shell corporations to be banned if they are more then two layers deep, forcing hidden puppeteers to come into the open. 

= The Trans Pacific Partnership (TPP) and NAFTA =  

And yes, transparency of ownership applies to issues before us, today. Such as "globalization" - a phenomenon hated-on by the far-left and far-right, but whose flaws never came close to the benefits - raising several billion people out of poverty.

Two international trade treaties are deemed top enemies by populists of both left and right – one of the few areas where rhetoric overlaps. But what I've seen makes me lean toward support for TPP! Especially since it sets several important precedents toward transparency of ownership.

Oh, to be clear, I dislike many things about globalization as-implemented, even in the TPP, like giving corporations levels of "standing" in international courts on a par with nations. See where I offer an almost science fictional take on this trend, weaving it together with Seasteading and other things you never imagined going together. 

But there are much bigger positive portions to the TPP. It welds the nations of SE and East Asia together with the U.S.  It sets new rules on labor and ecology that they must obey, bringing them all much closer to responsible standards. It protects intellectual property better. Above all, TPP sets a new plateau that China knows will become the standard of lawful behavior, before independent judiciary under rule of law, and if they don't start living by these rules, they will not be invited to the party.

Those who decry TPP point to NAFTA, claiming it responsible for losing some American jobs. And I will surprise you by avowing that's possible, even likely. Still they are shortsighted persons who miss a key point --

That it was and remains stunningly, staggeringly, spectacularly in our interest for Mexico to become a prosperous, middle class country. 

In fact, no single foreign policy objective is more in the long term interest of the U.S. No goal is more important to pursue.

Moreover, NAFTA is the biggest thing doing that. It is happening! Rapidly, as we speak. (The plummet in Mexican immigration to the U.S. came not just because of recession, but because jobs are increasingly available at home.) And when a middle class Mexico comes to fruition it will bring a myriad transitions.  For one thing, it is intrinsically easier for a prosperous North America to defend a short border with - say Guatemala - than for the U.S. to build a giant wall against a poverty-stricken Mexico.

The latter ridiculous fantasm is the current limbaugh-dancer fixation... and let me reiterate - the whole illegal immigration red herring is obsolete! Immigration from Mexico is now negative. Mexico is on the rise and we helped do that and they know it. We are helping make another Canada and boy will that be a happier soft landing than any alternative.

Failure to recognize that aspect of NAFTA -- one that's simultaneously beneficent and pragmatically self-interested -- is a stupidity shared across the spectrum, from right to left.  Already Mexico is importing vastly more from the U.S. than it did before NAFTA and that will rise as this investment pays off.

Come on, lads and lasses. You are sci fi folks. Try taking a big picture, for a change.

== But lest we forget ==

Still, keep an eye on the prize.

There is no other action that would better ensure an enlightenment-based, flat-open-fair-creative 21st Century than a firm international treaty on transparency of ownership.  

There are zero legitimate reasons to oppose it, unless you are a frothing Randian who actively wants a return to feudalism.

Solving World Debt Through Radical Economic Transparency

A Way Out of the World Debt Spiral?

My own debt exit strategy to Save Capitalism with Radical Transparency is likely to be the simplest, easiest and most effective you'll find... and thus it is the very least likely to be tried, since it would sharply reduce the power of the most-mighty. 

No, it isn't particularly radical.  In fact, the concept might be called "conservative" in its fundamental ethos and judged by the writings of Adam Smith. The notion does not entail any particular campaign of confiscation, higher taxes, socialism or new regulation.  In fact, it would allow a whole lot of regulations to simply fade away as no longer needed. It would certainly force very little change in the actual structure of capitalism.

The proposal is radical economic transparency. Imagine a simple requirement, negotiated into a treaty that encompassed the world, that is so simple it can be encapsulated in a few sentences.

Anyone who owns anything larger than a small farm or shop must simply  declare and avow, openly, that they own it. People should state what it is that they own, and how they came to own it.  

Oh, there is one necessary corollary to spell out.

 Further -- no property may be possessed by any set of holding companies more than two layers deep, before getting to actual human people, who admit, assert and avow that ownership.

That's it; all there is. There ain't no more.  Isn't it enough?

                             Not so radical an idea.

Note that there is nothing whatsoever socialistic, confiscatory or “leveling” about this proposal. All I am asking for is the situation that already, in theory, prevails!  Look into it. Exactly this level of traceable ownership is the basis for most of our market systems, not so much for the benefit of the state, but so that all market players, from corporations to small consumers, can have the Hayekian knowledge they need, in order to make informed market and legal decisions. 

See also my article: Transparent Ownership Treaty.

In other words... if it ain’t true, right now already, then it oughta be.

No property owned by the rich or mighty or by corporations... or by anybody at all... should be any more or less protected by the law, just because nobody knows who (or what) owns it.  The law is the law and tax policy, and every other property-related concern, would be better thrashed out in the open, by adult citizens via the open political processes that are supposed to control such things.

In other words, those who use political means to fight for lower taxes on the rich may continue to do so; indeed, the propaganda machine agitating for continued low rates of taxation on the aristocracy is in full swing and very effective.  But that is an entirely different matter from concealing the ownership path itself.  There are no bases for justifying that, political, moral or philosophical.

Indeed, the open and honest rich ought to really want this, in order to prevent their more unscrupulous peers from gaining advantage over them!

One immediate benefit? An ability to attribute accountability, when it is badly needed.  Take the case of the oil tanker that ran aground in Brittany, a few years ago, befouling half of Northern France. When it came to assigning blame, no one could even find out who owned the damned ship! Nested holding companies and flags of convenience simply should not be allowed to perpetrate such travesties.

So, what would happen to the secret wealth that’s revealed, if this plan were implemented?  Well, much of it was, in fact, completely innocent, sheltered from general nosiness, but otherwise entirely legal. So? Should the rich really get to be the ones who determine this, on completely their say-so? Privacy is one thing but  paranoia is another. We have a right to have a look, sniff a moment, and verify the aroma is good.  Enjoy the wealth, but openly, please.

Much of the rest was derived from tax avoidance -- and for that huge reservoir, a generous partial amnesty should ease the transition and cleanse a lot of consciences. And the problem with making these people live by the same rules that apply to us is...?

As for the rest of the newly revealed wealth? I have seen estimates that a substantial fraction of the world's hidden ownership would be simply abandoned, rather than allow public connections to real people. Ill-gotten gains from criminal enterprise, drug-lord stashes, the holdings of local debt-lords who have no legitimate provenance for the estates they make peasants slave-upon. At-best, this might result in the return of maybe half of the wealth that was ripped out of developing nations by their own corrupt elites. (Africa, alone, would probably see a doubling of public assets, from the restoration of loot stolen by the likes of Mobutu Sese Seko.

It is all very good for the right to blame the plight of deficit-ridden nations on excessive government and entitlements. And indeed, these are problems that need the corrective force of conservative criticism.  But that has nothing at all to do with the issue at hand, which is to fix the balance books as much as possible through the most-cleansing force of all.  Light.

And here's the crux: erasing much of the world’s official debt can take place without any confiscation or increased taxation of legally-gained assets. 

Ponder that last sentence again.  What at first seems a state power grab and tax rape is not anything of the sort.  Not inherently, at least. Not if put into effect honorably, by people who (with open eyes) genuinely want vibrant entrepreneurial markets to continue to work, ever-better.  That desire, if sincere and pervasive, should limit the “victims” of transparency to those who flee from some assets, abandoning them because they never did (or never should have) own them.

In fact, taxes on legal assets could probably go down, steeply, after such a move.  Think about that.  Especially if some of the abandoned property is then vested in the tenant farmers who actually till the soil, following the pro-market, pro-entrepreneurial methods of Hernando de Soto... methods that have vested property in the poor farmers of Peru, giving them a giant leg up toward middle-class, land-owning independence. This is a story that proves my point.  Lawful, open ownership is a goal that should inspire libertarians and honorable conservatives, easily as much as any liberal.


(It would also broaden the tax base, turning more of the voting population into tax-skeptical owners... think about it. In any event, the general transparency treaty might be accomplished as part of a no-new-taxes deal.  Would that sweeten the pot, for conservatives?)

 Ask economists.  They will tell you that open information flows are the life-blood of markets, both in theory and in practice.  According to F. Hayek, the patron saint of sane libertarians, capitalism falls apart when shrouded fogs - either of secrecy or pragmatic obscurity, or else oligarchic collusion - thwart the ability of six billion market participants to make intelligent choices, based upon all pertinent data.  Note, also, that obscurity in order to mask cheating is precisely the kind of crony-aristocratic meddling that Adam Smith thoroughly denounced, in The Wealth of Nations, when he first shed light on the fundamental principles of market capitalism.

Of course you would expect such a proposal from the author of The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom? But in fact, I am no goggle-eyed purist! I would allow considerable exceptions to Radical Transparency -- including professional confidentiality, basic intellectual property, tactical state security secrets, and temporary caching of business strategies and product development. This is not about purist radicalism, but pragmatically seeking equilibria that can help to keep our civilization healthy. 

And free.

Entirely at right angles to the hoary and stupid and discredited so-called "left-vs-right political axis,"  this is the reform most likely to rescue and re-invigorate capitalism.  It is also the one way that the debts can be paid off -- by criminals, tax cheats, and scoundrels.

And then there is science.

 Of course, even the prodigious debt-payoff that results from transparency-of-ownership won't prime the pump forever.  Sure, economic activity will also work better and more efficiently, with ownership information available to all.  Nevertheless,these are one-time jolts. Once we've incorporated the new efficiencies and the reservoirs of illicit wealth, what will drive the engine?

Look, over the long run, there is really only one way out of our current economic troubles.  Growth.  And what propels growth?  In developing nations it can be surges in previously under-utilized labor, as we've seen in China and India.  Marx said that capital formation can come from administrative theft, but we'll assume we're moving past that kind of thing.  So what is left?

It has been proved, time and again, that technology and science were responsible for 50% + of all growth in developed nations, since World War II. The figure in Western nations during the Internet boom of the 1990s was more than two-thirds, According to Mark Anderson of the Strategic News Service. Over sixty percent of growth, directly attributable to technological advancement.

Isn't the solution obvious?  Especially after the infamous War on Science reversed America's tech-driven growth spurt, during the first decade of this century?

More tech entrepreneurship.  More and better science education. Pull out the stops to encourage innovation.  And more science...

===   ====   ===

...and now... some Misc Political Items...

Said an alert fan: “FYI. Drudge just linked to a scare piece on an Alex Jones site about the coming dissolution of America in 2017, and they used a still from The Postman movie to illustrate the story. It was a hard LOL for me, and thought you'd all like to know.” 

Indeed, while Drudge & Jones are major apologists for oligarchy, Roberts is actually less predictable, sometimes interesting, and aims a zinger on-target, toward the end.: "America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy. Decisions were made in behalf of short-term profits for the few at the expense of unmanageable liabilities for the many."

Of course, the destruction of the American middle class should be the biggest political issue of our time. Hence, read this article!  Right now, the blame could very plausibly be heaped upon the Neoconservative Movement, whose misrule so horrifically harmed not only the United States, but the older mantle of responsible conservatism, which it hijacked.  President Obama could “get all populist on their asses” over this devastating example of retro-social-engineering.  But instead he has spent 18 months trying to reason with the unreasonable and to reach out to the rabid. 

He now has very little time left before he winds up owning the decline.  It is time to listen to Rahm Emmanuel. Or, at least, appoint a special prosecutor over the corruption at the Minerals Management Service... and let the SP’s trail take him where it will.

In the category of “who else do you know who has been saying all this, as long as I have been?”   “A U.S. audit has found that the Pentagon cannot account for over 95 percent of $9.1 billion in Iraq reconstruction money, spotlighting  that there is little to show for the massive funds pumped into their cash-strapped, war-ravaged nation.”

Continues the report: “The $8.7 billion in question was Iraqi money managed by the Pentagon, not part of the $53 billion that Congress has allocated for rebuilding. It's cash that Iraq, which relies on volatile oil revenues to fuel its spending, can ill afford to lose.... Complaints surfaced from the start of the war in 2003, when soldiers failed to secure banks, armories and other facilities against looters. Since then the allegations have only multiplied, including investigations of fraud, awarding of contracts without the required government bidding process and allowing contractors to charge exorbitant fees with little oversight, or oversight that came too late.”  Oh, BTW... 100% of the funds in question went missing during the Bushite Administration. And yes, I have said all this since 2004. 

Of course, you all could join the Coffee Party Movement. Yes, it is based on opposition to the rancorously partisan "Tea Party" movement.  But not so much over left-right issues as red-blue temperaments and basic approaches to life.  (There are conservatives and fiscal responsibility types etc in the Coffee Party movement; as I said, it is about personality.)  No, the thing being opposed is the rancor itself.  The culture war that is being foisted on America as a way to weaken us. "Our Vision: Reason, truth & civility in public affairs; A gov't of public servants accountable to the People; A People committed to civic virtue, compassion & the common good."

http://nakedcapitalism.com/  See an interesting extrapolation about hidden wealth in offshore tax havens... and the long-term implications for us all.

As someone who has experienced the most frigid extremes of the cold war between the US and Soviet Union, Admiral Bill Owens  has made it his life's mission to try to prevent a similar chill freezing the emerging relationship between Beijing and Washington.  (I have met Owens - a singularly impressive member of the officer corps.  And all I can say, again, is thank God for the Navy.)

According to the Wall Street Journal, consumer tracking “has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.” Tracking technology “beacons” are placed on a computer when you visit a website, gathering information on your online activity, your profile and preferences…this info is bought and sold on stock market-like exchanges…