News & Analysis
Germany Steals Swiss Tax Data?
German Finance Minister Wolfgang Schaeuble (pictured left) said in a newspaper interview that Germany will buy stolen information on Swiss bank accounts, backed by a poll showing voter support for the move if it helps fight tax fraud. The Swiss case is similar legally to a tax probe begun two years ago, when German authorities bought client data in Liechtenstein and used the information to pursue tax evaders, the southern German Augsburger Allgemeine newspaper cited Schaeuble as saying today in an interview. "For this reason we could hardly decide otherwise," Schaeuble was cited as saying. The decision has already been taken "in principle." A Finance Ministry spokeswoman wasn't immediately able to confirm his comments. A majority of Germans, 57 percent, said they support using information on tax violations even if it was illegally obtained, a Forsa poll of 1,000 people for Stern magazine showed. Forty-three percent said they oppose such a move, the poll showed. – Bloomberg
Dominant Social Theme: Tax evasion will not stand.
Free-Market Analysis: On the face of it, the Swiss business of banking secrecy seems to be under severe attack. But let's peer beneath the surface, shall we? The EU, right now is under tremendous pressure having to do with governmental over-spending in numerous states. Is it possible that EU difficulties are driving some of the attacks?
The unraveling of Greece might be exhibit A for this sort of hypothesis. Simply put, the Greek government spends too much, mostly on social programs, and if its spending cannot be reined in, either the EU will have to expel Greece or offer Greece euros to bridge the gap between outflow and inflow. We figure there will be some initial violence – that's already in the works – and then the EU will bow to the inevitable and find a way to declare Greece solvent even though it is not.
But what about Spain, Portugal, perhaps Ireland and a host of other countries? When one speaks of an EU bailout, one is actually referring to Germany, by far the biggest economy in Europe and easily the healthiest – though that's not saying much when considering what's actually happening. Throughout the middle 2000s the fiat-money boom papered over the problems of the EU's fiscal construction. But now the bill has come due. Shakier economies that purchased civil quietude through government largesse are now, like Greece, facing soaring deficits.
Even the strongest EU economy, Germany, has some of the same problems as Greece. It is strong unionism, and equally strong government pension guarantees, that are mostly responsible for the fix EU economies are in. The cradle-to-grave security that European countries, and now the EU, has promised to citizens, is sure to be seen eventually as a defunct civil contract.
And thus it is that the EU itself and its grasping vassal states are faced with a dilemma. They may wish to stave off a day of reckoning – especially seeing what Greece is going through – but the long-term prospects are not good. And as a result, they scratch for any revenue they can get. Enter Switzerland.
Here is a glittering prize, a tiny nation of six million controlling trillions in assets (via its private banking system), a goodly portion of the world's wealth. Switzerland, with its emphasis on free-market practicality, a republican style of government and general non-socialist environment must serve as both a temptation and reprimand to Europe's lamentable political class. In contrast to the failed and failing states of Europe, stands a country and a people (Swiss-German mostly) that succeeds by following the old-fashioned verities of classical liberalism. Every day, European socialists cast their eyes over the Alps and are angered and embarrassed by what they see.
Is this blow-up over Swiss banking secrecy driven by the inevitableness of pan-socialism? Or is a last-gasp striking-out of sinking countries – nations that are sinking alongside the EU itself? We're tempted to support the latter hypothesis as logic seems to fail when applied to the former. The EU model, in our opinion, is a failing model. The Swiss model is a successful one. Every day that the Swiss survive in their present condition is an affront to its collapsing, corrupt neighbors. France with its rabid public unions and Germany with its truculent private ones. Italy with its general impoverishing incompetence and Spain, an incipient bankrupt.
Meanwhile, the Swiss are still run from the bottom up, with conclaves of landowners gathering regularly to figure out what they want the national government to do. Swiss farms still glitter. Swiss trains run on time, and watches are deservedly expensive. How you do anything is how you do everything and the Swiss are known for attention to quality and detail and maintaining very high standards. However, the Swiss in our estimation are fighting a series of rear-guard actions to preserve their way of life while waiting for the EU to fully implode.
The Swiss model is such a successful one that we wonder why more countries and leaders don't emulate. The conclusion so far as the EU is concerned is to tear down Switzerland rather than adopt the features of Switzerland that makes it such an attractive and successful country. In fact, to accommodate this sort of negativism – in a kind of strange race toward the bottom -- the Swiss gave up their precious gold-linked money in 2000 and they've also made it easier for EU citizens to live and work in Switzerland.
Conclusion: But the bottom line reality of Switzerland has not changed. It remains a republic, dedicated to the republican values that have made it a successful nation state. Switzerland is the world's oldest republic. It managed to survive World War II, which was an even more trying time than this one, and it will likely survive the EU as well. And survive with most of its trillions in banking deposits intact. Switzerland or the EU? We'll take Switzerland, odds on.
NOTED: Undermining al Qaeda in Yemen – should the US outsource its security to a war criminal? ... The global reach of al Qaeda in Yemen became clear when a Nigerian disciple of the murder cult nearly blew up an airliner over Detroit. In response, the Obama administration is strengthening its support for Yemeni President Ali Abdullah Saleh (pictured left), one of the regions longest serving dictators and one of the most corrupt. ... The hypocrisy is stunning. The US administration is well aware that Saleh's government is committing atrocities against civilians that rise to the level of war crimes. In a Darfur-like conflict in Sa'ada, northern Yemen, collective punishment of Shiite civilians includes indiscriminate bombing and intentional starvation. A former recruiter for Osama bin Laden leads the military with the help of tribal militias, former Iraqi army officers and foreign jihaddists. Over 200,000 are homeless from the war and largely deprived of aid. When Oxfam warned of a "humanitarian catastrophe of terrifying proportions," the Yemeni Health Minister threatened to expel the organization. – Jawa Report (Ed Note: Seems like the military situation in Yemen is a bit more complex than has been reported. The Bell will return to this issue in the near future.)
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Posted by Bill Ross on 02/05/10 07:49 AM
You would think that Germans as well as Europeans in general would fully understand and remember what happens (and the horrible cost) when the law fails to control democratic excesses (Nazis, for those who have forgotten) and starts enforcing "all persons are NOT to be treated equally, in terms of rights and responsibilities, by law".
On this issue which is subject to discrimination (proceeds of crime, OK, for group called state), the parties are divided into superhuman (more rights for state and data thieves) and subhuman (less rights for those who OBEY the law of Switzerland and private banking). Not to forget the gross violation of the property rights of the productive represented by taxation, especially "progressive".
Nazis are not just a narrowly defined group of goose stepping idiots and sociopaths. They are those who believe the law does not apply equally to all persons and can therefore be used as a tool to determine whom is legitimate predator and who is prey. Democracy periodically flips the predator / prey role which is why politics is so corrupt.
Justice Defined: We are all free to profit or suffer and learn (adapt to excellence) by facing the consequences of our OWN choices. Injustice is to be forced to suffer the consequences of choices of unaccountable (irresponsible) others."
The danger is not that a particular class is unfit to govern. Every class is unfit to govern. The law of liberty tends to abolish the reign of race over race, of faith over faith, of class over class." ~ Lord ActonRule of Law, Defined:
http://www.cli.gs/RuleOfLaw
We, the thinking people should be very appreciative to be born in this time, occupying the vantage point of FINALLY seeing states get their due, by their own hand. Our far wiser ancestors can only shake their heads in awe of our collective stupidity and say "told ya so, no such thing as a free lunch".
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Posted by Goldfinger on 02/05/10 03:42 AM
The Germans decided to purchase stolen account information. What does this tell us? That Germany is no different from other countries. It is often said that(the Germans) perceive themselves as being ever so slightly superior to others. Now the truth comes out.No, we Germans don't deal with terrorists or kidnappers, what Bull Sh*t! This purchase of illegal data will only animate others to try to cash in on the scrupulousness of criminal governments be it the Germans or others.
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Posted by Shawn on 02/04/10 07:22 PM
Switzerland is an easy target as is Wall Street. The world has sunk deep into Keynesian socialism and it's not working. The citizens that have educated themselves worked hard and want to save some of their money, instead of being taxed to run failed socialize programs, have to look at places like Switzerland, not because they want to but because they are forced to.
We are in world wide depression. The numbers don't lie. The amount of money that is being printed are numbers that you could not count, your mind is incapable of seeing a trillion dollars in a pile. I wonder what a trillion dollars in gold looks like stack up?
Everywhere we look we see desperation, the blame game in full swing. Germany is the hub of Europe with incredibly resilient people that are not going to support the rest of Europe on their backs.
The EU sounds like a nice idea when the economy is chugging along not so sure now. Let's remember there is no love lost between countries in Europe they fought one and other at some time in the past.
The Swiss is the great working example. The rest of Europe will go down fighting for the welfare state because they are immersed in the collectivist state, the only way out is collapse, do you really believe those union workers in the EU are going to vote them selves out of work? Never.
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Posted by Larry on 02/04/10 04:29 PM
Let's see now! During WWII Switzerland's banks took in Nazi money - stolen from the Jewish population who they killed off. Actually kept Jewish monies of those incinerated. Later admitted. After this they took in Italian money funneled from Italy through the Vatican bank and this almost brought down the Italian government and certainly Pope John Paul I.
And all the time taking in "corrupt" money from every other source with the cover: "unless you can show us criminal intent we won't show you the "numbered" accounts."
The US has tried to get disclosure and now the Germans. Seems we have gone full circle here in who is the most corrupt. Doesn't it? Now many other countries around the globe are taking in shady monies as "off-shore" non-disclosure accounts. They are doing this because they see the Swiss method makes them RICH at fools expense!
Reply from The Daily Bell
There may be other ways of evaluating the issues you present. Even granting your argument, what countries are without sin? America's treatment of native Indians, or Europe's treatment, generally, of Africans during Colonialism, may be seen as cruel and unprovoked. We are not advocating criminal activity as regards tax avoidance, but we think the example of the Swiss republic, generally, is a positive one at a time when governments seem increasingly authoritarian and taxation and regulatory policies seem more punitive than reasonable.
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Posted by Linda on 02/04/10 01:34 PM
To think Switzerland has not changed requires suspension of disbelief. Reality is different than your perception, Switzerland has caved in to the Keynesian shysters that run the American economy.
Reply from The Daily Bell
Time will tell.
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Posted by Bill Ross on 02/04/10 12:21 PM
"Germany will buy stolen information on Swiss bank accounts, backed by a poll showing voter support for the move if it helps fight tax fraud."
In other words, those who wield the law consider it perfectly acceptable to "benefit from proceeds of crime" and being accessories to crime after the fact.
So much for "all are equally subject to the law". Some (with pretexts) are apparently "more equal than others". And "tax fraud?" Who's defrauding whom? The grim reaper of "Mathematics Of Rule" is rapidly sorting these scams out:
http://www.cli.gs/MathematicsOfRule
Sucks to be unproductive. What goes around, comes around OR, actions always have consequences.
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Posted by Bill Ross on 02/04/10 08:51 AM
"Sure to be seen eventually as a defunct civil contract."
ALL state programs which promise future entitlements (and immediate to the aged) which populations are taxed for are PONZI schemes, doomed to fail.
Baby boom demographics is dealing the fatal blow. This is because states refuse to keep these programs as a separate cost / revenue (and invest proceeds) business case. They prefer the concept of "general revenue", the big pot approach where the cost / benefits of any particular program cannot be evaluated and everything is connected to everything else.
States are financially unmanageable, by design. They are also monolithic, by design, to prevent attempts of pruning by voters, a package deal, with no competition.
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Posted by Fauvi on 02/04/10 08:11 AM
Merkel has been sued with fencing by a lawyer, who himself is a CDU member. You will not see that in the press, but look for it at "radio utopie". As about the pool, please take into consideration how brainwashed the majority of people are.
Unlikely to USA - yes, I have to deceive you - the baby boomers are a lost generation for internet, so the majority of people are victims of the manipulation of our MSM, which is worse than elsewhere.
Unfortunately the younger generation is also very ignorant so that's a long way ahead to achieve, if we want to get them understand the world they are living in.
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Posted by Robert on 02/04/10 07:15 AM
Let me see If I get this correct. Germany wants to pursue TAX CHEATS with "STOLEN GOODS" information! So the Cheat is pursued by a Crook(?). I guess that comes under "The end justifies the means". Hmm, that sounds very familiar! Seems like I have heard that before from Germany. Especially in the 40's.Another GREAT example for the younger generation to emulate. Nicht Wahr?
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Posted by Tommybab on 02/04/10 05:17 AM
Jealous has many manifestations! Especially when money is involved.
