Leaks like the #PandoraPapers and collapses like #Carillion have shone a spotlight on the role of "the professions" in enabling international finance crimes, which include both money-laundering and the underlying (ghastly, violent) crimes that produce the funds for laundering. 1/
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For example, the Sacklers knowingly, deliberately created the opioid epidemic that killed more than 800,000 Americans, and used America's most respectable, highest-price bankruptcy lawyers to let them keep billions and deny justice to their victims.
High-priced, respectable economics firms generate millions by ginning up opaquely complex "analyses" so monopolistic firms can bamboozle regulators into allowing anticompetitive mergers that destroy the real economy, communities and jobs:
And then there are auditors: four giants that gobbled up rivals and merged with one another, then "diversified" into "consulting," leaving them hopelessly conflicted,, signing off on frauds that lead to catastrophic collapses and billions in tax fraud:
The corruption of the audit industry is especially deadly, since auditors are meant to be the umpires of the world, providing oracular "ground truth" to claims about how companies conduct themselves and what they're making and spending:
The great finance capitals of the world, like London, are hives of finance crime enablers, where the great and the good wax fat on massive fees they charge to post-Soviet kleptocrats who have colonized both the city and the nation's politics:
But for all the attention paid to consultancies, lawyers, economists and other elite enablers, the accounting profession itself is rarely named when scandals erupt. Which is a mystery, since the keeping and auditing of financial ledgers is so key to corrupt practices. 8/
A late-2021 paper called "Does the Mafia Hire Good Accountants?" by academic accountants in the US, Italy and Germany, offers a tantalyzing explanation for the conspicuous absence of accountancy from the list of professions involved in global crime:
The paper uses a fascinating, robust methodology to examine the honesty of mafia accountants: they comb a national police database of mafia-related persons for accountants, then examine the audit records, tax records and legal history of their *non*-mafia clients. 10/
They conclude that if a business uses a mafia accountant, it has better, more honest finances than a business with a non-mafia accountant (!). 11/
"Firms serviced by accountants with [organized crime] ties have higher quality audited financial statements, as evidenced by lower levels of abnormal working capital accruals, fewer small earnings, fewer tax restatements, and lower levels of discretionary revenues. 12/
"Further, these firms receive more modified audit opinions, and pay higher fees." 13/
The authors suggest that when the mafia chooses an accountant, they have to choose between two mutually exclusive strategies:
I. Hire a stupid accountant that you can trick into signing off on dirty books; or 14/
II. Hire a smart accountant who can turn your dishonest business into one that is honest on paper, even if that erodes your profits.
The authors make a compelling case that the mafia choose the second strategy. 15/
What's more, they show that even accountants with known mob connections have no trouble finding non-criminal clients ("it is disheartening the Mafia can hire seemingly good accountants who appear to suffer no adverse reputation effects from their Mafia ties"). 16/
Perhaps that's because the mafia is so crucial to both the Italian and global business world: the authors quote a 2017 ISTAT study that says that *12%* of Italian GDP is mafia activity and a 2011 UNODC study that attributes 3.6% of *global* GDP to Italian mafia groups. 17/
But it would be a mistake to think that just because the mafia has clean books that it runs good businesses. 18/
Businesses that are run or colonized by mobsters aren't good firms - they pay poorly, produce low-quality goods and services, and engage in a variety of crimes and regulatory violations.
This is a fascinating and clever analysis, though it's short on recommendations. 19/
The most concrete policy proposal the authors advance is for police to maintain a public registry of accountants under investigation for mafia ties, and to bar those accountants from practicing until they are cleared. 20/
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Inside: To fight inflation, fight monopolies; How noncompetes shackle workers to dead-end jobs; Agricultural right to repair law is a no-brainer; and more!
John Deere was once an American icon, beloved by workers for good wages and job security, and by farmers, who co-innovated new agricultural techniques and technologies. Today, it's a case-study in the horrors of finance capitalism. 1/
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Today, the company is rotten to the core. Despite skyrocketing profits, the company has continued to grind down its workers, sparking a strike by all 10,000 of its workers. 3/
You've heard about the #GreatResignation, the legions of American workers who have reached a breaking point with their abusive, underpaid jobs and jumped ship. 1/
It's a remarkable, spontaneous, uncoordinated uprising that sees Alice quitting her job and Bob quitting his, and then Alice getting Bob's old job at a better wage, and Bob getting Alice's old job at a better wage, too. 2/
After 40 years of wage stagnation, workers are finally starting to claim back some of the share of the profits that had been diverted from people who do things to people who own things.
But as great as the Great Resignation is, it could be greater. 3/
The majority of the public blames #inflation on price-gouging. That's not surprising, because the CEOs of monopolistic companies keep boasting about their record profits even as they raise prices. 1/
If a company raises prices *and* margins, then we don't have an "inflation" problem, we have a price-fixing problem.
And yet, the majority of *economists* insist that this is impossible. 2/
They hew to the Reagan-era doctrine that says that inflation is always the result of giving poor people too much money, which leads to the "wage-price spiral." The answer is to hike interest rates, cut "generous" benefits and take away labor rights. 3/