Monthly Archives: April 2013

They’re Missing the Point

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The editorialists of Spiegel International Online are complaining about the evils of international tax havens.  They say, for instance,

no one knows how much money is on deposit in anonymous bank accounts in countries that are euphemistically referred to as tax havens.  Estimates by the non-governmental organization Tax Justice Network put the figure at about €16 to €25 trillion ($21 to $33 trillion).  In this manner, the native countries of these individuals and companies are deprived of hundreds of millions in taxes, sometimes legally but often illegally.

And

The debt-ridden countries of the Western world can no longer afford to be deprived of such massive revenues.  In addition, the public is sharply critical of the fact that some wealthy people can escape their responsibility for their countries through tax flight….

They misunderstand the underlying problem, though.  Those countries don’t actually need the tax revenue that’s heading overseas—their governments are spending far too much of their people’s money, and spending it on things that rightfully belong to those people to spend on, or not, according to their own imperatives.  The governments are deprived of nothing.  The governments should think, instead, of the benefits of those trillions staying at home, in the countries’ private—nongovernmental—economies, because without the present usurious and special interest oriented tax plans, no one would have need to hide his money from the tax man.

As for the public’s disgruntlement over the wealthy being able to hide their money when they cannot, they should be upset.  With properly low taxes, though, there is, again, no need to hide.

The editorialists do raise a legitimate beef, though.

Drugs and other criminal funds are hidden and laundered there [in the tax havens], shady deals are arranged, and hedge funds whose speculative activities could shake the financial system once again use them as a base.

You bet.  All together, now: if the domestic tax policies were more intelligent and honest—that is to say, set to low rates—the tax havens would be hard put to stay in business—and there would be fewer resources for hiding and laundering criminal funds and fewer bases for Evil Hedge Funds.

There’s a pattern here.

YGTBSM, Again

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Here’s this bit of news from Tech News Daily.

The Department of Defense (DoD) recently conducted an audit to evaluate how well the most powerful military force on Earth handled the security issues concerning personal mobile devices in conjunction with its professional duties.

The result: [failure]

DoD audited “use of iOS, Android, and Windows mobile devices among Army personnel and in Army facilities, where the devices joined on-site Wi-Fi networks.”  The audit found no requirement to:

  • secure storage for data on mobiles
  • insist on keeping devices free of malware
  • monitor mobiles while hooked up to computers or even
  • employ training or user agreements to keep military secrets under wraps
  • authorize personal mobile devices: almost 15,000 unauthorized devices in use (as a practical matter; the Army nominally requires prior authorization before use)

The audit also found these examples of failure:

  • a programmer failed to report a damaged iPhone, disposing of it on his own and replacing it out-of-pocket
  • mobile devices with no password protection
  • devices using outdated operating systems (leaving them open to exploits)
  • no protective software installed

If this is typical, our Army seems wholly unprepared for its role in a cyber strike.

The Mouse that Roared?

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With The People’s Republic of China confirming the northern Korea has been conducting live-fire drills near its border with the PRC, and with northern Korea having closed the Kaesong factory complex jointly run by northern Korea and the Republic of Korea—the last formal tie between nK and the RoK—a rude thought occurs to me.

Is Kim the Youngest smarter, more Machiavellian, than we give him credit for?

He has to know, after vacationingschooling in Switzerland as a younger youth just how badly off the northern Korean people are.  He might even consider them “his” people.  If he does, and if he’s of a mind to do anything about it, he also has to know that proposing reunification talks—a lá occupied Germany and the FRG—both is a death sentence for him and will blow up the government.  After all, the PRC has not fallen, and so it can still prop up a follow-on nK government, even if like the failed Soviet Union, it has no interest in bettering the lives of commoners.  The blowup, then, would have no effect vis-à-vis the outside world; although it would make things even worse internally, especially during the turmoil.

So, what’s a boy to do?  Start a fight he knows he can’t win, lose the fight, and get occupied.  If he burns a few (tens of thousands of) innocent bodies in the process, well, he is the product of three-plus generations of give-a-s*t about human life.

About all of his bluster and buildup: it might be of a piece with prior blusters, now getting out of control in the hands of a tyro.  But his actions sure are guaranteeing that the ones he’s going to attack are very well prepared for that attack.

The rat that roared?

Nah.  Probably not.

This is Foolish

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A regularly scheduled ICBM test at Vandenberg AFB that had been planned for this week has been delayed by DoD, ostensibly in an effort to lower the tension on the Korean peninsula.  This delay comes as northern Korea has moved ballistic missiles to its east coast.  At least one of those missiles has the range (if not known to have the accuracy) to hit sites in Guam, Japan, Alaska, and Hawaii.  It’s also important to note that the move is more an effort to conceal the missiles’ locations than an effort to get closer to any targets—the distance gained is trivial compared to the distances to be covered.

If this is the reason—tension management—it’s hard to see how it works.  Coming on the heels of last week’s decision by the Obama administration to reduce overflights of the Republic of Korea with nuclear-capable aircraft and to stop moving combat ships into nearby waters, also supposedly to lower tensions, this seems more likely to encourage Kim the Youngest by seeming to display timidity and weakness on our part.

Is the delay in order to arm and retarget what was a test article at Vandenberg?  This seems unlikely (and it would suggest ugly things about the flexibility of our missile force), as northern Korea wouldn’t seem worth the trouble or expense of using an increasingly scarce warhead, when that part of the peninsula has so little of targeting value beyond its army and missile launchers—and these are more promptly, efficiently, and cheaply destroyed with more conventional systems already in place or nearby.

Or is President Barack Obama setting us up for making another round of concessions, of paying another installment of tribute, to another generation of Mad Kims, as past administrations have done in response to other outbursts of verbose threats?

The dog is barking.  There’s no need to take it seriously.

It Appears to be Time

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…to walk away from Afghanistan commercially, if not militarily.  Our commercial presence flows from the mission creep that has long infested our war there—a creep from the Bush doctrine of going anywhere there are terrorists and burning them, which in the Afghan implementation meant burning al Qaeda and the Taliban.  Period.  Full stop.  That mission, following the destruction of those two terrorist organizations as viable entities in Afghanistan, unfortunately quickly morphed into nation-building, an attempt to meld widely and wildly disparate tribes and clans into an actual, unified country.

Here is an example of the failure of that mission creep and of the foolishness of allowing it.  Tamerlane Global Services, Inc, provides contracting services for the US government and is exempt from Afghan taxation.  At the time of this incident, Tamerlane was in the middle of a legal dispute in a US Federal court with an Afghan firm, Global Hub Logistics, over mutual allegations of breach of contract.  Whether impatient with the proceedings or disinterested in an anticipated outcome, or some other reason, Global Hub complained to the Afghan government, and the latter manufactured a tax dispute against Tamerlane.

And then they snatched a Tamerlane employee off the street and threw him into jail.

Tamerlane and its employee are not alone in this abuse.

Afghan companies have begun turning to the Attorney General’s Office to resolve business quarrels through criminal investigations and arrests, rather than going to arbitration, mediation or commercial courts, attorneys here said.

It took the involvement of American Congressmen to get the Tamerlane employee released from gaol, and the employee never has been charged with any crime.  His employer and attorney, Kimberley Motley, said afterward,

There’s no legal basis for this at all.

The US has over 33,000 American contractors in Afghanistan at risk of this treatment: with the employer having a dispute with an Afghan company, and the dispute not going in a direction that suits the Afghan company, the latter bellyaches and the Afghan government grabs a likely looking employee and jails him.

Ward Scott, an American commercial lawyer in Kabul:

Our firm is increasingly getting calls from Western executives fearing, with good cause, the imminent arrest of their managers in Afghanistan over commercial disputes[.]

This misbehavior has to stop, and unfortunately, the most effective way to stop it seems to be to stop dealing with Afghanistan commercially in the first place.