The Panama Papers Highlight the Inequality of Globalization

Nick Cassella wrote about the Panama Papers in Daily Clips this morning, but I can’t stop thinking about them, for obvious reasons. Have you seen this video of Iceland’s Prime Minister being asked about his role in the Panama Papers? It’s so uncomfortable to watch:

And the above video led, in part, to this crowd of 22,000 Icelanders protesting outside their seat of government. (For reference, Iceland’s population was 323,002 in 2013.)

I can’t be the only person who’s had this song stuck in my head since the Panama Papers hit the headlines yesterday, can I?

This really does seem to resemble Nick Hanauer’s prediction that if income inequality persisted, pitchfork-wielding mobs would be coming after plutocrats. What we’ve seen in the Panama Papers is that global elites seem to believe that a different set of rules apply to them. They believe they can stash their money—much of which was made through unethical means—away from taxes and the media’s scrutiny and the attention of their fellow citizens.

You know how Republican politicians complain that taxes take money outside of the economy? This is obviously baloney—governments are a huge part of the economy. By taking part in these Panamanian tax shelters, these global elites are actually removing money from the economy. Their taxes aren’t collected, the money isn’t invested into local businesses. It just—poof—disappears into a cozy little offshore account, waiting for its owner to collect it at a time of their choosing.

Rana Foroohar at TIME writes, in a story titled “The Panama Papers Could Lead to Capitalism’s Great Crisis,” why this is such a big deal:

Voters know at a gut level that our system of global capitalism is working mainly for the 1 %, not the 99 %. That’s a large part of why both Sanders and Trump have done well, because they tap into that truth, albeit in different ways. The Panama Papers illuminate a key aspect of why the system isn’t working–because globalization has allowed the capital and assets of the 1 % (be they individuals or corporations) to travel freely, while those of the 99 % cannot. Globalization is supposed to be about the free movement of people, goods, and capital. But in fact, the system is set up to enable that mobility mainly for the rich (or for large corporations). The result is global tax evasion, the offshoring of labor, and an elite that flies 35,000 feet over the problems of nation states and the tax payers within them.

This is a serious problem, and it needs to be addressed. Globalization is adding a whole new dimension to the conversation about income inequality. And unless we reform the system to address this inequality, we’re about to see a whole lot more angry crowds gathering in capitol cities around the globe, demanding justice.