The chickens are coming home to roost. And, you better have the coop in order because come home, they must.
An almost daily diet of dire economic news has steeled me somewhat to revelations of late. I stopped months ago asking myself, “What next?” The answer I always got was, “Anything.”
Still, there have been surprises.
Several recent developments, though not directly related to each other, exemplify the volatile times in which we live. In the end, however, they are related, if in no other way than being signs of the times.
The end of Swiss banking?
It appears the once safe haven for criminal income tax evasion is coming to an end, and before the dust settles it’s likely that tens of thousands of tax cheats will either be paying up handsomely or spending some years in federal prisons or both.
The I.R.S. wants from UBS, Switzerland’s biggest bank the names of 53,000 U.S. citizens suspected of tax evasion (as of this writing, the bank had agreed to only 250-300 names, but that is likely to change as public outrage grows).
It should be noted that Swiss banks are far from pristine, squeaky-clean financial institutions above reproach; many will recall them being forced to admit complicity helping Nazis move Jewish assets into those fascists’ private accounts during World War II.
The fact that UBS — in time, other banks will follow — is being forced to come clean is itself an earthshaking phenomenon. That wealthy Americans are greedy enough to seek refuge from paying taxes on the money they earned in their own country is downright reprehensible.
I look for Mississippians to be caught in the shakeup as offshore depositors are listed in the public record.
“The man behind the curtain”
I live about seven miles from Baldwyn in Saltillo, but am temporarily in Houston, Texas. On Feb. 17, the local Texas and national news media were ablaze about the raid and closure of Houston-headquartered Stanford Financial Group.
Imagine my surprise when I checked Mississippi papers online, as I do daily, to learn that No. 2 and No. 3 – James Davis and Laura Pendergest-Holt – in the Stanford house-of-cards financial empire are residents of tiny Baldwyn, working out of an office in Tupelo. Both were named in the suit.
In the darkest tradition of Bernie Madoff, here were two Mississippians running a company whose primary function appears to be bilking as many people as possible out of as much money as possible. Poof, it’s gone.
R. Allen Stanford, it seems, was the wizard of his own Oz. Even if no other Mississippians are named in future suits or indictments, there are likely many who have lost substantial sums of money in the scheme.
Maybe they would have been better off putting their money into Swiss accounts.
Last, but not least
The $787-billion economic stimulus package was signed into law Feb. 18. The majority of Mississippi’s congressional delegation and its governor opposed the American Recovery and Reinvestment Act.
I doubt they will oppose getting the funds. Sure, they are kicking up some dust about some of the particular issues and complain about “strings attached,” but they’ll be right at the front of the money line.
Which brings me to my personal apprehension: It appears that each state governor will be given substantial autonomy to decide where the funding goes. Unfortunately, we in Mississippi aren’t blessed with a governor whose funding-direction apparatus necessarily operates in the best interests of its citizens and small businesses, both of which are oft excluded.
Haley Barbour’s decision to pull $600 million out of Katrina housing replacement funding and spend it on expanding the Port of Gulfport is a good example. Suit was filed in December against the state for that decision; whether people’s homes or ships’ berths is the correct use for those funds may be decided in court.
That is only the latest of numerous funding and taxation decisions that tend to lend credence to the murmur that Barbour’s interests are often at odds with what is best for Mississippians.
Handing him billions more dollars could be problematic.
Fortunately, the ARRA architects included provisions for oversight by state legislatures. Denying governors’ spending priorities and even the right to override rejection of receiving funds a governor declines are the rights of those bodies.
Already, in neighboring Louisiana, Gov. Bobby Jindal has seen his $308-million list of ARRA road and bridge projects wholly rejected by that state’s joint legislative spending committee. Among the package items was $1 million Jindal earmarked for construction in rural West Carroll Parish for “a bridge at the end of a mud road that serves a private enterprise,” according to a Baton Rouge Advocate newspaper story.
One state senator, continued the story, “said he wants to know who the unnamed private enterprise on the other side of the bridge contributed to in order to get on the administration’s list.”
That sounds all too familiar.
Contact MBJ contributing writer Richard Cotton at email@example.com .