From time to time, rather randomly, I check to see what's new in the coverage of the "underground" or "shadow" or "black" economy which, as far as the U.S. is considered, hasn't been seriously evaluated in a dozen or more years.
In case you're wondering, this seems as good a definition as any:
The underground economy is legal and illegal exchanges of money for goods or services not reported in taxes.
Barter seems not to count although traditionally the black market was big on that. Anyway, although Los Angeles is trying to crack down on yard sales and limit their frequency, the countries of the European Union and even
China are getting more scholarly attention. One major problem associated with Greece is that the equivalent of 40% of its Gross Domestic Product is being conducted "off the books."
The most recent story line seems to be that a growing underground economy is a harbinger of economic collapse. I'd say it's a sign of public distrust, but that's just me.
Anyway, my recent random search turned up a couple of interesting things. One is an article in the New York Times, entitled Where the Mob Keeps Its Money, which, not surprisingly, has a global focus, but includes some local tidbits:
Last month, Senate investigators found that HSBC had for a decade improperly facilitated transactions by Mexican drug traffickers, Saudi financiers with ties to Al Qaeda and Iranian bankers trying to circumvent United States sanctions. The bank set aside $700 million to cover fines, settlements and other expenses related to the inquiry, and its chief of compliance resigned.
And our American law makers are implicated, if we are inclined to look.
A study last year by the Colombian economists Alejandro Gaviria and Daniel Mejía concluded that the vast majority of profits from drug trafficking in Colombia were reaped by criminal syndicates in rich countries and laundered by banks in global financial centers like New York and London. They found that bank secrecy and privacy laws in Western countries often impeded transparency and made it easier for criminals to launder their money.
Of course, there's no mention of the fact that not being registered is not the problem when:
Today’s mafias are global organizations. They operate everywhere, speak multiple languages, form overseas alliances and joint ventures, and make investments just like any other multinational company. You can’t take on multinational giants locally. Every country needs to do its part, for no country is immune. Organized crime must be hit in its economic engine, which all too often remains untouched because liquid capital is harder to trace and because in times of crisis, many, including the world’s major banks, find it too tempting to resist.
Rather, the problem is the belief that exploitation is good, as long as it's legal. Like what Bain Capital are still doing in Freeport, Illinois, as the
real economics blog reports. No wonder Willard Romney wants to distance himself from what Jonathan Larson refers to as the Casual Sadism of the Leisure Class.
The casual sadism of the Leisure Classes
Because tools and skills are the two most important assets a Producer has, the process of removing a functioning factory—that has usually taken many years to get running smoothly—is a direct assault on the wealth created by the hard work and ingenuity of the folks who built it. But the Predators have discovered that most of things that Producers do are actually a lot harder to get right than they would appear. So in an especially ugly twist of the knife, the strategy is now to get the Producers being robbed to give up their hard-won skills and knowhow too. Not since the Romans forced crucifixion victims to carry their own crosses has there been anything so relentlessly sadistic.
I'm actually somewhat embarrassed that I found "real-economics" on my own blog roll, which I'd obviously not consulted in a good long while. If only the days were longer!
That said, the pairing of producers and predators seems right on point and the following Youtube explains a lot in a short amount of time. It's an elegant riff on class.
Then, for the cherry on top, there are Willard's fake facebook accounts. I'll leave that for someone more tech-minded to explore. But, it's probably not very different from what World News Daily did in 2004. What ever happened to that fake reporter?