Show Details for the week of July 30th, 2012

Unfair taxes and unfair wages – topics for tonight’s show:

• $21 Trillion the Wealthy are Hiding: The Shocking Facts — and the Great Opportunity. An interview with James S. Henry
• Empty Anniversary: Minimum Wage Stuck as Poverty Climbs. An interview with Holly Sklar

More about our guests this week:

James S. Henry

James S. Henry is a leading economist, attorney and investigative journalist who has written extensively about global issues. He was the lead researcher for the report linked below

Mr. Henry served as Chief Economist, McKinsey & Co (NY) and VP Strategy, IBM/Lotus (Cambridge). As founder of The Sag Harbor Group, his clients have included such leading organizations as ABB, Allen & Co., Ashoka, AT&T/Bell Labs, ATKearney, Calvert Fund, Cemex, ChinaTrust, Scotland Yard/FBI Task Force on Caribbean Havens, IBM/Lotus, Intel, Oxfam GB, South Africa Telecom, the Rockefeller Foundation, the Swedish Power Board, TransAlta, and Volvo.

As an investigative journalist, Mr. Henry’s articles have appeared in Forbes, The Wall Street Journal, The New Republic, The Nation, The New York Times, The Washington Post, US News, Manhattan Inc., Harpers, The Washington Monthly, Fortune, Business Week, Newsweek, Time, The Conference Board, The Tax Lawyer, Jornal do Brasil, The Manila Chronicle, La Nacion, El Financiero, and Slate. His books include, with Paul Starr and Ray Bonner, The Discarded Army – A Study of the Veterans Administration and Vietnam Veterans. (Charterhouse, 1976); Prof. Richard Caves, ed., The Economics of Competition, Ch 5: “The Impact of Acquisitions on Shareholder Value.” (1988); Banqueros y Lavadolares. (Tercer Mundo, 1996); The Internet’s Impact on Financial Services. (1999); The Blood Bankers (Basic Books, 2005); Steve Hiatt, ed., A Game As Old as Empire, Chapter V: “The Mythology of Debt Relief,” (2007); and Pirate Bankers. (forthcoming).

Quote: “First, this hidden offshore sector is large enough to make a significant difference to all of our conventional measures of inequality. Since most of missing financial wealth belongs to a tiny elite, the impact is staggering. For most countries, global financial inequality is not only much greater than we suspected, but it has been growing much faster.

“Second, the lost tax revenue implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries, especially developing countries that are now struggling to replace lost aid dollars and pay for climate change. Indeed, once we take these hidden offshore assets and the earnings they produce into account, many erstwhile ‘debtor countries’ are in fact revealed to be wealthy. But the problem is, their wealth is now offshore, in the hands of their own elites and their private bankers. Indeed, the developing world as a whole has been a significant CREDITOR of the developed world for more than a decade. That means this is really a tax justice problem, not simply a ‘debt’ problem.

“Third, it turns out that this offshore sector — which specializes in tax dodging — is basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, and accounting firms, headquartered in First World capitals like London, New York, and Geneva. Our detailed analysis of these banks shows that the leaders are the very same ones that have figured so prominently in government bailouts and other recent financial chicanery.

“Fourth, given all this, it is scandalous that official institutions like the Bank for International Settlements, the IMF, the World Bank, the OECD, and the G20, as well as leading central banks, have devoted so little research to this sector. This scandal is made worse by the fact that they already have much of the data needed to estimate this sector more carefully. For reasons of their own, they have tolerated the growth of the offshore sector for far too long, out of sight. It is time for them to live up to their promises, and work with us on concrete policies to get it under control.”

He adds however: “From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems. We have an opportunity to think not only about how to prevent some of the abuses that have led to it, but also to think about how best to make use of the untaxed earnings that it generates.”

Links: Forbes Blog and Tax Justice Network’s Report(The price of offshore)

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Holly Sklar

Holly Sklar is the Director of Business for a Fair Minimum Wage and co-author of Raise the Floor: Wages and Policies That Work For All Of Us

Quote: “Time flies when you’re moving backward. With the federal minimum wage stuck at $7.25 an hour – just $15,080 a year — since 2009, workers now have less buying power than they did in 1997 at the start of the longest period in history without a raise. At minimum wage’s high point in value in 1968, retail workers, cooks, health aides and other minimum wage workers made $10.55 adjusted for inflation. The biggest problem for Main Street businesses is lack of customer demand. We can’t build a strong economy on downwardly mobile wages. It’s time to raise America by raising the minimum wage.”

Website: Business for a Minimum Wage

Related Article: An AP survey finds: “The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.”