Time | 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.
Where do we go from here? I think we’re heading towards a root to
branch re-evaluation of how our market system works–and doesn’t work.
The debate over free trade is part of that re-evaluation. The calls for a global campaign against tax evasion
are, too. I think there will also be intense scrutiny about the ease
with which financial capital can move around the world – we’ve already
seen that with the hoopla over tax inversions, but we’ll see a lot more backlash, in new areas.
“I expect that the populist backlash will be intense and will impact
everything from high-end real estate to PACs (effectively political
shell companies),” says one of my favorite sources, Peter Atwater, a
behavioral economist. “Voters are increasingly angry at the seeming
transience of the financial/corporate/political elite. The 1% can move
anywhere they want—and profit handsomely from the relocation, but the
99% can’t. Worse, the 99% are left with the aftermath—the empty
buildings of a deserted Detroit, the toxic waste from chemical plants in
West Virginia or the unsustainable tax liabilities of Puerto Rico.”
