Tag Archives: Inside Job

Nicholas Shaxson: Treasure Islands

Offshore banking. Trust funds. Financial services authority. Not exactly the stuff to stir the passions, is it? I’ve always found the main point of interest of the business section of the newspaper was that it served quite well as a base for cat litter, and I can never watch the city reports on the news without recalling the merciless deadpan parodies from The Day Today. So, a book detailing the history and mechanisms of tax havens? Isn’t Snog, Marry, Avoid on yet?

Sometimes however outside events catch the attention of even this hermetically isolated consumer of fictions. Stop me if I’m going too fast, but apparently there was some kind of global economic crisis a year or two ago, and since then we’ve somehow acquired a government who have deemed it appropriate to cut essential public services down to the bone marrow in order to preserve the right of patently incompetent and greedy institutions to award their employees astronomical salaries and bonuses. Anyone wanting a quick but thorough primer on the roots of this malaise should make point of watching the recent documentary Inside Job, to which Nicholas Shaxson’s book Treasure Islands (subtitle: Tax Havens And The Men Who Stole The World) is an excellent complement.

Shaxson knows his stuff. His particular area of experience is the exploitation of developing African countries by Western multi-nationals but he has investigated and reported on tax irregularities throughout the world. Or perhaps regularities is a better word – the main thrust of this impressively researched, tightly argued and in places incandescently angry book is that what passes for the global tax system is now irrevocably corrupt. It’s perfectly legal, and indeed standard practice, for big corporations to arrange their affairs so that they have no obligation to pay any tax in poor countries they are mining for resources, or in rich countries in which they are selling the end products of these resources at vastly inflated prices. National economies are being bent out of shape so that a relatively tiny number of powerful individuals can retain their status and meaninglessly enormous wealth. Shaxson carefully takes you through the steps by which the regulation that had provided stability from the war years to the 1970s was discredited and dismantled, and while some of the jargon and fine detail may be slightly hard-going, the overarching trends are quite clear.

Treasure Islands may make you feel sick, angry and powerless, but I’d urge you to read it nonetheless. There’s some major injustice going on behind those blandly boring terms I picked out at the start, and the more people know about it the better.

Inside Job: management anger

Charles Ferguson’s Inside Job is an exemplary documentary examining the causes and effects of the 2008 global financial crash. It provides a detailed and thorough explanation of the various deregulations and amalgamations that allowed a handful of megabanks to play fast and loose with astronomically large quantities of imaginary money without ever getting bogged down in technicalities, while also giving vent to the film-maker’s considerable anger at the relatively small number of individuals who enabled the sorry situation and walked away with stupefyingly large compensatory packages. I had no idea that the former CEO of Lehman Brothers was awarded a quite incredible 485 million dollars after he guided his bank to a spectacular collapse – you could fund quite a few libraries and hospitals for that, no?

Ferguson secured interviews with an impressive roster of former bank chiefs, government advisors, commentators and experts and has skillfully intercut these with sequences from old news footage and hearings in the US senate. Time and again you find yourself gasping when he forces an immaculately groomed city boss to face up to the consequences of their greedy and short-sighted policies – some dissemble ineffectually, some stumble revealingly over their words and some drop their professional demeanour and demand an end to the interview. It’s staggering, and depressing, that the very men (and it does always seem to be men) who constructed the whole pyramid of dodgy loans and impenetrable derivatives were then put in charge of sorting the mess out by the US government. This film has the dread appeal of a disaster movie, but in this case the disaster is ongoing – there’s no sign anywhere that the obvious lessons have been learned.