If you used Panamanian law firm Mossack Fonseca to sock away your wealth overseas, you have a problem on your hands this morning. Eleven million documents from the firm have leaked, and are now being scoured by journalists all over the world. The sheer scale of the leak is unprecedented.
The first round of media coverage is focusing on politicians who moved money out of their countries – including some $2 billion by close associates of Vladimir Putin. But this journalistic orgy is likely to last for months, and some big banks and companies are certain to get caught in its wake. It’s a little early to be predicting, but I’d guess it will become a major impetus for reforming the global tax and finance system.
Separately, the Washington Post published Saturday a long and fascinating interview with Donald Trump that provides the clearest look yet into his thinking about economic policy. It’s a jumble of Trumpian audacity, economic illiteracy, and peculiar logic. Some of the takeaways:
-Trump believes that easy money has created a bubble that leaves the U.S. on the verge of a “massive recession.”
-He says that the “real” unemployment rate is not 5 percent, but in “the twenties,” and that the U.S. pays the “highest taxes in the world” – showing either an ignorance of, or contempt for, official statistics.
-He promises a tax cut, yet claims he can eliminate the national debt in eight years, suggesting a monumental lack of understanding of basic public finance.
-He says he’s going to do that by renegotiating trade agreements and cutting trade deficits – exhibiting not only remarkable hubris about his deal-making abilities, but also confusion about the connection between trade deficits and budget deficits.
You can read the entire transcript of the interview here.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
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Around the Water Cooler
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