Pundits of all kinds are busy examining the rise of right
wing parties in Europe: the National
Front in France, Law and Justice in Poland, UKIP in the UK, Fidesz in Hungary,
and others. The parallels to the 1930s are certainly worrisome. Indeed, when
you look at the rhetoric that these parties have pumped out in the last few
years, you’d conclude that Donald Trump’s campaign in the US is the echo, not
the bang.
The political experts’ consensus is that ordinary people are
voting for the right because they’re angry that EU-focused elites have proven
unable to effectively manage either the economy or immigration.
The economy and immigration are undoubtedly key drivers of
protest, but analysts are making a serious mistake in ignoring another huge problem: ordinary people throughout the EU are
outraged by what they see as pervasive corruption.
The corruption that is feeding Europe’s anger has two
dimensions: outright bribery of
politicians and government’s consistent failure to prevent the wealthy from
evading taxes.
Greece is, of course, Exhibit A. A few years back, the French gave Greek
officials a CD with the names of people holding undeclared Swiss accounts. The
Greek officials did nothing. When the story finally came out, the involved
officials’ explanations were of the kind that would embarrass Inspector
Clouseau: I lost the CD! It wasn’t my
responsibility and I forgot to give it to someone else! It was digital
information and I didn’t know how to use it!
People who wonder why Germany was so harsh on refinancing
Greek debt should look first to this story, which was widely distributed and
commented on in throughout Europe. When ordinary German workers are aware that bribe-taking
is standard practice in Athens’ ministries and that the wealthy in Greece evade
nearly all of their taxes, why would they want to lend money on easy terms?
Again?
German workers don’t object to their Greek peers; rather,
they are repelled by corrupt Greek politicians and the country’s kleptocratic
business and professional elite.
There has been similar evidence of high level corruption and
tax evasion in Italy, Spain, and Portugal.
Of course, corruption is by no means a southern European
disease.
The bribes that Greek officials took were from German firms.
And the German state of North Rhine-Westphalia has shown that tax evasion is
widely practiced in the land of moral superiority.
Across the Rhine in France, the scandals affecting the
leadership of the mainstream conservative party are so deep and complex it’s
hard to sort them out. Consider that former President Sarkozy’s long time right
hand man was just convicted of stealing from the government payroll, and that
the courts have shown that government officials improperly interfered in a
decision that caused a huge amount of money to go to a political ally. And
more. Lots more, actually -- including plenty of Swiss account tax evasion by
wealthy and powerful individuals on the left as well as the right.
Across the Channel in the UK, it seems that any time a
newspaper wants a good story, it just has to dangle thinly veiled bribes in
front of a few MPs. The pols go for the cash like hounds after the hare. And
Prime Minister Cameron, while talking a good game, hasn’t yet cracked down on
the various crown dependencies that hold a large proportion of the world’s
tax-evaded wealth.
This phenomenon of disgust with rich thieves is also strong
in Donald Trump’s campaign. The Donald emphasizes his independence from wealthy
donors and fires up crowds by eviscerating tax-dodging hedge fund managers.
America has yet to make its next big decision about right
vs. left, but Europe’s direction is clear:
the anti-EU conservative populists are ascendant.
What to do if you care about a unified Europe?
It’s simple. Make it clear you won’t tolerate corruption,
including tax evasion. Junk the quiet, behind-the-scenes negotiations with your
nation’s foreign account holders and make it clear that tax evaders will go to
prison unless they admit to their crimes. And even if they do fess up, stress
that their names will be out there in the open for all to see.
Most wealthy people do pay their taxes. What kind of message
does it send when their cheating peers go unidentified? Not embarrassing rich criminals
is no longer an option.
As for government officials, including elected office
holders, it’s time to insist on unambiguous rules and unremitting transparency.
Tell the lobbyists that ethics rules will be enforced and that violators will
be punished and that auditing of their activities will be continuous rather
than episodic.
A vastly beefed-up enforcement staff for tax evasion and
auditing government officials is essential, but just a first step. Efforts to
combat corruption must move from the shadows to a place of prominence. That
means regular reports from authorities, likely including some index of progress
toward honesty.
The people who vote for Europe’s right wing populists have
no objective reason to believe that the newcomers will be more honest than
their predecessors. Indeed, the most advanced country in this populist right trend,
Hungary, suggests that the opposite will be true.
But it’s not wise to expect angry people to somehow always
operate on cool logic. Instead, ordinary people’s operative thinking here is “throw
the bums out” – a reaction common to every society.
The alternative, if we want to maintain rational government, is to
put the real bums in jail. The sooner the better.
