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Friday, April 26, 2013

New Domain Name

I have moved the site to No more "blogspot" in the address. This should not affect how you view the site, nor the feed. Please let me know if you do experience problems, of course.

It does affect some of the statistics. For example, all the tweets recorded at the old domain no longer show up, and all the votes in the poll from before the changeover have disappeared. Hopefully, that will be the extent of it.

Thanks for your support!

Thursday, April 25, 2013

Unemployment Hits New Highs in Spain and France

As if there were not already abundant proof of the failure of austerity in the eurozone, the BBC reports today that both Spain and France have hit new unemployment milestones.

In Spain, unemployment has jumped from February's 26.3% to a first-quarter rate of 27.2% (implying an even higher figure for March). In March 2012, it was "only" 24.1% (see source in table below).

In France, there are now 3.2 million unemployed, more than at any time since the country began keeping records in 1996. Complete EU unemployment data for March should be released in early May.

For a fuller picture of the continuing deterioration of the situation in the European Union and the eurozone, the unemployment rates tell a stark story.

Date     Eurozone     Spain     Greece     Portugal     Ireland     UK     USA   EU-27

3/2012   10.8%         24.1%    21.7%     15.3%      14.5%    8.2%  8.2%   10.2%
2/2013   12.0%         26.3%    26.4%     17.5%      14.2%    7.7%  7.7%   10.9%

Note: Greece and UK figures are for January 2012 and December 2012, rather than March 2012 and February 2013
Sources: Eurostat, 2 May 2012, for March 2012; Eurostat, 2 April 2013, for February 2013; Bureau of Labor Statistics for U.S.

Moreover, it is important to note that despite drastic budget-slashing, in none of the EU countries did debt come under control, even for Ireland and the UK, which have managed some slight growth over the 11-month period. Using this handy BBC interactive tool, we can see that Spain's debt/GDP ratio increased from 69.3% in 2011 to 84.2% in 2012 (Wait, that's under 90%! What's happening?), Greece declined from 170.3% to 156.9%, Portugal increased from 108.3% to 123.6%, Ireland increased from 106.4% to 117.6%, and the U.K. increased from 85.5% to 90%. In fact, just six short years earlier, Ireland had a debt/GDP ratio of just 24.6%. The Celtic Tiger, favorite of conservatives everywhere, has truly crashed and burned.

Given the Spanish and French figures, look for bad news for EU unemployment next week. Despite the continuing austerity fail, Republicans and some Democrats continue to push for deficit cutting here, and will maintain a steady drumbeat. But, like Reinhart and Rogoff, they all deserve the Colbert treatment.

Cross-posted at Angry Bear.

April Taxcast from Tax Justice Network

This month's Taxcast from the Tax Justice Network highlights the International Consortium of Investigative Journalists' major data dump from leaked documents, the agreement of the Group of 20 that automatic exchange of tax information should be the global standard, the imminent collapse of banking secrecy in Luxembourg (yes, you read that right!), and phantom foreign direct investment into India.

Enjoy the podcast!

Wednesday, April 24, 2013

Reinhart/Rogoff Gets the Colbert Treatment

Via Paul Krugman, Steven Colbert takes on Reinhart and Rogoff. Also be sure to check out his interview with Thomas Herndon.

German tax enforcement paying dividends

I have long advocated that the United States should follow Germany's example of aggressive pursuit of tax evasion, in particular its practice of paying informants for account information from secrecy destinations like Liechtenstein and Switzerland. The German Parliament's upper house (Bundesrat) rejected a deal in November that Prime Minister Angela Merkel was willing to sign with Switzerland that would have allowed German account holders to pay tax anonymously. (As I reported on April 12, automatic exchange of information is rapidly becoming the standard to which even Luxembourg will adhere, so Switzerland will come under great pressure to do the same, thus ending bank secrecy.)

Now, Naomi Fowler of Tax Justice Network points me to new enforcement actions based on leaked account information. Last week the southwest German state of Rhineland-Palatinate conducted searches of over 200 homes in connection with alleged tax evasion. The raids were based on a CD with data on thousands of German citizens with Swiss bank accounts, for which the state had paid an informant 4 million euros ($5.2 million). However, tax authorities estimated that they would have an over 100-fold return on this investment, expecting to collect 500 million euros ($654 million) as a result of the investigation.

Investigators in Rhineland-Palatinate stated that they were investigating Credit Suisse and its German subsidiaries for assisting in tax evasion as a result of data on the CD. This comes on top of a 2011 settlement by the bank to pay 150 million euros for facilitating German tax evasion.

How often do governments get a 100-fold return on investment? The U.S. routinely pays drug informants; it should be more aggressive in finding tax evasion informants.

Cross-posted at Angry Bear.