The U.S. Needs to Crack Down on White-Collar Crime
bloomberg.com
bloomberg.com
What we do need is vastly more resources for financial regulators, as well as courts. Yes the laws and regs could also be improved, but that is a harder problem. The easy problem is that the people doing good work to combat financial crimes only have the staffing and money to go after a small, small fraction of likely targets. And the courts do not have what they need to handle a high volume of increasingly complex, technical subject-matter.
That used to be the FBI's main job, but since 2001 they've been mostly ignoring white collar crimes to focus on counterterrorism.
My goodness that documentary had me so infuriated. If people haven't seen it, I highly recommend it.
> The only bank to be prosecuted criminally for shenanigans in the subprime era.
That's the amazing part. Out of all the multinational "too big to fail" banks in NYC, they went after a small community bank. Just on optics it looks terrible, but the bank they went after actually had very low numbers of defaults and foreclosures.
That was as clear a case of bullying as I've seen. They went after the smallest bank they could find to intimidate them and force them to settle so that they can tell the press the banks were punished for the financial crisis. Which would have been a farce had they succeeded.
https://www.pbs.org/video/abacus-small-enough-to-jail-suqmxe...
*unless you live outside the US.
The enforcement still wasn't enough in my opinion, but (and I'm struggling to find a source backing me up) I believe there were several hundred of these cases. None, however, from the big banks that arguably should take more of the blame.
They had some brokers that they fired, before any criminal action had been filed, when a senior manager noted indiscrepancies in the closing process (like writing multiple small checks for down payments and closing costs).
There is very little evidence that any elections in the US have been affected by fraud by any significant amount.
So to say that 'we definitely don't have an "election integrity" issue' isn't correct. There is nothing definite about it - we just have a consensus that we don't have a problem. You could say the same about every data security breach until they were discovered. I have noticed that there is a significant cultural interest in propagating the idea that our elections are sound so I tend to take the idea with a grain of salt as long as our system is as vulnerable as it is.
For example, in Georgia, US, one of the candidates himself blocked 53,000 voter registrations just 3 weeks before the election. The demographics of the 53,000 is 70% black.
https://www.npr.org/2018/10/13/657109536/georgia-puts-53-000...
Gerrymandering, strict voter id laws (e.g. requiring drivers license but removing all but one DMV in the entire county in opponent's strongholds) and similar are also various ways to negatively affect election integrity.
When Alabama enacted voter ID, it simultaneously shut down DMV offices in counties with the most potential black voters.
Or like in Texas where student IDs are specifically prohibited from being used for voting, even though gun permits are, in order to suppress student turnout.
Or in North Dakota, where voter laws were changed to suppress Native Americans from voting using tribal IDs.
So can knives.
> When Alabama enacted voter ID, it simultaneously shut down DMV offices in counties with the most potential black voters.
Most of these problems are now mitigated by years of not needing ID. Now we have voter registration mailouts and such. Don't just throw away a good idea because of past abuse. We strive to be better. Giving up is regressive.
The specific (Alabama) “past abuse” referred to by the grandparent was in 2011-2015, not some distant time where there has been intervening radical change in the political culture that would render it irrelevant.
> Don't just throw away a good idea
The whole idea was voter suppression. There is no good idea associated with Voter ID laws in the United States. People involved in them this decade have admitted the racial and partisan purpose (usually, when they thought only members of their race and party were around, obviously.)
The whole idea was for some people.
> There is no good idea associated with Voter ID laws in the United States
I disagree. Voting accountability is treated seriously in every state I've resided.
It's also one of the few that doesn't have compulsory universal uniform national (or even state) ID. Oddly, the same faction that is up in arms about voter ID is also dedicated to avoiding compulsory national/state ID.
If we had compulsory universal ID with the supportive policies necessary to avoid that becoming an unreasonable burden on the poor, or selected political groups or racial minorities, voter ID would be a non-problem. As it is, it's a problematic mechanism which is publicly sold as solving something which is a non-problem to all evidence, and has on multiple occasions been privately admitted by it's backers (and subsequentlt revealed) to be actually motivated by partisan interest and racial animus, in both cases being about keeping disfavored eligible voters from voting.
Disenfranchisement, gerrymandering, polling place reductions, unequal representation, etc. are, however, quite rampant. Not all votes are equal in the US, and not all voters are treated as equal either. The result is the same (subversion of democracy), but the tactics are different.
The idea that the US doesn't have election integrity issues is simply false.
No, if being well-connected means your crime gets left alone, you have a country run by, and for, gangsters. That's the initial condition, not the long term result if the situation continues.
If you do it long enough, people notice that the country is being run by and for gangsters.
The cost-benefit analysis almost always favors the criminal for white collar crimes (or any non-violent crime, really) when you have money. If I had $100m+ I wouldn't really pay attention to the law either.
I don't think your assertion is true.
EX: "In June 2009, the SEC sued Angelo Mozilo, former CEO of mortgage lender Countrywide Financial, and two other former officers, charging that they misled investors about the quality of Countrywide's loans while knowing the company was fueling its growth by letting its underwriting guidelines deteriorate and originating a growing number of risky subprime loans. In October 2010, the SEC settled the lawsuit and Mozilo was required to pay a fraction of the $521.5 million he had earned, just $67.5 million in penalties" https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_...
I think GP's point is that a $60M fine (against $520M in earnings) is not a an effective deterrent against such antisocial behavior.
I'm just saying that they aren't, as themagician asserted, lower than the actual gains from the frauds in question.
> I don't think your assertion is true.
I think you just haven't bothered to look.
First, our prosecutors arn't convicting, they are settling. HSBC paid 5 weeks of yearly profit for cartel money laundering.
https://www.marketwatch.com/story/netflix-documentary-re-exa...
The justice department also called this a fair punishment for an unrelated money laundering crime for Saudi nationals funding of terrorism. They didn't even bother to bring charges. (Which is a perfect answer to your question.)
I don't know why the justice department didn't pursue charges here. Maybe HSBC wasn't guilty? Maybe there wasn't sufficient evidence to win? Who knows. But this isn't an example of a caught party with a "so low that they don't matter" penalty.
I disagree... and frankly, just saying it isn't is a poor answer.
> Maybe there wasn't sufficient evidence to win?
Once again, your ignorance shows. The Justice Department expressed concern it would threaten the health of the financial system if they were too hard on HSBC at the time so they gave a low fee and ignored another crime.
> But this isn't an example of a caught party with a "so low that they don't matter" penalty.
I didn't say it was. I was answering your above question about a party that was 'caught' and faced a lower... NO penalty, in this case.
Banks are require to abide by a charter that requires good behavior. For evidence of criminal conduct that charter can be revoked and HSBC should have lost their right to operate in the United States. I would certainly call that a fee so low they don't matter penalty.
Especially since HSBC is now being accused of money laundering again... this time by Nigeria.
All you are giving is negative arguments. Saying things are not, and raising speculation without a basis does not add to the discussion. I am done with this.
You claim the parent is speculating without basis but the parent is asking for an example where a normal penalty is lower than the profit, because that is an extraordinary claim.
If hsbc was able to profit from money laundering while paying they penalty, they would still be doing it. They obviously had no moral barriers to doing it before so why would they stop?
First, apparently HSBC was making 2.6 billion USD (annual?) revenue from these accounts, and was fined 1.9 billion USD. Second, it is not a certainty that a company engaging in illegal behavior will get caught and fined. The company’s “expected value” function would multiply the expected fines by the chance of being caught. We can only observe the world in which they get caught and perhaps pay a fine larger than what they made. We don’t see the world in which they don’t get fined, which makes the illegal behavior on average profitable.
* https://www.npr.org/sections/parallels/2014/03/20/291934724/...
2) Your point about expected value is well taken, but here you are saying something far different from what themagician said and I was objecting to.
For something like banking I'm fairly certain that the marginal cost is tiny. It takes a lot of money to setup all the systems needed for moving money around, but once they are in place the difference between 10b and 11b flowing through them is tiny. As such HSBC probably pocketed most of that revenue.
But I'm not going to list a howto ;)
If all you lose is the income from illegal activity and a small fine it’s not much of a penalty now is it? The criminal justice system needs to be as vicious against criminals as collection agencies are against poor people.
I really have no problem seizing absolutely everything from somone who manipulates markets or defrauds investors. In fact, step it up. Seize everything and stick them with a lifetime of debt that can’t be discharged.
White collar crimes are murkier. There is, for example, nothing illegal about getting the upper hand in a transaction. But it can be illegal based on little more than what the seller knew or was thinking at the time of the sale. Even things like false claims to the government often turn on little more than the characterization of certain transactions. A great deal of the white collar prosecutions I've seen have left me unsettled--the evidence was murky or subject to different characterizations, and the "wrong" often turned on the unknowable--the accused's knowledge or intent.
If there's no victim, there's no crime.
(And, yes, identical logic does apply equally to illegal drugs).
If you want to pay $2000 for useless antibiotics, no problem. But the price will deter enough people that we don't get the scale required for widespread negative consequences, especially when insurance companies won't cover it without a prescription. Then the money can go to subsidize medicine in general so there is no net consequence for overall medical costs or insurance premiums.
And we could do the same thing for heroin with the money going to drug treatment etc. and do without all this business of SWAT teams and drug cartels.
Nah, when something has large negative externalities you set the tax to the point of mostly discouraging it. That'll be pretty high. It's supposed to be.
> in addition to being an absurd tax from the get-go (in my opinion), it is also quite regressive, since poor people are significantly more likely to be smokers.
"Regressive tax" only applies to necessities. Cigarettes are a luxury item, like lottery tickets or whiskey. Nobody ever starved or froze or lost their job for lack of a cigarette.
you really think each pack of cigs does $5.35 worth of damage to people other than the smoker?
Then where are the cartels and SWAT teams in the black market for cigarettes? The difference in the level of violence is stark. And most of the cigarettes on the market are sold through legal channels.
Failing to eliminate 100% of all crime is hardly an indictment of a significant improvement from the status quo.
A lot of the times the drugs being sold are painkillers, opioids and such. And this doesn't happen in a vacuum where no one else is harmed. Alcohol is legal, and there's lots of victims involving its use. We're just willing to tolerate it and we tried prohibition and it didn't work. And then some yahoos decided to try Prohibition II, like drugs are really different when alcohol is a drug itself.
The whole reason drugs are illegal is because of all the social ills having 20% of the population addicted to drugs in the late 19th century caused. And it's all been knee-jerk reactions and staying the course no matter how insane or counter-productive the results are ever since.
Drug approval services provided by government are there because we want added safety - not to be told what to do.
The U.S. has prosecuted white collar crimes in the past, and has underfunded and hamstrung its enforcement now. They could prosecute them again.
Now a $20M fine and a year in prison would make them think twice. More often than not, they make more in the commission of their crimes than they are fined, so they still come out in the black. In other words, they aren't truly punished.
The United States needs to reduce its prison population, not increase it.
Suggesting he be banned from serving as CEO would be much more reasonable, though I think the fine was more than enough.
I don't think most people are concerned with CEOs of large corporations overflowing the prisons.
Aside from that, do you believe that Elon Musk in particular deserves to have his freedom restricted, be in a potentially dangerous situation (even in low security), and be locked away from society because of a series of tweets that heavily jumped the gun and stated funding as "secured" when it wasn't?
Being barred from serving as Chairman for three years and being forced to step down in addition to a $20m fine doesn't seem to satisfy some people's bloodlust, I have my doubts that being forced to step down as Tesla CEO would.
You can punish someone without throwing them into a box. I don't see how that benefits Musk or society in any way. If he's unlikely to do anything like this again, he had power taken away from him, and investors recooped losses, what possible gain is there?
Elon Musk was forcibly removed as Tesla's chairman. That was the real punishment. Furthermore, Elon Musk agreed that two new board members would be selected by the SEC. Finally, Tesla promised that they'd watch Elon Musk's twitter account better.
The $20 Million was a slap on the wrist. The "real" punishment from the SEC were those new restrictions, which should clamp down on Musk's behavior.
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No one wants to see Tesla or Elon go bankrupt. The SEC just wants Elon to be more factual in his tweets. Neither jail nor fines help anybody.
IMO, the SEC should have threatened Elon Musk's CEO position a bit more (I mean... they could push him out of any officer position in publicly traded companies), but there's a strong argument that Tesla wouldn't survive if Elon were forced out.
I guess, neither of those are blatant securities fraud or libel against a person, so maybe it has, but...
https://people.com/music/elon-musk-responds-azealia-banks-al...
Not sure where all the fan-love for Musk comes from, but him and Kanye would do well together because of it.
Obviously not yet. But if Tesla fails to curb Elon Musk, I'd expect the SEC to continue to clamp down.
Remember: Tesla's settlement was to agree to clamping down on Musk's tweets. If Tesla violates that, then SEC can bring down the hammer again.
Supporting parent comments, it really wasn't. Poor people often get fines that wipe out most of their money, sometimes cost them jobs, and/or get jail time for low-value crimes. People like Musk get a fine that's a tiny percentage of they and their companies' worth with usually no jail time. I've always been in favor of jailing executives and/or board members for their part in crimes. Even if it's "make the numbers go up or else without giving me details." Oh no, we already know that's how most dodge responsibility. I think companies that do way better on talking to employees and accountability already show it could be done better. And then there's stuff like Undercover Boss showing a lot of problems can be spotted with one, undercover visit. Not even necessarily by CEO.
https://twitter.com/matt_levine/status/1033185120520417280
Tldr: "cracking down on fraud" will mostly harm poor people
https://www.nytimes.com/2016/02/07/your-money/vanguard-a-cha...
The UK's GAAR has this trick called a "double reasonableness test" which it uses to get rid of some types of tax _avoidance_ and that seems like an appropriate legal rule here if, in fact, the IRS does abuse this discretion.
The double reasonableness test asks this:
Could any reasonable person (not you, the jury member, judge or whatever, but some other reasonable person you're capable of imagining) think that this way of doing things was reasonable ?
Only if the answer is "No", which it will be only for the most extraordinarily tortured ways of avoiding tax, then this method of avoiding tax is prohibited. You don't go to jail or anything, your avoidance trick just doesn't work and you owe the taxes as usual.
The problem with transfer pricing is that "market price" is a context-dependent volatile fiction. If you buy a jar of peanut butter, it might cost $2 at one store and $2.50 at another on the other side of town. Which one is the market price? The difference is 25%, which at scale is enough to consume most companies' entire profit margin. And the answer is both, because the less expensive one is on the outskirts of town and the other is in the center of town where rents are higher and you pay a premium for the convenience.
Which is one of the ways international companies avoid tax. You have a 10% profit margin internationally, so you overpay/underpay by 10% for everything from your sister company and make zero profit in the high tax jurisdiction, but the entire difference is within the "market price" margin of error. It's even possible to justify the difference by making note of some value add feature/service you did or didn't have that justifies a higher or lower price.
The entire concept is a farce because the error margins are larger than typical profit margins.
Which is how you get bizarre nonsense situations like this. If Vanguard is charging less than others had historically, are they charging less than the market price, or that just the new market price?
Vanguard is in trouble for "charging" the funds below-market rate on the services provided by the management company. But the only reason there are charges to pay attention to at all is that Vanguard deliberately organized itself to return as much money as possible to investors.
Suppose you open a car dealership that gives every person who buys a car a share of the dealership. The next thing you know that dealership has the best service and the lowest prices and makes no profits, because all the owners are also customers and they care less about getting a $10 dividend than about service quality and price.
So then the argument is they're under-charging themselves and they owe tax on the difference between what they charged themselves and the fair market value. But it turns out all the customers love this ownership structure and having to compete with it has caused all the other dealerships to lose business and cut prices, and two new independent dealerships with the same structure sprang up and are now charging similar prices, meanwhile several of the incumbents with the old structure have gone out of business.
So the question is, what's the market price? It's clearly lower than it was, even the old incumbents that are still around are charging less, and losing market share while doing it. If there are now multiple companies offering the razor thin margins, isn't that the new market price? It's a price available to any member of the public and it's what anybody has to compete with if they want to enter the market.
The argument that there is a difference between what they're charging and the market price is ignoring the fact that their aggressive competition has lowered the market price down to what they're charging. But if you try to compare with what rates were like in 1975 then you get a squirrely result.
It's the same problem as with any of it. The grey area covers the entire map. The price they're charging is reasonable -- someone could charge it and operate a sustainable business, and several people do. But somebody else argues that it used to be higher. They're both right, and that's why the entire concept is a farce.
If Vanguard's tax filings are actually non-compliant, we should change the laws immediately.
There's a Matt Levine piece on this somewhere, it's worth finding and reading.
Case in point: no one would argue the Nazi regime was anything approaching "good", but when the war was done, we didn't throw away the V2 rocket and start research from scratch. We threw out all the horrible shit the Nazis did but kept their wildly successful rocket.
Likewise, it's possible to throw away the racist bullshit that perpetuates the drug war but use it's funding mechanism to fund prosecution of other crimes that would otherwise be financially infeasible to prosecute otherwise. If someone is convicted of insider trading, take all the money they gained from it and use it to prosecute other insider trading crimes.
What about the part where the war on drugs doesn’t actually reduce drug use? Sure it funds itself by sealing money from innocent people but that’s just another negative externality.
It was not necessary for the Nazis to kill millions of people to develop rockets. Oversimplifying that period of human history doesn’t make reusing failed law enforcement programs a better idea.
Neither I nor Animats ever stated that the war on drugs (or Nazism for that matter) were good things. I think that's entirely clear from even a cursory reading of our comments. In fact, I even stated that you can throw away all the bad stuff but keep one good thing.
It sounds to me like you're arguing that since the war on drugs is bad, we should never do anything affiliated with the war on drugs again. That's silly, and isn't an argument to anything anyone even came close to saying. Computers and cell phones are used in the war on drugs, should we get rid of them too?
Again, you're massively misrepresenting every argument that's been stated in this thread and using it to hold the moral high ground with the easy "Nazis are bad" argument. Of fucking course they are. Maybe read past that? Because it's not edgy. It's not "ends justify the means". It's an actual fucking argument that you're completely ignoring for an easy win.
Shame on you. You should aspire to be better than that.
This is the weirdest trolling I've ever seen.
But we did throw away all the research they did on unwilling human subjects even though it could conceivably have lead to better science if we ignored all the "racist bullshit"...
> Shiro Ishii, as the chief of the unit, was granted war crime immunity from the US occupation authorities, because of his provision of human experimentation research materials to the US.
Here are some of those reasons.
$3 for every $1 is an extremely misleading way of putting it, as though the IRS is a business and everything is good as long as it's turning a profit. A better way of putting it is that collecting taxes through enforcement has ~33% overhead, which is high. By comparison, the overhead of normal IRS tax collection is a fraction of a percent.
It also only accounts for the government's side of the expense, not the cost (and stress) imposed on innocent taxpayers who get audited to no avail in order to catch the smaller number of people who were actually committing tax fraud, and who are almost always small business owners because they're the ones with unusual tax returns. So the actual cost is even higher and is paid by a group of innocent people who create a disproportionately large amount of economic value while being at high risk of becoming unviable when you impose large surprise costs and time commitments on them like that.
The IRS also prioritizes its enforcement to maximize effectiveness, which means they're already taking the low hanging fruit and increased enforcement would be at the margin rather than at the existing average. For the average to be at parity you would need to be doing a lot of audits that cost more than the revenue they generate in order to cancel out the revenue gained from the net-positive enforcement that is already occurring.
It's possible that we could actually raise government income by doing less enforcement, because $3 is the average. It would be a net gain to eliminate the ones where we're spending $1 to raise $.50 (or $0) as long as we keep the ones where we spend $1 to raise $20.
I don’t believe the driving force is protecting small buisinesses from Audits- anecdotal, but small businesses in my family are still audited frequently. I believe it has to do with how unpopular the IRS is with the conservatives for ideological reasons, and they currently control the government. Our president bragged about how dodging taxes was an admirable quality- that kind of attitude is the driving force in american rhetoric, not protecting small buisiness owners.
But that doesn't work for small businesses. If you sell hamburgers, the majority of your customers won't have informed the IRS of the transaction. If any part of your supply chain includes normal retail outlets, same thing. Small business tax returns are pretty horrific. (They're at least as complicated for large businesses too, but they actually like it that way for all the usual reasons.)
> I don’t believe the driving force is protecting small buisinesses from Audits- anecdotal, but small businesses in my family are still audited frequently.
And they typically don't uncover major tax fraud, right? Evidence that the existing level of enforcement is, if anything, too high.
> I believe it has to do with how unpopular the IRS is with the conservatives for ideological reasons
That doesn't make any sense. Both of the major parties are ideologically bankrupt and ruthlessly pragmatic. Some part of their constituency wants it this way -- and it's probably the small business owners who keep getting audited even though they're not evading taxes.
> Our president bragged about how dodging taxes was an admirable quality- that kind of attitude is the driving force in american rhetoric, not protecting small buisiness owners.
Not paying taxes you don't actually owe is textbook capitalism. The idea that we should be outraged at companies for not paying what the law we passed says they don't owe instead of replacing the tax laws with ones that cause them to actually owe taxes is some kind of nonsense populist rhetoric.
Hamburger joints getting extra scrutiny at the government’s expense doesn’t seem like a problem to me, especially since they often already do. The people who aren’t getting audited often enough are not Mom&Pop hamburger joints, no one is arguing that. The premise of the parent poster is that the IRS is underfunded to deal with real large scale white collar crime, and as I understand you argue that’s not possible without splash damage to small buisinesses. But they're unrelated: you can specifically target large buisinesses, and you can make the government pay for audit services for small buisinesses.
> Some part of their constituency wants it this way -- and it's probably the small business owners who keep getting audited even though they're not evading taxes.
That’s utter nonsense. The large Republican doners not only have large tax bills at stake but believe they should not.
http://time.com/5075076/koch-brothers-tax-bill-campaign/
https://www.mcclatchydc.com/news/politics-government/article...
https://www.pastemagazine.com/articles/2018/05/sheldon-adels...
Each one of these doners individually spends hundreds of times more than the national small buisiness association on lobbying https://www.opensecrets.org/lobby/clientsum.php?id=D00005433...
And it’s harder to tell the exact numbers, but probably thousands of times more more than all small buisinesses in donations.
How ideologically bankrupt democrats are is irrelevant and doesn’t change what is happening here.
> The idea that we should be outraged at companies for not paying what the law we passed says they don't owe instead of replacing the tax laws with ones that cause them to actually owe taxes is some kind of nonsense populist rhetoric.
The idea is we should be outraged at the tax law and fix it, instead of celebrating the loopholes for billionaires.
The problem with "at government expense" is that it annihilates the premise that this is going to increase government income. If you audit someone, they not only have to hire a tax professional, they have to spend their own time on it because they're the only one who knows their own business. But because they're the only one who knows their own business, they also need to spend their time running the business. So the amount you would have to properly compensate them would be at something like the overtime rate, but worse because it's involuntary, and for someone whose time may already be valued at six or seven figures.
The government would never actually pay that full cost, so the idea that everything's fine because the government is paying for it is silly, and if they did it would immediately put the program deep underwater.
> The premise of the parent poster is that the IRS is underfunded to deal with real large scale white collar crime, and as I understand you argue that’s not possible without splash damage to small buisinesses. But they're unrelated: you can specifically target large buisinesses, and you can make the government pay for audit services for small buisinesses.
The problem is large businesses largely aren't the ones committing tax fraud -- hardly anybody is. Large businesses pay very low taxes because they hire very good accountants, not because they have fraudulent returns. The problem isn't that we need more audits, it's that we need better tax laws.
> The large Republican doners not only have large tax bills at stake but believe they should not.
Is it surprising that the people with the most money are the largest donors? It's basically a prerequisite.
> Each one of these doners individually spends hundreds of times more than the national small buisiness association on lobbying
Because small businesses don't have huge margins to be spending on lobbying. They're not a constituency because they donate, they're a constituency because they vote.
> The idea is we should be outraged at the tax law and fix it, instead of celebrating the loopholes for billionaires.
But that isn't where the outrage is directed. Nobody is actually fixing the laws -- either party. Even the Republican proposals (tax simplification, flat tax etc.) would fix it, but they never get enough votes to pass it because it's impossible to pass anything like that with the current level of polarization. If you can't get a single vote from the other party then it only takes a small handful in your own party to be corrupted by special interests and it's impossible to fix the problem.
Keep in mind the likelihood that the enforcement actions we spend $1 to raise $0.50 are there to deter tens or hundreds of billions in related avoidance or fraud schemes. That's more important than the actual revenue recovered.
This is one of those things the media is profoundly stupid at. For example:
> Johnston and her coauthor, Andrew Joy, BS, also of Western New Mexico University, reviewed data on mass shootings amassed by media outlets, the FBI and advocacy organizations, as well as scholarly articles, to conclude that “media contagion” is largely responsible for the increase in these often deadly outbursts.
https://www.apa.org/news/press/releases/2016/08/media-contag...
In other words, widespread media coverage of mass shootings has increased the number of mass shootings, because the perpetrators do it for the attention and seeing how much attention it gets encourages future perpetrators. So now the media does its level best not to inflame the public and give unnecessary publicity to these monsters.. or not.
It's the same kind of thing here. The deterrent effect you're looking for comes from people talking about the major tax evasion cases the IRS is winning. It gets reduced by publicly lamenting a lower enforcement budget -- which would have no effect on deterrence if nobody was talking about it.
It's way more important that people understand that the IRS is prosecuting people than whether the actual number of people they're prosecuting goes up or down. And they definitely still are.
It makes sense that the rate at the margin would be much higher than the overall rate, you've already collected all the low-lying fruit, now you're going after the scofflaws trying to avoid paying anything.
That's including all the taxes paid by people with unchallenged tax returns. That's basically just the cost of processing the checks. It's quite a lot more expensive to get money from someone who filed a fraudulent return and you have to do an audit to get them to pay. Especially when a lot of the audits you do won't turn up any real fraud.
Lack thereof, many people agreeing on the contents, is a sign that you can read the book and (sort of) trust it.
Nothing guarantees nothing, cogito ergo sum and all that, but it’s a good heuristic.
“In my mind,” of course ;)
While it may be, I found it difficult to get into. I felt like I was reading a long rant that was peppered w/ interesting facts here and there. I put it down years ago with the intent to try again. I've not gotten back to it yet.
A book I recommend that does touch on the S&L scandal is Lying for Money (Dan Davies). The Outlaw Bank (Beaty & Gwynne) was also an awesome read.
As for the greater topic of white collar crime, it's a key ingredient of the cake, forever to be baked in. My professional advise to folks is simply to be aware of that and act accordingly. Can't say much more than that on the matter.