CAPITALISM'S ACHILLES HEEL Dirty Money and How to

concentration accounts, and more—moves trillions of dollars out of poorer
countries into western accounts and has begun to move billions out of taxable
western profits into distant sink holes.
The only question left to ask is why. And the answer is the simplest one
possible.
WE LIKE THE MONEY
Magnitudes and Misunderstandings 201
“The U.S. has supported this as a matter of policy.” 62 A senior Treasury Department
official, after explaining the role of his unit in fighting money
laundering, was lamenting with me how much more difficult his task is
made by the door held open to many forms of illegal proceeds flowing out
of other countries into the United States.
“Efforts to curtail flight capital would deprive U.S. banks of deposits.
There would be major pressure against it.” 63 Another Treasury official was
confiding to me his lesson in political reality.
“You should open a branch in the Caribbean to capture your fair share
of flight capital.” 64 An executive vice president of a major West Coast bank
was passing on to me the advice he had received from a Treasury official.
A 2002 article in World Policy Journal put it as follows: “Traditionally,
the U.S. Treasury has welcomed foreign money from any source to fill the
gap in the country’s balance of payments. Only in the last years of the Clinton
administration did the Treasury begin to draw the line at laundered
money, and even then it was tentative, lest it impede global money flows
into Wall Street.” 65
At this point, I want to reiterate what I said in the Prologue. I’m all for
the free-market system—free trade, free currency convertibility, free movement
of capital. Provided it’s legal! And that means legal in origin, movement,
and use—legal at every point along the way. Legal money stays on the
books. Legal money serves legitimate trade and investment. Legal money is
properly taxed. Legal money fuels economic growth. Illegal money that is
criminally, corruptly, or commercially generated sneaks across borders and
hides in secret havens, often disappears from the books, undermines free
trade and investment, skips taxation, and reduces growth.
For the United States and Europe, the justification for encouraging and
facilitating the inflow of illicit money from abroad has been straightforward.