SPYING ON THE BANKS ISN'T THE REAL SCANDAL

From the Nation, national affairs correspondent William Grieder, like me confused about why bank-spying is a problem given that the feds already said they were doing it right after 9/11, finds a real scandal:

Dirty Money

The scandal here is not government over-reach, he tells me. The scandal is the pitiful reluctance of this administration (and others before it) to get serious about the problem.

Bankers, Blum explained, "have fended off every conceivable rule that would really be effective. Why are we pandering to them if we say we are in such a desperate situation?"

The political influence of bankers tops all other sectors, I learned as a young reporter. Regardless of party or ideology, politicians seek their friendship. So the United States has created a truly bizarre banking code that legalizes--and keeps secret--vast flows of ill-gotten gains. For what purpose? Terrorist financing, yes, but that business is dwarfed by the drug trade profits, insider looting of corporations, offshore tax evasion, securities fraud, plain-vanilla fraud and other uses.

Click here for the rest.

In other words, despite the amazingly business-friendly climate in the US, an opaque banking system is absolutely necessary for businesses, who want to violate what remaining laws continue to restrain them, to go about their dirty deeds. Corporate fraud and offshore tax havens have been in the press on and off for the last five years or so, but do not underestimate how deeply intertwined the international drug trade is with legitimate businesses. After all, drugs are a $400 billion dollar industry. That's an enormous amount of money, and, believe it or not, corporate America is up to their ears in it, which is probably why the government will never win the drug war: the elites, who are making money off of both sides in the fight, don't want it to end. At any rate, as Greider handily observes, the real scandal here is not that the feds are looking at world financial transactions; it's that they aren't doing nearly enough, and, clearly, that's by design.

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