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Whilst the situation in Russia is undoubtedly horrific, let's not pretend that corruption isn't endemic in the rest of the world; some counties have just legali

by ajays 14y ago

Whilst the situation in Russia is undoubtedly horrific, let's not pretend that corruption isn't endemic in the rest of the world; some counties have just legalized it to some extent. Every time there's a discussion of corruption, people make this statement, and it bothers me (I'm originally from India, which has a lot of corruption too). You cannot just equate the two. Corruption as described by the GP is like a cancer which has metastasized all over the body; corruption in the West is like an isolated blotch of melanoma on the skin. So yes, there is corruption everywhere I guess ( perhaps even in Sweden and Norway and Switzerland); but it's not at the same level as that in Somalia and Russia. The thing that draws entrepreneurs from all over the world to the US is that it is almost trivial to register and start a business here; and even if you're wildly successful, your "corruption overhead" is minimal (the occasional $35K dinner for $PRESIDENTIAL_CANDIDATE notwithstanding). This may not be the case in ALL industries, but in general it's true. Consider for example Google. Till a few years ago, despite revenue in the billions, Google didn't even have a lobbying presence in DC. This is not to say that we should not be alert. The way lobbying (i.e. corruption) is playing out in DC is a troubling trend. If things are left unchecked, there could come a time when, for example, instead of putting a competitor in jail (as in the article), companies would just get laws passed which kneecapped the competitor. We're not there yet (there might be exceptions), but we have to be vigilant.

arthurrr 14y ago
I think entrepreneurs are drawn to the US simply because it is the biggest economy. The corruption overhead is just a cost of doing business, you don't pay, your customers do, you just have to account for it when you create the pricing structure. I think Google is an exception, because it is a technology company. I would say the amount of corruption depends on the age of the industry and the vested interests, technology is so new it just isn't there yet. On the other hand, you have the financial industry and the big New York banks. The SEC is bought and paid for, they will never prosecute one of the big banks, and a judge will never rule against them either. One of the most interesting stories is Martin Armstrong (perhaps the only person in the world who actually understands how the global economy works imo) who was held in contempt of court in jail without trial for like 7 years because the government wanted to silence him. In the US you won't really see the corruption at the lower levels, but the higher up you go, the more corruption you will find. The corruption is hidden and more sophisticated. The real corruption occurs at the highest levels, behind the curtain. Governments are simply tools used by those who are really in power. It's more profitable to make your competitor (unknowingly) become your economic slave than it is to put them in jail.
- smsm42 14y ago
  As far as I can see, Armstrong was jailed not because government wanted to silence him (which would be futile anyway since there's ample ways to communicate from prison and many people do that) but because he refused to turn over some materials after being indicted (and later convicted) for financial fraud, which looks not entirely unlike what Madoff did. So it does not look like any government conspiracy theory is required. Of course, if you have data proving otherwise, it would be interesting to look at it. The courts in US regularly rule against big banks in various cases, so it is just plain wrong to claim judge will never rule against the bank. The SEC is more problematic, since high knowledge requirements for regulating banks and security industries leads very quickly to the situation when all SEC experts are industry people, and thus defend the industry interests. This is inevitable problem of state regulation - the only way to know what the industry does is to work there, and finding somebody that is both impartial and competent is next to impossible. Yet even SEC regularly issues rulings against banks. Of course, there's a lot of corruption is US, including the highest levels of government - so, former House Ways and Means Committee chair Charles Rangel was caught fraudulently evading taxes, getting huge donations from companies directly benefiting from rules he was promoting, taking lavish Caribbean trips paid by lobbyists, etc. He finally had to step down from the position and was censured by the Congress ethics committee, but still was reelected. So I think the problem here is the people that vote for corrupt officials as much as the corrupt officials themselves. If the people would refuse to vote for corruption, people like Rangel would not be able to persists in power for as long as they do now.

by ajays 14y ago

arthurrr 14y ago

I think entrepreneurs are drawn to the US simply because it is the biggest economy. The corruption overhead is just a cost of doing business, you don't pay, your customers do, you just have to account for it when you create the pricing structure. I think Google is an exception, because it is a technology company. I would say the amount of corruption depends on the age of the industry and the vested interests, technology is so new it just isn't there yet. On the other hand, you have the financial industry and the big New York banks. The SEC is bought and paid for, they will never prosecute one of the big banks, and a judge will never rule against them either. One of the most interesting stories is Martin Armstrong (perhaps the only person in the world who actually understands how the global economy works imo) who was held in contempt of court in jail without trial for like 7 years because the government wanted to silence him. In the US you won't really see the corruption at the lower levels, but the higher up you go, the more corruption you will find. The corruption is hidden and more sophisticated. The real corruption occurs at the highest levels, behind the curtain. Governments are simply tools used by those who are really in power. It's more profitable to make your competitor (unknowingly) become your economic slave than it is to put them in jail.

smsm42 14y ago
As far as I can see, Armstrong was jailed not because government wanted to silence him (which would be futile anyway since there's ample ways to communicate from prison and many people do that) but because he refused to turn over some materials after being indicted (and later convicted) for financial fraud, which looks not entirely unlike what Madoff did. So it does not look like any government conspiracy theory is required. Of course, if you have data proving otherwise, it would be interesting to look at it. The courts in US regularly rule against big banks in various cases, so it is just plain wrong to claim judge will never rule against the bank. The SEC is more problematic, since high knowledge requirements for regulating banks and security industries leads very quickly to the situation when all SEC experts are industry people, and thus defend the industry interests. This is inevitable problem of state regulation - the only way to know what the industry does is to work there, and finding somebody that is both impartial and competent is next to impossible. Yet even SEC regularly issues rulings against banks. Of course, there's a lot of corruption is US, including the highest levels of government - so, former House Ways and Means Committee chair Charles Rangel was caught fraudulently evading taxes, getting huge donations from companies directly benefiting from rules he was promoting, taking lavish Caribbean trips paid by lobbyists, etc. He finally had to step down from the position and was censured by the Congress ethics committee, but still was reelected. So I think the problem here is the people that vote for corrupt officials as much as the corrupt officials themselves. If the people would refuse to vote for corruption, people like Rangel would not be able to persists in power for as long as they do now.