Felt like I was too harsh in my rant last week #1453785 #1453638, so I'll share some nuggets from the end of the book.

Background: I already wrote up (too) many of my reflections going through this book… and it was a chore, honestly, the author saying outlandishly stupid things — and yet providing some quite interesting background — page up and page down.

As is made obvious throughout the book, bank and government compliance peeps are completely failing at preventing money laundering, “and the cost of their failure is being borne not by [compliance teams, police officers, criminals], but by the most vulnerable people in the world. I don’t care therefore how good their intentions are.” (p. 265)

Word. In the compliance world, "Appearances are everything, and substance is nothing." (p. 266)

…but somehow, the author – like many compliance officers deluding themselves that they’re doing good and important work – thinks the Sisyphean work of ticking boxes to prevent crime is worth it. (we gotta imagine Sisyphus happy, as Camus famously posited).

The Right to a Bank AccountThe Right to a Bank Account

OK, dubious:

“Banks have to pay for the checks on financial transactions that governments demand, and their customers end up losing accounts, [...] treating people as guilty until proved innocent can be used with impunity to tackle money laundering, because no one has a right to a bank account.” (p. 257)

= LEGALLY not correct – a bunch of countries employ legal-right-to-bank-accounts – and more importantly, quite disgusting. Plus, you can do precious few things in the modern, western, comfy-life world without running those payments through bank accounts, so just cutting poor/muslim/ex-criminals/Russians from the banking systems seems, uuuh, like a bad idea...?

Also, apparently, owning a company is not important:
"Owning a company is a privilege, not a right, and anonymity has nothing to do with it." (p. 274)

Proposals for fixing the problemProposals for fixing the problem

sum of Bullough’s pretty daft proposals (p. 283)

Pay the price, fuck the Swiss banks, ignore that "no one thinks money laundering is a significant enough issue to fall out over" (282)

What I keep coming back to on so many of these issues is that you can just do less, or try to remove the impetus for the obstacles in the first place. Drug war analogy is the most obvious: so much harm and power to criminal cartels comes from the drugs being illegal in the first place... legalize them (like we have weed in recent decades) and most of those problems go away.

Bullough spent a neat chapter outlining the VAT (= intra-EU sales tax, with insanely complicated netting/crediting between countries) carousel scams of the early 2000s, and then said:

“The sheer volume of paperwork and co-ordination involved in managing a crime this lucrative is hard to comprehend. MTIC is extraordinarily complicated, both in theory and practice, and I can’t help thinking that if its perpetrators had devoted themselves to, say, trying to solve global warming, it would probably be all taken care of by now.” (p. 252)

VAT system from the 1990s, still in place… “open invitation to industrial-scale fraud” (p. 254). Maybe just abolish it?

- oh no, it's ~15% of gov revenue

- ok, fine: either a) cut equivalent parts of government since it's mostly wasteful shite anyway, b) raise income taxes about equivalent to what the VAT implicitly was before: a 20% VAT is a reduction of the real value of your income by one-sixth (except that it hits non-income earners too: kids, unemployed, tourists) so raise income taxes a few percentage points if your precious government services are so important?

Set aside the mostly irrelevant topic of “global warming,” the point stands… entrepreneurial geniuses are devoted to pretty ridiculous, distortionary behavior – and then another nontrivial portion of the labor force working for banks or tax authorities trying to uphold compliance against said behavior.

Here's a novel take: just don't?

Reality has a well-known libertarian bias, I recall Bryan Caplan having quipped way back.Reality has a well-known libertarian bias, I recall Bryan Caplan having quipped way back.

Most obvious, well-known libertarian bias in action... Just stop making things illegal that shouldn't be!

If you criminalise things that don't need to be illegal or you exclude people from the financial system that don't need to be excluded, you are increasing the number of customers for the money laundering gangs, and thus the size and reach of the money laundering machine.

Precisely. So,

a) cancel all AML compliance

b) legalize all drugs

c) stop widely enforcing KYC rules, bring back anonymous/numbered accounts etc. (Or, that other Barack Obama quote about "Swiss bank accounts in their pockets")