Thursday, March 5, 2009

Todays Demonstration of Lack of Leadership Quality of Politicians

The current flurry of activities around bank secrecy helps to asses the quality, or the lack thereof, of politicians. What is the criterion?

Reading about Helmut Schmidt, the former German chancellor, I learned that he wrote 1961 a book with the title 'Defense or Retaliation', analyzing the current situation and drawing conclusion for actions based on a realistic assessment. I take this as just one example of what a politician should be: a leader, showing the way forward and opposing unrealistic positions.

Take the current economic “crisis”, which seems to produce the momentum to overcome the abuse of bank secrecy. The principle to protect the privacy of Swiss or Austrian citizens is fine, but its importance is mostly in helping people from other countries to to shift taxes from one country (high) to another country (lower), which is hardly fair to the citizens of the country where taxes are avoided.

Forward looking politicians in Switzerland, Austria and Luxembourg should have recognized the unfair advantage they gain from the protection of tax evasion and guided their banking industry to a economically more productive business. It was more profitable, in the short run, to benefit from it.

Observing how the ministers in Switzerland and Austria rally behind the defense of the undefendable 'banking secret' demonstrates their lack of leadership clearly.

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