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Incorporation Standards in Banking: A Race to the Bottom
April 10th, 2014
Sometimes—even usually—competition is a good thing. It lowers market prices; it sent a man to the moon; and it’s responsible for thousands of Olympic medals. In many cases, competitions–or races–are responsible for innovation, efficiency, and better performance. In these cases, an individual actor’s pursuit of victory leads to the betterment of society, a market, or a generation of athletes. However, sometimes competitions—or races—instead lead to worse outcomes for society. Often called a “race to the bottom,” these kinds of competitions include, for example, international degradations of environmental and labor standards. This kind of race also happens in...
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A Standard of Security
November 16th, 2011
Imagine for a moment that airline security were left up to individual states, rather than the federal government. It’s perhaps not too much of a stretch of the imagination to conclude that different states would adopt different levels of security. For example, some states might require their passengers to provide identification to ensure they aren’t terrorists and pass their bags through x-ray machines to ensure those passengers aren’t trying to load illicit materials onto the airplane. Other states, though, might think it’s advantageous to reduce their security requirements. They might argue that by reducing screening, they could trim down...
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Attracting the Wrong Kind of Crowd
September 30th, 2011
You probably already know that the Swiss Alps and tiny Caribbean islands aren’t the only places to hide illicit activities behind a veil of banking secrecy. Maybe you know that tax evaders and money launderers are increasingly looking to Asian centers like Hong Kong and Singapore to store their ill-gotten and government-evading dollars. Maybe you even know that some of the best places to hide your black money aren’t in the developing world or on a remote island. They’re in places like Delaware, London, and Nevada. In Delaware and Wyoming, for example, clients can anonymously set up shell corporations (companies...
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