The most pointed immediate reaction to the Panama Papers has been in Iceland, where about 1/14 of all the people in the country came out to protest what they saw as a conflict of interest in the prime minister’s offshore fund and its investments in Iceland’s failed banks. The size of the protest must have been some kind of record. The prime minister resigned and the country is headed toward a new election.
Discussion in the United States has been muted by comparison — spirited, perhaps, but indirect. The most consequential event here was a new tax rule designed to prevent some forms of offshore income-shifting in a corporate merger. Separately, one presidential candidate proposed a form of currency controls to shore up public finance, but looking at the details, it appears that the kind of rich and powerful people mentioned in the Panama Papers would be unaffected. Only one major presidential candidate has directly mentioned the Panama Papers. It seems that U.S. politicians are trying to create the appearance of responding without going so far as to address the substance of the issues raised.
If there have been a wide range of reactions, the reactions to the reactions have been equally varied. Looking at the United States, some commenters have said that U.S. officials are conspicuously absent from the Panama Papers. The U.S. government might have been behind the leak, a few have implied, and must have intervened to protect interests here. Others have focused on the large number of offshore companies registered in the United States, a recurring theme in the Panama Papers. Shadow-money investors seemed to prefer the states of Nevada, Delaware, and Wyoming. Taking this angle might imply that U.S. policymakers might look for ways to clean up their own laws and practices before focusing their criticisms on people elsewhere.
Panama Papers mentions have added fuel to the fire in Brazil, Argentina, FIFA, and the United Kingdom, but without leading to any obvious shifts in power. These are places and institutions in a state of perpetual scandal, and a few new details about the shadow money channels at work may actually serve as a welcome distraction from the previous details.
