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The Ronald McDonald Oligarch System

ronald022510.jpgWhen not dodging assassination attempts, journalist John Helmer writes about oligarchs, concessionary property rights, and the new U.S. interest in fighting state-linked International Organized Crime.  Here he sets out his theory of business in Russia:

Think of this as a process in which a grand concessionaire like Ronald McDonald awards the right to sell cheese burgers as long as the concessionaires he picks can meet their payment obligations. When they can’t, Ronald doesn’t shutter the shops, or replace their operators. Instead, Ronald takes a third to a half of the concession back into a personal trust; jacks up the cash payments; levies draconian interest payments and mortgage obligations; and congratulates his concessionaires on how lucky they are he isn’t throwing them into prison for fraud and tax evasion. In this Ronald McDonald world, the scheme converts income and dividend taxes into something else, because the effective interest rates charged on capital are hidden; and because the buy-back option camouflages who is really in control.

In places where usury is a form of organized crime, this type of Ronald McDonald concession is recognizable as a Shylock scheme.