Out to sea: yes, offshore banking is an outrage. No, it's not a metaphor for capitalism.

• Author: Frank, T.A.
• Position: Offshore: The Dark Side of the Global Economy - Book Review

Offshore: The Dark Side of the Global Economy By William Brittain-Catlin Farrar, Straus and Giroux, $25.00

If America needs a new enemy, the Cayman Islands might be a refreshing choice. They're dismayingly wealthy, temptingly close by, and, with a population of only 41,000, surely defeatable. Any post-war occupation and reconstruction phase would probably last under 24 hours, including swim breaks.

Luckily, we're also miffed at them. John Kerry singled them out during the 2004 campaign, complaining, "There are enough brass-plate companies down in Georgetown, the Cayman Islands, different places, to make anybody in America sick when they look at their own tax bill." Tax-sheltering aside, there's also a Caymanian coziness with companies that later go bust--according to one investigator looking into Enron, "We found 441 entities setup in the Cayman Islands," most of which were "inactive shells." Even the Islands' essential selling points--tax-free banking, adventurous financial instruments (of the not-legal-in-some-states variety), sweeping secrecy laws--seem to carry the whiff of, well, prison.

Then again, before we summon the destroyers, we should consider that there are worse offenders. Like Nauru. It's the world's smallest independent republic, an unlucky island occupying 8 square miles barely above the Pacific Ocean. When $70 billion disappeared out of Russian banks in 1998, they found their new home in Nauru. Not that anyone could really follow the trail: Nauruan law, at the time, required no recordkeeping for financial transactions (it has since been changed). The Cayman Islands look downright stuffy by comparison.

In other words, the problem is bigger than just the Cayman Islands. Today, over 60 nations currently offer some variation on the no-tax-no-tell banking formula, and, according to the International Monetary Fund, as much as $7 trillion in financial assets are now parked offshore. Secrecy laws in these shelters remain expansive, which means that questionable types can still find cover. As for the effect of such havens on the United States, it is estimated that they cost the Treasury at least $50 billion a year in tax revenue.

But how worried should we really be? Former BBC producer and corporate investigator William Brittain-Catlin offers one answer: very, very. His book Offshore: The Dark Side of the Global Economy takes us through the downfalls of Enron, Parmalat, the Bank of Credit and Commerce International, and any number...