The Wiring Is Being Stripped

Notes from a small roastery on the edge of a very large problem

Clear Lake Coffee Roasters · Clear Lake, Iowa · June 2026

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We roast coffee. We buy green beans from small cooperatives in Ethiopia, Guatemala, and Colombia. We pay fair prices, keep careful books, and sell to people who want to know where their coffee comes from. We are not economists, not political scientists, not journalists. We are a fifth-year small business in north-central Iowa, and we are writing this because we think the moment demands it — not from comfortable distance, but from exactly where we stand: in the middle of the American economy, watching the wiring get stripped out of the walls.

This is going to be a long cup of coffee. We hope you'll stay with us.

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r > g: The Formula That Explains Everything and Changes Nothing

In 2014, the French economist Thomas Piketty published Capital in the Twenty-First Century, a 700-page work that became, improbably, a global bestseller. Its central argument is expressed in three characters: r > g.

The rate of return on capital almost always exceeds the rate of economic growth over the long term, and when it does, the result is the concentration of wealth — and that unequal distribution of wealth causes social and economic instability.

It sounds dry. It isn't. What it means, spelled out plainly, is this: if you own capital — stocks, real estate, bonds, business assets — your wealth grows faster than the economy itself. If you earn wages, your share of the economy shrinks, year after year, generation after generation, as surely as compound interest works in reverse against you. The gap between those who own and those who work is not an accident of the market. It is not an accident but rather a feature of the contradictions of capitalism, and can only be reversed through state intervention.

Piketty's research shows that the average rate of return on capital has held at around 4% to 5% for most of human history, and that is the engine driving us toward a future that Piketty himself describes as incompatible with democracy. The World Inequality Lab, which Piketty co-directs, published its 2026 World Inequality Report with a stark finding: inequality persists at a very extreme level, and its latest edition includes, for the first time, systematic corrections for offshore wealth — because without accounting for what's hidden, even the most rigorous inequality data flatters the powerful.

That hidden wealth is where the story gets uncomfortable.

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The Papers: Panama, Paradise, and Pandora

Between 2016 and 2021, the International Consortium of Investigative Journalists published three landmark investigations that together constitute the most detailed forensic accounting of global financial secrecy ever assembled.

The Panama Papers came first. Eleven and a half million leaked documents — 2.6 terabytes of data — from the Panamanian law firm Mossack Fonseca, detailing more than 214,000 offshore entities. The Paradise Papers followed in 2017 with another major tranche from offshore service providers. And then, in 2021, came the Pandora Papers — larger than both: 11.9 million leaked documents with 2.9 terabytes of data, exposing the secret offshore accounts of 35 world leaders, including current and former presidents, prime ministers, and heads of state, as well as more than 100 business leaders, billionaires, and celebrities.

What sets the Pandora Papers apart is the leak's scale and scope. The data from 14 service providers gives an unprecedented insight into the offshore industry, showing once and for all that cases of tax evasion, money laundering, and other malfeasance exposed by previous investigations are not down to a few rogue operators, but are an essential part of how this secretive industry works.

The offshore system is, at this point, simply infrastructure. For decades, an army of lawyers, accountants, and advisers has helped corporations and the world's rich stash their money in low-tax jurisdictions with opaque disclosure laws. Estimates put the amount of money in offshore accounts in the trillions of dollars. Tax avoidance alone is estimated to cost the world's poorest countries $200 billion a year — far in excess of what they receive in development assistance.

And here is where the geography becomes inconvenient for American self-congratulation: trusts in several U.S. states — including South Dakota, Florida, Delaware, Texas, and Nevada — were sheltering at least $1 billion for offshore clients. South Dakota and more than a dozen U.S. states have become leaders in the business of selling financial secrecy — even as the U.S. blames smaller nations for enabling tax avoidance and dirty money flows.

We are not a tax haven in the Caribbean. We are a tax haven in the American heartland. The shell company sheltering someone's fortune is not necessarily in the Cayman Islands. It may be incorporated in Sioux Falls, twenty minutes from a family farm that just sold for a third of what it's worth because the operating costs crushed the owner.

The Panama Papers and the publication of once-secret corporate ownership information rocked governments and tax systems worldwide. Governments have since recouped hundreds of millions of dollars in back taxes and penalties — Spain $175 million, France over $208 million, Sweden $237 million. Notably, U.S. authorities never shared information on what, if anything, they recovered. The country that houses some of the world's largest secrecy jurisdictions has been conspicuously quiet on what was found inside them.

Whatever is still hidden will, in time, come out. It always does. The arc of leaked documents bends toward disclosure — and there are more leaks coming. There are always more leaks coming.

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The Frontier Problem: What $27 Trillion Does When There Is Nowhere Left to Go

Here is the tension at the heart of modern capitalism that Piketty identified and that the papers confirm: a vast accumulation of capital must generate returns. That is the only thing it knows how to do. At the scale we are now talking about — tens of trillions of dollars in private wealth, much of it offshore, untaxed, compounding — the demand for yield is structural and relentless.

The problem is the real economy. The real economy — the one where things are made, grown, and sold — cannot absorb that much capital at the returns it demands. A coffee roastery in Clear Lake, Iowa can employ a handful of people, buy good green coffee, and sell honest product. It cannot deliver 5% annually on a $50 billion fund. Neither can a bakery, a machine shop, a regional hospital, or a school.

So capital goes looking for frontiers. It always has — that is the history of colonialism, of the railroad boom, of the dot-com bubble, of the 2008 mortgage catastrophe. When there is no productive frontier left to extract from, capital manufactures one.

Look at what the last decade has produced. Cryptocurrency — the promise of a new financial system that has delivered, primarily, a mechanism for speculation and for moving money across borders outside the scrutiny of regulators. Prediction markets, now mainstream, which are simply gambling rebranded as "information." The explosion of sports betting, now legal in most states, which extracts money from working people at enormous efficiency and calls itself entertainment. Large language models proclaimed as a civilizational transformation — and perhaps some of them are, eventually — but packaged and deployed primarily as a product to be monetized at speed before the cycle moves on. The attention economy, which has converted human consciousness into an extractable resource.

None of this is evil by design. Much of it is the predictable result of surplus capital needing somewhere to go. When the return on productive investment is 3% and the return on speculation is 40%, the money goes to speculation. When wages stagnate and the economy offers nothing to the person without capital, they go to the lottery, to the casino, to the app that promises the cryptocurrency that will change everything.

The rot economy — a term that has emerged in recent years to describe the proliferation of zero-sum or negative-sum economic activity dressed in the language of innovation — has no creative use for surplus capital. It has only extractive use. And the superfluity is not only of capital. It is of people. When an economy is organized around the returns to capital rather than the productivity of labor, it generates, inevitably, a class of people for whom the system has no purpose.

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The Wiring

We come, finally, to the present.

America turns 250 years old this year. It is doing so as what international relations scholars are increasingly willing to name: a wounded hegemon. The dollar's share of global foreign exchange reserves has fallen to 57.4% — the lowest level since 1994, down from 66% in 2015. Between 2017 and mid-2025, gold's share of global reserves increased from 11% to 23%, with demand continuously rising while dollar demand shrinks. The South African and Chinese central banks have inaugurated direct renminbi settlement systems for African trade. The four pillars of American structural power — security, finance, knowledge, production — are all in varying stages of erosion.

When a hegemon becomes wounded and feels its dominance challenged, it becomes very dangerous and unpredictable. We are watching that dynamic play out in real time. The tariff regime, the dismantling of foreign aid infrastructure, the retreat from multilateral institutions, the hollowing of regulatory agencies — all of it is consistent with a power that has lost confidence in its ability to lead through legitimacy and is trying, desperately, to extract while it still can.

What is being stripped is not metaphorical. The institutions that made American dollar hegemony work — the credibility of the Federal Reserve, the reliability of the Treasury, the rule of law that made US courts and US contracts the global standard — these are the wiring. And wiring, once stripped, is very difficult to put back.

The corruption we are describing is not reducible to a single administration or a single party. It is structural, decades in the making, and it flows from exactly the dynamic Piketty identified: when capital accumulates faster than the economy grows, it inevitably captures the political institutions that are supposed to constrain it. The Panama Papers showed us global leaders hiding money offshore. The Pandora Papers showed us that this is not the behavior of outliers but of a system. The Paradise Papers showed us the corporations — household names — doing the same.

What happens in the United States, behind closed doors, in the spaces between public record and private arrangement, will come out. History suggests it always does — usually too late, always in fragments, never with full accountability. But it comes out. The question is what the country looks like when it does.

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What We Think About, Making Coffee

We think about these things while we roast. Not because we have answers, but because we believe small businesses have an obligation to be honest about the world they're operating in.

We buy green coffee from cooperatives that cannot afford to shelter income offshore. We pay sales tax, payroll tax, income tax. We compete in a marketplace that has been systematically tilted toward scale — where the giant can extract, the small must produce. We believe in production. In things made by people who show up, learn a skill, and take pride in it. In the kind of economy where a coffee roastery in Iowa can exist and matter.

That economy is possible. It has existed before, and it can exist again. But it requires, as Piketty argues, the political will to intervene — to tax capital, to enforce transparency, to close the secrecy jurisdictions, to fund the institutions that make legitimate commerce possible.

The wiring can be replaced. But not while someone is still stripping it.

America at 250 deserves better than to be handed to the 251st year with its infrastructure gutted and its institutions hollowed. Whatever is happening now, in the quiet rooms where power is exercised, will become public. The documents will leak. The relationships will be traced. The money will be followed.

We'll be here when it does. Making coffee. Keeping honest books. Hoping for a country worth roasting in.

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Clear Lake Coffee Roasters LLC · 15068 Hill St · Clear Lake, IA 50428 hello@clearlakecoffeeroasters.com · @clearlakecoffeeroasters

The views expressed in this post are our own. We are a coffee roastery, not a think tank. We cite what we can and speculate carefully. We encourage you to read the primary sources — the ICIJ's full reporting at icij.org, Piketty's work through the World Inequality Lab at wid.world, and to form your own conclusions.

 

 Six reasons for making Clear Lake Coffee Roasters - CLCR - your go-to coffee roaster:


☕️ We are a local family-run business located in the heart of Clear Lake, Iowa.

☕️ We go to great lengths to find only the finest and ethically sourced coffee around, from the top 2% of coffee beans in the world.

☕️ We only source 100% certified Arabica coffee beans, carefully hand-selecting each coffee based on specific quality and taste attributes.

☕️ Our roasting process has been refined over the years and each roast profile is individually designed to complement the nuances of the coffee we source, from Cup of Excellence (COE) award-winning producers.

☕️ By roasting in smaller batches, we can ensure our coffee is ALWAYS fresh, in fact, we roast your coffee only after you place an order - the same day your order ships out.

☕️ At CLCR, we are dedicated to a single mission: the unyielding pursuit of coffee perfection in every cup.

We would give you more reasons, but rather than reading it's better if you visit our website, purchase a bag or two, and experience a unique caffeinated or half-caff journey for yourself 😊!
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