What do German citizens, Michael Huckabee, and Credit Suisse shareholders have in common? They all have learned an important lesson this week about what causes capital to move around the world. It’s a lesson that Senators Obama and Clinton have yet to grasp.

On Monday, German authorities raided homes and offices in several cities searching for tax cheats who have stashed their income in neighboring countries to avoid the country’s hefty taxes. The investigation comes on the heels of last week’s resignation of a former CEO of Deutsche Post and chairman of Deutsche Telekom, Klaus Zumwinkel, who has been accused of hiding money in Lichtenstein to avoid taxes. News reports cast this case as involving dozens of high-level people and call it the worst tax scandal in Germany’s history.

Meanwhile, Mr. Huckabee, a former governor of Arkansas who I thought was still running for president, made a brief (and inexplicable) stopover in the Cayman Islands over the weekend to deliver an entirely nonpolitical speech to a fairly small crowd at the local Ritz-Carlton.

It was ironic, considering Mr. Huckabee has disparaged a former rival for the Republican presidential nomination, Mitt Romney, for investing in organizations registered in the Cayman Islands. Mr. Huckabee apparently emerged with a more enlightened view after hearing from local authorities about the country’s strict banking rules, which have recently won it the approval of the International Monetary Fund.

Last but not least, this week, shareholders of Credit Suisse found out that the sovereign wealth fund of Qatar had bought a stake in their company, apparently viewing today’s valuation of financial services companies as a bargain.

What is the connecting tissue here? As the world becomes more open to trade, it is also increasingly open to the exchange of capital. Just as manufacturing operations move around the world seeking lower labor or commodity costs, money flows from one country to another seeking higher returns, fewer regulations, and lower taxes.

I am frankly skeptical that Germans are shocked to discover that their wealthy compatriots are avoiding taxes. Germany imposes one of the most complex and onerous tax burdens in the world: Individuals pay a wage tax, an income tax, a “Church tax” of 8% to 9% — if you identify yourself as an official member of a German church (and who would?) — and 30 other taxes. The maximum individual rate at the margin is nearly 50%, which includes a “solidarity tax” of 5.5%, imposed to cover the costs of reunification. While the extent of the investigation, and presumably the cheating, may be unprecedented, Germans are not novices in trying to squirrel away money in some of their neighbors’ vaults.

Rather than dealing with the cause of this unproductive subversion of authority, governments of developed countries like Germany are shaming and badgering known tax havens into becoming more transparent. This effort may ultimately prove successful and, at the same time, unnecessary. Countries like the Cayman Islands have discovered that they do not need to operate outside the law but can prosper by offering institutions user-friendly regulations and tax policies.

The Cayman Islands are a British overseas territory that levies no income tax, no property tax, no capital gains tax, no inheritance tax, no corporation tax, and which imposes no controls on the foreign ownership of property. Government revenues come from business licensing fees and customs duties.

Is it any wonder that businesses flock to the Caymans’ shores? Some 45 of the world’s top 50 banks are registered in Grand Cayman; it is the largest offshore banking center in the world. It ranks second only to Bermuda in hosting captive insurance companies, and it is the leading worldwide location for hedge fund registration.

Happily, this high-end productivity has trickled down. The country boasts an English-speaking, racially mixed population that is 98% literate, with an 80-year life expectancy that is growing nicely.

The Cayman Islands are not alone in attracting capital. Thankfully, America is still viewed as an attractive and secure place to invest. However, the most visible inflow of funds today is from the sovereign wealth funds from oil-producing countries that are, in fact, simultaneously (if unintentionally) undermining American security.

There could be no better way to align interests than to welcome such investors as the $80 billion Qatar Investment Authority. This organization has made known its intention to invest up to $15 billion in American and European banks. Its recent purchase of a 1% to 2% holding in Credit Suisse is viewed as just a beginning, and for our stock market, it could not come at a better time.

As our candidates for president crank up the protectionist rhetoric, they appeal to those who fear the economic shifts brought about through globalization. This is a painful process, but it will be all but impossible unless we keep the scales balanced with an inflow of outside capital. Hiking taxes on investment returns or mandating onerous reporting requirements that discourage foreign investment in our companies would be the height of foolishness, and the height of arrogance. If we don’t welcome these investment funds, others surely will.

peek10021@aol.com