The Fate of U.S. Banks Is Our Fate

One wonders what politicians and current government-oriented economists think banks are. Ask them to define the concept, banks, and what could come out? Ask them what function they perform in the economy, the private economy, and what would they say? Then, there could be a difference between what they said and what they thought to themselves.

I expect that politicians and the Fed sees them as big piles of money, you know, something like bank robbers view them. Piles of money to loot or to use as influence for their political gain. They don’t view banks as having a particular identity that is necessary for the economy because they believe that they can force the banks into any shape they want and nothing particularly important will happen. Banks are toys, to be played with. Or, banks are whipping boys and every stroke makes the politician look good to the electorate, you know, the mob. The mob hates banks, and has for centuries.

It is my understanding that for a while, primarily in the 19C, some bankers in the U.S. were respected by many people. The name that comes to mind is J.P. Morgan, and his family. Today there is only an echo of that respect left. A PBS program I saw recently ascribed to Morgan a through going desire for power (undefined). That is bad for a banker apparently (but good for Obama).

Before the residential real estate mortgage crisis, banks were very heavily regulated and influenced. Now, the level of government control has gone up dramatically in the Western World. The worst step is Dodds-Frank. Even there I think that few of us, including myself, have but a superficial understanding of how destructive that law will be. It is probably the equivalent of what ObamaCare is for medicine.

But banks are vital for our economy, for an advanced, industrial, integrated economy. Finance, credit, routing of capital, are vital functions in our economy and banks are the number one tool used in those markets. There are a few others, e.g., venture capital funds, hedge funds perhaps, but they are small potatoes compared to the size and range of activities that are banks. To cripple our banks is to cripple our economy.

For the purpose of saving our economy and avoiding disaster, healthy banking is far more important than the size of government spending.

Again, as we have learned from Ayn Rand, and as I have said before on this blog, our first priority for our survival as individuals is freedom, which is the removal of controls and regulations.

Overspending, i.e., the creation of government debt, can kill us, yes. But the only way we win out and survive as men is through freedom. Learn about what is happening. Attack regulation.