Tag: banks

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general freedom ideological culture international affairs

BBC Apologizes, Bankers Squirm

Nigel Farage, gangsters, banksters, censorship

Banksters. It rhymes with “gangsters.”

The pejorative for bankers came to mind as I was reading about the British Broadcasting System’s public correction of a story it had published. In covering Coutts bank’s closure of Nigel Farage’s account, back on July 4, the BBC had said that it was not political.

But Mr. Farage, the former leader of the United Kingdom’s Independence Party, “later obtained a Coutts report which indicated his political views were also considered.”

Like we all guessed. 

The lengthy document seen by Farage and then the BBC “included minutes from a meeting in November last year reviewing his account” in which he was called “xenophobic and racist” and characterized as not the kind of customer compatible with Coutts’ “position as an inclusive organisation.”

Britain, like the United States, is in the throes of a very political “culture war.” Farage was the main proponent for Brexit in 2016. The unexpected success of Britain’s plebiscite to secede from the European Union became part of the global populist rebellion that led to the election of Donald Trump here. 

And, like here, in Britain it has gotten nasty.

Farage’s beef with the BBC was easily resolved, as Farage accepted the BBC’s apology and its reporter’s excuse that a “trusted and senior” confidential source within Coutts had fed the news organization misinformation.

The bank in question considers itself very upright and moral, apparently. Hardly a “gangster” — that’s not in its mission statement! But by taking sides in politics (apparently solidly in the Remainer rather than Brexiteer camp), the bank is following a trend we’ve seen here, where big business balks at doing business with people it doesn’t like — ideologically.

This is a recipe for the breakdown of open markets … and civil strife far beyond what we’ve seen so far.

That’s not good for business.

This is Common Sense. I’m Paul Jacob.

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Higher Ed Jubilee?

Student loans, bailout, bail out, loans, jubilee, banks, subsidies

“Everything is beautiful in its own way,” goes Ray Stevens’s hit song of 1970. But still, pay your bills. 

That’s what I thought reading a Fox Business story on a recent poll in which 42 percent of Americans, a plurality, thought that “President Trump’s administration should forgive all federal student debt in order to help stimulate the economy.”

Roughly 37 percent disagree, at least. Twenty-​one percent were undecided. 

For starters, justifying a huge financial giveaway to some citizens at the expense of other citizens as a way to help “stimulate the economy”? A sad commentary on the state of civic discussion.

Of course, this particular voter survey may have been concocted as nothing more than some capitalist PR plot by MoneyTips​.com. Still, the numbers are believable, and with total student debt reaching $1.3 trillion — owed by some 44 million Americans — the subject is certain to come up again. 

Let’s not forget, Bernie Sanders declared it a sin against public policy that Americans were not provided a free university-​level education. I can hear his future oration, “We bailed out the banks for the one-​percent. We can bail out the students!” 

It should be a popular position on college campuses, cui bono and all.

“Drilling into the data, we found millennials (18 – 29) were especially passionate about student loan debt forgiveness, strongly agreeing with the idea nearly twice as much as those 50 and older,” confirmed MoneyTips co-​founder Michael Dubrow. “Even if older people are still paying off their loans, younger people paid more and borrowed more for higher education.”

This sounds like a good reason to cut current subsidies, not increase them.

No. More. Bailouts.

This is Common Sense. I’m Paul Jacob.

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Accountability crime and punishment moral hazard nannyism national politics & policies property rights too much government

What’s Being Forfeited

asset forfeiture, banks, banking, IRS,TIGTA, Bank Secrecy Act

What do you call those who prey upon the innocent, illegally snatching their money? 

Thieves? Muggers? The Mob? 

Government.

Last month, the Treasury Inspector General for Tax Administration (TIGTA) issued a report on the Internal Revenue Service’s use of civil asset forfeiture against Americans accused — well, not accused … more like suspected … well, not actually suspected of doing anything wrong, but willy-​nilly deemed guilty without charge, judge, jury or conviction — of “structuring.” That’s depositing less than $10,000 in cash into a bank to avoid all the paperwork demanded by the United States Congress at that amount.

Congress passed the Bank Secrecy Act, making structuring illegal, supposedly to trip up drug traffickers and money-​launderers. But that is obviously a ruse, as the TIGTA report makes abundantly clear. The IRS is simply snatching money — they won’t tell us how much — right out of individuals’ and businesses’ bank accounts. 

Pity the cash-​oriented business that doesn’t accumulate at least $10,000 to deposit.

The TIGTA report highlights that an incredible 91 percent of the time, the IRS acted “against individuals and businesses whose income was legally obtained,” and whom the IRS did not suspect of criminal activity. Also, through the IRS’s process of thievery “the rights of some individuals and businesses were compromised.”

Why is the IRS using the law to pilfer from the innocent, instead of the guilty? 

As I explained Sunday at Townhall​.com, it is easier and more profitable to make “quick hits” against innocent businesses rather than devious criminals.

When those responsible for protecting the innocent from criminals, instead, illegally twist the law to victimize the innocent, it’s called tyranny. And what is forfeited is much more valuable than mere money.

This is Common Sense. I’m Paul Jacob.

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Accountability free trade & free markets general freedom government transparency moral hazard national politics & policies

Banking on Clinton

Hillary Clinton, Wall Street, Bernie Sanders, corruption, crony, presidential race, two-faced, 2 faced, illustration, Common Sense

I’ve been tough on Bernie Sanders, the socialist Vermont Senator and Democratic Party presidential candidate. Why? Because socialism is — to quote a current GOP candidate — “a disaster.”

But I appreciate his campaign for showing former Secretary of State Hillary Clinton for what she is, the ultimate establishment insider.

Even while, as SNL parodied, she seeks to co-​opt Sanders’s progressivism.

Nowhere is Hillary’s have-​it-​both-​ways mode of operation more obvious than in regard to Big Finance. She attacks the big banks, promoting her “very aggressive plan to rein in Wall Street.” Yet, she is supported politically and has been enriched personally by Wall Street firms. In 2014 and 2015 alone, Mrs. Clinton was paid $11 million dollars for speeches to various groups, including these financial interests.

On the campaign trail, Bernie has been calling on Mrs. Clinton to release transcripts of her speeches to Wall Street firms:

She gets paid $225,000 for a speech. Now you know that is a lot of money for an hour speech.… It must be mind-​blowing speech, it must be a Shakespearean speech, it must be a speech that could educate and enlighten the entire world.

An anonymous attendee of Mrs. Clinton’s speeches to Goldman Sachs has characterized her remarks as “far from what she sounds like as a candidate now. She sounded more like a Goldman Sachs managing director.” Another said making the transcript public “would bury her against Sanders.”

Understandably, Hillary refuses … until every other living person who has ever spoken a word to anyone on Wall Street does so first.

At his rallies, Bernie now throws his empty hands up into the air to release his non-​existent speech transcripts.

This is Common Sense. I’m Paul Jacob.

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Hillary Clinton, Wall Street, Bernie Sanders, corruption, crony, presidential race, two-faced, 2 faced, illustration, Common Sense

 

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folly free trade & free markets insider corruption national politics & policies

A $13 Billion Reward

The Federal Reserve, our central bank, hit the news big last week.

Beginning in August 2007 and continuing for the next two and a half years, the Fed lent the world’s biggest banks something like $7.77 trillion dollars at the barely perceptible interest rate of 0.01 percent. With that money, the banks bought Treasury bonds (federal debt) and made $13 billion in profit.

I reported on this multi-​trillion-​dollar loan figure in December 2008, a few weeks after the biggest day ever of Fed bailout fever. For some reason this information didn’t become widespread or understood until this December, when Judge Andrew Napolitano and Jon Stewart made a big deal of it on their respective TV shows, after Bloomberg reported the profits banks made off all that bailout money.

What does this figure represent? To me, it represents the outrageous amount of magic money a sick and corrupt fiat-​dollar/​bailout-​based system of moral hazard requires when it implodes.

I think we can all justifiably roll our eyes, now, when some rah-​rah boy for big government tells us how absolutely necessary it is to have a central bank. The old gold standard never fell apart this badly. The gold requirement itself placed a huge check on out-​of-​control banking.

But a $13 billion reward for the biggest financial mess in world history? That’s the very opposite of a check or balance on risk-​taking, greed, or downright stupidity.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Small, Dull, Solvent

You didn’t have to be a small community bank to steer clear of the helter-​skelter investments favored by the likes of Bank of America and AIG. But apparently it helped.

New York Times reporter David Segal writes that spending time with solvent bankers in places like Indiana was like stepping into an “alternate universe,” a place “where everything sounds a little strange because it makes perfect sense.”

Weird that it’s strange, eh? Sensible should be normal.

Turns out, the secret is to be boring. Clay Ewing, a banker in Jasper, says, “If banking gets exciting, there is something wrong with it.” So, no maniacal juggling of hyper-​complicated subprime debt instruments just for the thrill of it.

Boring bankers also tell Segal: “If you don’t understand the risk you’re taking, don’t take it.” Also: “We want to be around for decades, so we’re not focused on the next quarter.”

Today, banks that abided by such common sense are solvent. And declining government bailout money.

Profligate bankers propelled by visions of infinite if inexplicable returns were not the only culprits in the housing bust. The Federal Reserve stoked the buildup of demented debt. As did many politicians.

But bankers who made bad decisions also deserve blame for surging blindly ahead. They could have done otherwise. They could have been, well, boring. 

This is Common Sense. I’m Paul Jacob.