What Would Actually Happen If All Debt Was Erased?


TheEventChronicle

 

The Invention of Debt

What you may not know is that debt arose recently on the human stage. Throughout more than 99% of our history we have not even had a concept for debt. (The interested reader can pick up David Graeber’s excellent book Debt: The First 5000 Years for full story.)

Anthropological studies of hunter-gatherer societies reveal that there were no barter systems, no currencies to use for money, and — in the absence of these cultural artifacts — there was no debt. With all the great variation cross cultures one might expect from ethnographic research, the anthropologists found that some tribal communities engaged in “gift economies” where status arises from how generous a person is who has acquired wealth, while others have remained egalitarian and non-hierarchical for thousands of years by sharing their food and materials based on the principles of “from each as they are able, to each as they need.”

This belies the great misunderstanding about communism that treats it as a state-centric governing system, when in truth it is the foundational sentiment of any community that builds upon the trust and good will of social relations between people who know and depend upon one another — a condition that has held for all hunter-gatherer societies throughout our long 200,000 year history as a species.

Pick up an economics textbook at random and you will find a classic (and false) “just so” story about the need for barter systems to have money. They all go something like this: Steve has potatoes and needs some shoes. Bob has shoes but does not need any potatoes. They are unable to directly exchange goods due to this mismatch of need, and so must introduce a money system to preserve the value of currency across multiple exchanges that enable Steve to sell his potatoes to Sue and acquire money that he can then use to pay Bob for a pair of shoes. What this simple narrative conceals is the broad evidence from ancient cultures studied by anthropologists that no such problem arises in this way.

What really happens is that a warring society has arisen somewhere (to get a sense of how this happens, read my article about psychopaths and agrarian city states) and is in a mode of conquest. When this burgeoning empire conquers new land, the ruler imposes a system of taxation on the local populace to pay for the costs of war. This imposition of scarcity, by extracting resources from the local population to be hoarded by the warrior chieftain, is what leads to the emergence of barter systems and — in some instances — the introduction of a money system by the ruler.

In the absence of war and conquest, hunter-gatherer societies do not spontaneously create barter systems. Instead they share more or less equally within their tribe and only trade with other tribes through highly ritualized and often conflict-ridden exchanges that take place when two tribes come together for a brief interaction. The pathway that does lead to the emergence of barter systems takes place in agrarian societies where some kind of accounting system has been created to track debts. And from these accounting systems we do find that debt is present.

So where does debt come from if it isn’t naturally a part of human societies? Again it is the imposition of scarcity by the ruling class — designed to extract and hoard wealth in the hands of a powerful elite — that creates the notion of debt. Does this sound familiar in today’s context? Many countries were “modernized” throughout the 20th Century by introducing market systems that structure debt into the economies of newly founded nations. These nations now must pay tributes — in the form of interest payments — to external banks that extract wealth from the poor countries and hoard it in the coffers of wealthy countries.

Stated plainly, debt is created when a powerful group of people impose scarcity upon another group of people who have been conquered. This is the root cause of poverty. It is the destabilizing force of unequal societies that breeds civil unrest and revolution. Thus the need for Hebrew kings to introduce Jubilee. They knew that a revolution might cause the people to rise up and clear their own debts, while also uprooting the monarchy from power. In order to preserve their power base, they would routinely erase the debt and start again.

A Note About Debt and Moral Accounting

The astute reader may already be asking, “What does this story about the creation of debt say about the religious use of moral accounting?” You may have noticed that all the world religions have at their core a transactional relationship between God and humans — where each person owes a debt to their creator and must pay it either by relinquishing sin from their lives or by returning to their maker upon death.

This economic transaction frame for moral accounting is not present in all human societies. Those hunter-gatherer tribes practicing the ethic of distribution based on need have no concept for trading an eye-for-an-eye. Nor do they see a gift as something to be repaid, expressing disgust at the insult of treating their generosity in such a transactional manner.

Instead what anthropologists have found is that debt-based morality is only present in societies that already have accounting systems and also engage routinely in barter and monetary exchange. In other words, this moral accounting system is a product of war and conquest and not a natural part of human society. So the next time you feel a debt to one of your friends, society, or your maker it may help to keep this in mind.

What Would It Mean to Erase All Debt?

We are living in a time when too many of our financial resources are allocated to non-productive activities — principally the accumulation of wealth by “making money with money” and a myopic focus on economic activities that service our massive debts. This is why people work at jobs they hate. It is why investments are not being made in renewable energy, public education, the arts, health care, or the eradication of poverty. We have built a massive financial house of cards on debt — with money itself coming into being when loans are taken out, a pool that grows exponentially due to the interest that accompanies it — and so we are not able to bring consumer culture to an end or focus our creative talents on planetary sustainability.

By the way, this is exactly what my friends at /The Rules are trying to address in their global mobilization effort.

So if we were to erase all debt, the 7 billion people alive today could focus on their passions. We could all come together to address global threats — be they resource-based like the scarcity of fresh water or peaking of global oil production; or cultural like the loss of spiritual meaning in the secularization of society or the soullessness of employment drudgery that comes from working long hours at a mind-numbing job.

What comes to my mind is the way cities try to implement broad solutions to address economic development, transportation, resource management, social justice, and environmental concerns. They must operate within constrained budgets that keep draining further without a clear end in sight. I imagine what would be possible if everyone was able to set out on their own intellectual and experiential journeys without the fear of a debt-collector coming to their door. How then would the peoples of this world choose to live out their lives?

Perhaps you have your own dreams of a better world for you and your loved ones. What comes to mind for you? This is not merely an academic question, by the way, because we each participate in the social realities that are lent our beliefs, our actions, and our obligations. If we were to collectively decide that our debts are no more, they would cease to exist.

This is because what we take to be real in many respects becomes so as a self-fulfilling prophesy. We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance. In this way, the Gross Domestic Product was claimed as an economic alter for measuring the progress of civilization in the 20th Century. Perhaps in the 21st we will replace it with Gross National Happiness or some other novel metric for capturing the essence of our values and purpose as a civilization on this Earth.

Watch the video below:


Joe Brewer is co-founder and research director of Culture2 Inc., a culture design lab for social good. He is a former fellow of the Rockridge Institute, a think tank founded by George Lakoff to analyze political discourse for the progressive movement.

Source: Common Dreams
Via: Conscious Life News

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The Fake News About Central Banking


TheDailyBell

Trump Shouldn’t Bully the Fed … U.S. President-elect Donald Trump repeatedly criticized Federal Reserve Chair Janet Yellen during his campaign. British Prime Minister Theresa May has questioned the Bank of England’s recent actions, for a while putting Governor Mark Carney’s tenure in doubt. The long-cherished principle of central-bank independence seems to be under attack.  – Bloomberg

The mainstream media is up in arms over “fake news” but the reality is that almost everything the mainstream reports is in a sense fake. Global warming is fake. Vaccines do not work as advertised. Central banking is fake too.

On and on. Truth has been overtaken by propaganda. We call these fake notions “dominant social themes.” They are inevitably intended to reinforce the idea that a very few must have control over the many.

Central banks fix the volume and value of “money” – and price fixing inevitably creates disasters. But you will never find this simple fact stated in almost any mainstream media article about central banking.

This Bloomberg article is no exception. Seldom do we see all the fallacious reasons for a central bank gathered together in one short editorial, but Bloomberg has done us this favor.

In this case, Bloomberg is trying to justify why central banks should be “independent.”

More:

 The standard case for leaving central banks alone to conduct monetary policy rests on three points.

First, a government that controls the central bank might be tempted to finance unaffordable budget deficits by printing money. (See Zimbabwe.) Second, to provide economic stability, a steady hand on the monetary controls is required, which demands some insulation from day-to-day politics. (Would anybody want to put Congress in charge of interest rates?) Third, monetary policy done right is a technical thing, like running a utility. It’s basically apolitical.

All three of these points are fallacious. First, central banks, independent or not, over-print money on a regular basis. Western central banks have a goal of creating price inflation, which institutionalizes this overprinting, usually via too-low interest rates.

Second, the idea that an independent central bank can provide “a steady hand on monetary controls” is laughable. Central banks the world over are cartelized via the Bank for International Settlements in Switzerland. Central bank policy is created via a secret monopoly and anyone looking over the past 20 years of central bank existence can easily see that the current “steady hand” has yielded up a series of global monetary disasters.

Even Bloomberg has trouble with the third reason being cited, that central banking is “apolitical.”

The editorial admits that “Changes in interest rates hurt some and help others,” and thus central bank policy-making is innately political. But because it is political, the predictable argument is made by Bloomberg that central banking ought to be “independent.”

Bloomberg states, “Disagreement is OK. Intimidation is not.”

The argument here is that statements by Donald Trump regarding the endless and ruinous low-rate regime of the Federal Reserve are “worrying” because Trump is bullying the Fed rather than criticizing it.

The larger argument, and it’s one that Trump is surely familiar with, is that central banking cannot be justified at any level. As soon as individuals or groups attempt to manipulate the money supply, prosperity is inevitably affected and wealth is endlessly consolidated.

This is just what’s happened around the world and especially in the West. Wealth has been gathered into fewer hands and the financial industry itself has grown without stopping until it has virtually taken over the larger economy.

Conclusion: Money needs to be regulated by markets, not by a handful of individuals. There is plenty of free-market economic theory that illustrates logically why this should be so. Bloomberg’s argument is wrong, but at a more fundamental level, Bloomberg is addressing the wrong issue. The problem with central banking is not whether it should be independent, but whether it should exist at all.

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Russia Issues Full-Scale War Alert As West Faces Financial Armageddon


whatdoesitmean

By: Sorcha Faal, and as reported to her Western Subscribers

A new Ministry of Defense (MoD) report circulating in the Kremlin today states that the first squadrons of Sukhoi Su-24, Sukhoi Su-34 and Sukhoi Su-25 ground support fighter aircraft ordered to Syria by President Putin to take part in the freeing of Aleppo from Obama regime backed Islamic terrorists have begun to arrive in the Levant War Zone at the same time that the Ministery of Foreign Affairs (MoFA) is warning that “full-scale war may be imminent” and as the West “is nearing financial Armageddon”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

According to this report, President Putin’s ordering these fighter aircraft to support the freeing of Aleppo from the grip of “Obama’s terrorists” is in “direct retaliation” to these “modern day barbarians” ceaseless attacks upon the innocent civilians of this city—and that the US shockingly this week stated they were preparing for nuclear war with Russia in order to let this “senseless slaughter of innocents” continue.

To how grave the situation in Aleppo has become, this report continues, Syrian supreme commander Major-General Zaid Saleh outlined this week by stating: “The terrorist groups are using civilians as human shields to prevent the Army from targeting them. They heavily depend on US and Turkey to supply them with weapons. But we won’t allow this to happen”.

With Syrian troops, under the protective cover of Russian aircraft, now penetrating more deeply into Aleppo against “Obama’s terrorists, this report notes, this proxy war where the Gulf States, the US and until recently, Turkey have poured billions-of-dollars and hundreds of tons of equipment into while using tens-of-thousands of foreign fighters to kill hundreds-of-thousands is nearing its end.

 

As all hope is now lost for the Obama regime to protect its Islamic terrorists, this report says, the Americans and its allies have gone into “hyperbolic mode” accusing Russia of “savagery” and are not only threatening to “send Russian’s home in body bags”, they are, also, now saying that they are going to give these terrorists portable ground to air missiles—which if happens, most assuredly, will soon after be used to shoot down planes over Europe and the United States.

Particularly angering the Obama regime about Russia’s impending total victory in Syria over these Islamic terrorists, this report explains, is President Putin’s playing by what the American’s call the “Grozny Rules”—which is a reference to Russia’s total war against Chechen Islamic terrorists where the entire city of Grozny was destroyed in order to eliminate these terrorists forever.

Angering the Obama regime even worse, this report continues, is their “losing the information war” over this conflict to Russia—but that Federation experts more rightly state is people simply knowing what the truth is, and who have bluntly stated about Western media hypocrisy:

The Western media have become so embedded in the ideological matrix of the ruling Western class that they no longer know what the meaning or purpose of genuine journalism is. Just this week, American forces and their various allies killed civilians in Syria, Afghanistan and Yemen. Bloodied children’s bodies were pulled like lifeless rag dolls from rubble in Yemen after US-supported Saudi air strikes continued their week-after-week slaughter of civilians there. No coverage of these crimes in Western media. No emotive denunciations from UN officials. No calls for sanctions, prosecutions or editorial condemnations of Washington and its allies as “outlaw states”.

 

With Russia, however, knowing what an “outlaw state” looks like, this report says, the Ministry of Affairs this morning bluntly told the Obama regime about their continued support of Islamic terrorists by warning that unless stopped it will result in a full-scale war that will lead to “tectonic shifts” in the whole region—if not the entire world.

With Brexit clearly showing these Western elites the limitations of their continuous fear-based campaigns against all who oppose them, MoD experts in this report point out, they still fail to see that the credibility of their “third-way politics” as championed by Bill Clinton, Tony Blair and other communist-like leftists ruling Europe and America, has been completely savaged by the very people they rule over—but who are now prepared to start World War II in their last gasp bid to continue their monstrous rule.

But to the latest tragedy to befall these Western peoples at the hands of their elite rulers, this report warns, is the financial Armageddon they are soon to face as one of their largest banks, Deutsche Bank, is nearing complete collapse due to its over $42 trillion in derivatives (bets) and whose failure will take down nearly every bank in the United States and Europe with it.

 

With German Chancellor Merkel already stating that her government will not bail out Deutsche Bank (as it would be political suicide to do so), this report continues, these German bankers are now rushing to the United States in hopes that the Obama regime will.

Grimly too, this report points out, is that aside from Deutsche Bank nearing collapse, according to the global banking body The Bank for International Settlements (BIS), both Canada and China are nearing a total banking collapse too.

This report concludes by noting that among the least prepared people in the world for total war and economic collapse are the Americans—who like in 2007 when they failed to heed the warnings that their entire economy was about to collapse (and we, likewise, reported on in our 28 June 2007 report US Banking Collapse ‘Imminent’ Warns French Banking Giant) and who are, once again, are listening to their propaganda media, instead of hearing the truth, while their life savings, pensions and stock holdings are about to disappear into the hands of their elite rulers—just like the last time.

 

Other reports in this series include:

“Level B” Russian Ministries Ordered To Bunkers After US Threat To Cut Off Diplomacy

Putin Convenes “Holy Council Of War” As Obama Regime Threats Intensify

Russia Collapses Entire US Intelligence System Using Microsoft, Facebook And Google

Russia Moves ICBM’s To EU Border After Recording Confirms Pentagon Coordinated ISIS Attack

World On Brink After Obama Activates Missile Shield, Prepares Weapons For Space

Top Russian Ministries Flee To Bunkers As “Hillary Clinton War” Warned May Be Unstoppable


October 2, 2016 © EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

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Will #Deutsche’s Problem Ever End?


BANG! More Bad News For Deutsche and Friends as the Take Down Intensifies
Finance

There should be no doubt in anyone’s mind that the Official Take Down of the Global Monetary System has kicked into OVERDRIVE!!

Even the government and regulators are doing their part to destroy the system!!

Deutsche Bank, Paschi, Numora Staff Charged Over False Accounts
http://www.bloomberg.com/news/articles/2016-10-01/deutsche-bank-paschi-nomura-staff-charged-over-false-accounts-itr5z2ku

“Six current and former managers of Deutsche Bank AG — including Michele Faissola, Michele Foresti and Ivor Dunbar — along with two former executives at Nomura Holdings Inc. and five at Banca Monte dei Paschi di Siena SpA were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank and manipulate the market.”


The charges deal another blow to Deutsche Bank, which is seeking to reassure investors and clients that it will be able to withstand pending U.S. penalties over the bank’s sale of mortgage-backed securities and its dealings with some Russian clients. Monte Paschi, the world’s oldest bank, restated its accounts and has been forced to tap investors twice to replenish capital amid a surge in bad loans and losses on derivatives. It’s now attempting to convince investors to buy billions of soured debt before a fresh stock sale. – Bloomberg


END

This couldn’t happen at a WORSE time for the world’s largest derivative holder.

And there will be more “bad news” soon.

PS – At this end of this Road is a Silver Moonshot that will be for the record books!!

May the Road you choose be the Right Road.

Bix Weir
http://www.RoadtoRoota.com

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EU Banking Mayhem: One Bank at a Time – Then All at Once


 

by Wolf Richter

Investors are not amused.

The European banking crisis simply doesn’t let up. Currently, the big two German banks are grabbing the headlines away from the Italian banks, due to their size and the damage they could do to the global financial system. Other banks are in bigger trouble still, and some have already collapsed, with bailouts and bail-ins getting lined up.

Deutsche Bank had to endure a horrendous Monday after it was leaked on Friday that Merkel had refused to entertain bailing out the bank before the general elections a year from now. Merkel’s popularity has gotten broadsided recently, and bailing out bank bondholders with taxpayer money is just not popular at the moment.

Then Commerzbank, in which the government already owns a stake of 16% as a result of the bailout during the Financial Crisis, graced the headlines with leaks that it would lay off 9,000 employees, nearly one-fifth of its workforce. This will cost about €1 billion, according to the sources. To pay for it, the bank will scrap its dividend for 2016 to reduce the bleeding and preserve capital, in what is turning out to be the hellish environment of negative interest rates.

We’ve been writing about the European banking crisis for a long time, it seems, as it drags on, and meanders from one country to another, and sometimes we write about it in an amused fashion because we’ve got to keep our sense of humor in all this gloom.

But investors who believed in all the hype and in Draghi’s promises and in Merkel’s strength and in the willingness of all of them to do whatever it takes to protect bank bondholders and stockholders, and who believed in the miracle of Spain’s recovery, and in Italy’s new government and what not – well, they’re not amused.

For them, it has been bloody. The global financial crisis got swept under the rug. Then the euro debt crisis took down some banks at the periphery, and taxpayers stepped in to bail out the bondholders, mostly, and a lot more things got swept under the rug. But the problems weren’t solved. And as the decomposing assets under the rug kept exuding their pungent odor, investors held their nose and played along for a while.

But now it’s just getting worse. And investors are wondering what exactly is under these rugs – or maybe they’d rather not know for it’s too ugly to behold. And every time someone does look, for example at the Italian banks, they find even bigger problems that have started to metastasize.

This banking crisis has the potential to transmogrify into a financial crisis. All it takes is for one of the big ones to suddenly topple. The flow of credit would freeze up instantly. In an economic system that depends on credit, and whose lifeblood is credit, such an event is a financial crisis.

The problem isn’t restricted to a couple of Italian or German banks. It’s deep and wide.

Here are the 29 banks in the ESTX Banks Index of Eurozone banks (so Swiss and UK banks, for example are not included). It shows the percentage drop from their 52-week high. But for some of these banks, particularly for Italian and Portuguese banks, that 52-week high was just about last year’s 52-week low, so relentless has their decline been over the years. Some of them had already been reduced to penny stocks years ago, and for them, in euro terms, the biggest losses occurred back then. So these mayhem banks, color coded by country:

eurozone-bank-estx_from-52-week-high

If a bank stock plunges from €0.04 to €0.01 over the 52-week period, such as Banco Comercial Português in Portugal, it has been toast for longer than 52 weeks, and the percentage plunge is essentially meaningless because shares were worthless to begin with.

The shares of five of these banks trade under €1. Another 8 banks trade under €3. These 29 banks form a big part of the European financial system. It includes some of the world’s largest banks, such as Deutsche Bank, Societe Generale, and BNP Paribas. It includes a slew of other “systemically important financial institutions,” such as Unicredit, ING, and Santander.

They’re troubled at the same time. The can has been kicked down the road for years. Now negative interest rates appear to have inadvertently crushed the can.

So when will Merkel buckle? Read…  Deutsche Bank in Free Fall. Shares, CoCo Bonds Plunge. Merkel Gives Cold Shoulder on Bailout. Bank Denies Everything

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Elizabeth Warren – a devoted tool for the civic religion that is statism


FEE

Elizabeth Warren’s Selective Outrage

Joey Clark

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I made the mistake of checking my newsfeed only to witness that paragon of Potemkin progress, Elizabeth Warren, indignantly shaming the CEO of Wells Fargo over the bank’s recent cross-selling scandal.

Say what you will about the senior Senator from Massachusetts, love her or hate her, but waking up to an Elizabeth Warren harangue is about as pleasant as a throbbing hangover without the consolation of a previous night’s revelry.

Despite having the moral high ground (Wells Fargo did, indeed, defraud their customers), Senator Warren’s presentation came across as effective yet priggish. This is the Elizabeth Warren many progressives have come to know and love. When one progressive writer recently described Warren (and I believe with loving intentions) as a “moral drill bit,” he wasn’t far off from describing her as a useful tool.

A Veritable Swiss Army Knife

I happily welcome this metaphor. Warren is, indeed, a tool – a passionate tool for the populist left, an unwitting tool for government cronyism, a conscious tool of Hillary Clinton, and a devoted tool for the civic religion that is statism.

Though Warren may “speak truth to power” to Wall Street, she often turns mute on some of the worst abuses of government. Like most statists, she sees the speck in her brother’s private eye while failing to see the beam in her own public eye. A whole manner of sins, it seems, are forgiven once one is “serving the public” in government.

Yet, the crucial distinction between government and business is not private vs. public. After all, business often serves the public while government often serves private interests. The crucial difference between government and the so-called private sector is impunity – the ability to assault, kill, and defraud without consequence. The more government and business become intermingled, the more the law becomes a tool of privilege for private and public players alike rather than a defensive measure for the equal liberty and dignity of all.

Elizabeth Warren and those of her ilk seem to think the remedy to crony capitalism is to further empower the very source of such abuses in the first place – state power. When they express righteous indignation in the face Wall Street executives’ impunity but turn a blind eye to the state’s own, it is nothing more than hypocrisy.


Given their incessant prattling and absurd demands, we might as well start calling the whole damn Congress the “Knights Who Say Ni!”


Impunity is impunity is impunity, yet sadly there are plenty of hypocrites on Capitol Hill who damn private actors for actions that are par for the course, or even encouraged, in the public arena. However, among this recent bunch of public servants, Elizabeth Warren takes the cake. Her presentations are not only hypocritical and sanctimonious but boldly so.

As warranted as Senator Warren’s dressing down of Wells Fargo’s CEO was, let us consider this “moral drill bit” in terms of both her style and substance.

Warren’s “Progressive” Political Stylings

Warren always seems one monosyllabic utterance away from sounding exactly like a Michael Palin character in a famous Monty Python film. Almost without fail, after asking the Wells Fargo CEO each of her questions, Warren allowed little to no time for answers. No, her committee time would be used for a hectoring lecture come hell or high water. The folks back home expect nothing less, and to be fair, such an approach is not unique to Elizabeth Warren.

Leading questions and political grandstanding are a mainstay at congressional hearings no matter the party affiliation of the inquisitor. Given their incessant prattling and absurd demands, we might as well start calling the whole damn Congress the “Knights Who Say Ni!” If only we could get them to shut-up by simply saying “it.”

That said, Elizabeth Warren has largely proven herself first among equals when it comes to displays of high dudgeon. She needles the Wall Street elite like no one else, and her star has risen accordingly among progressive populists. The more she pooh-poohs the rising stock prices of corrupt bankers, the higher her own political stock rises.

One may say Elizabeth Warren is the left’s version of Donald Trump more than Bernie Sanders ever was. She is notoriously gifted at marshaling invective, outrage, suspicion, and resentment against not only corrupt bankers but a whole class of people – entrepreneurs – who, according to Warren, somehow become rich and successful en masse by not cooperating with others or serving the needs of society.

No, in Warren’s mind, the only way to “pay it forward” to society is to serve the state:

“There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
This consistent schtick has now earned Warren a spot in the progressive political big leagues. According to Benjamin Wallace-Wells in his piece for The New Yorker (the same piece that “lovingly” compared her to a tool,) Elizabeth Warren has been tapped as the “Democratic Party’s insult comic” for her effective belittling of Trump.

This consistent schtick has now earned Warren a spot in the progressive political big leagues. According to Benjamin Wallace-Wells in his piece for The New Yorker (the same piece that “lovingly” compared her to a tool,) Elizabeth Warren has been tapped as the “Democratic Party’s insult comic” for her effective belittling of Trump.

Yet, Warren must be careful of hypocrisy by her own progressive standards. By taking on Trump, she is coming to the aid of Hillary Clinton who is much too cozy with Wall Street for most progressives’ liking. In fact, as Warren was lambasting Wells Fargo’s CEO, she forgot to mention the ties of her chosen presidential candidate to the very same bank:

Wells Fargo, both the bank and its foundation, have given generously to the Clinton Foundation over the years. The bank has given between $10,001 and $25,000, and the foundation has given between $100,001 To $250,000. In 2011, former President Bill Clinton gave a speech to Wells Fargo for $200,000.

Of course, one may forgive Elizabeth Warren for doing the best she can to choose the lesser of two evils in the corrupt world of presidential politics, but even forgetting this shallow game of guilt by association with the Clintons, Warren’s hypocrisy still stands based on her own flawed political theory.

Impunity for Me and Not for Thee

So, why was Elizabeth Warren so upset at Wells Fargo anyway?

Bloomberg reports:

“The lender opened more than 2 million accounts that consumers may not have known about, the Consumer Financial Protection Bureau said in a statement Thursday. Wells Fargo, which fired 5,300 employees over the improper sales practices, agreed to pay a record $100 million fine to the CFPB, $35 million to the Office of the Comptroller of the Currency and $50 million to the Los Angeles city attorney to settle the matter. The San Francisco-based bank also will compensate customers who incurred fees or charges, the agencies said.”

So let me get this straight: a major bank took out accounts in people’s name without their consent and started charging them fees. Many Wells Fargo’s customers not only lost money in the short-term. Unwitting customers who had a line of credit taken out in their name without their consent could potentially have their credit ratings downgraded with long-run consequences. When these aggrieved customers tried to sue for damages, the bank claimed it was immune from punishment given certain contract stipulations.

I agree with Elizabeth Warren that this is deplorable behavior. I agree with her that this is an institutional problem rather than just a few thousand rogue employees. The incentives given by bank leadership clearly influenced bad behavior by the bank’s lower-level agents. I agree justice must be done.

Fraud and Force? Look at Government

Elementary justice would call for Wells Fargo to make the customers they defrauded whole, a refund plus damages. Yet, under the state’s theory of justice, not only must the bank pay back those who have been done wrong, they must also pay the state. Whereas the wronged customers of Wells Fargo will receive a few million dollar pittance in total, the state will receive hundreds of millions of dollars in fines. That sniffs of more than simple justice. That smells more like a protection racket.

Again, it is immoral and criminal when any one person or institution without explicit consent takes the life, liberty, or property of anyone else, and Wells Fargo appears to have committed fraud.

Yet, how can Elizabeth Warren and her ilk be so outraged by this bank’s actions, yet so sentimental about the government’s own modus operandi of force, fraud, and impunity? Why so sad in the face of Wells Fargo’s fraudulent contracts yet so enthusiastic for the social contract?

As deplorable as Wells Fargo’s behavior was in this situation, their actions pale in comparison to what the state does every day legally.

I Never Consented to the Social Contract

Just think of what the government does every day. The government looks at people living in its geographic monopoly (its customers) and presumes their consent, but I personally have never given my consent (and never would) for most of what the government does.

Though I have never consented to programs such as Social Security and Medicare (programs passed decades before my birth), the government persists in charging me fees for their administration. Though I have never consented to the War on Drugs, the government continues to take my money through threat of force only to then turn around and threaten me again with kidnapping and imprisonment for non-violent and often pleasurable behavior. When the government’s low-level agents, say the police, overstep the bounds of natural liberty in their enforcement of state rules I never consented to, the police may be sanctioned, but the politicians are never punished for giving the police the incentive to do so.

Furthermore, when the government does not take my property directly through taxation, it takes debts out in my name and sees fit to issue more currency by means of its monopoly on the production of money, harming the future credit prospects of a whole generation in the long-run while destroying the purchasing power of millions of Americans’ wages through inflation in the short-term. It then uses these debts to prosecute wars abroad in my name and grant special privileges to big business and other special interests.


Who judges the judges? Who guards the guards?


Again, I never consented to any of this, and when I try to sue the state or seek redress, the government claims to be immune from the basic dictates of justice and the ancient rules of liberty. Infuriatingly, the U.S. government claims this impunity for the sake of upholding liberty. They trample on our rights to uphold our rights. Go figure.

And this is supposed to be the institution serving as my champion against the likes of Wells Fargo? Where is Elizabeth Warren? What is her opinion on the bloody impunity of the state? Other than demonizing regulators on occasion for not doing “enough,” when has Elizabeth Warren ever struck at the root of the problem that is the state’s impunity?

Where is your indignation now, Senator?

Well, as Senator Warren told libertarian voters nearly four years ago:

“I’ve taught contract law for 25 years and contracts are about private ordering, about parties and voluntary exchanges who engage in transactions that make all of us better off. I love contracts and I think it’s a core part of the libertarian principles. It is an important part. Libertarians believe in social ordering, right? That the social ordering is by private arrangement, so, that they ought to believe in contracts and in fact I think they do.”

Yes, libertarians, or true liberals, believe in contracts based on voluntary consent. Libertarians are all for standards, rules, morality, and community; as long as they are freely chosen. This is not because of some arbitrary or peculiar penchant for personal liberty; rather, the libertarian contends voluntary standards are superior to imposed dictates because standards, rules, morality, and community are predicated on individual consent, e.g. a community that has not been freely chosen is no community at all, at least not a free one; if imposed through aggressive coercion, it is a society of institutional subjugation.

Yet, Elizabeth Warren, as noted above, is a true believer in the “social contract”—that by voting or simply living in a certain area, we have implied “our” consent to the state. Well, by that logic, I suppose Wells Fargo’s victims implied their consent by simply being customers with the bank in the first place.

However, unlike the state, Wells Fargo is subject to sanction from the government protection racket. There will be some semblance of justice served despite the state’s perverse understanding of justice. But, obviously, the government itself is not subject to its own scrutiny in the same way. Who judges the judges? Who guards the guards? How can we trust a monopoly to ever police its own monopoly powers in good faith?

Can One Consent to the Social Contract in the First Place?

If Warren is such a big believer in social ordering by private arrangement and voluntary consent, would she ever deem a contract signed under duress valid? Can one really consent to something, say the social contract, in the first place if one is never given the option to “just say no”?

As Gary Chartier writes in his book, The Conscience of an Anarchist:

“..if there is no real way of opting out, if the state doesn’t provide a way of allowing people not to consent to its authority while remaining within the territory it claims, then there’s really no way of opting in, either. The state treats us as having consented to its authority whatever we do, so we’re not really being given the choice to consent at all. And it’s hard to take seriously the idea that your consent means anything, that it should obligate you in any way, if you don’t have the option of not consenting.”

So, Elizabeth Warren, please continue to call out the massive frauds on Wall Street, but when you do, be sure you call out the state as well. After all, how can we trust an institution that doesn’t play by the same rules as the rest us to keep us honest in the first place?

I imagine this is a large part of why so many institutions, private and public, act criminally with impunity today. They have discovered a loophole in the system. If you wish to break the law, make the law a matter of one’s own authority rather than a matter of content as best gleaned by the dictates of a free and equal people’s reason and good faith.

If we are to have governance at all, it must be subject to same rules as those it governs. If I, or anyone else, defraud or murder someone, my consent is not needed to punish me. But, if I have done no one harm, what right does any person or government have to my life, liberty, or property? None whatsoever.

I am all for sniffing out unjust force, fraud, and impunity. However, I am under no illusion that impunity can ever be conquered by impunity. Only someone who loves the state could believe in such a fantasy.

Unfortunately, in the midst of this 2016 presidential election, I must admit this bloody delusion is going strong, and Elizabeth Warren is merely a bit player in a timeless struggle of liberty against power. Sometimes she gets it right, but overall, she accepts the basic lie of democratic state power that “we” are the government.

In time, I hope she learns to love liberty and be just as suspicious of the state as she is of Wall Street.


Joey Clark is a budding wordsmith and liberty lover. He blogs under the heading “The Libertarian Fool” at joeyclark.liberty.me. Follow him on Facebook.

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Swindling Bank$ter$ Should be Jailed


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Senator Elizabeth Warren, a Democrat from Massachusetts, told Wells Fargo Chief Executive Officer John Stumpf that he should resign and face criminal prosecution in relation to the opening of unauthorized customer accounts by the bank’s employees. She spoke during a Senate Banking Committee hearing.

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