by Ian McLeod
Welp, this is the beginning of the end of the end.
As you may or may not have heard, Cyprus is “exchanging” shares in their banks for cash in a forced transaction that might, in saner times, be called “theft” but in our day and age, is just a bailout. All bailouts are theft–whether from taxpayers or, in an unprecedented move, the “customers” themselves.
While my Economics For Fun And (Not Much) Profit series exists only as a distant memory in ANF’s previous incarnation, I’m pretty sure somewhere back there I made it clear that bailouts were the work of the Devil. Or Cthulhu. I’ve slept since then.
10, 20, 30 years ago, the people who warned about the times in which we now live were labeled crackpots and conspiracy theorists, shunned.
I do not believe in conspiracy theories. I enjoy the hell out of them, but there is no conspiracy, there is only one fundamental truth: “absolute power corrupts absolutely,” and in that light, people who seek power should under no circumstances ever be given it. The more widely distributed power is, the less damaging abuses of power become. That was the purpose of the Constitution. That’s why, whether you like or dislike a particular clause in the Constitution or certain part of the Bill of Rights, it’s a mistake to try to weaken any aspect of it. The more fundamental rights you cede in favor of this or that perceived benefit or so-called “social good,” the less power you have to live your life as a free and valuable individual human being. Weakening one right weakens them all. We’d have no War on Drugs if the Commerce Clause and Amendments 4 and 5 hadn’t been rendered meaningless by the Supreme Court.
So, Cyprus has seized 9% of the savings of the wealthy, and over 6% of everyone else’s savings. “It’s not theft–they’re getting shares (in insolvent banks.) It’s a bailout! Promise!”
Given the TARP bailouts, and the Obama Administration’s bailouts, and the increasing instability in Europe, mark my words, this day is coming to our shores. I don’t have a crystal ball or a timeframe, and while our Debt to GDP is OK compared to much of the world, we’re still the biggest debtor. The old adage “if you owe the bank $1000, you have a problem, but if you owe them $1,000,000, they have a problem” does not scale internationally, as the people at the top are all in each others’ pockets and in the grand game, the music eventually stops for each participant.
Like the projected, insane increases to medical and insurance costs we’re just now discovering as the ACA is implemented as the final nail in the coffin of the middle class–our own bank seizures will be sold to us as a cost-saving mechanism, a way to get the wealthy to pay their fair share, and to help the poor and balance the budget. And the masses will support it because it sounds good and will be packaged in the language of equality and fairness, and it’s someone else’s money, right? Then they will repent in dust and ashes when 6-9% of their money just vanishes in the dead of night–because that’s how it’ll be done. The legislation will be drafted and will look comparably fair from the outset, and then late night in the halls of Congress, language will be added and approved, and no one can do anything until it’s too late.
Indeed, “one-time levies” on 401ks have been on the table for quite some time now.
Everyone will get hit hard when this happens–just like in Cyprus. It’s not a Republican thing, or a Democrat thing, it’s a Politician thing, a Banker thing, the very reason why we need a separation of Business and State.
I came out of retirement from political writing to tell you this: I’ve followed this shit for 15 years now–both the conspiracy side and the official story, and in my experience the truth indeed lies in the middle. However, the truth used to be much closer to the official story, but now the middle inches away from the talking heads and politicians, and closer and closer to the madmen and crackpots. Every day I wake up and read the news, and am both vindicated and horrified that yesterday’s insanity is today’s reality.
If your money’s in the bank, you should at least think about the worst-case scenario, even through the lens of healthy skepticism–think about it.