The Cyprus Parliament may show some common sense…
…unlike the EU “leaders” and the Cyprus president who agreed to the reckless trashing of the people’s trust in the integrity of their bank accounts:
Cyprus’s Parliament is likely to reject an international bailout package that involves taxing ordinary depositors to pay part of the bill, President Nicos Anastasiades said Tuesday, despite a revision that would remove some objections by exempting small bank accounts from the levies…Should the measure fail in Parliament, Mr. Anastasiades and his E.U. partners would have to return to the negotiating table.
I’ve said many times that I’m not a financial or economics expert; far from it. But I do credit myself (pun intended) with a fair amount of common sense.
Which is more than I can say for people like IMF managing director Christine Lagarde, who may be smart about the money angle but who doesn’t seem to understand the first thing about human beings, which after all are a part of the equation here. Lagarde has said that she thinks if the smaller depositors are excluded from the “tax” on deposits that will be a good fix, but she’s ignoring the effect it has on trust as a whole.
I repeat: the banking system is built on trust. Undermine it—raid the accounts of depositors, no matter how rich, no matter if they’re mostly Russian gangsters—and you do it at the peril of the entire structure.
It’s not rocket science.
[NOTE: By the way, Lagarde does not appear to be a leftist. She is described as being a member of a “center-right” party in France, or what passes for center-right there, which is sometimes to the left of what we in the US would call “center-right.”
It’s not especially relevant, but Lagarde was appointed to her current position to fill the shoes of Dominique Strauss-Kahn. Remember him?]
[ADDENDUM: It continues to occur to me that this is very similar to what Obama did with the Chrysler negotiations. Revisiting:
Why would anyone lend money to heavily unionized companies knowing that if things went wrong, the president and his men could trash their security interests by executive decree, hold them up to public vilification, and subject them to future retribution by regulators?”¦
How is the Federal Government supposed to unwind its ownership in the growing number of companies it has nationalized if prospective buyers know that should things ever take a turn for the worse, Uncle Sam will be back demanding extralegal “sacrifice” in the name of “saving” jobs?
How is private credit supposed to “start flowing again” if the United States of America morphs into a caudillo-run kleptocracy whose explicit policy is to “empower the workers,” chasing ever higher poll numbers by demonizing the very people whose job it is to provide credit?]
The E.U. unelected bureaucratic leadership has no choice but to go after assets. Cyprus is a trial run by EU regulators. They are looking for the current combination of taxation and seized assets necessary to keep kicking the economic can down the road.
Socialists don’t admit to the possibility that they could “run out of other people’s money” because their premise of the primacy of ‘fairness’ necessitates incrementally categorizing that everything ultimately belongs to the state.
Socialism’s base premise of fairness (selectively applied) is the liberal justification for the end justifying the means and since socialism ignores economic reality it must, over time eat its own society’s ‘seed corn’ and inevitably result in an entrenched elite ruling over a regulated population.
The question; “How is the Federal Government supposed to unwind its ownership in the growing number of companies it has nationalized” presupposes that the Obama administration wants to “unwind its ownership” and that it has the intention to do so. It presupposes that the nationalization of American companies isn’t a goal in and of itself as part of a larger agenda of “fundamentally transforming” America.
We, at least some of us, can see into the future, the “what ifs”, increment by increment, and it is ugly.
I alerted my brother, who is a liberal nihilist, about the Cyprus business, and he was a big, “So what”? Suggested the alternative was for Cyprus to simply nationalize the banks, that way all Cypriots could share.
I knew when I alerted him it was futile. But I keep trying. He must care for something more than the legalization of marijuana.
Nothing new here. If I recall correctly the British government raided the private pension funds in the UK about a decade ago. As Willey Sutton said about robbing banks, that’s where the money is.
It is a sad and difficult thing to realize, when relatives reveal, by their own attitudes and reactions, that they welcome the nanny state’s beneficent domination with the freedom from the risks inherent to self-determination that it provides.
“If God didn’t want them sheared, he would not have made them sheep.” Mexican bandit speaking of poor villagers
People are either sheep, wolves or sheepdogs.
Few sheep ever realize the cost of the bargain that they have made. The response of “so what?” and “what difference does it make now?” are evasions so as not to confront the truth.
Churchill notably asked, “Once in a while, we stumble upon the truth, will you face it or decide to pick yourself up and hurry along, as if nothing had happened?”
Those who refuse to face reality are its certain victims. But these are ‘victims’ who choose their victimhood.
Ed Driscoll over at PJ Media wrote this yesterday in his Crossing the Rubicon article:
“Normally when we think of a wealth tax we think of property taxes, estate taxes or car registration fees. But there is a nice conglomeration of wealth nobody has dared to think would be taxable. And not just taxable, but easily stolen as well.
Your retirement plans.”
This theme about the US govt. raiding private retirement accounts has been coming up more regularly lately, and it’s worth reading for that reason. http://pjmedia.com/eddriscoll/2013/03/18/the-eu-crosses-the-rubicon/2/
There ARE american congressmen and academics who are backing this as a viable plan, and as Driscoll points out, it may be idiots we elected in Washington, who kick the can down the road until they have no other choice but to steal it. I’m sure if it happens, we who are appalled by the action will be considered selfish, unpatriotic people, and those who have nothing to contribute will be virtuous; each one a victim of the savers who were hoarding money they didn’t need.
It’s hard to believe this idea is even mentioned or debated in our country as a serious consideration, and yet here we are, the once free USA, wondering if you would be stupid not to prepare for it.
You don’t have to be an ‘expert’ (remember Krugman is a nobel prize winning economist) to know there is a reason for banking regulations and bankruptcy laws. The bankruptcy of corporations and big banks harms everyone, but its the only way to cut away the rot. Feeding the rot never ends well.
Glenn Reynolds has a great suggestion: A smart conservative Senator or Representative should propose legislation making it illegal for the government to tax or otherwise raid retirement savings accounts, and dare liberals to vote against it. Now I’m hearing of proposals for the government to take over “management” of retirement accounts, claiming as possible justification that most savers don’t know how to properly manage these accounts on their own, or are susceptible to scams and fraud… Sounds to me as if they are feeling out ways to skim such accounts.
Putting a limit on “small depositors” does not make it acceptable. It is still theft. It is just stealing money from savers to bankroll the EU Nomenklatura, of which the bankers are a part.
Largarde does not “know anything” about finance, she too is part of that Nomenklatura, and she is just looking out for her bunch. It is just her turn to be at the IMF. It is absurd to thing that any of these people know anything about “business” at all. Heaves, the IMF is bankrolled by the taxpayer–it is not a “bank”.
Seizing assets of “the wealthy” does not solve anything at all. It just destroys everything that Western order of the last 300-400 years is built on.
This business in Cyprus, if it goes much further, will be a disaster for us all.
Oh, and there is no “center-right
party in France, at least not the way we think of it.
“Seizing assets of “the wealthy” does not solve anything at all.”
Only the assets of the un-PC wealthy will be seized. The primary goal is to seize the assets of the shrinking middle class making us dependent upon the state. Its proper name is fascism.