Sunday, November 23, 2014

How Government Officials are Using Bank Regulations to Shutdown Industries

Lew Rockwell, in his important book, Fascism versus Capitalism, argues that the United States rather than having a capitalist economy, at its core has a fascist economy:
The state, for the fascist, is the instrument by which the people's common destiny is realized, and which the potential for greatness is to be found. Individual rights, and the individual himself, are strictly subordinate to the state's great and glorious goals for the nation.
In Rockwell's view, via fascism, although the means of production are technically owned by the private sector, the rules are set for much of the economy by the government:
 The reality of bureaucratic administration has been with us at least since the New Deal, which was modeled on the planning bureaucracy that lived in World War I. The planned economy — whether in Mussolini’s time or ours — requires bureaucracy. Bureaucracy is the heart, lungs, and veins of the planning state. And yet to regulate an economy as thoroughly as this one is today is to kill prosperity with a billion tiny cuts.
How accurate is Rockwell in his view that the state now plays a major role in directing the economy for the goals of the state?

Many examples can be shown, but perhaps it is most instructive when a former government official, William Isaac, former chairman of the Federal Deposit Insurance Corp., clearly explains how government is using regulations to snuff out entire industries:
The Justice Department touts its Operation Choke Point as a good-faith effort to crack down on illegal businesses, weed out fraud and protect consumers. None of these claims is true.

It is becoming clear that the real goal of the program announced last year—or at the very least a desired collateral benefit—is to target entire industries deemed undesirable by putting regulatory pressure on the banks that serve them. The House Oversight and Government Reform Committee recently released evidence that “federal regulators are pressuring banks to terminate relationships with legal yet disfavored industries, without regard to the legitimacy or risk profile of individual companies.”...

The government has gone after two dozen businesses including ammunition dealers, check-cashers, payday lenders, telemarketers, firearms and fireworks vendors, raffles, pharmaceutical sellers, surveillance-equipment firms and home-based charities. The Justice Department and several regulators have pressured banks to close accounts with these businesses—on a sweeping, industry-wide basis—without any proof of wrongdoing. By choking off their access to bank services, the government is attempting to shut these industries down or drive them underground.
An economy where the government snuffs out entire industries through back-door regulations is hardly a free market system. And the more that individuals look to government for solutions to problems, often largely caused in the first-place by government regulations already on the books, the more we move toward even more fascist-type rule, where it is the government who decides what firms are allowed to live and which are killed off. The march to this type of regulation is doing nothing but putting the ghost of the fascist Mussolini in charge.


  1. Greenberg, AIG, CIC and the Backdoor Bailout

    Richard Teitelbaum has written the hardest hitting article about former Goldman Sachs CEO Hank Paulson's backdoor bailout of Goldman and its cronies when he was Treasury Secretary during the financial crisis. Paulson waved off a potential investment from CIC which gave him more latitude to make an unjustified payment of 100 cents on the dollar for the suspect underlying assets of credit derivative protection written by AIG.

  2. I disagree - I think Mussolini would be shocked at the level of corruption going on today.

  3. The US was a free enterprise country before the Federal Reserve System. Then it became a capitalist country. Capitalism is an ism ie invention of the international fractional reserve banksters as is communism,socialism and fascism.If you all had paid attention to Marx(a bankers tool) you would know this-Thesis vs. antithesis=synthesis. What's that mean in plain English? The conflict between capitalism and communism leads to the banksters utopia of fascism. Why can't you people understand something so simple.
    If you are for capitalism or socialism or communism or fascism you are still in the MATRIX.
    Free Enterprise is the economic system of FREE men and women not capitalism!

  4. When Dish network's owner, Charlie Ergen, was buying wireless spectrum to create an "OTT"(over the top) alternative wireless broadband network, he was thrown all kinds of bureaucratic, regulatory, and legalistic hurdles as well as muscled by the larger carriers. He emerged slightly victorious but said, "the government picks winners and losers all the time". He hasn't stopped trying...

    Sprint and T-Mobile Merger: Could Dish Network Swoop In?

    Google and Dish to launch own wireless network?

    I believe Charlie, his wife, and a partner started this company from the ground up installing those huge dishes back in the 1990s. A true American entrepreneur in my opinion.

    Lew Rockwell's book is a tremendous resource and helped me better understand the mindset of a host family I lived with in Italy, who were disgruntled fascists, that had a picture of mussolini in their kitchen. This was in the 1980s.The national blindness and delusions they had were astonishing, I was barely a teenager.

    Thanks for what you do, it's very appreciated.