Big banking troubles impact little guys
Financially the deck is stacked against the average person. The system is set up to benefit the people with the most money. It’s set up to keep that money within that group and to keep the rest of us fighting over the crumbs.
Forgive billions in Payroll Protection “loans” to help corporations, no problem. Forgive individual people $10,000 in student loans “Why should we help those slackers? They got the benefit of education let them pay it off.”
The argument that “It would be unfair to the lender to deprive them of their anticipated interest by forgiving the loan” is not that different from indentured servitude and the “Divine Right of Kings.”
It’s useful to remember that at one time in Europe society was seen as a body. The king and other royalty were considered the head. The knights were the arms, the church it’s spirit and the peasants were the body itself, made to serve the head. The world was divided into owners and people who were owned.
It wasn’t until they encountered the First Nations People of North America that Europeans saw a classless society. The Haudenosaunee (the French called them Iroquois) had no king. Leaders were chosen by merit not heredity. All people were equal. No one owned anyone else.
The preamble to the constitution was lifted from the Haudenosaunee Great Law of Peace. “We the People, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”
This is their clear summary of the purpose of government. Our government is to serve us, not to rule over us.
Personally I really like the system we have going right now.
If I have a concern I can call my legislator, I can write to the paper or I can speak at a public meeting. I even have the right to call for a public meeting about an important topic. I cherish our freedom.
We are in danger though. In 2010 the Supreme Court ruled in “Citizens United v. FEC” that it was OK for independent corporations and other associations to air political campaign adds limited only by their own money. This has given corporations tremendous power. They are using it to loosen regulations on themselves and arrange deals for themselves.
Corporations exist to provide a profit for their shareholders. They do not exist “to promote the general welfare” of society. Governments exist for that.
We have this pattern going We have a panic or widespread Bank failure. People agitate for Regulations controlling Bank behavior. We get regulations. Banks are great for a while. Conservatives get into power. Regulations are relaxed. Banks fail again.
fter the financial collapse of 2008 regulations were put in place that banks can only have a certain percentage of the money in risky investments. In 2018 under the Trump administration those regulations were rolled back and now five years later, right on schedule we have three banks collapse.
Our banking system is a game of trust. The money in my account isn’t physically at the bank.
It’s loaned out and invested in other things. As long as the money is moving within the system the bank is OK. A bank run happens when a lot of people try to take their money out all at once. The bank has to sell assets and it might not be able to liquidate fast enough. The federal government steps in at that point and takes over.
A bank run is a social/psychological phenomenon. It can easily spread through even a healthy system if people are afraid. In that way it’s important to keep the whole system from collapse but shouldn’t we find ways to help the ordinary person too?
Forgiving $10,000 in student loans is not that different from helping corporations when a bank fails. Right now the Supreme Court is hearing an argument brought by the Higher Education Loan Authority of the State of Missouri. It is a public entity that would lose revenue from student loan forgiveness. They are saying they have a right to the student’s earnings even if the debt is paid off. This does not seem fair to me.
Forgiving this debt would also be an economic stimulus. All those people would be able to buy things instead of servicing debt.
President Joe Biden has said the banking system is strong. That the run will not spread. Elizabeth Warren is saying we must reenact the regulations to keep the banks healthy. Unfortunately the Republicans in the house are not interested in bank reform. They are busy investigating Hunter Biden. We need them to focus on the economy instead.
The “Divine Right of Kings” was an artificial construct. Corporations as people is also an artificial construct that can be changed.
Marie Tomlinson is a Fredonia resident. Send comments to email@example.com