"Wildcat" is defined by Dictionary.com as "characterized by or proceeding from reckless or unsafe business methods". So, while it certainly wasn't perfect, the totally private baking we had during the 19th Century allowed the unscrupulous to rip people off. Which is why I advocate a return to it.
| Investopedia: The term "wildcat banking" supposedly had its genesis in 1830s banking in Michigan, where bankers were believed to have set up banks in areas so remote that wildcats roamed there. These bank locations were sometimes the only places where the bank's notes could be redeemed, thereby creating a formidable obstacle for their redemption by note holders and providing an unfair advantage to unscrupulous bankers. |
Truth is, deregulation, which I am strongly in favor of, does not work in the consumers' favor, instead benefitting big business, who form moponolies and then screw consumers.
| "The benefits of deregulation are short-to intermediate-term generally for any industry," said James Shaw, a professor of business economics at the University of San Francisco. "A burst of competition and innovation occurs in the short run, and prices fall," he said. "Consolidation of market players then produces price stability through resultant diminished competition". (The Myth of Deregulation's Consumer Benefits by David Lazarus. The Los Angeles Times, 2/14/2013). |
Of course small "L" libertarians such as myself try to sell deregulation as having the opposite effect, but that's a lie to get the ignorant masses to buy into it. For example, I could be honest and admit that there were a lot of banking panics during the timeframe I cite above. Or I could dissemble and characterize a lack of a central bank, banking deregulation and the downturns that resulted as not being a perfect system, but that the resulting downturns were brief and the recoveries robust.
That would be as opposed to the truth, as laid out by ThinkAdvisor, a financial advisory website...
| [During the course of the] 19th century [we saw] recurrent and severe financial crises. The [2nd] central bank's demise [in 1836]... removed a brake on the ability of state-chartered banks to issue paper money (as previously a bank issuing too much or irregular currency might find its paper not accepted by the federal bank). That fueled land speculation [and] the speculative bubble, followed by the hard-money crackdown, brought on the Panic of 1837. Waves of bank failures and bankruptcies began in the West and rolled across the nation. ... Throughout the century, major panics occurred at roughly two-decade intervals. (The Tumultuous 19th Century From the Jan 2010 issue of Research Magazine). |
Anyway, the thing to remember here is that downturns and panics are good. So what if some people (middle class types, mostly) lose their shirts? When that happens that money can be funneled into the hands of the rich, which is exactly what happened following our most recent recession.
So, stability and prosperity for all? I say NO WAY. Instability and prosperity for a few... that's more like it!
Byline: This awesome commentary was authored by Willis "I Love Strawmen" Hart. Purveyor of straw men. LLIN-136.
Small decentralized entirely private banks, with "strong regulation" to "stabilize", "prevent fraud", etc is where it SHOULD be.
ReplyDeleteYou're talking about regulatory capture, right dmarks? Yes, that would work, but why not just neuter the regulators by slashing their budgets (shrinking government)? That is what Will proposes and I am in agreement with him. Ineffective regulators are better than captured ones, I say.
ReplyDeleteOK, I was wrong. The banks should be entirely private, but the regulations should be weak, thereby maximizing bank profits. We are now all in agreement?
ReplyDeleteYou got it dmarks! Except for the "small" part. Without regulations, banks, like any business, tend toward monopoly, which benefits the wealthy class. In any case, this is why I ran down the idea of a strong central bank and fiat currency on my other blog, stating that these things could be indispensable tools of the modern-day warfare state. True, perhaps, but access to money also makes other things possible (things Socialists want to do on behalf of The People). Starve the government of money and it can't do these things. Why should the government do them when the private sector can do them for a profit? Sure - with health care, for example - that means some poor people go without (or die), but what's more important - that the poor get what they need to survive, or that the rich make out like bandits?
ReplyDeleteThat the rich make out like bandits, of course! That's an easy one, Will! Screw the Poors and screw middle class losers. If the rich are to keep getting richer these two groups need to be SQUEEZED for all the blood that can be extracted from them.
ReplyDeleteWell said, Les.
ReplyDeleteYou're absolutely right, Will. Also, I should note, because it is carnard-bait for Stalin-lovers like wd, that the poor people who die due to a lack of health care (mentioned by Will), are killing themselves - via their laziness. If they went out and got jobs they could afford health care, even if it is "overpriced" due to private insurers needing to make a huge profit. This isn't the same as the State killing people - as the State tends to do when Socialist/Communists are in control (like with wd's hero). I've got no problem with lazy poor people dying because they're too lazy to get a job.
ReplyDeleteWell said, dmarks. Lazy people like wd are essentially committing suicide. Let them, I say.
ReplyDeleteI suppose you could refer to my comment as a "gold nugget", as opposed to wd's blog/cesspool, where reading his missives and wading through the comments are akin to wading through amounts of bullcrap. Which is why I stay away... although, as I understand it, Les has waded through that sewer on numerous occasions. Seems like he's wised up now, however.
ReplyDeletewd is banned from the Rational Nation USA blog, but not here? Why is that, Les? Your blog, your rules, of course. I just thought if you banned him on one of your blogs, you would ban him on both?
The Idiot in Chief is up to his Big Ears in hot water, lies, coward like actions,, IRS scandals, Cover-Up’s, Benghazi, ( you name it) and the Progressive Imbecile is still blogging about. a civilian named Sarah Palin !!!
ReplyDeleteObama deserves all the blame, not Bush, not Nixon and certainly NOT Sarah Palin.
Mocking Sarah Palin and her family and the GOP, is NOT going to take the heat of Barack Hussain Obama and the Moocher! No way, No how! In other words, "What difference does it make?"
So Get Over It You Old Ass -Hole, and Stop your stupid belly aching, no-one care what you say or write, except the three other IDIOTS who kiss your ass with praise about anything you say and write..
Yes, BAN, the sucker!!
ReplyDeleteI think what you're talking about is Wildcat Banking, not Baking. Anyway, it is dumb for the very reasons you point out in your commentary. Our money supply belongs to The People. The FED should be nationalized.
ReplyDeleteAs for who should be banned, I vote for "Will YaEverLearn". He will never learn that what he THINKS are Obama "scandals" and "cover ups" are just Republican lies and hot air.
Ban me !
ReplyDeleteWho gives a Shit!
Certainly no me!
In fact, I'll ban myself. , but first let me say ... Fuck You.
Does Willis have any recipes he'd like to share for those of us interested in baking a wildcat? While I have no interest in doing so, I thought someone might. Anyway, is wildcat tasty?
ReplyDelete