I’m back. Thanks to my son Political Sphere for contributing
with a three-part discussion (Part I, Part II, Part III) on the connection between the law and morality,
proving you can’t have one without the other.
During our recent travel, when Mr. Spherical Model and I arrived
at our destination, a close relative picked us up at the airport to drive us to
Mr. Spherical Model’s mother’s home. We had an interesting conversation in the
car (that, in hindsight, I wish I’d recorded so I’d have better details for
you). Our driver—I’ll call him Bill—is an entrepreneur, working these past
several years on a product related to banking and bank cards. He started this conversation with, “I’ll
never do business in America again.” He’s pursuing alternatives: India, France,
Great Britain, Japan, Korea….
He started in America. But this administration’s roadblocks
are daunting. They just spent two years working with various US banks, with the
banks going through the process of figuring out how to use this product while complying
with myriad, endless regulations. Some of these come from the Dodd-Frank
legislation, which has expanded in size day-by-day with additional rules—about 15
million words worth. (I found an interesting infographic here.) So, it took banks and their legal
and compliance staffs two years to study the product. And as they were nearing
a positive decision, suddenly the rules changed yet again. And rather than just
trust that all would be well, the banks said they’d have to start the process
over based on the new rules. In the meantime, overseas banks are very
interested and a lot less limited by spools and spools of government red tape.
This reminds me of something I learned in a college
government class concerning the rule of law. One of the basic requirements of
law is that it is knowable to those who are subject to it. What we have now is
tyranny by bureaucracy, with almost no way to comply completely to arbitrary,
everchanging hidden details.
Bill had another example of government interference doing
the opposite of helping. Someone he knows in the finance world has a business
in which he provides an alternative to high-interest payday loans, using
reloadable no-carried-balance credit-type cards. He screens those who use it
and makes a specific contract with them. The customers temporarily draw a
certain amount of unsecured credit on the card, with the promise to pay back
that amount by a set short-term date. If the amount is paid according to the
contract, there is no interest charge. If the amount hits the deadline, there
is a prompt reminder sent to the customer, who is given till the end of the
next business day to get the money paid without any penalty or interest charged.
If the payment isn’t made, the relatively high interest rate of 18% kicks in, which is
not higher than many payday loans, and only applies if the debt isn’t paid as
contracted. And unlike payday loans, there’s no 20% (or whatever) transaction
fee. So, for someone who needs short-term credit until known income arrives,
this is a much better deal. If the customer defaults, he can no longer
reload the card, and the business could write off the loss, so it was minimal
risk and a much appreciated service that brought return business and connections
for other services the business offered.
But the government didn’t like the idea that a “credit card”
could charge 18% interest. So they made a rule that shut down the product
altogether. So now, if someone has need of short-term credit, they are subject
to the high transaction fee as well as the just-as-high-or-higher interest rate
of a payday loan (with the risk of doubling the interest rate if you’re late).
So, thanks again for government interference that does exactly the opposite of protecting
the consumer.
Is government regulation ever helpful? It’s a question worth
considering. The idea that government cares enough to protect us from ourselves
is downright frightening, considering their pattern of unintended consequences.
I have more to say on government regulation, but I think I’ll save it for a
whole separate post.
So, back to the conversation with Bill. He went on about the Federal
Reserve. Bill was surprised to learn that I actually knew the Federal Reserve
Bank was neither a federal organization nor a bank. Bill said 99% of Americans are clueless. They look at the name and assume it's some sort of federal agency, and maybe a supreme top-of-the-hierarchy bank that holds the country's money. Actually it's a consortium of
individuals who set themselves up to control the nation’s money supply, and
works in conjunction with similar consortia worldwide. Sort of a sophisticated collaboration of mob bosses.
Have I mentioned that 1913 was a very bad year? Happy Centennial
of the worst year in America’s history! Federal income tax started that year. The
Constitution was amended to allow for direct election of senators, eliminating
representation for state government interests. President Woodrow Wilson was in
the process of implementing “progressive” ideology that would undermine
constitutional principles. And the Federal Reserve started that year as well. The
story is told in a book called The Creature from Jekyll Island, by G. Edward Griffin. It sounds like an old horror B-movie, but it's actually a different kind of nightmare-inducer. Jekyll
Island, along the coast of Georgia, is where the founders of the Federal
Reserve met and set in motion their plans.
I’ve been aware of the book for a while, and it’s been on my
to-read list. But Bill had a copy he let us borrow during the visit. The book
is hefty, but it’s set up so you can do a digest version. Every chapter has a
chapter heading of what’s coming, and ends with a one-page summary. If you’ve
only got a short time, you can get the gist of what happened by reading headings
and summaries, which you can probably do in about an hour.
I’m afraid I have to warn that this book will make your heart
heavy. Things are not as our Constitution's founders put in place for our eternal
benefit. But if you value truth and knowledge, you probably ought to buck up
and digest what you can of this information.
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