Eurozone Chief: Cyprus was just the start

March 26, 2013
"Obama loan officer at work."

“EU bureaucrat at work.”

Hoo, boy. I just had a feeling that, once the the EUrocracy learned it could take depositors’ money at will without a total meltdown, the temptation to do it again (and again and again and again…) would be too great to  resist. Thus we read in the Telegraph:

Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe’s single currency by propping up failing banks, a senior eurozone official has announced.

The new policy will alarm hundreds of thousands of British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.

The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, told the FT and Reuters that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe.

“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?’,” he said.

“If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders.”

Ditching a three-year-old policy of protecting senior bondholders and large depositors, over €100,000, in banks, Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts.

Don’t you just love how Dijsselbloem puts it? “We’ll ask them to contribute.” As if Manuel the Madrid taxi driver, who’s put his life’s savings into a bank he thought he could trust, will get any chance to say no. If he’s lucky, he’ll wake one morning to discover that his masters in Brussels have left him anything at all.

This is just immoral. Depositors in Cyprus are being robbed to cover for the bad borrowing decisions of governments and the equally stupid lending decisions of bankers, and now Dijsselbloom and his fellow mandarins are casting their gaze across Europe and seeing a smorgasbord filled with tasty accounts waiting to have a bite taken out of them.

Let’s review an old principle of (real) liberalism that’s more and more forgotten these days: your bank account is your property, as it represents the fruits of your labor. Security in your right to property is essential to your liberty; if you do not have the first, then you lack the second. If some bureaucrat can come and take your property via a diktat dressed in legal finery, then you are not a free human being.

Desperate to save their precious Euro at all costs, the Eurocrats and the national governments are all but guaranteeing a future bank run and financial panic as frightened people take their money and try to put it beyond the reach of grasping, blundering officials and quite possibly creating the very crash they’re trying to avoid.

With establishment politicians like these, is it any wonder people turn in frustration and anger to radical politics?

PS: And I wish the EU would stop giving Obama ideas…

via Bryan Preston

(Crossposted at Sister Toldjah)

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Quote of the day: Message to Obama from Cicero

February 13, 2013
"Time for a lesson, Barack."

“Time for a lesson, Barack.”

And I don’t mean Cicero, Illinois, but the great Roman lawyer and orator, Marcus Tullius Cicero (1):

“Whoever governs a country,” Cicero wrote in On Duties,  “must first see that citizens keep what belongs to them and that the state does not take from individuals what is rightfully theirs. . . . Indeed, the chief reason we have a constitution  and government at  all is to protect individual property. Even though nature led people to come together into communities in the first place, they did so with the hope that they could keep what rightfully belonged to them.”

Smart people, those Romans.

via Roger Kimball

Footnote:
(1) And whose prose tormented me in Latin classes. Caesar, Livy, Tacitus, Virgil… no problem! But Cicero? That man broke every rule of grammar you ever learned and made you thank him for it. That’s probably the real reason Marc Antony had him killed.


This is why California can’t have nice things: idiotic local governments edition

July 6, 2012

The new flag of California?

There are so many levels of “dumbass” in this, I scarcely know where to begin. If encouraging banks to issue unsafe mortgages that are then bundled by the US government and sold into the securities market lead to a national financial crisis, how much stupider is it to seize underwater mortgages under eminent domain and leave the public holding the bag?

Answer: Lots.

Eminent domain allows a government to forcibly acquire property that is then reused in a way considered good for the public—new housing, roads, shopping centers and the like. Owners of the properties are entitled to compensation, which is usually determined by a court.

But instead of tearing down property, California’s San Bernardino County and two of its largest cities, Ontario and Fontana, want to put eminent domain to a highly unorthodox use to keep people in their homes.

The municipalities, about 45 minutes east of Los Angeles, would acquire underwater mortgages from investors and cut the loan principal to match the current property value. Then, they would resell the reduced mortgages to new investors. …

For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program’s private financiers would fund the city’s seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors.

“Investors.” As if anyone is going to buy a devalued mortgage that was seized by the government in an utter ravaging of private property rights? What’s to guarantee the government won’t seize it from the next investor latest sucker in the name of “helping people?” Only a fool would buy one of these, and, since successful investors aren’t fools, that means the public will be left on the hook when the inevitable defaults occur.

In the linked post (1), Ed Morrissey describes some of the many problems with this:

Furthermore, it will hand a carte blanche to local politicians looking to curry favor with residents — and we can expect them to use it as often as they think they can get away with it.  Nothing sells like populism, and nothing in populism sells better than “sticking it to the banks,” even when the “banks” really means lots of investors, large and small, who bought mortgage-based securities for retirement funds and the like.  On top of that, the process heightens the moral hazard of government intervention, which then encourages people to take irrational and damaging risks by expecting private gain with public loss.

Ed’s right, this is the spawn of the Supreme Court’s horrid Kelo decision, which ruled that a city could take real property from one private citizen and give it to another private citizen in the hope of higher tax revenue under a twisted notion of “public purpose.”  Now the county of San Bernardino and the cities of Fontana and Ontario want to extend that perverse principle to financial instruments —private property nonetheless— and shaft one set of citizens in favor of another, because the latter are voters.

I’m sure, at some point in the process of coming up with this bright idea, someone invoked the Orwellian magic words “fairness” and “social justice,” which makes it all better.

Respect for property rights is essential to ordered liberty and the economy’s well-being. All this will really do is drive troubled city and county finances further into train-wreck territory as real estate lending comes to a halt or investors demand sky-high interest rates to compensate for the risk. Hiding behind the emotional blackmail of “helping people,” these schmucks are instead going to salt their own economic fields, crippling any chance of real growth. It is a stupid, stupid plan that should never see the light of day.

Which means Sacramento will likely love it and adopt it for the whole state.

Footnote:
(1) The original article is behind a subscriber pay-wall.

PS: Graphic courtesy of The Open Clip Art Library.

UPDATE 7/27/2012: Naturally, California’s “progressive” Lieutenant Governor, Gavin “Brylcreem” Newsom, just loves this idea.

(Crossposted at Sister Toldjah)


America’s fork in the road: the Tea Party vs. the Occupy Movement

December 1, 2011

Here’s a good video from Encounter Books and narrated by Bill Whittle on the choice the US faces in 2012 between two populist movements: the largely classical-liberal Tea Party and the progressive-and-further-Left Occupy movement (1). The video provides a clear and succinct summary of the deep philosophical differences between the two groups, and I think you’ll find the five or so minutes it takes to watch is time well-spent:

Every four years it seems people call the approaching election “the most important in our history,” and I admit I’ve become somewhat jaded to those claims. But there’s no doubting that the sequence of elections beginning in 2008 and perhaps climaxing in 2012 is very significant. In a process that began in 1980 with Reagan’s election and that continues to this day, the two parties are developing genuine (2) and serious ideological differences, as illustrated in the video.

It may not be the “most important election in our history,” but the choice is real and the repercussions will last for a long time.

Footnotes:
(1) Although I kind of hesitate to call Occupy “genuinely populist,” given the heavy backing from Big Labor.
(2) And, in the interests of authenticity, may I suggest the Democrat Party stop holding their Jefferson-Jackson Day dinners? You’ve gone so far down the Social-Democratic road that Presidents Jefferson and Jackson would run screaming in horror. (Well, Jackson might draw a sword, instead…)

(Crossposted at Sister Toldjah)


The forgotten lesson of Thanksgiving

November 24, 2011

Happy Turkey Day, everyone.

I remember in grammar school we used to be taught the “lessons of Thanksgiving,” including such wonderful things as sharing and gratitude. It seems one lesson never gets taught, though, and so reporter John Stossel wrote to remind us of it in this 2010 article:

Had today’s political class been in power in 1623, tomorrow’s holiday would have been called “Starvation Day” instead of Thanksgiving. Of course, most of us wouldn’t be alive to celebrate it.

Every year around this time, schoolchildren are taught about that wonderful day when Pilgrims and Native Americans shared the fruits of the harvest. But the first Thanksgiving in 1623 almost didn’t happen.

Long before the failure of modern socialism, the earliest European settlers gave us a dramatic demonstration of the fatal flaws of collectivism. Unfortunately, few Americans today know it.

The Pilgrims at Plymouth Colony organized their farm economy along communal lines. The goal was to share the work and produce equally.

That’s why they nearly all starved.

They nearly starved because too few people were willing to work hard to make the land productive enough to feed everyone, knowing they could still draw from the communal pot regardless of their (lack of) effort. Hence, not enough food was produced and the Colony nearly died.

But it didn’t. Having seen the failure of communalism and a planned economy, the colony’s leaders decided to divide the land into plots of private property and make each family responsible for their own livelihood. The results, as reported by Governor Bradford were amazing:

“This had very good success,” Bradford wrote, “for it made all hands very industrious, so as much more corn was planted than otherwise would have been. By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many.”

In other words, private property and a free market made prosperity possible, while Socialism nearly got everyone killed.

Read the rest before you settle down to turkey and football (and the inevitable food coma), and let’s keep this forgotten lesson in mind.

Enjoy the day, folks!

(Crossposted at Sister Toldjah)


Occupy Oakland: never bring uptwinkles to a gunfight

November 4, 2011

I think Oakland has just met its next mayor, who knows how to handle rioters:

“We had people who attempted to break into our building,” the landmark Rotunda Building on Frank Ogawa Plaza outside City Hall, [Oakland developer Phil] Tagami said Thursday. He grabbed a shotgun that he usually keeps at home, went down to the ground floor and “discouraged them,” he said.

“I was standing there and they saw me there, and I lifted it – I didn’t point it – I just held it in my hands,” Tagami said. “And I just racked it, and they ran.

Clint would be proud:

Compare Tagami’s action to the pusillanimous whines of appeasement coming from Oakland’s elected “leaders:”

City Administrator Deanna Santana apologized to business owners for the “chaotic events” that enveloped the city. Mayor Jean Quan called the rioters “a small and isolated group.”

“It shouldn’t mar the overall impact of the demonstration and the fact that people in the 99 percent movement demonstrated peacefully and, for the most part, were productive and very peaceful,” Quan said.

Neville Chamberlain is alive and well in Oakland’s city hall.

Citizen Tagami, however, isn’t buying it:

Tagami disagreed, calling the Occupy Oakland encampment “basically concealment and cover for anarchists who are doing this to our city.”

“We’re very concerned that a group of people can be allowed to do this type of destruction to our town and to our image without any repercussions,” Tagami said. “They need to be held accountable.”

Exactly.

In all seriousness, this is what happens when muddleheaded governments break the social contract and fail to protect the rights of all people equally, as they are supposed to.  The right to have one’s livelihood and possessions secure from violence is as fundamental and natural to liberty under the rule of law as freedom of speech. When government officials such as Mayor Quan vacillate and refuse to do the job for which they were elected, it is left to citizens such as Frank Tagami to defend their rights themselves in a state of nature.

Again, no one is saying the Occupiers don’t have a right to protest — they most certainly do. But our very open, very tolerant society provides wide-open avenues for protest that don’t require the logic of violence that lies at the heart of the Occupy movement.

In contrast, witness the myriad, often huge rallies held by the Tea Party: all done within the law, everyone’s rights respected, and the movement’s point forcefully and effectively made through freedom of speech and association.

And not a broken window in sight.

Meanwhile, it’s time for the mayors of the various “Occupy” cities to do their duty by their residents and taxpayers and put an end to the camps, with their lawlessness and their squalor.

Enough is enough.

PS: Tagami for Mayor in 2014!

LINKS: More from Hot Air.

(Crossposted at Sister Toldjah)


“Red” Jan Schakowsky: “You don’t deserve to keep all of your money”

September 14, 2011

I’ll give Comrade Congresswoman Schakowsky this much: she’s at least honest, although I’m sure it wasn’t intentional. On the Don Wade & Roma Show on WLS-AM this morning, the host tried to tie her down on the question of how high the tax rate should be:

“I think you need to pay your fair share for things we’ve decided are our national priorities,” Schakowsky added.

Host: So Jan Schakowsky, out of every dollar that I earn, how much do you think I deserve to keep?

Schakowsky: What is really your question here? Do you think you should not contribute to firefighters?

Host: No, no, it’s a very simple question. Out of every dollar I earn, how much do you, Jan Schakowsky, think I deserve to keep?

Schakowsky: No, it’s not a simple question. No, it is not a simple question. I’ll put it this way. You don’t deserve to keep all of it.

Host: Why?

Schakowsky: It’s not a question of deserving. What government is, is those things we decide to do together.

That last line is probably garbled. I think she meant to say:

“…those things we, your betters who are so much wiser than you, decide you want.”

However, the congresswoman committed the cardinal sin of modern American Socialism: she forgot to be stealthy about her intentions. Having failed to provoke revolution in the 60s and early 70s, mainstream American Socialism coalesced around the idea that it was better to disguise their true intentions behind the honeyed words of “communitarianism” and “shared values,” while working for incremental, instead of revolutionary change. They were supposed to be open just amongst themselves, at conferences only they paid attention to and journals only they read. (Because they’re too turgid and abstruse for most folks. And bloody dull.) But Schakowski, an open member of the Democratic Socialists of America, probably forgot she wasn’t on wholly safe ground.

Shouldn’t blame her too much, though. Even her party leader couldn’t hide his inner Socialist completely.

Remember, your money is not your property, peasant. It is at the service of the State.

SEE ALSO: Big Government and Power Line.

(Crossposted at Sister Toldjah)