Deregulating the banks?

[AndyW]

Hi folks, I'm having a debate with someone currently who is saying that Ron Paul wants to deregulate the banks (which is the opposite of what I thought he'd do) and they're saying that, therefore, he wants to take America back the the 1920s - pre crash.

I obviously am not stupid and now that Paul is for sound economic policy, so trust what he says, but could someone help me some up why deregulating the banks would be better than the current system of having regulations which worked for years and then breaking those regs to extort money. I thought they were the only things keeping things safe.

(although I guess they don't matter anyway now because banksters do what they want).

[Travlyr]

If we would just obey the constitution the banks would be self-regulating.

This video by Judge Andrew Napolitano - The Story of Money is pretty good.

[Seraphim]

They key is competition in currency (repealing legal tender laws).

This would effectively neuter The Federal Reserve and the mega investment and commercial banks that have insane amounts of leverage and power over the market.

In doing so, consumers and the general market would have the power to regulate banks as the banks would be forced to pander to us, not the other way around.

Deregulating the banks in the current enviroment is stupid. Keeping the Fed intact and regulating a broken and downright fascist system is even stupider.

End the monopoly on currency creation and creating beaucratic jobs to "regulate" is not necessary.

Deregulating the banks would be one of the final steps to our movement...it is in no way the solution, in and of itself.

[AndyW]

Travlyr, thanks for the video. I kinda know all that stuff - was looking for something more about deregulating vs regulating. Like what Seraphim says - but would be good to have some material to reference.

Thanks.

[Paul Or Nothing II]

If we would just obey the constitution the banks would be self-regulating.

This video by Judge Andrew Napolitano - The Story of Money is pretty good.

Travlyr, thanks for the video. I kinda know all that stuff - was looking for something more about deregulating vs regulating. Like what Seraphim says - but would be good to have some material to reference.

Thanks.

Hate to say it but judge is incorrect with regards to colonial-scrips, they were often massively devalued & since Americans would pay Brits & Europeans with it, by the time, they Brits used to try to use them to buy something from America, they used to have lost their purchasing-power & that was one of the reasons that pissed British - the inflating worthless scrips
Franklin only thought they were great because he had press & he used to get to print them, there's plenty of material out there about this on the internet & here's Rothbard talking about mostly pre-revolution currencies & scrips

[heavenlyboy34]

Hate to say it but judge is incorrect with regards to colonial-scrips, they were often massively devalued & since Americans would pay Brits & Europeans with it, by the time, they Brits used to try to use them to buy something from America, they used to have lost their purchasing-power & that was one of the reasons that pissed British - the inflating worthless scrips
Franklin only thought they were great because he had press & he used to get to print them, there's plenty of material out there about this on the internet & here's Rothbard talking about mostly pre-revolution currencies & scrips

Didn't watch the judge's vid yet, but you are correct about Continental dollars. This is where the saying "not worth a Continental" came from. The dollar was more stable (and paid of the war debt), but still not as good as free market money (which Trav correctly pointed out).

[Paul Or Nothing II]

Hi folks, I'm having a debate with someone currently who is saying that Ron Paul wants to deregulate the banks (which is the opposite of what I thought he'd do) and they're saying that, therefore, he wants to take America back the the 1920s - pre crash.

I obviously am not stupid and now that Paul is for sound economic policy, so trust what he says, but could someone help me some up why deregulating the banks would be better than the current system of having regulations which worked for years and then breaking those regs to extort money. I thought they were the only things keeping things safe.

(although I guess they don't matter anyway now because banksters do what they want).

First, you must understand that most of the mess was the result of OVER-REGULATION & government programs :
Yes, the Glass-Steagall was repealed but it was stupid because it & FDIC were a "package-deal" regulations installed in 1933, there were two main parts to this regulation, 1) separation of commerical & investment banking 2) FDIC
The first one was repealed & deregulated but as I've said it was a "package-deal", either they should kept both as it was or repealed both but they repealed the first which merged commercial & investment banking but FDIC was left in tact, now that is problematic, FDIC is essentially backed by Fed & taxpayers' money so with now half the regulation gone, commercial banks could take on more risks & having FDIC along with it is like telling banks - go ahead, take risks, if you make a profit you keep it & if you fail, we'll bail you out - which is why Ron Paul had voted AGAINST this "half-deregulation", both should've been repealed so that banks are on their own instead of having an explicit guarantee of Fed & taxpayers through FDIC

Then there was the the "regulation" of Community Reinvestment Act which FORCED banks to make loans to people who were incapable of (to correct supposed racial discrimination by banks) which the banks had to make by law, they knew these loans were going to go bad sooner or later
And then there's Freddie & Fannie, again government bodies that should NOT even exist, so banks started packaging there good loans with bad ones & passed on as much as they could Freddie & Fannie & rest they got stuck with & tried to juggle around & shift risk around through derivatives but it was a ticking time-bomb that inevitable to off & it did

On top of all this mess, the biggest culprit, Fed kept interest-rates far too low for a long time, when Fed keeps interest low, people borrow more loans & moneysupply increases, now since the whole Community Reinvestment Act, a lot of them ended up buying homes & thereby pushing the home-prices up & up & as I've said, all those bad loans ought to backfire & they did

So, repealing half the Glass-Steagall was government stupidity, having FDIC government stupidity, Community Reinvestment Act government stupidity, & same with Fed - & when all hell broke lose, the banks & derivatives get the blame, sure, they were participants to the process but without all the government help they couldn't have done it So thank government & their "regulations"!

And bailouts were even worse, it's sign of corporatism & it tells the big banks that they can take whatever risks & they can keep the profits & if they fail government will bear the loss through Fed & put it on taxpayers's tax hence Ron Paul voted AGAINST bailouts

What he'd get rid of all this messy "regulations" which really don't help & get rid of FDIC guarantee, send a message that Fed & government won't bail'em out again & possibly, if he could he'd try to get rid of "corporate personhood"
"Corporate Personhood" laws/regulations see companies as "legal persons" so if people running them make bad decisions, only company's assets will be used to pay off company's debts & losses while those running it go scotfree so they know they can take big risks, if they make profits, they pay themselves big salaries, bonuses, etc & if the risks don't pay off then don't have to bear the loss
Repealing "Corporate Personhood" would make the persons running the company PERSONALLY LIABLE as in, if company's assets aren't sufficient enough to cover its losses then those running their PERSONAL PROPERTY will be seized to cover them
So getting rid of this one government regulation will how enormous impact on how banks & companies in general manage risks & no other candidate will even touch this issue because they're all bought by banks & corporations so they can't put people running them in jeopardy

And "Regulations" in general are usually NOT to keep people safe, they're mostly created by politicians for the sake of lobbying corporations, they're just sold as "good" to the people, who probably don't even read or understand the each & every "regulation" that passes; just look at Fed, they'll tell us its so good & everything but it's just money-monopoly cartel-system

[Paul Or Nothing II]

Didn't watch the judge's vid yet, but you are correct about Continental dollars. This is where the saying "not worth a Continental" came from. The dollar was more stable (and paid of the war debt), but still not as good as free market money (which Trav correctly pointed out).

Judge's video mentioned about "Colonial Scrips" which are different from "Continentals", "Continentals" were issued by Continental Congress during the War while "Colonial Scrips" were issued by various states in the pre-Revolution period, they were just as worthless nonetheless That's why Founders didn't allow government to issue paper-money

Here's a good one :
Paper money eventually returns to its intrinsic value -- zero.
- Voltaire

[cubical]

http://www.youtube.com/watch?v=TxcjT8T3EGU

Economic Cycles Before the Fed | Thomas E Woods, Jr.

[onlyrp]

Not all regulations are equal. Ron Paul wants freedom for banks to lend as they please, but STRICT regulations against fraud, wrongdoing. He wants no freedom for central banks, but all the freedom for banks which are citizen run or local communities approve of, in other words, freedom for the little guy.