Of Signs and Deception

It may seem immodest of me to point out how “insightful” was my posting, published at the very doorstep of the 2008 election of Barack Obama as President of the United States. I think I am in no danger, however, as the predictions were all too easy to make, the signs too clear then to justify special credit now. More significant, I believe, are how the lessons taught then apply as we enter another presidential election season. Give the greatest weight to what candidates do and what they have done, particularly when such evidence is distinctly at variance with what they say.

 

A well-known principle of propaganda is that if you are going to tell a lie, the bigger the lie the more believable it will be. Most people are so trusting that they do not want to believe in the enormity of a big lie. They do not want to believe that someone can intentionally say something appallingly false. Rather than disbelieve the liar, they will want to disbelieve the person who exposes the lie.

One of the biggest of lies is asserting something to be exactly the opposite of what it is. Such is the warmonger who claims to be the leading pacifist, the thief who claims to be the victim of theft—and accuses the real victim of being the criminal—or the bigoted radical who accuses opponents of intolerance.

In recent travels on the streets, roads, and highways I notice at this time of the year the beautiful Fall foliage—and the many political campaign signs. While for some there might be a distaste for seeing these, I feel to rejoice in the signs as evidence of a vigorous system of subjecting our political leaders to public vote.

Having said that, I do draw the line at the steady growth of the mega-yard and curb signs, the five-foot by eight-foot broadsides. So, already inclined to dislike such construction-size boards, I have been particularly disturbed to see what appears to be a planned series of Obama-Biden signs advocating policies that these two Washington insiders have long worked hard to oppose.

I have noticed three in this series. There may be others. The ones that I have seen show the names of the two candidates, followed by a motto reading something like, “Better Schools,” “Lower Taxes,” and “Energy Independence.”

If facts matter, and I believe that they still do (even if they are optional in the mass media), such messages on the signs of these two politicians should be jarring to the honest in heart. The political record of Obama and Biden are unequivocal on these three issues. They both have strongly and consistently opposed school reform, supporting doing more of the same old stuff that has been steadily undermining the quality of government-run schools since the 1960s.

Both have been leading advocates for raising taxes and opposing tax cuts. Even in the current campaign they advocate new tax hikes. They try to disguise their intentions with the assertion that their proposals supposedly would reduce taxes on 95% of Americans (including the 40% who pay little or no income taxes), while raising them on the rest. Either they failed with the simple math, or they hope that voters cannot or will not be able to apply simple math, but you cannot get enough taxes out of 5% to pay for genuine tax cuts for 95%. In fact, their proposals are just another camouflage for the old tried and failed policies of tax and spend. Not only does that always put more power into the hands of the politicos who take and then redistribute, but it is a highly dangerous thing to do in the teeth of an economic downturn. Taxes fall on income and investment, and whatever you tax you get less of. Now is not the time for less income and investment.

And as for energy independence, both Obama and Biden support programs that will yield little and have yielded very little new energy—at very high expense in government subsidies—while staunchly opposing expanded use of the energy resources that are abundant in the United States, particularly oil, coal, and nuclear energy. Independence seems to me to increase reliance on your own resources. Obama and Biden are consistent supporters of policies that keep U.S. energy resources under lock and key.

This should not be surprising from two candidates who campaign on change while advocating the oldest political formula in the history of government, that government knows best, that decisions about spending, whether for health, education, or job creation, are best made by power brokers in the halls of Washington power centers, rather than by families in their homes. Calling that change may be the biggest lie of all.

(First published November 2, 2008)

Of Unbanked and “Underbanked”

Speaking of banks, as I did on this page a short time ago, there are those who are concerned that too many people in the United States are “unbanked” or “underbanked.” By the former they seem to mean those who do not use any banking services, particularly who do not have any bank accounts. By the former, they mean those who obtain some banking services from businesses that are not banks. The very existence of the terms, and the way that they are used by those who use them, implies that being “unbanked” or “underbanked” is a bad thing.

I will here disclose that I have worked for banks for nearly 10 years and for all I know may continue to do so for some time into the future. Whatever bias or color to my views that this condition provides I will nevertheless try to comment from a fair and factual point of view.

My first point, therefore, is that I am not prepared to assert that absolutely everyone should have a bank account. I can easily envision the value of a bank account for most if not all people, but I concede that they should be allowed to choose for themselves and that it would be terribly wrong to force people into banks. I acknowledge that there are some alternative providers of financial services who seem to please their customers, and I do not deny that banks can benefit from good competition. Banks have a long history of drawing upon the ideas and innovations of non-banks, just as non-banks have been eager to try their hand at successful new products and services that banks have pioneered. Bank customers have benefited the most from that process, as the variety and value of financial products have expanded, and the United States has led the world in the discovery of new and useful financial services.

Having said that, the nation cannot do well without a strong, vibrant, and prosperous banking industry. Our nation and people grow as we save financial resources and invest them in improvements for the future, whether new homes, new factories, or new ideas of how to do and make things better, faster, and cheaper. That is a major part of what banks do and are all about.

Moreover, there are a lot of things we do and a lot of places we go because we know that our ability to pay and get paid—to exchange things we value less for things that we value more (the reason we buy and sell things and use money to do it)—is secure, reliable, accurate, and relatively quick. That is our payments system, and banks created it and are at the center of it.

Americans also like the idea of becoming wealthier and expect to do so. If that seems a commonplace to you, recognize that it is not so in all parts of the world, where getting by from day to day is about the most to which people can aspire, for whom poverty is a way of life that they expect to bequeath to their children. To the extent that this miserable condition is becoming less the case in much of the world, that more people are beginning to believe that they can build and improve their wellbeing for themselves and their posterity, this new-found hope for accumulating wealth is attributable to the dispersion of principles of freedom and prosperity that Americans take for granted but which are new to much of the world. The global adoption of many American principles of prosperity has been a major contribution of the New World to the Old World and to all mankind.

Now get ready for the bold but true statement: you cannot get there and stay there without banks and the services that banks provide. Banks gather wealth, safeguard wealth, allow it to be used efficiently, and apply it to building the future. That is why governments pay so much attention to banks, and also why it is so harmful when governments try to capture banks and channel their services to the personal gain of themselves and their cronies. That is also why misguided bank regulations are harmful—even if in subtle but powerful ways—to the nation and its people.

Which brings us back to the agenda of the “unbanked” and the “underbanked.” In the United States, chief causes for people remaining “unbanked” are regulations that make banking more difficult and services more expensive; cultural barriers for people who come from societies where personal banking is either unknown or where the experience has been one of banks used by local governments to harvest wealth from people to enrich the governing elites and their cronies (much of Latin America, for example); and people who for whatever reason just do not prefer to use banks. The first cause regulators can solve but have largely been resistant to solving; the second can be overcome by time and experience and is showing signs of that; and the third cause is no more of a problem than people who prefer to rent rather than own their home, to eat eggs without grits, or who do not like the New York Yankees. I do not have to understand the personal preference to acknowledge it.

The concept of “underbanked” (that government needs to help banks figure out how to serve people who may get some banking services outside of banks) I fear may be a political device to harness American banks to serve the cronies of the “underbanked” advocates. We have already seen this game with the Community Reinvestment Act (CRA) regulations, adopted ostensibly to ensure that banks lend to their local communities (as if bankers, unlike other businessmen, need government regulation to notice business opportunities right under their own nose). In practice, CRA has been used to coerce banks into providing loans and even grants to and through poverty advocacy agencies that tend to prosper more than the people whom they claim to be helping. The folks who fret about the “underbanked” have marvelous formulas and plans for other people’s money to solve problems about which the people to be helped seem little concerned. I have never heard of any truly “underbanked” people themselves calling for the firm hand of government to get them into the banking system; if they want banking services, they just go and get them.

I have the haunting suspicion that the “underbanked” advocates would if they could use banks the same way found in the abandoned societies of the “unbanked,” where banking services came through the hands of people who knew better than others and always made sure to get their cut for their benevolence. That is not really banking, and that is symptomatic of why people flee those lands. The wealth creation of such captive banks seems to be for someone else. If it happens in America, where will the people go?