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Tuesday, March 19, 2013

Could a Cyprus-style banks robbery happen in the U.S.?

This past weekend was spent semi-unplugged.  Heck I didn't know that Miami had beaten UNC for the ACC Basketball Tournament title until late last night!  Since all that mess was happening in Greensboro I drove a hunnerd miles the opposite direction on 220 to do ballroom dancing and general geek-ery with my girlfriend.

But even so, I have been following the mess in Cyprus, where the government is poisoned to confiscate 10% of everyone's bank accounts in an attempt to get bailed out of the monetary mess of its own manufacture.  So much commentary could be made of this: the failure of socialism, the complete failure of the Eurozone as anything remotely a feasible concept, the failure of policies that can only lead to hyper-inflation, the failure to rein-in the "banksters" (i.e. those who see banking as not a sacred trust but an exploitable resource), the failure to hold those most responsible accountable for their own mistakes and misdeeds...

Right now banks across Cyprus are closed until Thursday (at least).  The ATMs are empty or damn near it: an old-fashioned bank run for the 21st Century.  There is now concern that Italy and other countries are considering similar measures.

It was two years ago that I read Atlas Shrugged for the first time.  A book some consider to be semi-science-fiction.  It's now clear to me that what Ayn Rand had written was in fact a horror novel, and not nearly scary enough.  For all the madness that Directive 10-289 embodied, Wesley Mouch knew better than to raid the private bank accounts.  The same cannot be said of too many politicians in Europe and now, little Cyprus could set off financial disaster throughout Europe and around the world.  It might well be the camel that breaks the straw's back.

(Witless warble of words or cryptic commentary with cliche?  I'll leave it as an exercise for the reader...)

Could a Cyprus-ish raid on our bank accounts happen here in the good ole' Yoo-Ess of Aye?  Neil Boortz thinks so.  Writing at Townhall.com, Boortz suggests that not only could it happen but that it has been incrementally building up toward such for two decades (at least).  From his essay...
Oddly enough, the people of Cyprus weren’t particularly elated over this move, nor were investors and citizens throughout the Eurozone. Imagine that! Cypriots immediately grabbed their ATM cards and started to withdraw as much money as they could from their accounts. Cash in their hands wouldn’t be hit for 10%. It was clear there would be a run on the banks as soon as they reopened. Now the plan to simply seize individual wealth is being delayed, though not abandoned.
Could it happen here? Well certainly it could. Congress could pass and the President could sign legislation calling for the seizure of 10% of every checking and savings account in every bank in America. This might finally be enough to cause a resurrection, but they could do it. So in America the wealth seizure has to be just a bit more selective and subtle. And that brings us to the warning I’ve been voicing for 20 years.
There's plenty more at the Townhall.com link, including mention of something that has not been remembered nearly enough: the 1993 budget battle in Congress that saw retroactive taxation: something which according to the Constitution should never have happened.  I phoned the office of Steve Neal, my representative at the time.  His lackey listened to me rant about how wrong this was and then told me "well sir that's for the courts to decide."

The courts didn't stop it from happening then.  Anyone wanna bet that a raid on the banks by the government could be stopped now?