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Mar 23

Written by: Diana West
Monday, March 23, 2009 5:17 AM 

 

Pointing out the rift between small business and big business, former Republican Rep. JC Watts writes:

Republicans are finally waking up and recognizing what I discovered long ago: that the virtues of some in big business can sometimes be as bad as the virtues of big government.

Because of this, there's always room for oversight. Not over-regulation of market activities, but oversight of the human abuse of market activities.

As I have noted--as Steve Sailer has voluminiously documented--the economic meltdown resulted from decades of  social engineering designed to create a national spread sheet of home mortgage borrowing that reflected the nation's racial make-up. (George W. Bush and Karl Rove seized on this same social engineering machinery in a disastrous effort to Republicanize incoming Hispanic populations.) Essentially, banks penalized for "red-lining" were government-compelled to make increasingly risky loans--government-  guaranteed via Fannie and Freddie. This led to the creation of those "exotic" financial instruments we read about, and the marketplace for them that became a global trading frenzy ultimately saddling the great banks of the world with "toxic" paper. So long as the housing bubble kept growing, all was well; once the bubble popped, well, you know the rest. But that's another story. Watts concludes:

As a nation, we must not forget that true wealth is created by real gross domestic product, and not by falsified, fictitious equity.

Thomas Jefferson said in 1842: "I believe banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all properties until their children wake up homeless on the continent their fathers conquered."

Thomas Jefferson said that? Obviously, "1842" is a typo, but is the quotation for real? Consulting Mr. Internet, I found my way to a fascinating Jefferson site, The Jefferson Encyclopedia, which concludes that this quotation is at least in part spurious. For one thing, the words "inflation" and "deflation" didn't come into usage until 1860 and 1920 respectively. But there is a Jeffersonian essence to the statement that is quite apt:

The second part of the quotation ("I believe that banking institutions are more dangerous to our liberties than standing armies...") may well be a paraphrase of a statement Jefferson made in a letter to John Taylor in 1816. He wrote, "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."  

 

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