How Republicans Illogically Propose that Regulating Banking is Socialism
Executive Summary
- Republicans oppose banking regulation proposing it is socialists.
- Republicans provide pure stupidity and falsity on banking.
Introduction
Republicans like to use the term socialism to describe what they do not like. It is curious to see how they label the regulation of an entirely social good, money — which is based upon a social credit — as “socialism.”
What is the Social Credit Theory of Banking
This is explained in the article The Seignorage or Social Credit Theory of Money.
This is covered in the following quote.
President Joe Biden’s nominee to become the government’s top banking regulator faced a wave of criticism Thursday at a tense Senate hearing that cast further doubt on her chances of being confirmed.
Saule Omarova, tapped to be comptroller of the currency, was met with resistance from Republicans over her advocacy for a dominant role for government in finance. One GOP lawmaker questioned the Cornell law professor, who was born in the former Soviet state of Kazakhstan, about her previous affiliation with a communist youth organization and asked if he should refer to her as “comrade.” Omarova vigorously denied having any sympathy with communist views.
But in an evenly divided Senate, the real threat to her nomination could come from moderate Democrats like Sens. Jon Tester of Montana and Mark Warner of Virginia, who took issue with her opposition to a 2018 law they spearheaded that rolled back regulations on some banks, largely small and regional lenders.
“I’m pretty disappointed in your views on [that bill], which I was proud to be one of the authors of,” Warner said at the Senate Banking Committee hearing, noting that the measure got 69 votes. “I very much disagree with your characterization of that bill.”
Omarova acknowledged she had “deep concern” the bill might result in “inadvertently loosening the regulatory oversight of the largest financial institutions.” But she said she supports lighter rules on smaller banks that don’t engage in riskier trading activities. And she said her goal is to make the system more fair.
“If confirmed by the Senate, I will work to ensure that our financial system gives every family the tools they need to build their own American Dream,” she said.
A potential defeat for the nominee would be a blow to Biden, who has won the broad support of Senate Democrats for almost all of his appointments.
Omarova, who if confirmed would oversee national banks, has repeatedly expressed concern about the size and reach of U.S. megabanks. She has suggested the government could play a greater role in lending to the private sector, and she participated in a 2019 Canadian documentary “Assholes: A Theory,” in which she called banking a “quintessential asshole industry.”
“My concern with Professor Omarova is her long history of promoting ideas that she herself describes as ‘radical,’” said Sen. Pat Toomey of Pennsylvania, who has led the GOP fight against her appointment. “I agree that they are radical. But I’d also describe them as socialist. In fact, I’ve never seen a more radical nominee to be a federal regulator.” – Politico
What Republicans Call “Radical”
What is radical, according to Republicans, is for governments to regulate banks in a way that is best for the public good. This is why Republicans normally oppose usury laws. Furthermore, what is today called radical by Republicans, was generally accepted for decades as necessary to maintain a stable banking system.
From Where Does the Money Creation Power Come?
What is curious is that Republicans do not mention that the entire power to create money is granted to banks by governments. When a bank makes a loan, they bring money into existence that they can only do because the government has given them that power. Banks want to maximize profit, using the government’s money-creation ability to make the most money for themselves. And they lobby for the right only to maximize profit and not be concerned with social good. — however, they lobby for this while using or living off of the government’s money-creation function. The Fed can also create money, but if the Fed created Fed “certificates” no one would want them. The Fed creates dollars that are a US government currency. So again, the Fed has been granted this power, but by the government. The government has the authority to take this money creation function from the Fed. They have the power to eliminate the Fed and place that money creation power back with the government.
Observe that the Republicans call regulation “socialism.” Let us look at the definition of socialism.
a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. For Andrew Vincent, “[t]he word ‘socialism’ finds its root in the Latin sociare, which means to combine or to share. The related, more technical term in Roman and then medieval law was societas. This latter word could mean companionship and fellowship as well as the more legalistic idea of a consensual contract between freemen”. – Wikipedia
Banking is inherently socialist. Banking is based upon social credit. No metal or other commodity need or should be tied to or back money. Money is brought into existence by social trust. This social trust is enabled by governments, and money is the currency, which is required for the payment of taxes.
Socialism Applied to Banking
How can regulating banks be “socialists” if the entire banking enterprise is socialism? Banks can go ahead and loan their own money and not be held down by government regulations. However, they want to loan money created out of nothing by a power given to them by the government. But they don’t want to worry about anything but profit maximization. Any policy that opposes the interests of profit maximization is referred to as “radical” by Republicans.
The quote continues.
Omarova would be the first person who is not a white man to be confirmed to the position and has suggested that some of the opposition to her candidacy was rooted in racism.
Most likely not. There have been many people confirmed who have not been white to different government positions like this. The opposition to her nomination is because she wants to regulate banks, which those who oppose her nomination have been paid to change.
The quote continues.
The Biden administration has privately told people that at least seven Democratic senators have reservations about her nomination, POLITICO reported, including Tester and Warner, as well as Sens. Kyrsten Sinema of Arizona and Raphael Warnock of Georgia, who both sit on the Banking Committee, which will vote whether to send her nomination to the full Senate.
The Independent Community Bankers of America, an influential trade group that represents small lenders, also opposes her nomination.
Still, Banking Chair Sherrod Brown (D-Ohio) expressed confidence that Omarova would be able to secure enough votes. “Many of my colleagues used to say, ‘well, President [Donald] Trump, he should get his nominees,’” Brown said, suggesting the same standard should apply to Biden. – Politico
This is a different issue: presidents should have all their nominees confirmed as a “courtesy.”
This means that the qualifications of the person or their likely approach to managing their area should never be analyzed. Under this logic, there should be no nomination process, and all nominees should be automatically confirmed. There is another question: why the president should have the right to nominate the head of various departments, and why they don’t simply hire internally. Hiring internally would mean hiring people with much more experience in the field than who the president will nominate. This appears to be a qualified candidate, but Pete Buttigieg became the head of the Department of Transportation, with zero experience in the field. He was given the position of dropping out of the presidential race. This is also undemocratic to remove people from the field by promising them positions in the administration if, in this case, Biden won. The entire nomination process for the heads of agencies is highly corrupt, and there is no reason for it. It leads to people of poor qualification leading US agencies that owe their allegiance to the president.
The quote continues.
Republicans largely focused on her past writings in their criticism, including a recent proposal that would move consumer deposits out of private institutions and into the Federal Reserve. But the hearing took an uncomfortable turn away from her policy views when Sen. John Kennedy (R-La.) asked about her membership in a communist organization while she was growing up in the Soviet Union.
“It’s commonly referred to as the ‘young communists,’” he said to Omarova. “Were you a member?”
“Senator, I was born and grew up in the Soviet Union,” she said. “Everybody in that country was a member of the Komsomol, which was the communist youth organization.”
After Kennedy asked whether she had any record of resigning from the group, Brown made the rare move of interrupting the GOP lawmaker to say that she had renounced her Kazakhstan citizenship, causing an argument to flare between the two senators. “I understand that, but you’re not the witness, she is,” Kennedy said. He told the nominee that he didn’t know whether to call her “professor or comrade.”
Omarova repeatedly underscored her love for America, her appreciation for private markets, and the oppression her family had faced under the government of Soviet leader Joseph Stalin. She told Kennedy because of that oppression, she didn’t know half her family.
“I am not a communist. I do not subscribe to that ideology,” she said. “I could not choose where I was born.” – Politico
This is an idiotic line of questioning. It should be easy to determine if this person is a communist. The fact a person grew up in a communist country is not evidence that they are communist. I grew up in a very liberal environment, but that is not my view today. People who leave community countries are usually very anti-communist. They tend to be reactionaries like Ayn Rand, that completely flip to the other extreme.
The quote continues.
Following Kennedy’s remarks, fellow Republican Sen. Thom Tillis of North Carolina implicitly rebuked him.
“I want to make a few things crystal clear: Republican concerns with this nominee are directly tied solely to your extensive written record,” he told Omarova. “With the exception of some of the comments that my friend and colleague Senator Kennedy made, I think we’ve tried to focus on what we believe are legitimate policy differences.”
Brown also cited Kennedy’s comment after the hearing. “Every Democrat in this body just finds repulsive the attacks on her,” he said. “Being called a comrade by Kennedy, I know there’s a sense of decency among my colleagues, and she will be confirmed.”
The comments around Omarova being called Comrad are minor compared to the objection to removing more banking regulations categorized as “socialist.”
Conclusion
Republicans mischaracterize banking as some type of activity that is entirely separate from the government. Banking does not exist without the government. Banks loan out money that they create that the government has given them the power to create. That is, they make something out of value from nothing and then charge interest on it. That is an enormous unearned benefit, which should be regulated to ensure it is done responsibly and in line with social good. Republicans and all political representatives of the financial industry want the public misinformed on how banking works.
Source: Politico, Wikipedia
https://www.politico.com/news/2021/11/18/saule-omarova-banking-nomination-522978