Hating Bankers or Hating Washington?
By William Shughart • Saturday January 7, 2012 4:33 PM PDT • 3 Comments
In his most recent contribution to The Economist (January 6, 2012, p. 60), “Schumpeter” derides “hatred of bankers” as one of “the world’s oldest and most dangerous prejudices”. Arguing that “scorn for moneymen has a long pedigree”—traceable to Jesus’ expulsion of the moneychangers from Jerusalem’s Temple and to Muhammad’s proscription of usury—he rehearses the old saw that “the love of money is the root of all evil” and summarizes popular prejudices connecting anti-banker sentiments to anti-Semitism targeting the Rothschilds, Goldman-Sachs and other leading lights, then and now, of an international “Jewish” conspiracy meant to defraud Gentiles of their wealth. Bernie Madoff, call your office!
“Schumpeter” cites evidence from a survey published in the Boston Review suggesting that 25 percent of non-Jewish Americans blame Jews for the recent financial crisis and the ensuing “Great Recession”. Although it is true that Washington’s policy actions can be understood primarily as benefiting Goldman-Sachs, the home base of the last two U.S. Treasury secretaries and, very likely, the private-sector destination of the current chairman of the Federal Reserve System, one does not need to see the constellation of political forces at work as being shaped by racism.
Those actions can be explained more simply by a public choice model in which policymakers are influenced by the vote motive in a setting wherein voters are rationally ignorant of the impact of macroeconomic policymaking on their own wealth and welfare. Such ignorance is rampant among the members of the Occupy Wall Street and “Occupy fill-in-the-blank” movements. “Demonizing bankers will not solve [the protesters’] problems”, as Schumpeter observes. What will solve those problems is the demonization of Washington, which created today’s problems by supplying incentives for bankers to lend money to borrowers, especially people wanting to fulfill the “American dream” of home ownership, who could not be expected to repay their loans.
Racism is an unfortunate human failing, but not when it is directed at the political class which, in the Keynesian model, is thought to be a benevolent dictator, who knows better than the unwashed masses what is best for them.
Tags: Money and Banking 
I do believe that the “unwashed masses,” at least those that vote, like the system just the way it is. Easy credit,”buy now pay later,” “signing on the dotted line” etc.,etc. Why pay cash when you can put it on plastic? And,of course,Washington aides and abets the situation by borrowing to the point that the debt will be impossible to pay off. Low interest on savings and investments. Penalizing taxes aimed at the frugal and productive. And,of course,the hidden penalty and tax of inflation discourages saving. Paying !/2 a percent on savings accounts, 2 or 3 percent on a CD,Treasury Bonds at 3 or maybe 4 percent,when the real inflation rate is close to 10%. And of course the biggest fraud of all paper fiat currency that is printed in larger and larger quantities thus destroying it’s value. To blame an “International Jewish Cabal” for the problem is ridiculous. Why did a majority of the voters choose Wilson who bought us the Federal Reserve and the Income Tax? Why did a majority of the voters vote 4 times to bring us FDR who took us off the Gold Standard and introduced the unsustainable Welfare State to the Federal government? Why did a majority of the voters vote for LBJ that took us off the silver coinage system and bought us socialized medicine and a no win war in Vietnam that nearly bankrupted the nation? Why did a majority of the voters choose Nixon who took us off the last vestiges of the Gold Standard thus cementing once and for all programed inflation into the American Economy? The majority of the American people went along with the system and forgot about the lessons of past generations. That lesson being economy and frugality in life. Don’t purchase that which you can’t afford to pay for and don’t live off the efforts of others but be independent. In the final analysis the majority of the American people got what they voted for. The status of a debt serf.
Libertarian Jerry | Jan 8, 2012 | Reply
What’s the problem with hating bankers?
They are scumbags and they are the government.
TPaine | Jan 13, 2012 | Reply
I just saw this video and it has me so angered I can not see straight. Made 5 years ago it is more relevant today as ever. Maybe you all already knew what the message is on this video but it crystallized what I had suspected but couldn’t quite convey. My son-in-law perished because of the agenda of the pharmaceutical company. He went in complaining of a back ache and 4 years later he was dead due to poly-pharmacy and his doctors inability to know or understand the signs of an adverse reaction. It more than sickens me what happened to him and what is happening to millions of others like him around the world. There are no words to explain the anguish when you tell a 8 and 12 year old they have lost their father. I will crusade to bring awareness about this conspiracy to medicate the world with toxic poisons and at the same time restrict people from consuming vitamins and nutrients. http://video.google.com/videoplay?docid=451097355502728465&hl=en
Toni | Jan 17, 2012 | Reply