The $8.5 billion mortgage settlement agreed to by ten major
banks on January 7 reveals, once more, the coercive power of government to expropriate
assets from businesses judged guilty by public opinion without proof of legal wrongdoing.
Eligible home owners will receive from
hundreds of dollars up to $125,000 -- another case where the government “throws
a little money at everyone and hopes the problem will go away.” (New York Times The
Foreclosure Disaster).
Following a familiar pattern, ten accused mortgage lenders caved
to demands of the Office of the Controller of Currency (OCC) and the Federal
Reserve rather than face the wrath of the regulators who rule over them. In
violation of basic legal principles, settlement funds are to be distributed in
small portions to all who had the potential to be harmed, not in proportion to actual
damages. Such an arrangement is akin to distributing Hurricane Sandy Funds to
all residents of the affected states on the grounds that they could potentially
have been harmed, whether they were or not.
So much for the rule of law.
Prof. Gregory,
ReplyDeleteThe distribution of settlement proceeds that way is not what violates the rule of law though it be inequitably done. It is the very nature on which these banks operate that is. The notion of a fiat monetary system--no less than Hurricane Sandy appropriations violating the enumerated powers--is quite foreign to the rule of the Constitution where it purposefully mandates that "No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts; . . . ."
One other thing to mention is that Stalin would be proud of our centrally planned bankers centrally planning the economy.
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